U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal quarter ended July 31, 1999
Commission file number 0-26955
Archer Systems Limited, Inc.
(Name of small business issuer as specified in its charter)
Delaware 22-3652650
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.)
75 Lincoln Highway, Route 27, 2nd Floor, Iselin, NJ, 08830
(Address of principal executive offices)
(732) 906-9060
(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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 October 27, 1999, 520,496,750 shares of the Common Stock
were outstanding.
<PAGE>
Archer Systems Limited, Inc.
(A Development Stage Company)
Form 10-QSB Index
July 31, 1999
PART I
Page
..........................................................................Number
Item 1. Financial Statements (Unaudited):
Balance Sheet at July 31, 1999.................................... 3
Statements of Operations and Accumulated Deficit for the quarter
ended July 31, 1999 and the year ended April 30, 1999............. 4
Consolidated Statements of Cash Flows for the quarter
ended July 31, 1999 and the year ended April 30, 1999............. 5
Notes to Financial Statements..................................... 6
Item 2. Management's Discussion and Analysis or Plan of Operations........ 8
PART II
Item 1. Legal Proceedings................................................. 9
Item 2. Changes in Securities............................................. 9
Item 3. Defaults Upon Senior Securities................................... 9
Item 4. Submission of Matters to a Vote of Security Holders............... 10
Item 5. Other Information................................................. 10
Item 6. Exhibits and Reports on Form 8-K.................................. 10
Signatures................................................................. 12
2
PAGE>
ARCHER SYSTEMS LIMITED, INC.
(A Development Stage Company)
BALANCE SHEET
July 31, 1999
(Unaudited)
ASSETS
July 31, 1999
-------------
Current Assets:
Cash...................................................... $ 145
--------------
Total Current Assets................................... 145
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Rent and Administration
Related Party.......................................... $ 1,200
Accounts Payable.............................................. 21,234
--------------
Total Current Liabilities............................ 22,189
--------------
Long-term Liabilities:
Long-term Debt........................................... 7,500
--------------
Total long-term Debt................................. 7,500
--------------
Stockholders' Deficit:
Common stock, $.0001 par value; 600,000,000 shares
authorized; 520,496,750 shares issued ($52,050 less
par in excess of capital $52,050)...................... 0
Deficit Accumulated During the Development Stage...... (29,789)
--------------
Total Liabilities & Stockholder's Deficit................. $ 145
==============
See Accountants' Report and Notes to Financial Statements.
3
<PAGE>
ARCHER SYSTEMS LIMITED, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
Cumulative Quarter Ended Year Ended
From July 31, 1999 April 30, 1999
Inception (Unaudited) (Audited)
----------- ------------- --------------
<S> <C> <C> <C>
Income
Revenue During Development Stage.................$ 0 $ 0 $ 0
Expenses
Fair Value of Rent and Administration
Donated by Related Party....................... 1,200 1,200 0
General and Administrative Expenses.............. 28,789 8,789 20,000
------ -------- --------
Net Loss During Reactivation from Dormancy....... (29,989) (9,989) (20,000)
Extraordinary Item
Sale of Operating Name
Computer Technology International, Inc. 200 0 200
------ -------- --------
Net Loss After Extraordinary Item (29,789) (9,989) (19,800)
------ -------- --------
Accumulated Deficit - Beginning.................. 0 (19,800) 0
------ -------- --------
Accumulated Deficit - Ending..................... (29,789) (29,789) (19,800)
======== ======== ========
Net Loss Per Share After
Extraordinary Item (Based on Shares
Outstanding of 520,496,750)................... $ (.000019) $ (.000019) (.000038)
======== ======== ========
</TABLE>
See Accountants' Report and Notes to Financial Statements.
