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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934(Fee Required)
For The Fiscal Year Commission File #2-80891-NY
Ended June 30, 1996
MODERN TECHNOLOGY CORP.
(Exact Name of Registrant as Specified in its Charter)
Nevada 11-2620387
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
461 Beach 124 Street. P.O.B. 940007. Belle Harbor, New York 11694
(Address of Principal Executive Office) (Zip Code)
(718)474-6568
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding twelve
months and (2) has been subject to such filing requirements for the
past ninety days.
Yes \X\ No \ \
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding twelve
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. \X\Yes \ \No
As of September 18, 1996, there was no aggregate market value of
the voting stock held by non-affiliates of the Registrant due to
the fact that there was no trading market in the shares of the
Registrant.
The Number of Shares Outstanding of Common Stock $.0001 par value
at June 30, 1996 was 20,150,000.
Documents Incorporated by Reference: None.
PART 1
1. Business
The Registrant is engaged in aiding prospective clients in
obtaining financing and in providing managerial services to client
companies. During the year ended June 30, 1996, the Registrant was
involved in providing managerial services to Davin Enterprises Inc.
("Davin") which it also had aided in obtaining financing. The
Registrant received managerial fees of $9,600 from Davin during the
year ended June 30, 1996.
Presently, the Registrant is seeking out joint venture
candidates and companies for which it can aid in providing
financing and managerial services although no assurances can be
given that the Registrant will be successful in gaining new clients
in the near future.
During the year ended June 30, 1996, the Registrant purchased
25,000 shares of Delta Three Inc. for $25,000-. Delta Three Inc.
is a telecommunications provider, using Internet technology for
voice transmission.
During the fiscal year ended June 30, 1996, the Registrant had
a net loss of $3,720. Its revenue for the year ended June 30, 1996
was derived from management income amounting to $9,600 and interest
income of $30,849. Total revenues for the year ended June 30, 1996
amounted to $40,449.
Item 2. Properties.
As of June 30, 1996, the Registrant owned no property. The
Registrant has its offices in the home of its officers, using
approximately 200 square feet for which it pays no rent.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholders Matters.
During the past three fiscal years there was no market for the
shares of the Registrant.
On September 12, 1996, there was no market for the shares of
the Registrant.
Number of Shareholders - 374 shareholders of record as of 9/12/96.
Dividends - None paid.
Item 6. Selected Financial Data
for the Year ended June 30,
1996 1995 1994 1993 1992
Total Revenues $40,449 $40,708 $31,278 $36,803 $398,900
Operating Income
(Loss) 6,777 (14,375) (10,694) (2,255) 338,091
Net Income (Loss) (3,720) (14,375) (10,694) (2,255) 224,095
Net Income (Loss)
per share NIL NIL NIL NIL .0111
Total Assets 718,443 721,014 735,389 747,283 862,558
Long Term Debt -0- -0- -0- -0- -0-
Dividends -0- -0- -0- -0- -0-
Item 7. Management's Discussion and Analysis of Results of
Operations.
The Registrant had a net loss of $3,720 for the year ended
June 30, 1996. The net loss for the year ended June 30, 1995
amounted to $14,375.
Fiscal year 1996 revenues and income was mainly influenced by
interest income and management income. During fiscal year 1996,
the revenues amounted to $40,449 as compared with fiscal year 1995
revenues of $40,708. Operating expenses declined in fiscal year
1996 as compared with the comparative fiscal year 1995 figure. The
net loss for fiscal year 1996 was principally due to a loss
experienced by an affiliated company, Soft Sail Wind Power Inc.
(accounted for by the Registrant under the equity method); the
Registrant's share of the loss for fiscal year 1996 amounted to
$9,486.
The Registrant has been receiving a monthly management fee of
$800 from Davin for the fiscal year ended June 30, 1996. The
Registrant provides administrative, clerical, bookkeeping and other
services to Davin. At June 30, 1996, the Registrant owned 501,000
restricted shares of Davin, at a cost of $7,950, representing 25.8%
of the outstanding shares of Davin.
On July 27, 1994, the Registrant signed an agreement to invest
$40,000 for a 40% ownership interest in a company entitled Soft
Sail Wind Power Inc. The purpose of Soft Sail Wind Power Inc. will
be to exploit and commercialize wind power. During fiscal year
1996, the Registrant loaned Soft Sail Wind Power Inc. an additional
$11,400 and received additional shares. The Registrant presently
owns a 36% ownership interest in Soft Sail Wind Power Inc.
