UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10KSB
GENERAL FORM FOR REGISTRATION OF SECURITIES
Annual Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
EUROPEAN TECHNOLOGY ENTERPRISES INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-4044714
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2500 City West Boulevard
Destec Tower, Suite 300
Houston, Texas 77042
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number (713) 267-2348
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Securities to be registered pursuant to Section 12(g) of the Act:
Voting Common Stock 6,000,000
Check here whether the issuer (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange
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_______
As of January 31, 2000, the following shares of the Registrant's
common stock were issued and outstanding:
Voting common stock 6,000,000
Traditional Small Business Disclosure
(check one): Yes X No
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PART I
Item 1. DESCRIPTION OF THE BUSINESS
HISTORY AND ORGANIZATION
EUROPEAN TECHNOLOGY ENTERPRISES INC., (the "Company"), a
developmental stage company, was organized on December 31, 1996
under the laws of the State of Delaware, having the stated
purpose of engaging in any lawful act or activity for which
corporations may be organized.
The Company was formed to enter the telecommunications industry
and provide international telephone interface service. The
company sought to provide two types of service to consumers: call
re-routing via a cheaper international carrier and telephone
calling card service. Its business plan was to install
communication equipment to re-route calls directly, purchasing
time from an international call carrier.
In February 1997, the Company sought to raise funds pursuant to a
private placement to one investor to implement its business plans
and fund research of its idea by issuing 3,500,000 shares of
common stock at $0.01. The placement was exempt from
Registration pursuant to Section 4(6) of the Securities Act of
1933. The Company was successful in raising $35,000.00 however
was unsuccessful in implementing its business plan. Investors to
the Company requested that they be represented on the Board of
Directors and the Company's management resigned from their
position to pursue other endeavors as they did not wish to devote
further time to the Company and to research and assess available
market opportunities. New management was brought in to pursue
the goals of the Company.
After additional research, the Company believed that there was a
market for its ideas and that the telecommunications market was
poised for rapid development. At that point, the Company sought
to pursue a merger or alliance with an existing corporation which
would be inclined to implement the Company's business plan. The
Company has been unable to attract a potential candidate for the
purpose of effectuating a merger or alliance. It has therefore
chosen to voluntarily become a reporting company with the
Securities and Exchange Commission in order to become more
attractive and to obtain a trading symbol from the NASD.
The Company has engaged in research to identify the most
profitable markets to develop its plan. The findings of that
research indicate that the telecommunications industry, although
dominated by big name players, is ripe for further growth. The
Company has also researched competition in the industry and
evaluated the costs involved with setting up its technology
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infrastructure. The Company has also been identifying the
particular areas of the telecommunications industry which it
feels there is the best growth prospects, call routing and most
feasible to establish and operate. Management has also been
addressing and researching the immense competition coming from
the cellular telephone industry which threaten the use of land
phones. Management has also been exploring possible acquisition
targets that could be carried out once the requisite funding is
in place. At this time however, no such discussions or
negotiations have commenced with any such entity.
The Company's management believes that the telecommunications
industry is ripe for growth and therefore additional research
should be completed in order to determine the best service and/or
product which the Company can provide to capitalize on the
industry's potential. The Company has obtained funding for this
additional research by conducting a private placement pursuant to
Regulation D 504 in accordance with a Private Placement
Memorandum dated December, 10, 1998, which raised $25,000 through
the sale of 2,500,000 shares of common stock.
The business plan of the Company has not yet been fully
implemented because market research is still being conducted.
This is to ascertain the exact opportunities in this quickly
evolving marketplace. The company is made aware of these
opportunities and each one is carefully researched to give the
management a clear picture of the future possibilities that might
be achieved for that particular opportunity.
The Company's initial product focus will be on providing call re-
routing services to business's with international call traffic.
In addition to this the Company intend to operate a charge card
facility for corporate clients and individuals. The card is aimed
at the business traveler and can be used to make substantial
savings on calls back to the UK.
Once the Company initiates its business plan, the Company will be
subject to the rules and regulations of OFTEL, the
telecommunications regulatory body in the United Kingdom.
Management will takes all steps necessary to insure that the
Company is in compliance with all rules and regulations of OFTEL
and that the Company's operations will remain in compliance with
those regulations.
