Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-26886
INTERNET HOLDINGS, INC.
(formerly China Biomedical Group, Inc.)
(Exact name of Registrant as specified in its charter)
State of Utah 13-3758042
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
c/o The Law Office of Steven A. Sanders, P.C.
50 Broad Street, Suite 437
New York, New York 10004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 681 8400
--------------------
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 Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes.....X..... No..........
1
<PAGE>
PART I
Item 1. Financial Statements
Attached.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Sources of Capital
As of June 30, 1996 the Registrant had current assets of $0.00 as compared to
$89,243 as of March 31, 1996 and $70,558 as of December 31 1995. The registrant
had total assets of $3,000,000 as of June 30, 1996. To provide funds for future
development the company intends to do a small private placement once the company
considers market conditions to be favourable.
Results of Operations
It was stated in the 10-Q for the period ended March 31 1996 that the Registrant
had entered into a contract to dispose of its wholly owned subsidiary C.B.
Marketing & Investment Ltd. This was in order to avoid substantial liabilities
which would otherwise have been incurred by the Registrant.
This disposal was approved at a special meeting of shareholders on April 22,
1996.
On June 30, 1996, the Company acquired a license from Interactive Media Europe
Ltd to exploit certain of that companies Internet related technologies. This
license was acquired by the Company in exchange for 3,000,000 shares of its
authorized but unissued shares of common stock.
Currently the Company is pursuing a policy of investing in research and
development to exploit the licences which it has acquired. It does not expect to
realize significant revenues in the immediate future from these activities.
2
<PAGE>
PART II
Item 1. Legal Proceedings
Neither the Registrant not its subsidiaries were subject to any legal
proceedings during the reporting period.
Item 2 Change in Securities.
Not Applicable
Item 3 Defaults Upon Senior Securities
Not Applicable
Item 4 Submission of matters to a Vote of Security Holders
At a special meeting of shareholders on April 22, 1996 the Company approved a
Divestiture Agreement to dispose of its interest in C.B. Marketing & Investment
Ltd. A total of 738,859 shares were voted in favour of the divestiture. No
shares were voted against and 373,210 abstained.
Item 5 Other Information
On June 30, 1996, the Company acquired a license from Interactive Media Europe
Ltd to exploit certain of that companies Internet related technologies. This
license was acquired by the Company in exchange for 3,000,000 shares of its
authorized but unissued shares of common stock.
The Company's business direction was changed in connection with the acquisition
of the above license from Interactive Media Europe Ltd. Additionally, effective
June 30, 1996, the Company's name was changed from China Biomedical Group, Inc.
to Internet Holdings, Inc.
Item 6 Exhibits and Reports on Form 8-K
(A) Exhibits
1. Certificate of change of name
3
<PAGE>
(B) Reports on Form 8-K
None filed this quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
Dated this 14 day of August, 1996
Internet Holdings, Inc.
(the Registrant)
By: /s/ Richard O'Dell Poulden
_____________________________
President
4
<PAGE>
[SEAL] State of Utah
DEPARTMENT OF COMMERCE
Division of Corporation & Commercial Code
150 East 300 South, Second Floor
P.O. Box 45801
Salt Lake City, Utah 84145-0801
Greetings:
The Division of Corporations and Commercial Code has received notice of
the resignation of your registered agent. A copy of the resignation notice is
enclosed for your records. The effective date of the resignation is 30 days
after the "date received" stamp indicated on the document.
Each business organization is required by law to continuously maintain
a registered agent in Utah. Please appoint a new registered agent and submit the
completed form below to our offices within 30 days. A corporation, limited
partnership, limited liability company or dba is subject to suspension,
revocation or cancellation if it does not file a replacement registered agent.
You may designate your new registered agent on this form and return it
to the Division offices. If you have any questions please call (801)530-4849.
Filed in the Division of
Corporations & Commercial Code
of the Utah Dept. of Commerce Sincerely,
Date: 7/11/96 Korla T. Woods, Director
By: (Sig. appears here) Division of Corporations
Customer Service Agent and Commercial Code
- --------------------------------------------------------------------------------
Name of Business Organization: INTERNET HOLDINGS LTD. fka CHINA BIOMEDICAL
GROUP, INC. File #: 073631
Type of Business Organization (Circle One): [Corporation], Limited Partnership,
Limited Liability Partnership, Limited Liability Company, or DBA.