During fiscal year 1995, the Registrant purchased an
investment in TTR Inc., amounting to a 10% promissory note in the
amount of $25,000 with warrants for 4,000 shares exercisable at
$.01 per share at the time of a TTR initial public offering. TTR
Inc. was incorporated for the purpose of designing, developing and
marketing computer software products. Recently, TTR Inc. filed an
inital public offering of 1,275,000 shares at $6 each. No
assurance can be given that the public offering of shares will be
successfully completed.
During the year ended June 30, 1996 the Registrant purchased
25,000 shares of Delta Three Inc. for $25,000-. Delta Three Inc.
is a telecommunications provider using Internet technology for
voice transmission.
At June 30, 1996 the Registrant's total assets amounted to
$718,443 as compared with $721,014 for total assets at June 30,
1995. At June 30, 1996, stockholders' equity amounted to $716,094,
as compared with $719,814 at June 30, 1995.
Item 8. Financial Statements.
Attached.
Item 9. Changes In and Disagreement With Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers.
The executive officers and directors of the Registrant are as
follows:
Name Age Title Term Expires
Arthur Seidenfeld 45 President and Director Next Annual Meeting
Anne Seidenfeld 83 Treasurer, Secretary Next Annual Meeting
and Director
Gerald Kaufman 55 Director Next Annual Meeting
Each of the above named individuals has served the Registrant
in the capacity indicated since its formation on July 27, 1982 with
the exception of Anne Seidenfeld who became a director of the
Registrant on March 31, 1989 and treasurer on December 17, 1989 and
Gerald Kaufman who became a director in 1990.
Arthur Seidenfeld, has been president and a director of the
Registrant since its formation. Mr. Seidenfeld was awarded a B.S.
Degree in Accounting from New York University in 1972 and a M.B.A.
Degree in Finance in 1978 from Pace University.
He is also president and director of Daine Industries, Inc.,
a publicly traded company which through its wholly owned
subsidiary, Lite King Corp, is engaged in the manufacture of wiring
devices. He is also president and director of Davin Enterprises,
Inc., a publicly traded company that went public in Sept. 1987,
which is seeking out appropriate business opportunities and which
also has an equity position in Target Vision, Inc., a privately
owned company in the computerized communication field. From July
1994, he is also treasurer-secretary of Soft Sail Wind Power Inc.,
a newly established company engaged in wind energy research and
development activities.
Anne Seidenfeld, Treasurer, Secretary and Director, received
her diploma from Washington Irving High School, New York City, in
1931. Mrs. Seidenfeld is the Treasurer, Secretary and Director of
Daine Industries, Inc. and Davin Enterprises, Inc.
Gerald Kaufman, Director, has been a practicing attorney for
over twenty five years. He has served as a director of the
Registrant, along with being a director of Daine Industries Inc.
and Davin Enterprises, Inc. since November 1990. He has also been
a director of American Mayflower Life Insurance Co. since 1973.
Arthur Seidenfeld is the son of Anne Seidenfeld.
Item 11. Management-Remuneration and Transactions.
During the fiscal year ended June 30, 1996, management
salaries were as follows:
Anne Seidenfeld - Treasurer-Secretary $7,200
The Company's president, Arthur Seidenfeld, did not receive a
salaryfor the year ended June 30, 1996. Anne Seidenfeld, the
Company's treasurer and secretary, pursuant to an oral agreement
with the Company earned $7,200 as an annual salary effective
through June 30, 1996.
PART IV
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
a. The following are known to Registrant to be beneficial
owners of 5% or more of the Registrant's common stock.
Title of Class
Common Stock
Name of Beneficial Owner Amount & Nature of Percentage
Beneficial Ownership of Class
Arthur Seidenfeld
461 Beach 124 Street
Belle Harbor, New York 9,654,820 47.9%
Anne Seidenfeld
461 Beach 124 Street
Belle Harbor, New York 2,426,500 12.0%
All Officers and
Directors as a Group (3) 12,081,320 59.9%
b. The shares owned by management are as follows:
Common Stock.
Name of Beneficial Owner Amount & Nature of Percentage
Beneficial Ownership of Class
Arthur Seidenfeld 9,654,820 47.9%
Anne Seidenfeld 2,426,500 12.0%
Item 13. Certain Relationships and Related Transactions:
For the year ended June 30, 1996, the Registrant received
management fees from Davin Enterprises, Inc. amounting to $9,600.
