Form 10-QSB
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 September 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.
(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 organisation) Identification Number)
c/o The Law Office of Lewis M. Klee
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....
<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 September 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 commence a $200,000 private
placement during the quarter commencing October 1, 1996 once the company
considers market conditions to be favourable. The Company has no present
commitments for such funding and there can be no assurance that such funding can
be raised.
Results of Operations
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
authorised but unissued shares of common stock. The issuance of the shares was
contingent upon the satisfactory completion of the Company's due diligence
process.
As a result of this due diligence process the Company has decided not to proceed
with the licence as originally formulated and thus the shares were never issued.
The Company does not expect to realise significant revenues in the immediate
future from these activities.
2
<PAGE>
PART II
Item 1. Legal Proceedings
Neither the Registrant nor 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
None
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-K
Reports on Form 8-K
None filed this quarter.
3
<PAGE>
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 authorised.
Dated this ___15th _____ day of November, 1996
Internet Holdings, Inc.
(the Registrant)
By: /s/ Christopher J. Wilkes
----------------------------
Christopher J. Wilkes
President
4
<PAGE>
INTERNET HOLDINGS, INC.
(FORMERLY CHINA BIOMEDICAL GROUP, INC.)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
----------------- -----------------
ASSETS (Unaudited) (Note 1)
<S> <C>
CURRENT ASSETS:
Cash $ - $ 1,489
Net assets of discontinued operations - 8,842,881
----------------- -----------------
$ - $ 8,844,370
================= =================
LIABILITIES AND
STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Loans payable $ - $ 70,000
Accrued expenses 100,316 75,145
----------------- -----------------
Total current liabilities 100,316 145,145
----------------- -----------------
STOCKHOLDERS' DEFICIT:
Common stock, $.001 par value, 50,000,000 shares
authorized, 1,688,069 and 1,112,069 shares issued and
outstanding, respectively 1,688 1,112
Additional paid-in capital 4,909,386 13,292,503
Accumulated deficit (5,011,390) (4,594,390)
----------------- -----------------
Total stockholders' deficit (100,316) 8,699,225
----------------- -----------------
$ - $ 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 Nine months ended
September 30, September 30,
-------------------------------------------------------------------------
1996 1995 1996 1995
----------------- ----------------- ----------------- ------------------
<S> <C>
NET SALES AND REVENUES $ - $ - $ - $ -
SELLING, OPERATING AND ADMINISTRATIVE
EXPENSES 18,000 - 171,710 -
----------------- ----------------- ----------------- ------------------
Loss from continuing operations (18,000) - (171,710) -
LOSS FROM OPERATIONS OF DISCONTINUED
SUBSIDIARY - (395,078) (245,290) (1,452,016)
----------------- ----------------- ----------------- ------------------
Net loss $ (18,000) $ (395,078) $ (417,000) $ (1,452,016)
================= ================= ================= ==================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 1,688,069 904,008 1,199,192 716,553
================= ================= ================= ==================
Loss from continuing operations per share $ (0.01) $ - $ (0.14) $ -
================= ================= ================= ==================
Net loss per share $ (0.01) $ (0.44) $ (0.35) $ (2.03)
================= ================= ================= ==================
</TABLE>
See notes to financial statements.
F-2
<PAGE>
INTERNET HOLDINGS, INC.
(FORMERLY CHINA BIOMEDICAL GROUP, INC.)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
------------------------------------------
1996 1995
------------------- --------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (417,000) $ (1,452,016)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Decrease in accounts receivable - 6,910
Increase in accrued expenses 25,171 797
Decrease in bank overdraft - (7,707)
------------------- --------------------
Net cash used by operating activities (391,829) (1,452,016)
------------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in net assets of discontinued operations 8,842,881 (8,161,169)
------------------- --------------------
Net cash provided (used) by investing activities 8,842,881 (8,161,169)
------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in common stock and additional paid-in capital 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 (8,452,541) 9,613,185
------------------- --------------------
NET 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
nine-month periods ended September 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 agreed to issue 3 million shares
of $.001 par value common stock in connection with the acquisition of
certain media related licenses which had been valued at $3,000,000. The
issue of the shares was contingent upon the satisfactory completion of
the Company's due diligence process. As a result of the due diligence
process, the Company decided not to proceed with the licenses as
originally formulated. In connection therewith, the 3 million shares of
$.001 par value common stock were returned to the Company.
(4) Change of name
Effective June 30, 1996, the Company changed its name to Internet
Holdings, Inc.
F-4
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<ARTICLE> 5
<CIK> 0001001601
<NAME> INTERNET HOLDINGS INC
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-31-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 100,316
<BONDS> 0
0
0
<COMMON> 1,688
<OTHER-SE> (102,004)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 18,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (18,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (18,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,000)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0
</TABLE>