The Company at this time is considered a shell company based on
the fact that the Company has no significant assets. The Company
is filing this Form 10SB12-G to make information about the
Company more readily available to potential investors,
prior to a proposed private placement to raise funds to implement
the business plan. The Company is currently a developmental
stage company and currently has no material operations. The
directors are now determined that the Company should become
active in seeking potential business opportunities with the
intent to acquire or merge with such businesses. The Company has
began to consider and investigate potential business
opportunities.
Item 2. DESCRIPTION OF PROPERTY
The company's administrative offices are located at Talbot House,
High Street, Crowthorne, Berks, United Kingdon and also in
Destec Tower, Houston, Texas. The Company's office in Houston,
Texas is utilized as a base to explore and contact potential
business transactions and to service the Company's
administrative needs. The United Kingdom office is also utilized
as a base to explore and contact potential business transactions.
The Company may seek or target a potential merger candidate which
is outside the United States. It should be noted that there are
inherent risks which may arise for the Company in the event it
does engage in a business transaction with such an outside
entity. Factors relevant to international laws, foreign exchange
rates, duties, taxation and political stability of the targeted
entity's country will all be considered to determine the impact
of such factors on the Company. In the event the Company
believes, in its discretion, that any of the aforementioned
factors create a substantial and uncertain risk for the Company,
then any business transaction with such targeted entity shall not
proceed. Each targeted entity outside the United States will be
evaluated on a case by case basis by the Company to consider the
risks and factors inherent to consummating a business transaction
with such entity.
Item 3. LEGAL PROCEEDINGS
There are no legal proceedings are pending at this time.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders.
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PART II
Item 5. Market for Common Equity and Related Stockholder
Matters
The Company is not aware of any quotations for its common stock,
now or at any time within the past two years. As of January 31,
2000, there were approximately 313 holders of record of the
issued and outstanding shares of Issuer's common stock. Issuer
has never paid a dividend on its outstanding equity. The Company
currently has no established public trading market for its common
stock.
At this time, the Company does not foresee the need to issue
additional shares of common stock. However, in the event a
merger or acquisition is undertaken, then there is a possibility
that additional stock may be issued as part of such merger
agreement. The large amount of authorized but unissued stock was
part of previous management's plan to compensate consultants with
shares of the Company's common stock in exchange for the services
of potential consultants.
Neither the Company, nor anyone on its behalf, will take any
affirmative steps to request or encourage any broker-dealer to
act as a market maker for the Company's securities. At the
present time, there is no market in the Company's securities.
The Company's securities are not listed on any equity exchange.
There have been no discussions between the Company, or anyone
acting on its behalf, or any market maker regarding the future
trading market of the Company's securities.
At this time, there are no plans, proposals, arrangements or
understandings with any person in regard to the development of a
trading market in any of the Company's securities.
As of January 31, 2000, there were only two shareholders of the
Company who reside in the United States. Those shareholders are
The Law Office of Shane Henty Sutton, P.C., holding 331,667
shares of the Company and Peter Moulinos, holding 331,666 shares
of the Company. The other majority shareholder, Karela Giselle
Pty Ltd., holds 331,667 shares of the Company and is an
Australian company. The remaining shareholders all reside
outside of the United States and received their securities
through the Regulation D 504 private placement offering which was
conducted by the Company in April 1998.
Of the 313 shareholders of the Company, 311 of the shareholders
are overseas and foreign investors. The shareholders have not
executed any "lock-up" letter agreement which would preclude them
from selling their respective shares of the Company's common
stock until such time as the Company has successfully consummated
merger or acquisition and the Company is no longer classified as
a "blank check" company.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company is a development stage company and is also considered
a shell company at this time based upon the fact that the Company
has no significant assets. The Company's principal business
purpose is to locate and consummate a merger or alliance with a
private entity. Because of the Company's current status having
no assets and no recent operating history, in the event the
Company does successfully acquire or merge with an operating
business opportunity, it is likely that the Company's present
shareholders will experience substantial dilution and there will
be a probable change in control of the Company.
Potential investors are alerted that any investment in the
Company is highly complex and risky. The Company has only
limited resources and no assets at this time making it very
difficult for the Company to find favorable opportunities. There
can be no assurance that the Company will be able to identify and
acquire any business opportunity which will ultimately prove to
be beneficial to the Company and its shareholders. The Company
will select any potential business opportunity based on
management's business judgment.
