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, 2004
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) 861-1183
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, 2004, the Company's revenue was zero.
As of November 12, 2004, the number of shares of Common Stock outstanding was 1,145,987. The aggregate market value of the Company's Common Stock held by non-affiliates of the registrant as of November 12, 2004, was approximately $2,177,375 (based upon 1,145,987 shares at $1.90 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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ITEM 1 DESCRIPTION OF BUSINESS...............................................3
General...................................................................3
Company History...........................................................3
Fiscal Years 1988-1994................................................3
Fiscal Years 1995-1997................................................3
Fiscal Years 1998-2004................................................4
Patents, Trademarks and Proprietary Protection............................4
Employees.................................................................5
Selected Consolidated Financial Data......................................5
ITEM 2 DESCRIPTION OF PROPERTY...............................................6
ITEM 3 LEGAL PROCEEDINGS.....................................................6
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................6
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTTERS................................................7
Holders...................................................................7
Dividends.................................................................7
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.................................8
Fiscal Years 2004 and 2003................................................8
Results of Operations.................................................8
Liquidity and Capital Resources.......................................8
ITEM 7 FINANCIAL STATEMENTS................................................. 9
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE................................10
ITEM 8A. CONTROLS AND PROCEDURES..............................................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...............................................14
1999 Stock Option Plan...................................................15
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................15
ITEM 13 EXHIBITS AND REPORTS ON FORM 8K......................................16
ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES...............................18
SIGNATURES....................................................................20
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PART I
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ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
Prior to its discontinuance of operations, Dimensional Visions Incorporated (the "Company") created and delivered 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. It Corporate charter was revoked September 30, 2003, for failure to file its annual report with the Arizona Corporation Commission.
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)861-1183.
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 1998-2004
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.
The Company has discontinued all operations and has no active business. 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.
PATENTS, TRADEMARKS AND PROPRIETARY PROTECTION
The Company has received trademark registration of DV3D(R).
Historically, when the Company enters engages in business transactions involving its technology, it 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 who serves without compensation. 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, 2004 June 30, 2003 June 30, 2002 June 30, 2001 June 30, 2000
------------- ------------- ------------- ------------- -------------
Operating revenue $ -- $ -- $ 131,946 $ 234,347 $ 1,008,862
Net loss $ (107,613) $ (118,808) $(1,515,774) $(1,059,775) $(1,021,144)
Net loss per share of
common stock $ (.22) $ (.21) $ N/A $ N/A $ N/A
Balance Sheet Data:
Working capital (deficit) $(1,264,203) $(1,178,340) $(1,059,532) $ (542,882) $ 205,284
Total assets $ -- $ -- $ 18 $ 211,594 $ 885,033
Total liabilities $ -- $ -- $ 18 $ 211,594 $ 885,033
Stockholders' equity
(deficiency) $(1,264,203 $(1,178,340 $(1,059,532) $ (385,574) $ 365,921
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ITEM 2. DESCRIPTION OF PROPERTY.
In order to reduce expenses, the Company is currently operating out of office space made available 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.
In 2003, the Company was sued in the Superior Court of the State of California, Orange County, by the law firm of Oswald & Yapp, A Professional Corporation. The suit was based on claims of legal fees for services rendered but not paid. The Company failed to respond to the suit and on February 27, 2004, a judgment was entered against the Company in the amount of $31,578.91.
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.
On May 6, 2003, a majority of our shareholders executed a majority written consent in lieu of special meeting. The majority shareholders voted "for" the following actions:
* Reversing the number of issued and outstanding shares, giving one (1) new share for each sixty (60) existing shares, and authorizing the filing of a Certificate of Amendment with the Delaware Division of Corporations to effect same.
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 "DVSO" from May 18, 2004. From January 12, 1998 to May 18, 2004, it was traded under the symbol "DVUI". Prior to January 12, 1998, the Company's Common Stock traded under the symbol "DVGL."