4
<PAGE>
ARCHER SYSTEMS LIMITED, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative Quarter Ended Year Ended
From July 31, 1999 April 30, 1999
Inception (Unaudited) (Audited)
------------ -------------- --------------
<S> <C> <C> <C>
Cash Flows From Operations:
Net Loss After Extraordinary................ $ (29,789) $ (9,989) $ (19,800)
Adjustments to Reconcile Net Increase to
Net Cash Provided by Operations
Increase in Current Assets.................. 0 200 (200)
Increase in Current Liabilities............. 22,434 2,434 20,000
------- ------- -------
Net Cash Used in Operations................. 7,355 7,355 0
Cash Flows from Financing Activities:
Proceeds from Long-term Borrowings........... 7,500 7,500 0
------- ------- -------
Net Cash Provided by Financing Activities....... 7,500 7,500 0
Net Increase (Decrease) in Cash............. 145 145 0
Cash Balance Beginning of Year.............. 0 0 0
------- ------- -------
Cash Balance End of Year.................... $ 145 $ 145 $ 0
======= ======= =======
</TABLE>
See Accompanying Notes to Financial Statements.
5
<PAGE>
Archer Systems Limited, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 1999
(Unaudited)
Note 1 - Organization and Summary of Significant Accounting Policies
A. Organization: Archer Systems Limited, Inc. was incorporated on March
19, 1986, under the laws of the State of Delaware. The Company was
established by Archer Limited, a foreign corporation based in London,
England which is no longer in existence. The Company adopted a fiscal
year ending, April 30.
The Company was organized to acquire the name and all the common stock
of a publicly traded computer related technology company. The Company
exchanged common stock on a one for one basis for the shares of the
computer technology company. On December 14, 1998, the Company sold
the name of Computer Technology International, Inc. to an individual
for $200.
Archer Systems Limited, Inc. intends to acquire, develop and/or
operate Internet and Technology related companies through majority
owned subsidiaries or investment in other internet companies through
venture capital arrangements. At the present time, the Company has not
submitted any proposals for potential acquisition.
Because of the speculative nature of the Company, there are
significant risks which are summarized as follows:
- Newly formed company has no operating history and minimal assets.
- Limited funds available for acquisitions.
- Management is inexperienced and offers limited time commitment.
- Conflict-of-interest, as all employees have other part-time or
full-time employment.
- The Company is considered to be in the development stage as defined
in the Statement of Financial Accounting Standards No. 7. There have
been no operations since incorporation.
B. The preparation of the unaudited financial statements in conformity
with generally accepted principles, requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ
from those estimates.
6
<PAGE>
It is recommended that the unaudited financial statements and notes
thereto in this Report be read in conjunction with the financial
statements and notes thereto in the Company's Form 10-SB/A filed on
September 10, 1999.
C. Method of Accounting: The financial statements have been prepared in
accordance with the accrual basis method of accounting. Under this
method of accounting, income and expenses are identified with specific
periods of time and are recorded as earned or incurred without regard
to date of receipt or disbursements of cash.
D. Earnings Per Share: Computed by dividing the net loss by the weighted
average number of shares outstanding during the year. Common stock
warrants attached to the predecessor Computer Technology, Inc. shares
expired prior to 1986, 15 months after issuance. They are excluded
from the earnings per share computation because of their expiration
date as well as their anti-dilutive effect on the loss per share if
there were such common stock equivalents.
E. Since Archer Systems Limited, Inc. is considered to be in development
stage, there is no prior period comparison due to no activity and/or
transactions for the three months ended July 31, 1998.
Note 2 - Stockholders' Equity
Incorporation Shares: Upon incorporation, the Company had authorized
100 shares of common stock, no par value.
In June 1986, the Company's officers approved a change in the
authorized shares from 100 shares common stock, no par value, to
600,000,000 shares of common stock, $.0001 par value. The increase in
authorized shares was ratified by the majority stockholder and
directors on December 14, 1998.
In June 1986, the Company exchanged 520,496,750 shares of common stock
of the Company for all the issued and outstanding common shares, on a
one for one basis, of Computer Technology International, Inc. (see
Note #1A).
Note 3 - Related Party Sublease and Administration
As of June 1, 1999, the Company now shares office space at 75 Lincoln
Highway, Iselin, New Jersey. The space is leased by GRQ Financial,
Inc. which is solely owned by Richard J. Margulies, President of the
Company. No rent is presently charged to the Company by GRQ Financial,
Inc. and no formal lease exists between GRQ Financial, Inc. and the
Company. The fair market value of donated rent and administrative
costs assumed by GRQ Financial, Inc. are represented by the related
party to accrue at $600 per month.