Investors are further alerted that because the Company has not
identified an entity to merge or acquire, the Company may be
considered a blank check company as defined by the Securities and
Exchange Commission. The definition of a blank check company is
one which has no specific business or plan other than to
consummate an acquisition of or merge into another business or
entity. While the Company has a specific business plan, which is
to enter the telecommunications industry and provide
international telephone interface service, the Company has not
identified an entity to merge with or acquire. This may cause
some states to classify the Company as a blank check company.
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In the event the Company does not consummate a merger or
acquisition of an entity in the telecommunications industry, the
Company will attempt to continue as an ongoing concern and
implement its business plan. The Company will attempt to raise
funding through private investors however such a plan is clearly
speculative at this stage and there is no guarantee that the
Company will be able to raise such funding or continue as an
ongoing concern.
Any target acquisition or merger candidate of the Company will
become subject to the same reporting requirements as the Company
upon consummation of any such business combination. Thus, in the
event that the Company successfully completes an acquisition or
merger with another operating business, the resulting combined
business must provide audited financial statements for at least
the two most recent fiscal years or, in the event that the
combined operating business has been in business less than two
years, audited financial statements will be required from the
period of inception of the target acquisition or merger
candidate.
The Company has no recent operating history and no representation
is made, nor is any intended, that the Company will be able to
carry on future business activities successfully. Further, there
can be no assurance that the Company will have the ability to
acquire or merge with an operating business, develop sustaining
business opportunities or acquire property that will be of
material value to the Company. In the opinion of management,
inflation has not and will not have a material affect on the
operations of the Company as it does not currently have any
significant assets, debt or income.
Because the Company lacks funds and significant assets, it may be
necessary for the officers and directors to either advance funds
to the Company or to accrue expenses until such time as the
Company begins to generate sufficient income to cover such
expenses. Management intends to hold expenses to a minimum and
to obtain services on a contingency basis when possible.
Further, the Company's directors will forego any compensation
until such time as the Company begins to generate sufficient
income to cover such expenses. However, if the Company engages
outside advisors or consultants in search for business
opportunities, it may be necessary for the Company to attempt to
raise additional funds.
There is no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
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The Company has not used any notices or advertisements in its
search for any business opportunities.
The Company has had no discussions, understandings or agreements
with any consultant in regard to the Company's business
activities.
The Company's officers in the past have not used any particular
consultants or advisers on a regular basis.
In the event the Company is required or needs to hire independent
consultants, the Company will consider as criteria for hiring
such consultant the area of expertise which it will require the
consultant to be knowledgeable with, the experience of the
consultant in the particular field, the education of the
consultant, the cost to the Company to retain such consultant and
the availability of the consultant for the purpose of devoting
its time and effort to the Company.
The officers and directors of the Company may advance funds to
the Company. Such advances will be capped at $75,000.00.
The repayment of such advances will be a condition that any
target Company must be willing to pay and a consideration of
criteria during the selection process.
In the opinion of management, inflation has not and will not have
a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition or
merger. At that time, management will evaluate the possible
effects of inflation on the Company as it relates to its business
and operations following a successful acquisition or merger.
In the event the Company consummates a merger transaction or
acquisition, the Company believes that there will be a change in
control in the Company. The Company believes that any merger
would include the new issuance of common stock in the Corporation
to a potential merger candidate followed by a reverse split of
the Company's issued common stock thereby effectively passing
control of the Company to the merged candidate.
The Company will not borrow funds for the purpose of funding
payments to the Company's promoters, management or their
affiliates or associates. Any funds borrowed by the Company will
be utilized to pay statutory, legal and accountant fees expended
by the Company.
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The Company does not foresee that any terms of sale of the shares
presently held by officers and/or directors of the Company will
also be afforded to all other shareholders of the Company on
similar terms and conditions.
Management does not anticipate actively negotiating or otherwise
consenting to the purchase of any portion of their common stock
as a condition to or in connection with a proposed merger or
acquisition. In such an instance, all shareholders are to be
treated equally. This policy is upheld by the inclusion of a
resolution of the Board of Director's of the Company, contained
in the Company's minutes. In the event management wishes to
actively negotiating or otherwise consenting to the purchase of
any portion of their common stock as a condition to or in
connection with a proposed merger or acquisition, this would need
to be disclosed to the Board of Directors and entered into the
Company's minutes. The company's shareholders will be afforded
an opportunity to approve or consent to any particular stock buy-
out transaction or merger.