During the year ended June 30, 2003, and until May 18, 2004, at times when the average number of shares issued and outstanding exceeded 60,000,000 shares, the Company's shares traded at prices in the mils. In May 2004, the Company effected a 1 for 60 reverse split of the number of shares issued and outstanding. This change was reflected in the market on May 18, 2004. Subsequent to the contraction in the number of shares issued and outstanding, during the last 30 trading days of the Fourth Quarter, the prices of the Companies shares have ranged from a low of $0.55 to a high of $7.00.
HOLDERS
As of November 12, 2004, the number of stockholders of record was 261, 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 $116,425. 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 2004
The Company issued 29,000 shares of the Company's common stock to consultants for services rendered valued at $21,750.
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.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
FISCAL YEARS 2004 AND 2003
RESULTS OF OPERATIONS
The Company ceased all operations in the first quarter of 2002 and is exploring new business possibilities.
The net loss for the fiscal year ended June 30, 2004, was $107,613 compared with a net loss of $118,808 for the fiscal year ended June 30, 2003. General and administrative expenses decreased in the fiscal year ended June 30, 2004 by approximately $10,885 over the fiscal year ended June 30, 2003. 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 years ended June 30, 2004 and June 30, 2003 were eliminated as a result of a decline in business and lack of funding resulting in a discontinuance of operations.
Revenue for the fiscal years ended June 30, 2004 and June 30, 2003, was zero, as the Company had no activity during the year.
As a result of the cessation in revenue, the Company has eliminated its fixed overhead costs. 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 made available to it at no charge to the Company.
LIQUIDITY AND CAPITAL RESOURCES
The Company had no collections during the fiscal year ended June 30, 2004.
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.
The accountants for the Registrant is the firm of Shelley International CPA, 161 East 1st Street, Suite 1, Mesa, AZ 85201 who were engaged on November 5, 2004. Prior to that, the accountants for the Registrant was the firm of Kopple & Gottlieb, LLP, 420 Old York Rd., Jenkintown, Pennsylvania 19046. The decision to change accountants was necessitated by the fact that Kopple & Gottlieb was acquired by another public accounting firm. The acquiring firm has elected not to provide services to clients who are required to report to the Securities Exchange Commission. Kopple & Gottlieb, LLP, had been the Company's independent certified accountants since the year 2000.
Prior to the engagement of Kopple & Gottlieb, the principal accountants for the Company was Gitomer & Berenholz, P.C., Huntingdon Valley, Pennsylvania, whose services were terminated by the Company as of July 13, 2000. The principal accountant's report on the financial statements of the Registrant contained no adverse opinion or a disclaimer of opinion, nor was qualified nor modified as to uncertainty, audit scope, or accounting principles. The termination of Gitomer & Berenholz, P.C. was approved by the Board of Directors.
The report of the Company's former independent certified accountants, Kopple & Gottlieb, LLP, covering the fiscal year ended June 20 2003 and Shelley International CPA fpr the fiscal year ended June 30, 2004, did not include an adverse opinion or disclaimer of opinion, and was not qualified as to the audit scope or accounting principles.
In connection with the audits of the two most recent fiscal years and during any subsequent interim period preceding the resignation of Kopple & Gottlieb, LLP, there did not develop any disagreement on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure between such former independent certified accountants and management of the Company or other reportable events which have not been resolved to the Company's former independent certified accountants' satisfaction.
ITEM 8A. 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.
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 $100,000 in the last three fiscal years.
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------ --------------------------------
Awards Payouts
-------------------- --------
Other Securities
Annual Restricted Underlying All Other
Compen- Stock Options/ LTIP Compen-
Year Salary($) Bonus($) sation($) Awards($) SARs(#) Payouts($) sation($)
---- -------- -------- -------- -------- --------- --------- --------
Preston J. Shea 2004 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
President, Secretary, 2003 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
CFO (1)
Jason M. Genet, 2003 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
President(2)
Larry Kohler, 2003 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
CFO(3)
Lawrence G. Olson, 2003 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
VP, Secretary(4)
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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 current 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 November 12, 2004 with the number of outstanding shares at 1,145,987; (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, 185,000 16.1%
1636 Los Alamos circle
Mesa, AZ 85204
David W. Keaveney 285,000 24.9%
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. 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.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits - The following Exhibits are incorporated by reference:
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(d) 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.
