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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
 For the transition period from  to
 Commission File Number 000-29211
 DAC Technologies Group International, Inc.
  Florida
    
    65-0847852(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 12120 Colonel Glenn Road, Suite 6200 Little Rock, AR
(Address of principal executive offices)
    
    72210
(Zip Code)
 
  þ o þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
  o þ




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TABLE OF CONTENTS
 PART I FINANCIAL INFORMATION
    
    
    1ITEM 1. FINANCIAL STATEMENTS
    
    
    1PART F/S
    
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    9Background
    
    
    10Financial Condition and Results of Operations
    
    
    11Liquidity and Capital Resources
    
    
    12Trends
    
    
    12Gun Legislation
    
    
    13Critical Accounting Estimates
    
    
    14Off-Balance Sheet Arrangements
    
    
    15ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    15ITEM 4. CONTROLS AND PROCEDURES
    
    
    15ITEM 4T. CONTROLS AND PROCEDURES
    
    
    15PART II OTHER INFORMATION
    
    
    16ITEM 1. LEGAL PROCEEDINGS
    
    
    16ITEM 1A. RISK FACTORS
    
    
    16ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    16ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    16ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    16ITEM 5. OTHER INFORMATION
    
    
    16ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
    
    
    16SIGNATURES
    
    
    17EX-31.1EX-31.2EX-32.1EX-32.2




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PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 .
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DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
 Condensed Consolidated Balance Sheets
 March 31, 2009 and December 31, 2008
 March 31,
    
    
    December 31,2009
    
    
    2008(unaudited)AssetsCurrent assetsCash
    
    $
    124,313
    
    
    $
    599,103Accounts receivable, less allowance for doubtful
accounts of $20,000 in 2009 and 2008
    
    
    648,304
    
    
    
    495,718Due from factor
    
    
    1,936,295
    
    
    
    1,542,918Inventories
    
    
    3,927,528
    
    
    
    2,742,563Prepaid expenses and deferred charges
    
    
    128,607
    
    
    
    72,068Current deferred income tax benefit
    
    
    31,019
    
    
    
    31,019Total current assets
    
    
    6,796,066
    
    
    
    5,483,389Property and equipmentLeasehold improvements
    
    
    55,323
    
    
    
    55,323Furniture and fixtures
    
    
    298,821
    
    
    
    297,356Molds, dies, and artwork
    
    
    536,809
    
    
    
    536,809890,953
    
    
    
    889,488Accumulated depreciation
    
    
    (635,435
    )
    
    
    (623,477
    )Net property and equipment
    
    
    255,518
    
    
    
    266,011Other assetsPatents and trademarks, net of accumulated
amortization of $123,426 and $119,772 in 2009 and 2008
    
    
    118,854
    
    
    
    121,718Deposits
    
    
    17,351
    
    
    
    17,351Advances to employees
    
    
    32,392
    
    
    
    28,617Note receivableLong-term
    
    
    20,000
    
    
    
    20,000Related party
    
    
    72,518
    
    
    
    72,518Shareholder
    
    
    220,888
    
    
    
    170,382Total other assets
    
    
    482,003
    
    
    
    430,586Total assets
    
    $
    7,533,587
    
    
    $
    6,179,986
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DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
 Condensed Consolidated Balance Sheets
 March 31, 2009 and December 31, 2008
 March 31,
    
    
    December 31,2009
    
    
    2008(unaudited)Liabilities and Stockholders EquityCurrent liabilitiesNotes payable
    
    $
    92,475
    
    
    $
    104,609Accounts payable
    
    
    1,989,638
    
    
    
    795,136Accrued payroll tax withholdings
    
    
    26,284
    
    
    
    25,519Accrued expenses-other
    
    
    71,068
    
    
    
    92,850Income taxes payable
    
    
    126,570
    
    
    
    89,700Total current liabilities
    
    
    2,306,035
    
    
    
    1,107,814Deferred income tax liability
    
    
    66,574
    
    
    
    66,574Stockholders equityPreferred stock, $.001 par value; authorized
10,000,000 shares; none issued and outstanding
    
    
    
    
    
    
    Common stock, $.001 par value; authorized
50,000,000 shares; 6,323,364 shares issued at
March 31, 2009 and December 31, 2008; 5,793,699
and 5,882,999 shares outstanding at March 31, 2009
and December 31, 2008, respectively
    
    
    6,323
    
    
    
    6,323Additional paid-in capital
    
    
    1,963,102
    
    
    
    1,963,102Treasury stock, at cost
    
    
    (401,043
    )
    
    
    (372,124
    )Retained earnings
    
    
    3,592,596
    
    
    
    3,408,297Total stockholders equity
    
    
    5,160,978
    
    
    
    5,005,598Total liabilities and stockholders equity
    
    $
    7,533,587
    
    
    $
    6,179,986
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DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
 Condensed Consolidated Statements of Operations
 For The Three Months Ended March 31, 2009 and 2008
 2009
    
    
    2008Net sales
    
    $
    3,533,456
    
    
    $
    2,715,769Cost of sales
    
    
    2,461,760
    
    
    
    1,986,908Gross profit
    
    
    1,071,696
    
    
    
    728,861Operating expensesSelling
    
    
    445,789
    
    
    
    315,762General and administrative
    
    
    278,049
    
    
    
    281,587Total operating expenses
    
    
    723,838
    
    
    
    597,349Income from operations
    
    
    347,858
    
    
    
    131,512Other income (expense)Interest expense
    
    
    (47,053
    )
    
    
    (62,877
    )Other income
    
    
    14
    
    
    
    Total other income (expense)
    
    
    (47,039
    )
    
    
    (62,877
    )Income before income tax provision
    
    
    300,819
    
    
    