There is a probability that there will be a change in control of
the Company upon the consummation of an acquisition, merger or
business transaction however the Company cannot predict or
estimate such a probability. The Company may decide to
relinquish control in the event it believes during negotiations
with another entity that a change in control would benefit the
Company's shareholders and advance the Company's business plan
for the purpose of attaining sustainable growth and revenue. In
such event, management shall consult with its shareholders to
determine whether it would be advantageous to relinquish control
of the Company.
The Company has not adopted a policy relating to a cash finder's
fee to anyone who locates a transaction which is consummated by
the Company. The Company does not intend to issue securities
(debt or equity) as a finder's fee. Finder's fees will not be
payable to officers, directors or promoters of the company and no
action. For this reason, no plan of action has currently been
undertaken to prevent any conflict of interest regarding the
payment of such fees to officers, directors or promoters of the
company.
There is no present potential that the Company may acquire or
merge with a business or company in which the Company's
promoters, management or their affiliates or associates, directly
or indirectly, have an ownership interest. Existing corporate
policy does not permit such transactions, unless disclosed by the
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individual with such interest and consent to by the Board of
Directors. This policy based upon an understanding between
management and the Board of Directors. Management is unaware of
any circumstances under which this policy, through its own
initiative, may be changed.
LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.
As a result, the Company had from time of inception to January
31, 1999 no revenue and a net loss from operations of $77,500.00.
As of January 31, 1999, the Company had a net capital deficiency
of 12,450.00.
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with
start up and trading of retail outlets. It is not anticipated
that the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. The
Company does not have a working capital line of credit with
any financial institution. Therefore, future sources of
liquidity will be limited to the Company's ability to obtain
additional debt or equity funding. The Company anticipates that
its existing capital resources will enable it to maintain its
current implemented operations for at least 12 months, however,
full implementation of its business plan is dependent upon its
ability to raise substantial funding. Management's plan is to
find and consummate a merger or business acquisition in order to
maximize the benefit of ownership by shareholders in the Company.
YEAR 2000 DISCLOSURE
The Company has not yet commenced any material active operation
systems which will be affected by the Year 2000 problem. The
Company is still carrying out market research into the
telecommunications industry and has not set up any technical
operations. Therefore new systems which the Company expects to
set up this year will be implemented with software addressing or
correcting the year 2000 problem. This will prevent any
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potential disruptions to the Company's operations. However, as
there is a wide uncertainty as to the effects of the Year 2000
problem on the entire business community, there is no guarantee
that the Company's operations will not be affected by the Year
2000 problem. This disclosure complies with the directives of
the Securities and Exchange Commission, specifically Staff Legal
Bulletin No. 5 (CF/IM), regarding Year 2000 issues.
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Item 7. Financial Statements
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
European Technology Enterprises, Inc.
We have audited the accompanying balance sheet of European
Technology Enterprises Inc., (a development stage company) as of
January 31, 2000, and the related statements of loss, cash flows
and stockholders' equity (deficiency), for the year then ended
January 31, 2000, and for the period from December 31, 1996
(inception) to January 31, 2000. These financial statements are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on 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 statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of European Technology Enterprises Inc. as of January 31, 2000,
and the results of its operations and its cash flows for the year
ended January 31, 2000 and for the period from December 31, 1996
(inception) to January 31, 2000 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 2 to the financial statements, the Company has losses
form operations and a net capital deficiency, which raise
substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters also are
described in Notes 2 and 4. The financial statements do not
include any adjustments that might result form the outcome of
this uncertainty.
Graf & Repetti
New York, New York
July 13, 2000
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EUROPEAN TECHNOLOGY ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
As of January 31,
2000 1999
<S> <C> <C>
ASSETS
Current Assets
Cash $ 0 $ 0
Other Current Assets 0 0
-------------------------
Total Current Assets $ 0 $ 0
Other Assets 0 0
-------------------------
Total Assets $ 0 $ 0
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable $ 0 $ 0
Accrued Expenses 12,550 12,450
-------------------------
Total Current Liabilities $12,550 $ 12,450
Other Liabilities
Loan Payable - Warren Investments Ltd.