14(e) Dimensional Visions, Inc. Code of Ethics
21.1(b) Subsidiaries of the Registrant
23.1(e) Consent of Shelley International CPA
31.1(e) 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(e) 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 filed:
1. Form 8-K, filed May 24, 2004, giving notice that (1) on May 6, 2004 the Registrant filed a Certificate of Amendment with the Delaware Division of Corporations to reverse its issued and outstanding shares, giving one (1) new share for each sixty (60) existing shares, and (2) that before the end of May, 2004, the Registrant intends to send to the Securities and Exchange Commission its Form D, Rule 506 Notice regarding its Seven Hundred Fifty Thousand Dollar ($750,000.00) private placement financing to accredited investors. Pursuant to this proposed registration, the investor will receive a one year debenture with an interest rate of ten percent (10%) per year, payable quarterly. Further, the investor will receive one (1) share of the restricted stock of the registrant for each two dollars ($2.00) of debentures purchased. As of the date of the 8-K report the amount of debentures sold and paid for was none. This Seven Hundred Fifty Thousand Dollar ($750,000.00) financing, after expenses and commissions, will be used for working capital and product development by the registrant. This Form 8-K report is incorporated herein by reference.
2. Form 8-K/A, filed September 23, 2004, giving notice that Registrant's proposed Seven Hundred Fifty Thousand Dollar ($750,000.00) private placement financing to accredited investors has been cancelled with nothing raised. Further, the negotiations by the Registrant to acquire Global Entertainment Marketing & Advertising, Inc. has been terminated. This Form 8-K report is incorporated herein by reference.
(b) Incorporated by reference from the Company's Registration Statement on Form SB-2 dated July 10, 2001 (Registration No. 333-56804).
(c) Incorporated by reference from the Company's Amendment No. 1 to Annual Report on Form 10-KSB, dated February 22, 2002.
(d) Incorporated by reference from the Company's Form 10KSB for FYE June 30, 2003, filed October 15, 2003.
(e) Incorporated herein.
ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following is a summary of the aggregate fees billed to Registrant by its principal accountant(s) for professional services rendered for the fiscal years ended June 30, 2004 and 2003.
Fee Category Fiscal 2004 Fees Fiscal 2003 Fees ------------ ---------------- ---------------- Audit Fees (1) 10,000 7,500 Audit-Related Fees (2) 0 0 Tax Fees (3) 0 0 All Other Fees (4) 0 0 Total Fees 10,000 7,500 ------------- |
1. Audit Fees. Consists of fees billed for professional services rendered for the audits of Registrant's financial statements for the fiscal years ended June 30, 2004 and 2003, and for review of the financial statements included in Registrant's Quarterly Reports on Form 10-QSB for those fiscal years.
2. Audit-Related Fees. Consists of fees billed for services rendered to Registrant for audit-related services, which generally include fees for audit and review services in connection with a proposed spin-off transaction, separate audits of employee benefit and pension plans, and ad hoc fees for consultation on financial accounting and reporting standards.
3. Tax Fees. Consists of fees billed for services rendered to Registrant for tax services, which generally include fees for corporate tax planning, consultation and compliance.
4. All Other Fees. Consists of fees billed for all other services rendered to Registrant, which generally include fees for consultation regarding computer system controls and human capital consultations. No services were performed related to financial information systems design and implementation for the fiscal years ended June 30, 2004 and 2003.
None of the "audit-related," "tax" and "all other" services in 2004, as defined above, were approved by the Audit Committee in reliance on the de minimus exception to the preapproval requirements under federal securities laws and regulations.
Pre-Approval of Services of Principal Accounting Firm
The Audit Committee's written policy is to pre-approve all audit and permissible non-audit services provided by Registrant's principal accounting firm (independent auditor). These services may include audit services, audit-related services, tax services and other permissible non-audit services. Any service incorporated within the independent auditor's engagement letter, which is approved by the Audit Committee, is deemed pre-approved. Any service identified as to type and estimated fee in the independent auditor's written annual service plan, which is approved by the Audit Committee, is deemed pre-approved up to the dollar amount provided in such annual service plan.