Note 4 - Long-term Debt
On June 9, 1999 and July 1, 1999 the Company issued promissory notes
to a lender for the principal amounts of $2,500 and $5,000
respectively, both at an annual interest rate of 6% and due in two
years from the date of issuance.
7
<PAGE>
Item 2.
Management's Discussion and Analysis or Plan of Operations
The Company is considered to be in the development stage as defined in the
Statement of Financial Accounting Standards ("FASB") No. 7. There have been no
operations since the date of incorporation. There is no prior period comparison
due to no activity and/or transactions for the three months ended July 31, 1998.
Management believes it will be able to satisfy its cash requirements
through debt financing and sales of equity through private placements during the
next twelve months. However, there can be no assurance that the Company will be
able to raise the financing required.
The Company intends to acquire, develop and/or operate Internet and
Technology related companies through majority owned subsidiaries or investment
in other Internet companies through venture capital arrangements. If successful
in such acquisition program, the number of employees would increase in
proportion to the companies acquired. At the present time, the Company has not
submitted any proposals for potential acquisition.
In the next twelve months, the Company plans to seek out business
opportunity candidates. To date, the Company has not undertaken any efforts to
locate business opportunity candidates. The Company believes that this plan of
operations can be conducted through the efforts of its current officer and will
not require any additional funds. The Company anticipates that business
opportunities will be available to it through the contacts of the Company's
President. The Company anticipates that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, and other instruments will be done by the President or under his
direction. The Company plans to investigate, to the extent believed reasonable
by it, such potential business opportunities. Due to the Company's limited
experience and resources in business analysis, the Company may not discover or
adequately evaluate adverse facts about a potential business opportunity.
Inasmuch as the Company will have no funds available to it in its search
for business opportunities, the Company will not be able to expend significant
funds on a complete and exhaustive investigation of potential business
opportunities. The Company anticipates that it will incur nominal expenses in
the implementation of its business plan described herein. Loans in the amount of
$7,500 have been obtained from a third party to cover certain administrative
expenses.
To date, the Company has not developed any criteria for the selection of
business opportunities, and the Company may not develop such criteria in the
future. The Company cannot assure it will be able to ultimately effect any
business opportunity, successfully integrate any business into its operations or
otherwise successfully develop its operations.
REVENUES
The Company does not have an operating business so that there are no
revenues to be accounted for.
8
<PAGE>
RENT AND ADMINISTRATION
As of June 1, 1999, the Company shares office space at 75 Lincoln Highway,
Iselin, New Jersey. The space is leased by GRQ Financial, Inc. which is solely
owned by Richard J. Margulies, President of the Company. No rent is presently
charged to the Company and no formal lease exists. The fair market value of
donated rent and administrative costs assumed by the related party is $600 per
month and the Company has accrued two months of expenditures.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the quarter ended July 31, 1999
amounted to $8,789. Expenses for the year ended April 30, 1999 totaled $20,000
resulting from Audit Fees. Cumulative expenses since inception total $28,789.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position was $145 as of July 31, 1999, as compared with
a zero balance as of year end April 30, 1999. Cash flows from activities during
the three month's ended July 31, 1999 used cash of $7,355 due to the net loss of
$9,989 adjusted for an increase in current assets of $200 and an increase in
current liabilities of $2,434.
The net cash provided by financing activities during the three months ended
July 31, 1999, consisted of long-term borrowings totaling $7,500. These proceeds
funded operating activities during the quarter.
During the next twelve months, Archer Systems Limited, Inc. plans to
satisfy its cash requirements through additional debt and/or equity financing.
There can be no assurance that the Company will be successful in raising the
additional financing.
As of the date of the filing of this report, there were no commitments for
material capital expenditures.
PART II
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
9
<PAGE>
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.
(a) Exhibits
The following exhibits marked with a footnote reference were filed with a
periodic report filed by the Company pursuant to Section 14 of the Securities
Exchange Act of 1934, as amended, or a registration statement effective under
the Securities Act of 1933, as amended (the "Securities Act"), and are
incorporated herein by this reference. If no footnote reference is made, the
exhibit is filed with this Report.