Note 5 24,450 0
-------------------------
Total Liabilities $37,000 $ 12,450
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding 6,000,000
Shares 6,000 6,000
Additional Paid in Capital 61,450 59,050
Deficit Accumulated During
the Development Stage (104,450) (77,500)
--------------------------
Total Stockholders' Equity ( 37,000) (12,450)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 0 $ 0
The accompanying notes are an integral part of these financial
statements
</TABLE>
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EUROPEAN TECHNOLOGY ENTERPRISES, INC.
(A Development Stage Company)
CONDENSED STATEMENT OF LOSS
FROM DECEMBER 31, 1996 (INCEPTION) TO JANUARY 31, 2000
<TABLE>
<CAPTION>
For the Year From
Ended Inception to
Jan. 31, 2000 Jan 31, 2000
------------- -------------
<S> <C> <C>
TOTAL REVENUES: $ 0 $ 0
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OPERATING EXPENSES:
Accounting 7,000 9,400
Legal 17,500 27,500
Rent - Note 2 2,400 7,400
Filing Fee 50 150
Other Start Up Costs 0 60,000
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Total Operating Expenses 26,950 104,450
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Net Loss $(26,950) $(104,450)
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NET LOSS PER SHARE $ (0.00) $(0.02
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WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 6,000,000 4,842,465
---------- ----------
The accompanying notes are an integral part of these financial
statements.
</TABLE>
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EUROPEAN TECHNOLOGY ENTERPRISES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FROM DECEMBER 31, 1996 (INCEPTION) TO JANUARY 31, 2000
<TABLE>
<CAPTION>
For the Year From
Ended Inception to
Jan. 31, 2000 Jan. 31, 2000
------------- -------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net Loss $(26,950) $(104,450)
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Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Changes in Assets and Liabilities:
Increase in Accrued Expenses 100 12,550
Additional paid in capital
Contributed by shareholders
For rent and other expenses 2,400 7,450
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Total Adjustments 2,500 20,000
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Net Cash Used in
Operating Activities (24,450) 84,450
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CASH FLOWS FROM
FINANCING ACTIVITIES:
Increase in loan payable -
Warren Investments Ltd. 24,450 24,450
Proceeds from Insurance of
Common Stock - 60,000
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Net Cash Provided by
Financing Activities 24,450 84,450
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Net Change in Cash 0 0
Cash at Beginning of Period 0 0
Cash at End of Period $ 0 $ 0
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SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash Paid During the Period
for Interest Expense $ 0 $ 0
-------- --------
Corporate Taxes $ 0 $ 0
-------- --------
The accompanying notes are an integral part of these financial
statements.
</TABLE>
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EUROPEAN TECHNOLOGY ENTERPRISES, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
FROM DECEMBER 31, 1996 (INCEPTION) TO JANUARY 31, 2000
<TABLE>
<CAPTION>
Total
COMMON STOCK ISSUED Additional Accumulated Shareholders'
SHARES PAR VALUE Paid in Cap Deficit Equity
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ISSUANCE OF
3,500,000
SHARES
FEBRUARY 10, 1997 3,500,000 $ 3,500 $31,500 $ 0 $35,000
NET LOSS
FOR THE
PERIOD FROM
INCEPTION TO
JAN. 31, 1999 0 0 2,650 (37,650) (35,050)
-------------------------------------------------------------
BALANCE
JAN. 31, 1998 3,500,000 3,500 34,150 (37,650) 0
ISSUANCE OF
2,500,000 SHARES
JAN. 5, 1999 2,500,000 2,500 22,500 0 25,000
NET LOSS
FOR THE
YEAR ENDED
JAN. 31, 1999 0 0 2,400 (39,850) (37,450)
-------------------------------------------------------------
BALANCE
JAN. 31, 1999 6,000,000 $6,000 $59,050 $(77,500)$(12,450)
NET LOSS
FOR THE
YEAR ENDED
JAN. 31, 2000 0 0 2,400 (26,950) (24,550)
-------------------------------------------------------------
BALANCE
JAN. 31, 1999 6,000,000 $6,000 $61,450 $(104,450)$(37,000)
The accompanying notes are an integral part of these financial
statements.