Arthur Seidenfeld, President and a director of the Registrant owns
29.4% of the outstanding shares of Davin Enterprises, Inc. Anne
Seidenfeld, Treasurer-Secretary and a director of the Registrant
owns 0.2% of the outstanding shares of Davin Enterprises, Inc.
MODERN TECHNOLOGY CORP.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
FILED WITH THE ANNUAL REPORT OF THE COMPANY
ON FORM 10-K
ITEM 14- EXHIBITS
Financial Statements and Schedules and Reports on Form 8-K.
ACCOUNTANT'S REPORT
BALANCE SHEET AS OF JUNE 30, 1995 and JUNE 30, 1996
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD JULY 1, 1993 TO
JUNE 30, 1996
STATEMENT OF OPERATINS FOR THE YEARS ENDED JUNE 30, 1994, 1995, and
1996
STATEMENT OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 1994, 1995 and
1996
NOTES TO FINANCIAL STATEMENTS
SCHEDULES
I SUPPLEMENTARY PROFIT AND LOSS INFORMATION
MODERN TECHNNOLOGY CORP.
FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
I N D E X
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
BALANCE SHEETS 2
STATEMENT OF STOCKHOLDERS' EQUITY 3
STATEMENTS OF OPERATIONS 4
STATEMENTS OF CASH FLOWS 5
NOTES TO THE FINANCIAL STATEMENTS 6-8
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
MODERN TECHNOLOGY CORP.
Belle Harbor, New York 11694
We have audited the accompanying balance sheets of MODERN
TECHNOLOGY CORP. as at June 30, 1996 and 1995 and the related
statements of operations and stockholders' equity and cash flows
for each of the three years in the period ended June 30, 1996.
These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based upon our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statements presentation. We believe that our audits
provides a reasonable basis for our opinion.
In our opinion, the financial statements enumerated above present
fairly, in all material respects, the financial position of MODERN
TECHNOLOGY CORP. at June 30, 1996 and 1995, and the results of its
operations and cash flows for the three years in the period ended
June 30, 1996, in conformity with generally accepted accounting
principles.
GREENBERG & COMPANY LLC
Springfield, New Jersey
September 12, 1996
Page 1 of 8
MODERN TECHNOLOGY CORP.
BALANCE SHEETS
June 30,
1996 1995
A S S E T S
CURRENT ASSETS
Cash and Cash Equivalents $616,268 $645,753
EQUIPMENT - At Cost 9,939 9,939
Less: Accumulated Depreciation 9,939 9,939
-0- -0-
INVESTMENTS
Investments, At Cost (Note 2) 74,770 49,770
Investments, At Equity (Note 3) 16,005 25,491
Loan Receivable - Affiliate 11,400 -0-
Total Investments 102,175 75,261
TOTAL ASSETS $718,443 $721,014
L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y
CURRENT LIABILITIES
Accrued Expenses and Taxes $ 2,349 $ 1,200
STOCKHOLDERS' EQUITY
Common Stock Par Value $.0001
Authorized; 150,000,000 Shares
Issued and Outstanding: 20,150,000
Shares 2,015 2,015
Paid-In Capital in Excess of Par 495,161 495,161
Retained Earnings 218,918 222,638
Total Stockholders' Equity 716,094 719,814
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $718,443 $721,014
The accompanying notes are an integral part of these financial statements.
Page 2 of 8
MODERN TECHNOLOGY CORP.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD JULY 1, 1993 TO JUNE 30, 1996
Total
Par Retained Stock-
# of Value Paid-In Earnings holders'
Shares $.0001 Capital (Deficit) Equity
BALANCES AT
JULY 1, 1993 20,150,000 $2,015 $495,161 $247,707 $744,883
(Loss) for
the Year Ended
June 30, 1994 (10,694) (10,694)
BALANCES AT
JUNE 30, 1994 20,150,000 2,015 495,161 237,013 734,189
(Loss) for
the Year Ended
June 30, 1995 (14,375) (14,375)
BALANCES AT
JUNE 30, 1995 20,150,000 2,015 495,161 222,638 719,814
(Loss) for
the Year Ended
June 30, 1996 (3,720) ( 3,720)
BALANCES AT
JUNE 30, 1996 20,150,000 2,015 495,161 218,918 716,094
The accompanying notes are an integral part of these financial statements.