Number Exhibit
3(a) Certificate of Incorporation of Company filed
with the Secretary of State of Delaware on
March 19, 1986. (1)
3(a)(1) Certificate for renewal and revival of Charter of the
Company filed with the Secretary of State Division
of Corporations on December 2, 1998. (1)
3(a)(2) Certificate of Amendment of the Certificate of
Incorporation of Archer Systems Limited, Inc.
filed with the Secretary of State Division of
Corporation on February 22, 1999. (1)
3(a)(3) Certificate of Correction to Certificate of
Amendment of the Certificate of Incorporation
of Archer Systems Limited Inc. filed February 22,
1999 with the Secretary of State Division of
Corporations. (1)
3(b) Copy of the by-laws of the Company. (1)
4(a) Specimen Stock Certificate. (1)
10(a) Copy of 6% Promissory Note Due June 30, 2001.
10(b) Copy of 6% Promissory Note Due June 8, 2001.
10
<PAGE>
27 Financial Data Schedule
________________________________
(1) Filed as an exhibit to the Company's Form 10SB12G/A filed September 10,
1999 and incorporated herein by this reference.
(b) Reports on Form 8-K. None.
11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: October 27, 1999
ARCHER SYSTEMS LIMITED, INC.
By: /s/ Richard J. Margulies
--------------------
Richard J. Margulies
President
By: /s/ Walter J. Krzanowski
--------------------
Walter J. Krzanowski
Secretary/Treasurer
12
<PAGE>
EXHIBIT INDEX
Exhibit No Description Page
10(a) Copy of 6% Promissory Note Due 2
June 30, 2001
10(b) Copy of 6% Promissory Note Due 3
June 8, 2001
1
NOTE
$5,000 Date: July 1, 1999
FOR VALUE RECEIVED, Archer Systems Limited, Inc., the undersigned
("Payor"), hereby promises to pay to the order of Zamora Funding, Inc., a
Delaware corporation, ("Holder"), the principal amount of $5,000.00, payable
twenty four (24) months after the date first set forth above. The principal
amount hereof from time to time outstanding shall bear interest at the rate of
six percent (6%) per annum, payable on the date set forth above. All payments
hereunder shall be in lawful money of the United States of America at the
address of the Holder hereof or at such address as shall be specified by the
Holder to GRQ Financial, Inc. If any default shall be made in the payment of
interest or principal, then the Holder, by written notice to the Payor, may
exercise all of its legal rights to collect the balance due unless within five
(5) business days after such notice the default shall be cured by Payor. Such
notice shall be deemed given three (3) days after having been deposited in the
United States Mail properly addressed and sent by registered mail to the
particular addressee, return receipt requested.
Prepayments may be made in this note voluntarily at any time and from time
to time, without penalty.
Archer Systems Limited, Inc.
BY:/s/Richard Margulies
-----------------------
Richard Margulies, President
2
NOTE
$2,500 Date: June 9, 1999
FOR VALUE RECEIVED, Archer Systems Limited, Inc., the undersigned
("Payor"), hereby promises to pay to the order of Zamora Funding, Inc., a
Delaware corporation, ("Holder"), the principal amount of $2,500.00, payable
twenty four (24) months after the date first set forth above. The principal
amount hereof from time to time outstanding shall bear interest at the rate of
six percent (6%) per annum, payable on the date set forth above. All payments
hereunder shall be in lawful money of the United States of America at the
address of the Holder hereof or at such address as shall be specified by the
Holder to Archer Systems Limited, Inc.
If any default shall be made in the payment of interest or principal, then
the Holder, by written notice to the Payor, may exercise all of its legal rights
to collect the balance due unless within five (5) business days after such
notice the default shall be cured by Payor. Such notice shall be deemed given
three (3) days after having been deposited in the United States Mail properly
addressed and sent by registered mail to the particular addressee, return
receipt requested.
Prepayments may be made in this note voluntarily at any time and from time
to time, without penalty.
Archer Systems Limited, Inc.
BY:/s/Richard Margulies
-----------------------
Richard Margulies, President
3
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<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0001088789
<NAME> Archer Systems Limited, Inc.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> MAY-01-1999
<PERIOD-END> JUL-31-1999
<CASH> 145
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 145
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 145
<CURRENT-LIABILITIES> 22,189
<BONDS> 7500
0
0
<COMMON> 0
<OTHER-SE> (29,789)
<TOTAL-LIABILITY-AND-EQUITY> 145
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,989
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,989)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,989)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