    68,635Provision for income taxes
    
    
    116,520
    
    
    
    26,661Net income
    
    $
    184,299
    
    
    $
    41,974Basic and diluted earnings per share
    
    $
    0.03
    
    
    $
    0.01Weighted average number of common shares:Basic and diluted
    
    
    5,857,710
    
    
    
    6,036,168
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DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
 Condensed Consolidated Statements of Cash Flows
 For the Three Months Ended March 31, 2009 and 2008
 2009
    
    
    2008Cash flows from operating activitiesNet income
    
    $
    184,299
    
    
    $
    41,974Adjustments to reconcile net income to
net cash used in operating activities:Depreciation
    
    
    11,958
    
    
    
    12,171Amortization
    
    
    3,654
    
    
    
    3,867Changes in operating assets and liabilitiesAccounts receivable
    
    
    (152,586
    )
    
    
    (288,691
    )Due from factor
    
    
    (393,377
    )
    
    
    426,532Inventories
    
    
    (1,184,965
    )
    
    
    (52,454
    )Prepaid expenses and deferred charges
    
    
    (56,539
    )
    
    
    (65,463
    )Income taxes receivable
    
    
    
    
    
    
    26,661Advances to employees
    
    
    (3,775
    )
    
    
    (559
    )Accounts payable
    
    
    1,194,502
    
    
    
    (389,470
    )Accrued payroll tax withholdings
    
    
    765
    
    
    
    179Accrued expenses other
    
    
    (21,782
    )
    
    
    (4,075
    )Income taxes payable
    
    
    36,870
    
    
    
    Net cash used in operating activities
    
    
    (380,976
    )
    
    
    (289,328
    )Cash flows from investing activitiesPurchases of property and equipment
    
    
    (1,465
    )
    
    
    (15,264
    )Payments for patents and trademarks
    
    
    (790
    )
    
    
    Net payments (advances) on notes receivable  stockholder
    
    
    (50,506
    )
    
    
    9,202Net cash used by investing activities
    
    
    (52,761
    )
    
    
    (6,062
    )Cash flows from financing activitiesPayments on notes payable
    
    
    (12,134
    )
    
    
    (35,660
    )Purchase of treasury stock
    
    
    (28,919
    )
    
    
    (6,800
    )Net cash used in financing activities
    
    
    (41,053
    )
    
    
    (42,460
    )Net decrease in cash
    
    
    (474,790
    )
    
    
    (337,850
    )Cash  beginning of period
    
    
    599,103
    
    
    
    402,468Cash  end of period
    
    $
    124,313
    
    
    $
    64,618
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PART F/S
DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
SELECTED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Forward-Looking Statements
  Nature of Business
    Organization and Summary of Significant Accounting Policies
 Organization and basis of presentation
  6




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Unaudited interim condensed consolidated financial statements
 .
 Use of Estimates
  Inventories
  Mar. 31, 2009
    
    
    Dec. 31, 2008Inventories consist of:Finished goods
    
    $
    2,562,878
    
    
    $
    2,314,319Inventory in transit
    
    
    1,337,638
    
    
    
    415,102Parts
    
    
    27,012
    
    
    
    13,142$
    3,927,528
    
    
    $
    2,742,563
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Due from Factor
  Mar. 31, 2009
    
    
    Dec. 31, 2008Accounts receivable factored
    
    $
    2,567,353
    
    
    $
    4,724,918Amounts advanced and outstanding
    
    
    631,058
    
    
    
    3,182,000Due from factor
    
    $
    1,936,295
    
    
    $
    1,542,918
 Earnings per Share: Dilutive Effect
  Fair Value of Financial Instruments
  Accounting Changes
  8




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Treasury Stock Transactions
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  9




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
    
    achieving planned revenue and profit growth in each of the Companys business units;
    
    renewal of purchase orders consistent with past experience;
    
    increasing price, products and services competition;
    
    emergence of new competitors or consolidation of existing competitors;
    
    the timing of orders and shipments;
    
    continuing availability of appropriate raw materials and manufacturing relationships;
    
    maintaining and improving current product mix;
    
    changes in customer requirements and in the volume of sales to principal customers;
    
    changes in governmental regulations in the various geographical regions where the
Company operates;
    
    general economic and political conditions;
    
    attracting and retaining qualified key employees;
    
    the ability of the Company to control manufacturing and operating costs; and
    
    continued availability of financing, and financial resources on the terms required to
support the Companys future business strategies.
  
   10




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Gun Maintenance.
 Hunting and camping.
 Gun Safety.
 Household Products.
  
 Financial Condition
   Results of Operations
  11




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12




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District of Columbia vs. Heller
  Federal Assault Weapons Ban liability Vitter Amendment
 13




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Long-lived Assets
  Inventories.
 Patents and Trademarks.
 14




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
   
 Item 4T. CONTROLS AND PROCEDURES
  15




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PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
  Exhibits2
    
    Acquisition Agreement3(i)
    
    Articles of Incorporation3(ii)
    
    By-laws
  Exhibits31.1
    
    Certification of David A. Collins Pursuant to Rule 13a-14(a)/15d-14(a)31.2
    
    Certification of Robert C. Goodwin Pursuant to Rule 13a-14(a)/15d-14(a)
 16




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32.1
    
    Certification of David A. Collins Pursuant to Rule 13a-14(b) or Rule
15d-14(c) of the Securities Exchange Act of 1934 and 18U.S.C. Section 135032.2
    
    Certification of Robert C. Goodwin Pursuant to Rule 13a-14(b) or Rule
15d-14(c) of the Securities Exchange Act of 1934 and 18U.S.C. Section 1350
 
 SIGNATURES
       17