During the year, the principal accounting firm may also provide additional accounting research and consultation services required by, and incident to, the audit of Registrant's financial statements and related reporting compliance. These additional audit-related services are pre-approved up to the amount approved in the annual service plan approved by the Audit Committee. The Audit Committee may also pre-approve services on a case-by-case basis during the year.
The Audit Committee's approval of proposed services and fees are noted in the meeting minutes of the Audit Committee and/or by signature of the Audit Committee on the engagement letter. The principal accounting firm of Registrant and management are periodically requested to summarize the principal accounting firm services and fees paid to date, and management is required to report whether the principal accounting firm's services and fees have been pre-approved in accordance with the required pre-approval process of the Audit Committee.
Non-Audit Services
The Audit Committee of the Board of Directors has considered whether the provision of non-audit services by the Registrant's principal accountants is compatible with maintaining auditor independence.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DIMENSIONAL VISIONS, INC.
Dated: November 15, 2004
By: /s/ Preston J. Shea
------------------------
Preston J. Shea, President
Principal Accounting Officer
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated:
Signature Title Date
/s/ Preston J. Shea President, November 15, 2004
------------------- Principal Accounting Officer,
Preston J. Shea Director
|
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
YEARS ENDED JUNE 30, 2004 AND 2003
Page
----
Independent Auditors' Report F-2
Consolidated Financial Statements
Balance Sheet F-4
Statements of Operations F-5
Statements of Stockholders' Deficiency F-6
Statements of Cash Flows F-7
Notes to Consolidated Financial Statements F-9
|
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 (not included here-in) 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 the year 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 the year 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 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2004, and the related consolidated statements of operations, stockholders' equity (deficiency), and cash flows for the year ended June 30, 2004. 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 of the Public Company Accounting Oversight Board (United States). 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, 2004 and the results of their operations and their cash flows for the year ended June 30, 2004 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 $1,264,203 as of June 30, 2004, 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/ Shelly International CPA's -------------------------- Mesa, Arizona November 10, 2004 |
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
JUNE 30, 2004
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 631,683
------------
Total current liabilities 1,264,203
------------
Total liabilities 1,264,203
------------
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 1,058,526 1,059
Additional paid-in capital 22,456,043
Deficit (24,630,723)
------------
Total stockholders' deficiency (1,264,203)
------------
Total liabilities and stockholders' deficiency $ --
============
|
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2004 AND 2003
2004 2003
----------- -----------
Operating revenue $ -- $ --
Cost of sales -- --
----------- -----------
Gross profit -- --
----------- -----------
Operating expenses
Engineering and development costs -- --
Marketing expenses -- --
General and administrative expenses 38,083 48,968
----------- -----------
Total operating expenses 38,083 48,968
----------- -----------
Loss before interest expense (38,083) (48,968)
----------- -----------
Interest expense (69,530) (69,840)
Net loss (107,613) (118,808)
Dividends in arrears on preferred stock (116,425) (105,875)
----------- -----------
Net Loss available to common shareholders $ (224,038) $ (224,683)
=========== ===========
Loss per share
Basic and diluted loss per common share $ .22 $ (.21)
=========== ===========
Shares used in computing net loss per share 1,031,665 1,065,884
=========== ===========
|
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
YEARS ENDED JUNE 30, 2004 AND 2003
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, June 30, 2002
524,044 $ 524 $ 908,894 $1,065,984 $1,066 $22,434,228 $(24,404,302) $(1,059,532)
======= ====== ========== ========== ======= =========== ============ ===========
Surrender of 36,458
shares of the Company's
common stock originally
issued for compensation (36,458) (36) 36 -- --
Net loss -- -- -- -- -- (118,808) (118,808)
------- ------ ---------- ---------- ------- ----------- ------------ -----------
Balance, June 30, 2003
524,044 $ 524 $ 908,894 $1,029,526 $1,030 $22,434,264 $(24,523,110) $(1,178,340)
======= ====== ========== ========== ======= =========== ============ ===========
Issuance of 29,000 shares
of the Company's common
stock to consultants for
consultants for services
valued at $21,750 29,000 29 21,721 -- $21,750
Net loss -- -- -- -- -- $(107,613) $(107,613)
------- ------ ---------- ---------- ------- ----------- ------------ -----------
Balance, June 30, 2004
524,044 $ 524 $ 908,894 1,058,526 $1,059 $22,455,985 $(24,630,723) $(1,264,203)
======= ====== ========== ========== ======= =========== ============ ===========
|
* The above common shares have been adjusted retroactively for a 60:1 reverse stock split occurring May 6, 2004.