Page 3 of 8
MODERN TECHNOLOGY CORP.
STATEMENTS OF OPERATIONS
For The Years Ended June 30,
1996 1995 1994
REVENUES
Interest Income $ 30,849 $ 31,108 $ 21,678
Management Income 9,600 9,600 9,600
40,449 40,708 31,278
EXPENSES
Officers' Salaries 7,200 8,200 10,200
General and Administrative
Expenses 26,472 31,925 31,772
33,672 40,125 41,972
INCOME (LOSS) BEFORE OTHER
EXPENSES & TAXES 6,777 583 (10,694)
OTHER EXPENSES & TAXES
Equity in (Loss) of
Affiliated Company (9,486) (14,958) -0-
Income Tax Expense (Note 4) (1,011) -0- -0-
NET INCOME (LOSS) $(3,720) $(14,375) $(10,694)
INCOME(LOSS) PER SHARE NIL NIL NIL
NUMBER OF WEIGHTED AVERAGE
SHARES OUTSTANDING 20,150,000 20,150,000 20,150,000
The accompanying notes are an integral part of these financial statements.
Page 4 of 8
MODERN TECHNOLOGY CORP.
STATEMENTS OF CASH FLOWS
For The Years Ended June 30,
1996 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (3,720) $(14,375) $(10,694)
Adjustments to Reconcile Net Income
to Net Cash Provided By (Used In)
Operating Activities:
Changes in Assets and Liabilities:
Decrease (Increase) Interest
Receivable -0- -0- -0-
Increase (Decrease) Accrued
Expenses 1,149 -0- (1,200)
Net Cash Provided By (Used In)
Operating Activities (2,571) (14,375) (11,894)
CASH FLOWS FROM INVESTING ACTIVITIES:
Write Down of Investments 9,486 14,958 -0-
Purchase of Securities (25,000) (65,449) -0-
Loan - Affiliate (11,400) -0- -0-
Net Cash (Used In) Provided By
Investing Activities (26,914) (50,491) -0-
Net Increase (Decrease) in Cash
and Cash Equivalents (29,485) (64,866) (11,894)
Cash and Cash Equivalents,
Beginning of Year 645,753 710,619 722,513
CASH AND CASH EQUIVALENTS,
END OF YEAR $616,268 $645,753 $710,619
Supplemental Disclosures Of Cash Flow Information
Cash Paid During The Period For:
Taxes $ -0- $ -0- $ -0-
Interest -0- -0- -0-
The accompanying notes are an integral part of these financial statements.
Page 5 of 8
MODERN TECHNOLOGY CORP.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996, 1995, 1994
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING POLICIES
Modern Technology Corp.'s accounting policies conform to
generally accepted accounting principles. Significant
policies followed are described below.
PRINCIPLES OF CONSOLIDATION
The Company has an investment in an affiliate, Soft Sail
Wind Power Inc., which is accounted for on the equity
method. The equity method of accounting is used when the
company has a 20% to 50% interest in other companies.
Under the equity method, original investments are
recorded at cost and adjusted by the company's share of
undistributed earnings or losses of these companies.
CASH AND CASH EQUIVALENTS
Cash equivalents consist of highly liquid, short-term
investments with maturities of 90 days or less.
NOTE 2: INVESTMENT IN EQUITY SECURITIES (AT COST)
Investments in Equity Securities consist of the
following:
June 30,
1996 1995
Investment in 25,000 shares
of Delta Three, Inc. $25,000 $ -0-
Investment in TTR Inc.
10% promissory note 25,000 25,000
Investment in 72 million
restricted shares in
Daine Industries, Inc. 15,900 15,900
Investment in 501,000
restricted shares in
Davin Enterprises, Inc. 7,950 7,950
Investments in other
restricted securities 920 920
$74,770 $49,770
Page 6 of 8
MODERN TECHNOLOGY CORP.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996, 1995, 1994(Continued)
The Company purchased 72 million shares of Daine
Industries, Inc. stock at a cost of $15,900. This
represents 29% of the total outstanding shares of common
stock.
The Company purchased 501,000 shares of Davin
Enterprises, Inc. at a cost of $7,950. This represents
25.8% of the total outstanding shares of common stock.