Old Registered Agent: ROBERT K. IPSON
Registered Address: 1873 CARRIGAN CIRCLE SALT LAKE CITY, UTAH 84109
New Registered Agent: ROBERT TEW
New Registered Office Street Address: 2014 EAST RIDGEHILL, BOUNTIFUL,
UTAH 84010
The above changes were authorized by resolution of the governing board as
required of our business organization by state law. Under penalties of perjury,
we declare that this information is to the best of our knowledge and belief,
true, correct and complete.
/s/ Robert Tew /s/ Richard O'Dell Poulden
- ------------------------------ -------------------------------
Robert Tew Richard O'Dell Poulden
Signature of NEW Registered Agent Signature of authorized
Corporations Officer, General
Partner or Member or Applicant
<PAGE>
State of Utah
Department of Commerce
Division of Corporations and Commercial Code
I Hereby certify that the foregoing has been filed
and approved on the 11 day of July 96
In the office of this Division and hereby issue
this Certificate thereof.
Examiner (Sig. appears here) Date: 7/12/96
/s/ Korla T. Woods
- -----------------------------
Korla T. Woods
Division Director
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
CHINA BIOMEDICAL GROUP, INC.
Pursuant to the provision of Section 16-10a-1006 of the Utah Revised
Business Corporation Act, China Biomedical Group, Inc. hereby adopts the
following amendment to its Articles of Incorporation.
AMENDMENT
Effective June 30, 1996, Article I of the Company's Article of
Incorporation is amended to read as follows:
Article I - Corporate Name. The name of the Corporation is INTERNET
HOLDINGS, INC. (rp)
ADOPTION OF AMENDMENT
The above amendment to the Articles of Incorporation of China
Biomedical Group, Inc., was duly adopted by the shareholders of the corporation
on June 15, 1996 pursuant to the requirements of the Utah Revised Business
Corporation Act, as follows:
Voting Number of Undisputed No. of Votes
Group Shares Votes Represented
Designation Outstanding Allowed by written consent
Common Stock 572,069 572,069 438,750
The shareholders voted pursuant to written consent as follows follows on such
Amendment:
Voting Group Votes For Votes Against
Designation Amendment Amendment
Common Stock 438,750 0
The number of shares cast for the amendment by the sole voting group
was sufficient for approval of the amendment by the voting group.
1
<PAGE>
EFFECTIVE DATE OF THIS AMENDMENT
Pursuant to the provisions of Section 16-10a-123(2), this amendment
shall be effective at the beginning of business on June 30, 1996.
IN WITNESS WHEREOF, the undersigned president and secretary, having
been thereunto duly authorized, have executed the foregoing Articles of
Amendment for the corporation this 15th day of June, 1996.
By /s/ Richard O'Dell Poulden
-------------------------
Richard O'Dell Poulden,
President
Attest:
/s/ Lewis M. Klee
- ----------------------------------
Lewis M. Klee, Assistant Secretary
<PAGE>
INTERNET HOLDINGS, INC.
(FORMERLY CHINA BIOMEDICAL GROUP, INC.)
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------------- -----------------
ASSETS (Unaudited) (Note 1)
<S> <C> <C>
CURRENT ASSETS:
Cash $ - $ 1,489
Net assets of discontinued operations - 8,842,881
----------------- -----------------
Total current assets - 8,844,370
----------------- -----------------
INTANGIBLE ASSETS 3,000,000 -
----------------- -----------------
$ 3,000,000 $ 8,844,370
================= =================
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable $ - $ 70,000
Accrued expenses 82,316 75,145
----------------- -----------------
Total current liabilities 82,316 145,145
----------------- -----------------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value, 50,000,000 shares
authorized, 4,688,069 and 1,112,069 shares issued and
outstanding, respectively 4,688 1,112
Additional paid-in capital 7,906,386 13,292,503
Accumulated deficit (4,993,390) (4,594,390)
----------------- -----------------
Total stockholders' equity 2,917,684 8,699,225
----------------- -----------------
$ 3,000,000 $ 8,844,370
================= =================
</TABLE>
See notes to financial statements.