</TABLE>
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EUROPEAN TECHNOLOGY ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. DESCRIPTION OF COMPANY: European Technology Enterprises Inc.,
("the Company") is a for-profit corporation incorporated under
the laws of the State of Delaware on December 31, 1996. European
Technology Enterprises Inc.'s principal objective is to provide
low-cost international telephone service.
B. BASIS OF PRESENTATION: Financial statements are prepared on
the accrual basis of accounting. Accordingly revenue is
recognized when earned and expenses when incurred.
C. USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results
could differ from these estimates. Significant estimates in the
financial statements include the assumption that the Company
will continue as a going concern. See Note 4.
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NOTE 2 - USE OF OFFICE SPACE
The Company uses 200 square feet of space for its executive
offices at Destec Tower, 2500 City West Boulevard, Houston, TX,
which it receives from one of its shareholders at no cost. The
fair market value of this office is $200 per month, which is
reflected as an expense with a corresponding credit to additional
paid-in capital. The Company also utilizes space in London,
United Kingdom also at no charge.
NOTE 3 - EARNINGS PER SHARE
For the Year From Inception
Ended To
January 31, 2000 January 31, 2000
--------------------------------------
Net Loss per share $(0.00) $(0.02)
NOTE 4- LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company's limited operating history, including its losses and
no revenues, primarily reflect the operations of its early stage.
As a result, the Company had from time of inception to January
31, 2000 no revenue and a net loss from operations of $104,450.
As of January 31, 2000, the Company had a net capital deficiency
of $37,000.
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with the
start up of its telephone service. It is not anticipated that
the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. European
Technology Enterprises Inc., does not have a working capital line
of credit with any financial institution. Therefore, future
sources of liquidity will be limited to the Company's ability to
obtain additional debt or equity funding.
NOTE 5 - LOAN PAYABLE - Warren Investments Ltd. and Related Party
Transactions
During the year ended January 31, 2000, Warren Investments Ltd.
paid $24,450 of liabilities on behalf of European Technology
Enterprises Inc. Warren Investments Ltd. is owned by one of the
officers of ETE. The loan is not evidenced by a note. The
informal agreement calls for no payment of interest. ETE intends
to repay the loan out of any fund raising that it may carry out
or when the Company achieves sustainable revenue.
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in, or disagreements with, accountants
on accounting and financial disclosure matters.
PART III
Item 9. DIRECTORS AND EXECUTIVE OFFICERS
Position(s) Held and
Name Age Duration of Service Family Relation
---------------- --- ------------------- ---------------
Andrew Turner 28 President and Director None
John Cole 71 Secretary-Treasurer
and Director None
All directors hold office until the next annual meeting of
stockholders and until their successors have been duly elected
and qualified. There are no agreements with respects to the
election of directors.
Set forth below is certain biographical information regarding the
Company's executive officers and directors:
Andrew Turner is 27 years old and began his business career in
retail. In 1990 he joined AFN Porsche, a subsidiary of Porsche GB
Ltd, a manufacturer and retailer of high performance and luxury
automobiles, and carried out various roles within the
organisation involving a high level of consumer contact. After
advancing his marketing and communication skills, he commenced a
position with Scantruck Limited, a subsidiary of Scania GB Ltd,
itself a subsidiary of Scania AB, a Swedish dual listed public
company on the NYSE and the Stockholm stock markets. With this
company he was responsible for consumer satisfaction, and the
ongoing marketing and sales of various products and services, and
was involved with the company receiving an award as best dealer
from its industry peers.
John Cole has managed his own business consultancy company, I
Plus Limited, for the past 20 years advising business's on the
best way to capitalize on their business plans. He has advised
numerous companies and is experienced in all forms of focusing a
business's direction.
Current management was introduced to former management at a
business development seminar on business techniques and
development strategies in October 1998. They then formed a
relationship agreeing to assist in the further development of the
Company.
On November 28, 1998, Messrs. Turner and Cole were appointed to
the Board and subsequently took their positions as President and
Secretary on January 5, 1999 when the former management resigned.
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There are no agreements or understandings for an officer or
director to resign at the request of another person and none of
the officers or directors are acting on behalf of or will act at
the direction of any other person.
Material to the operations of the Company will be the efforts and
work performed by Messrs. Andrew Turner and John Cole.
Wing Capital Limited, Vuma Healthcare Limited, L. Wise
Investments Ltd., Bradwall Limited and European Technology
Investments are all investment companies which invest in
development stage companies. None of the officers or directors
of the Company have any relationship with any of these entities.