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2004 AND 2003
2004 2003
----------- -----------
Operating activities
Net loss $ (107,613) $ (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 -- --
Consulting service paid through issuance of common stock 21,750 --
Depreciation and amortization of property and equipment -- --
Amortization of debt discount -- --
Amortization of other assets and deferred costs -- --
Security deposit used to pay rent -- --
Changes in assets and liabilities which provided (used) cash
Accounts receivable, trade -- --
Prepaid supplies and expenses -- --
Accounts payable, accrued expenses and other liabilities 85,863 118,590
----------- -----------
Net cash used in operating activities -- (218)
----------- -----------
Financing activities
Short term borrowings -- 200
----------- -----------
Net cash provided by financing activities -- 200
----------- -----------
Net decrease in cash and cash equivalents (18)
Cash and cash equivalents, beginning of year 18
----------- -----------
Cash, end of year $ -- $ --
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ -- $ --
=========== ===========
Issuance of common stock in connection
with consulting services $ 21,750 $ --
=========== ===========
|
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
YEARS ENDED JUNE 30, 2004 AND 2003
Supplemental disclosure of non-cash investing and financing activities for fiscal year 2004:
The Company issued 29,000 shares of the Company's common stock to consultants for services rendered valued at $21,750.
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2004 AND 2003
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 years ended June 30, 2004 and 2003. The volume of business is not sufficient to support the Company's cost structure. Accordingly during April 2002 the Company ceased its present operations.
Effective May 6, 2004, the Company's stockholders approved a one for sixty Reverse Split of its common stock ("The Reverse Split"). The effect of the Reverse Split has been retroactively reflected as of July 1, 2002 in the consolidated financial statements. All references to number of shares issued, conversions to common stock, per share amounts and stock option data have been restated to reflect the effect of the Reverse Split for the period presented.
LIQUIDITY AND CAPITAL RESOURCES
The Company has incurred losses since inception of $24,630,723 and has a working capital deficiency of $1,264,203 as of June 30, 2004. 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, 2004, 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.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
Note 1: Summary of Significant Accounting Policies (continued)
LIQUIDITY AND CAPITAL RESOURCES (continued)
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.
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.
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.
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.
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").
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
Note 3: Accounts Payable, Accrued Expenses and Other Liabilities
Accounts payable $430,546
Accrued Interest 185,065
Salaries 16,072
--------
Total $631,683
========
Note 4: Short-Term Borrowings
Interest
Rates 2004 2003
-------- ---- ----
Investors Group 10% $399,253 $399,253
Convertible Debentures 12-14% 45,000 45,000
Secured Note 12% 180,000 180,000
Individual -- 8,267 8,267
----------- --------
$632,520 $632,520
|
On January 29, 2002, the investor group as the guarantor on the secured line of credit with Merrill Lynch paid off this obligation, after the loan was declared in default. The Company continues to accrue interest under this obligation.
The outstanding debt may also be converted by the individual stockholders at a rate of one half a share of the Company's common stock for every dollar assumed.
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 6,000 shares of the Company's common stock at $7.50 per share after given effect for the 1 to 60 share reverse split.
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 accrue interest under this obligation.
During January 2002 the company borrowed $8,267 from an individual and no repayment terms have been established at this time.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
Note 4: Short-Term Borrowings (continued)
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 $ 53,208 for the benefit of the Company through June 30,2004, which is included in accounts payable. 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 November 2004, no plan of reorganization has been entered into.