The Company purchased an investment in TTR Inc., a 10%
promissory note in the amount of $25,000 with warrants
for 4,000 shares exercisable at $.01 at the time of a TTR
initial public offering. TTR Inc. incorporated for the
purpose of designing, developing, and marketing computer
software products.
The Company purchased 25,000 shares of Delta Three, Inc.
for $25,000. Delta Three, Inc. is a telecommunications
provider using Internet technology for voice
transmission.
NOTE 3: INVESTMENT IN AFFILIATE
Investment in Soft Sail Wind Power, Inc. (representing
approximately 36% of the outstanding common stock)
The summarized unaudited financial information below
represents the Company's nonsubsidiary affiliate:
Balance Sheet Data at June 30, 1996
Total Assets $ 12,656
Total Liabilities 11,400
Net Assets 1,256
Company's Equity in Net Assets 452
Earnings Data
Net Earnings (Loss) (26,350)
Company's Equity in Net
Earnings (Loss) (9,486)
NOTE 4: INCOME TAXES
The Company has accrued taxes on an income tax basis in
prior periods in accordance with APB opinion No. 11.
Effective 1993 the company has adopted FAS 109 for
reporting income taxes. This did not result in any
material changes from prior periods.
Page 7 of 8
MODERN TECHNOLOGY CORP.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1996, 1995, 1994
(Continued)
There were no differences between book and tax income.
Income taxes are accrued at statutory income tax rates.
6/30/96 6/30/95 6/30/94
Current tax expense:
Federal income tax $ 427 $ -0- $ -0-
State & city income tax 584 -0- -0-
Income Tax Expense $ 1,011 $ -0- $ -0-
NOTE 5: POSTRETIREMENT BENEFITS
The company does not maintain any employee benefits
currently. The company does not maintain a plan for any
postretirement employee benefits, therefore, no provision
was made under FAS's 106 and 112.
NOTE 6: RELATED PARTY TRANSACTIONS
Davin Enterprises, Inc. (Davin) entered into an oral
agreement with Modern Technology Corp. providing for the
partial use of office space for Davin on a month to month
basis. The company does not pay rent but pays a fee to
Modern Technology Corp. for services. There were no
outstanding balances between any companies.
Arthur Seidenfeld, President and a director of the
Company, owns 14.5% of the outstanding shares of Daine
Industries, Inc. and 29.4% of the outstanding shares of
Davin Enterprises, Inc. Anne Seidenfeld, Treasurer,
Secretary and a director of the Company, owns 12% of the
outstanding shares of Modern Technology Corp. Anne
Seidenfeld is Arthur Seidenfeld's mother.
Page 8 of 8
Our examination was made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The information
contained in the following Schedules is presented for purposes of
additional analysis and is not a required part of the basic
financial statements, but is supplementary information required by
the Securities and Exchange Commission. Such information has been
subjected to the auditing procedures applied in the examination of
the basic financial statements and, in our opinion, is fairly
stated in all material respects the financial data required to be
set forth therein in relation to the basic financial statements
taken as a whole.
GREENBERG & COMPANY LLC
Springfield, New Jersey
September 12, 1996
SCHEDULE I
MODERN TECHNOLOGY CORP.
SUPPLEMENTAL PROFIT AND LOSS INFORMATION
For the Year Ended June 30, 1996
Column A Column B
Item Charged to costs and
expenses for the period
Legal expenses $8,400
Advertising and publicity -0-
Sales promotion -0-
Payments directly and indirectly to trade associations
and service organizations, and contributions to other
organizations -0-
Total $8,400
Other schedules not submitted are omitted, because the informatin is included
elsewhere in the financial statements or the notes thereto, or the conditions
requiring the filing of these shcedules are not applicable.
Supplemental information to be furnished with reports filed pursuant to Section
15(d) of the Securities Act of 1934 by Registrant which have not registered
securities pursuant to Section 12 of the Securities Act of 1934.
a) No annual report or proxy material has been sent to security holders. When
such report or proxy materials are furnished to securities holders subsequent to
the filing of this report, copies shall be furnished to the Commission when sent
to securities holders.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
MODERN TECHNOLOGY CORP.
By Arthur J. Seidenfeld
President, Principal Executive Officer
and Principal Financial Officer
Dated: September 18, 1996
Pursuant to the requirements of the Securities 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.
Name Title Date
Arthur Seidenfeld President and Director September 18, 1996
Anne Seidenfeld Treasurer, Secretary September 18, 1996
and Director
Gerald Kaufman Director September 18, 1996