To the knowledge of management, during the past five years, no
present or former director or executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any
state insolvency law, nor had a receiver, fiscal agent or similar
officer appointed by a court for the business or present of such
a person, or any partnership in which he was a general partner at
or within two years before the time of such filing, or any
corporation or business association of which he was an executive
officer within two years before the time of such filing;
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations and
other minor offenses);
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him
form or otherwise limiting, the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliated person, director of any
investment company, or engaging in or continuing any conduct or
practice in connection with such activity; (ii) engaging in any
type of business practice; or (iii) engaging in any activity in
connection with the purchase or sale of any security or commodity
or in connection with any violation of federal or state
securities laws or federal commodity laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or
state authority barring, suspending, or otherwise limiting for
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more than 60 days the right of such person to engage in any
activity described above under this Item, or to be associated
with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the judgment in
subsequently reversed, suspended, or vacate;
(6) was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any federal commodities law, and the judgment in such
civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or
vacated.
The Company's common stock has not been previously registered.
Item 10. EXECUTIVE COMPENSATION
SUMMARY
The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or
directors. The Company has not paid any salaries or other
compensation to its officers, directors or employees for the year
ended January 31, 1999, nor at any of its officers, directors or
any other persons and no such agreements are anticipated in the
immediate future. It is intended that the Company's directors
will forego any compensation until such time as an accusation or
merger can be accomplished and will strive to have the business
opportunity provide their remuneration. As of the date hereof,
no person has accrued any compensation from the Company.
The payment of the directors compensation by any target company
will not be a criteria of consideration in the event the Company
consummates an acquisition, alliance, merger or business
transaction with another entity.
COMPENSATION TABLE: None; no form of compensation was paid to any
officer or director at any time during the last two fiscal years.
CASH COMPENSATION
There was no cash compensation paid to any director or executive
officer of the Company during the two fiscal years ended January
31, 1999.
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BONUSES AND DEFERRED COMPENSATION: None.
COMPENSATION PURSUANT TO PLANS: None.
PENSION TABLE: None.
OTHER COMPENSATION: None.
COMPENSATION OF DIRECTORS: None.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT:
There are no compensatory plans or arrangements of any kind,
including payments to be received from the Company, with respect
to any person which would in any way result in payments to any
such person because of his or her resignation, retirement, or
other termination of such person's employment with the Company or
its subsidiaries, or any change in control of the Company, or a
change in the person's responsibilities following a change in
control of the Company.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth the information, to the best
knowledge of the Company as of January 31, 2000, with respect to
each person known by the Company to own beneficially more than 5%
of the Company's outstanding common stock, each director of the
Company and all directors and officers of the Company as a group.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
---------------- -------------------- --------
Andrew Turner 5,000 0.05%
15 Grayshott Close President
Sittingbourne, Kent UK
John Cole 5,000 0.05%
31 Walden Avenue Secretary
Chislehurst, Kent UK
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Wing Capital Limited 800,000 8.0%
International House
31 Church Road
Hendon, London UK
Vuma Healthcare Limited 800,000 8.0%
11 Waterloo Place
London, UK
L. Wise Investments Ltd. 600,000 6.0%
168 Church Road
Hove, Sussex UK
Bradwall Limited 500,000 5.0%
S8 International Business
Center
Casemates, Main Street
Gibraltar
The Company has been advised that the persons listed above have
sole voting, investment, and dispositive power over the shares
indicated above. Percent of Class (third column above) is based
on 6,000,000 shares of common stock outstanding on January 31,
1999.
None of the directors of the Company are shareholders in any of
the corporate shareholders listed above. Additionally, a
shareholder of the Company, European Technology Investments,
holds 300,000 shares of the Company, and is in no way related to
the Company or is a subsidiary of the Company.
Management of the Company currently devotes approximately twenty
hours per week to the Company's activities.
Management at this stage is not promoting any blank check
entities and therefore there are no conflict of interests or the
possibility of any conflict arising.
The Company does not intend to issue any stock to management,
promoters or their affiliates or associates, prior to any
business transaction or merger. The Company may issue stock to a
consultant for the payment of such consultant's services however
the Company at this time does not foresee the need or requirement
to utilize or retain a consultant to render services for the
Company.