F-1
<PAGE>
INTERNET HOLDINGS, INC.
(FORMERLY CHINA BIOMEDICAL GROUP, INC.)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
------------- ------------ ---------------- ----------------
<S> <C> <C> <C> <C>
NET SALES AND REVENUES $ -- $ -- $ -- $ --
SELLING, OPERATING AND ADMINISTRATIVE
EXPENSES 153,710 -- 153,710 --
----------- ----------- ---------------- ----------------
Loss from continuing operations (153,710) -- (153,710) --
LOSS FROM OPERATIONS OF DISCONTINUED
SUBSIDIARY -- (460,613) (245,290) (1,056,938)
----------- ----------- ---------------- ----------------
Net loss $ (153,710) $ (460,613) $ (399,000) $ (1,056,938)
=========== =========== ================ ================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 825,034 881,000 968,553 618,394
=========== =========== ================ ================
Loss from continuing operations per share $ (0.19 $ -- $ (0.16) $ --
=========== =========== ================ ================
Net loss per share $ (0.19) $ (0.52) $ (0.41) $ (1.71)
=========== =========== ================ ================
</TABLE>
See notes to financial statements.
F-2
<PAGE>
INTERNET HOLDINGS, INC.
(FORMERLY CHINA BIOMEDICAL GROUP, INC.)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------------------
1996 1995
------------------- -------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (399,000) $ (1,056,938)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Decrease in accounts receivable - 6,910
Decrease in accrued expenses 7,171 797
Decrease in bank overdraft - (7,707)
------------------- -------------------
Net cash used by operating activities (391,829) (1,056,938)
------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in net assets of discontinued operations 8,842,881 (8,556,247)
Increase in intangible assets (3,000,000) -
------------------- -------------------
Net cash provided (used) by investing activities 5,842,881 (8,556,247)
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in common stock and additional paid-in capital 3,533,050 9,613,185
Decrease in common stock and additional paid-in capital (8,915,591) -
Decrease in loans payable (70,000) -
------------------- -------------------
Net cash provided (used) by financing activities (5,452,541) 9,613,185
------------------- -------------------
NET INCREASE (DECREASE) IN CASH (1,489) -
CASH, BEGINNING OF PERIOD 1,489 -
------------------- -------------------
CASH, END OF PERIOD $ - $ -
=================== ===================
</TABLE>
See notes to financial statements.
F-3
<PAGE>
INTERNET HOLDINGS, INC.
(FORMERLY CHINA BIOMEDICAL GROUP, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(1) Basis of presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. The balance sheet at
December 31, 1995 has been derived from the audited financial
statements at that date. In the opinion of management, all adjustments
(consisting of normal recurring adjustments and certain adjustments
discussed in Note (2)) considered necessary for a fair presentation
have been included. Operating results for the three-month and six-month
periods ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1996. For
further information, refer to the consolidated financial statements and
footnotes thereto for the year ended December 31, 1995.
(2) Discontinued operations
On April 22, 1996, China Biomedical Group, Inc. (the "Company") entered
into an agreement to sell its wholly-owned operating subsidiary, CB
Marketing and Investment Ltd. (the "Subsidiary") to its former owners
on the basis of one share of the Subsidiary for one share of the
Company. Accordingly, the assets and liabilities of the Subsidiary as
of December 31, 1995 have been restated as net assets of discontinued
operations, and the operating results for the Subsidiary have been
reflected as loss from operations of discontinued subsidiary for all
periods presented.
(3) Intangible assets
Effective June 30, 1996, the Company issued 3 million shares of $.001
par value common stock in connection with the acquisition of certain
media related licenses which have been valued at $3,000,000.
(4) Change of name
Effective June 30, 1996, the Company changed its name to Internet
Holdings, Inc.
F-4
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,000,000
<CURRENT-LIABILITIES> 82,316
<BONDS> 0
0
0
<COMMON> 4,688
<OTHER-SE> 2,912,996
<TOTAL-LIABILITY-AND-EQUITY> 3,000,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 153,710
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (153,710)
<INCOME-TAX> 0
<INCOME-CONTINUING> (153,710)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (153,710)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> 0
</TABLE>
