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, 1997
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 Company 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 Beckman Millman & Sanders, LLP
116 John Street
New York, New York 10038
(Address of principal executive offices)
Company's telephone number, including area code: (212) 406-4700
Indicate by check mark whether the Company (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 Company 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
Item1. 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 1997, the company had current assets of $323,234, as compared
to $370,745 on June 30 1997, $89,243 as of March 31, 1996 and $0.00 as of
December 31 1996. It should be noted that the major changes between the two
reporting periods are accounted for by the Company's acquisition of Chiron
Systems Ltd (CSL), which is the Company's main operating subsidiary. Prior to
this acquisition the Company had no operations.
The Company believes in the potential of CSL and has raised funds on the basis
of the potential of CSL. It should be noted that further funding will be
necessary for the Company to continue its expansion and development. 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 May 22, 1997 the Company acquired the whole of the issued capital of Chiron
Systems Ltd. (CSL), in exchange for 2,640,313 shares of the Company's common
stock. CSL is an English company, engaged in the business of designing and
developing products for the Integrated Services Digital Network (ISDN) market
place. CSL was a management buy-out from GEC-Plessey Telecommunications ("GPT")
in 1993 and had transferred to it, under the terms of that buy-out, rights to
certain technology developed by GPT which had a development cost in excess of
$6million.
The sales during the quarter were lower than the previous quarter ended June 30,
1997 partly due to manufacturing problems experienced by CSL with existing
production operations in the U.K. CSL believes that these issues have now been
resolved.
Further discussions with SCI, Venture Manufacturing and, NatSteel Electronics in
Singapore are close to providing the Company with low cost manufacturing for
CSL's products for sale in ASEAN and the rest of the world.
During the quarter CSL signed a letter of intent with Teledata Sendirian BHD., a
subsidiary of Ahli Kumpulan Sapura Holdings SDN. BHD. This provides for a joint
venture to be set up for CSL and Sapura to supply the CSL's products in Malaysia
and ASEAN. This will involve CSL supplying the technology and Sapura the finance
and manufacturing expertise to develop and build a basic ISDN telephone.
It is envisaged that a definitive agreement should be in place within the next
quarter.
2
<PAGE>
PART II
Item 1. Legal Proceedings
Neither the Company 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 6 Exhibits and Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereto duly authorised.
Dated this 12th day of November, 1997
Internet Holdings, Inc.
(The Company)
By: /s/ Christopher Wilkes
-------------------------------
Christopher J. Wilkes
President
3
<PAGE>
INTERNET HOLDINGS, INC.
BALANCE SHEET
SEPTEMBER 30, 1997
UNAUDITED
September 30, December 31,
1997 1996
(Unaudited) (Note 1)
----------- -----------
ASSETS
CURRENT ASSETS:
Cash 67 --
Accounts Receivable 170,289 --
Stock 152,877 --
----------- -----------
Total Current Assets $ 323,234 $ --
----------- -----------
FIXED ASSETS 2,283,238 --
INTANGIBLE ASSETS 757,794 --
----------- -----------
$ 3,364,265 $ --
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank Overdraft $ 174,218 --
Taxes payable 34,197 --
Accounts payable and accrued expenses 347,835 70,507
Other liabilities
----------- -----------
Total current liabilities 556,249 70,507
----------- -----------
Long term loans 354,875 --
----------- -----------
Total liabilities 911,124 70,507
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value, 50,000,000 shares
authorized, 1,697,858 and 3,160,208 shares
issued and outstanding respectively 3,160 1,698
Additional paid-in capital 5,727,382 3,151,481
Accumulated deficit (3,277,401) (3,223,686)
----------- -----------
Total stockholders' equity 2,453,141 (70,507)
----------- -----------
$ 3,364,265 $ --
=========== ===========
The accompanying notes to financial statements are an
integral part of this statement.
F-1
<PAGE>
INTERNET HOLDINGS, INC.
STATEMENTS OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended September, 30 Nine Months Ended September, 30
-------------------------------- -------------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES $ 229,109 $ -- $ 792,348 $ --
COST OF SALES 128,549 388,833
----------- ----------- ----------- -----------
Gross Profit 100,560 -- 403,514 --
SELLING, OPERATING AND ADMINSTRATIVE
EXPENSES 148,217 18,000 368,276 171,710
----------- ----------- ----------- -----------
Profit / (Loss) from operations (47,657) (18,000) 35,238 (171,710)
INTEREST CHARGES 22,266 -- 53,380 --
DEPRECIATION 7,377 35,573
----------- ----------- ----------- -----------
Profit / (Loss) before provision for income taxes (77,300) (18,000) (53,715) (171,710)
PROVISION FOR INCOME TAXES -- -- -- --
----------- ----------- ----------- -----------
Net Profit / (Loss) $ (77,300) $ (18,000) $ (53,715) $ (171,710)
=========== =========== =========== ===========
Profit / (Loss) per share $ (0.02) $ (0.01) $ (0.02) $ (0.14)
----------- ----------- ----------- -----------
Weighted average number of common
shares outstanding 3,160,208 1,688,069 3,160,208 1,199,192
=========== =========== =========== ===========
</TABLE>
The accompanying notes to financial statements are
an integral part of these statements.
F-2
<PAGE>
INTERNET HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Proft / (Loss) $ (53,715) $ (417,000)
Adjustments to reconcile net profit to net cash
used by continuing operations:
Depreciation and amortization 35,573 --
(Increase)/Decrease in stock (152,877) --
(Increase)/Decrease in accounts receivable (170,289) --
Increase/(Decrease) in accounts payable
and accrued expenses 277,328 25,171
Increase/(Decrease) in payroll and sales taxes payable 34,197 --
Increase (Decrease) in bank overdraft 174,218 --
----------- -----------
Net cash Generated/(Used) by operating activities 144,434 (391,829)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in assets (3,041,032) 8,842,881
----------- -----------
Net cash provided (used) by investing activities (3,041,032) 8,842,881
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 1,462 533,050
Increase in loans payable 354,875 (70,000)
Increase in additional paid-in capital 2,491,229 (8,915,591)
----------- -----------
Net cash provided by financing activities 2,847,566 (8,452,541)
----------- -----------
NET INCREASE (DECREASE) IN CASH (49,032) (1,489)
CASH, BEGINNING OF PERIOD -- 1,489
----------- -----------
CASH, END OF PERIOD $ 67 $ --
=========== ===========
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
F-3
<PAGE>
INTERNET HOLDINGS, 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 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, 1996 has been derived from audited financial statements at
that date. In the opinion of management all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the nine month period ended September 30, 1997
are not necessarily indicative of the results which may be expected for the year
ended December 31, 1997. For further information refer to the financial
statements and footnotes thereto for the year ended December 31, 1996.
F-4
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 67
<SECURITIES> 152,877
<RECEIVABLES> 170,289
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 323,234
<PP&E> 2,283,238
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,364,265
<CURRENT-LIABILITIES> 556,249
<BONDS> 0
0
0
<COMMON> 3,160
<OTHER-SE> 2,449,981
<TOTAL-LIABILITY-AND-EQUITY> 3,364,265
<SALES> 229,109
<TOTAL-REVENUES> 229,109
<CGS> 128,549
<TOTAL-COSTS> 128,549
<OTHER-EXPENSES> 148,217
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,266
<INCOME-PRETAX> 77,300
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 77,300
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