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PRIOR BLANK CHECK COMPANIES
The Company's promoters and directors have not previously been
involved with any blank check offerings.
The Securities and Exchange Commission regulations generally
define a penny stock to be an equity security that has a market
price of less than $5.00 per share, subject to certain
exceptions. Such exceptions include any equity security listed on
NASDAQ or a national securities exchange and any equity security
issued by an issuer that has (i) net tangible assets of at least
$2,000,000, if such issuer has been in continuous operation for
three years, (ii) net tangible assets of at least $5,000,000, if
such issuer has been in continuous operation for less than three
years, or (iii) average annual revenue of at least $6,000,000, if
such issuer has been in continuous operation for less than three
years. Unless an exception is available, the regulations require
the delivery, prior to any transaction involving a penny stock,
of a disclosure schedule explaining the penny stock market and
the risks associated therewith. The impact of the regulations
applicable to penny stocks on the Company's securities is to
reduce the market liquidity of the Company's securities by
limiting the ability of broker/dealers to trade the Company's
securities and the ability of purchasers of the Company's
securities to sell their securities in the secondary market. The
low price of the Company's Common Stock also has a negative
effect on the amount and percentage of transaction costs paid by
individual shareholders and the potential ability of the Company
to raise additional capital by issuing additional shares. The
primary reasons for these effects include the internal policies
of certain institutional investors that prohibit the purchase of
low-priced stocks, the fact that many brokerage houses do not
permit low-priced stocks to be used as collateral for margin
accounts or to be purchased on margin and certain brokerage house
policies and practices that tend to discourage individual brokers
from dealing in low-priced stocks. In addition, since broker's
commissions on low-priced stocks represent a higher percentage of
the stock price than commissions on higher priced stocks, the
current low share price of the Common Stock results in individual
shareholders paying transaction costs that are a higher
percentage of their total share value than would be the case if
the Company's share price were substantially higher. The
Company's stock may be considered penny stock under this
definition and it may be subject to the restrictions on
broker/dealer trades of penny stock which may in turn limit the
trading market for the Company's stock and thereby depress the
price of the Company's stock.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS.
To the best of Management's knowledge, during the fiscal year
ended January 31, 2000, there were no material transactions, or
series of similar transactions, since the beginning the Company's
last fiscal year, or any currently proposed transactions, or
series of similar transactions, to which the Company was or is to
be a party, in which the amount involved exceeds $60,000, and in
which any director or executive officer, or any security holder
who is known by the Company's common stock, or any member of the
immediate family of any of the foregoing persons, has an
interest.
CERTAIN BUSINESS RELATIONSHIPS:
During the fiscal year ended January 2000, there were no material
transactions between the Company and its management.
INDEBTEDNESS OF MANAGEMENT:
To the best of Management's knowledge, during the fiscal year
ended January 2000 there were no material transactions, or series
of similar transactions, since the beginning of the Company's
last fiscal year, or any currently proposed transactions, or
series of similar transactions, to which the Company was or is to
be a party, in which the amount involved exceeds $60,000, and in
which any director or executive officer, or any security holder
who is known by the Company to own of record or beneficially more
than 5% of any class of the company's common stock, or any member
of the immediate family of any of the foregoing persons, has an
interest.
TRANSACTIONS WITH PROMOTERS:
To the best Knowledge of management, no such transactions exist.
Item 13. FINANCIAL STATEMENTS, EXHIBITS AND REPORTS ON FORM 8-K
(A) FINANCIAL STATEMENTS
The Following financial statements are filed as part of this
registration statement:
Balance Sheet
Statement of Loss
Statement of Cash Flows
Statement of Shareholders' Equity (Deficit)
Selected Financial Data
(B) EXHIBITS AND INDEX OF EXHIBITS
The following exhibits are included in Item 13(c). Other
exhibits have been omitted since the required information is not
applicable to the registrant.
EXHIBIT
3 Certificate of incorporation and by-laws
11 Statement regarding computation of per share
earnings
27 Financial Data Schedule
(C) REPORTS ON FORM 8-K
No Report on Form 8-K was filed during the fourth quarter of the
period for which this Annual Report is filed.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
European Technology Enterprises, Inc.
-----------------------
(Registrant)
Date: July 17, 2000
By: /s/ Andrew Turner
-------------------
President