Note 5: 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 $116,425
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 6: Common Stock
As of June 30, 2004, there are outstanding 111,008 non-public warrants and options to purchase the Company's common stock at prices ranging from $7.50 to $15.93 with a weighted average price of $9.52 per share.
As of June 30, 2004, there were 524,044 shares of various classes of Convertible Preferred Stock outstanding which can be converted to 14,814 shares of common stock (see Note 7).
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
Note 6: Common Stock (continued)
As of June 30, 2004, there are convertible debentures outstanding that can be converted to 6,000 shares of common Stock (see note 4) and the investor group can also convert the outstanding loan to 19,963 shares of common stock at an exchange rate of three shares for every dollar.
On June 4, 2004 the Company issued 29,000 Shares of the Company's common stock for consulting services rendered to the Company and valued a $21,750.
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 151,785 shares as of June 30, 2004, and would be in addition to the 1,058,525 shares of common stock outstanding as of June 30, 2004.
Note 7: 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 .027 share 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 5).
The Company's Series B Convertible 8% Preferred Stock ("Series B Preferred"), is convertible at the rate of .067 share 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 5).
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
Note 7: Preferred Stock (continued)
The Company's Series C Convertible Preferred Stock ("Series C Preferred") is convertible at a rate of .007 share 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 .034 share 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 .034 share 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 .007 share 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.
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.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
Note 8: 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, 2004, 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.
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, 2004 and 2003, no options or SAR's have been granted.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
Note 8: Stock Option Plan and Equity Incentive Plan (continued)
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:
2004 2003
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Net Loss available to common shareholders $ (224,038) $ (224,683)
Net Loss - pro forma $ (224,038) $ (224,683)
Net Loss per share - as reported $ (.22) $ (.21)
Net Loss per share - pro forma $ (.22) $ (.21)
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Note 9: Income Taxes
The tax effects of significant items comprising the Company's net deferred taxes as of June 30, 2004 were as follows:
Deferred tax assets:
Goodwill $ 173,000
Net operating loss carryforwards 8,001,000
-----------
8,174,000
-----------
Net deferred tax asset 8,174,000
Valuation allowance (8,174,000)
-----------
Net deferred tax asset reported $ --
===========
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The change in valuation allowance for the year ended June 30, 2003 was increased by approximately $46,000.
There was no provision for current income taxes for the years ended June 30, 2004 and 2003.
The federal net operating loss carry forwards of approximately $21,698,000 expires in various years through 2024. In addition the Company has state carry forwards of approximately $6,927,000.
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.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
NOTE 10. The Effect of Recent Account Standards
Below is a listing of the most recent accounting standards and their effect on the Company.
SFAS 148 ACCOUNTING FOR STOCK-BASED COMPENSATION-TRANSITION AND DISCLOSURE
Amends FASB 123 to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation.
SFAS 149 AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
This Statement amends and clarifies financial accounting and reporting for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives) and for hedging
activities under FASB Statement NO.
133, Accounting for Derivative Instruments and Hedging Activities.
SFAS 150 FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY
This Statement requires that such instruments be classified as liabilities in the balance sheet. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003.
INTERPRETATION NO. 46 (FIN 46)
Effective January 31, 2003, The Financial Accounting Standards Board requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a continuing financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The Company has not invested in any such entities, and does not expect to do so in the foreseeable future.
The adoption of these new Statements is not expected to have a material effect on the Company's financial position, results or operations, or cash flows.
EXHIBIT 14
DIMENSIONAL VISIONS, INC
Code of Ethics
This Code of Ethics sets out the minimum ethical standards for all directors, officers and employees of Dimensional Visions, Inc., and its subsidiaries (referred to collectively as "Dimensional"). Dimensional is committed to enforcing these standards through effective internal systems reporting structures and compliance programs.
Dimensional' directors, officers and employees, in conducting the business of the Company, will:
o Obey the law, including all applicable rules and regulations, and conduct themselves with honesty and integrity.
o Avoid engaging in any conduct where the personal interests interfere or appear to interfere with those of Dimensional.
o Advance the legitimate interests of Dimensional when the opportunity arises and avoid competing with Dimensional directly or indirectly or using Dimensional property, information, or their positions with Dimensional for improper personal gain.
o Respect the rights of and deal fairly with Dimensional' customers, suppliers, competitors and employees.
o Not offer or accept bribes or kickbacks either directly or indirectly.
o Report to work in condition to perform their duties, free from the influence of alcohol or illegal drugs.
o Keep honest and accurate records and reports of company information.
o Make full, fair, accurate, timely and understandable disclosures in reports and documents that Dimensional provides to any governmental authority and in all other public communications made by Dimensional.
o Respect the diversity of Dimensional' employees and not engage in wrongful discrimination or harassment.
o Preserve the confidentiality of nonpublic information and any other information entrusted to them in confidence by Dimensional or its customers, except when disclosure is authorized or is legally mandate.
o Not use or share confidential information for stock trading purposes or any other purpose except to conduct the business of Dimensional.
o Protect Dimensional' assets and ensure their proper and efficient use, including property, equipment, products and other tangible assets, and proprietary information such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports.
o Maintain a safe and healthy workplace for all employees by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.
o Promptly report concerns regarding accounting, auditing and internal controls matters on a confidential basis to the Board of Directors of Dimensional or the Audit Committee of Dimensional. Such reports will be investigated by Dimensional under the direction of the Board of Directors or Audit Committee.
o Promptly report work-related activities by company personnel that violate the law, this Code and any other company policy. Reports of violations may be made to a supervisor, an executive officer of Dimensional or a member of the Board of Directors of Dimensional. Reports of violations by executive officers or senior financial personnel must be made to the legal counsel for Dimensional or the Chairman of the Audit Committee, or to a member of the Board of Directors of Dimensional.
Dimensional does not permit retaliation of any kind for reports of misconduct made in good faith. If you have questions about this Code, Dimensional' compliance program or whether conduct may violate this Code, the law or a compliance program, you should consult with a supervisor, an executive officer of Dimensional, legal counsel for Dimensional, or a member of the Board of Directors of Dimensional.
Waivers of this Code may be made only upon written request submitted to and approved by Dimensional' Board of Directors. Changes in or waivers of this Code will be promptly disclosed as required by applicable law or regulation.
This Code of Ethics was duly approved and adopted by the Board of Directors of Dimensional Visions, Inc., on the 2nd day of April 2004.
/s/ Preston J. Shea -------------------- Secretary |
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation of our report, dated November 10, 2004, included in this Form 10-KSB in the previously filed Registration Statement of Dimensional Visions Incorporated on Form S-8 (File No. 333-115815, effective May 24, 2004).
/s/ Shelley International CPA ------------------------------ Shelley International CPA Mesa Arizona November 15, 2004 |
Exhibit 31.1
CERTIFICATION 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
In connection with the Annual Report of Dimensional Visions, Inc. (the "Company") on Form 10-KSB for the period ending June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Preston J. Shea, President and Principal Accounting Officer of the Company, certify, pursuant to Rules 13a-14 and 15-d14 of the Securities Exchange Act of 1934 (the "Exchange Act"), as adopted pursuant to ss.302 of the Sarbanes-Oxley Act of 2003, that:
(1) I have reviewed this Report;
(2) Based on my knowledge, this 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 Company, as of, and for, the periods presented in this Report;
(4) I and the other certifying officers of the Company 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 Company 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 Company, including any 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 Company'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 Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
(5) I and the other certifying officers have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and to the audit committee of the Company'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 Company'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 Company's internal control over financial reporting.
/s/ Preston J. Shea -------------------- Preston J. Shea President and Principal Accounting Officer November 15, 2004 |
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 filing of the Annual Report on Form 10-KSB for the year ended June 30, 2004, (the "Report") by Dimensional Visions, Inc., each of the undersigned hereby certifies that:
1. The Report complies in all material respects with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Registrant.
Dated: November 15, 2004
/s/ Preston J. Shea
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Name: Preston J. Shea
Title: President
/s/ Preston J. Shea
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Name: Preston J. Shea
Title: Principal Accounting Officer
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