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 October 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 December 14, 1999, 520,496,750 shares of the Common Stock
were outstanding.
<PAGE>
Archer Systems Limited, Inc.
(A Development Stage Company)
Form 10-QSB Index
October 31, 1999
PART I
Page
..........................................................................Number
Item 1. Financial Statements (Unaudited):
Balance Sheet at October 31, 1999........................... 3
Statements of Operations and Accumulated Deficit for the quarter
and six months ended October 31, 1999 and cumulative since
inception to October 31, 1999............................... 4
Statements of Cash Flows for the six months ended October 31, 1999
and cumulative since inception to October 31, 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............................................ 10
Item 2. Changes in Securities........................................ 10
Item 3. Defaults Upon Senior Securities.............................. 10
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
October 31, 1999
(Unaudited)
ASSETS
October 31, 1999
----------------
Current Assets:
Cash..................................................... $ 44
Prepaid Expenses and Other Current Assets................ 3,210
--------
Total Current Assets................................. 3,254
--------
Total Assets............................................. $ 3,254
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Liabilities...................................... $ 281
Accounts Payable......................................... 17,710
--------
Total Current Liabilities............................ 17,991
Long-term Liabilities:
Long-term Debt........................................... 23,000
--------
Total long-term Debt................................. 23,000
--------
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..... (37,737)
--------
Total Liabilities & Stockholder's Deficit................ $ 3,254
========
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>
Three Months Six Months
Ended Ended Cumulative
October 31, 1999 October 31, 1999 From
(Unaudited) (Unaudited) Inception
---------------- ---------------- -------------
<S> <C> <C> <C>
Income
Revenue During Development Stage............................$ 0 $ 0 $ 0
Expenses
Fair Value of Rent and Administration
Donated by Related Party.................................. 1,800 3,000 3,000
General and Administrative Expenses......................... 5,867 14,656 34,656
Interest Expense............................................ 281 281 281
---------------- ---------------- --------------
Net Loss During Reactivation from Dormancy.................. (7,948) (17,937) (37,937)
Extraordinary Item
Sale of Operating Name
Computer Technology International, Inc...................... 0 0 200
----------------- ---------------- --------------
Net Loss After Extraordinary Item........................... (7,948) (17,937) (37,737)
----------------- ---------------- --------------
Accumulated Deficit - Beginning............................. (29,789) (19,800) 0
----------------- ---------------- --------------
Accumulated Deficit - Ending................................ (37,737) (37,737) (37,737)
================= ================ ===============
Net Loss Per Share Before and After
Extraordinary Item (Based on Shares
Outstanding of 520,496,750)............................... $(.000015) $(.000034) $(.000073)
================= ================ ===============
</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>
Six Months Ended Cumulative
October 31,1999 From
(Unaudited) Inception
----------------- -------------
<S> <C> <C>
Cash Flows From Operations:
Net Loss After Extraordinary................................ $ (17,937) $ (37,737)
Adjustments to Reconcile Net Increase to
Net Cash Provided by Operations
Increase in Current Assets.................................. 3,010 3,210
Increase in Current Liabilities............................. (2,009) 17,991
----------------- --------------
Net Cash Used in Operations................................. 22,956 22,956
Cash Flows from Financing Activities:
Proceeds from Long-term Borrowings.......................... 23,000 23,000
----------------- --------------
Net Cash Provided by Financing Activities................... 23,000 23,000
Net Increase (Decrease) in Cash............................. 44 44
Cash Balance Beginning of Period............................ 0 0
----------------- --------------
Cash Balance End of Period.................................. $ 44 $ 44
================= =============
</TABLE>
See Accompanying Notes to Financial Statements.
5
<PAGE>
Archer Systems Limited, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 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
December 9, 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 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 and six months ended October 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.
7
<PAGE>
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.
On August 2 and August 18, 1999, the Company issued promissory notes to
an officer of the Company in the principal amounts of $1,000 and
$14,500 respectively, both at an annual interest rate of 6% and due in
two years from the date of issuance.
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 and six months
ended October 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
$23,000 have been obtained from a third party and an officer of the Company to
cover certain administrative expenses.
8
<PAGE>
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.
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 five months of expenditures totaling $3,000 as
of October 31, 1999.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the quarter and the six months
ended October 31, 1999 amounted to $5,867 and $14,656, respectively. Cumulative
expenses since inception totaled $34,656 of which $20,000 was incurred for audit
fees.
INTEREST EXPENSE
Interest expense for the quarter and the six months ended October 31, 1999
totaled $281 resulting from borrowings during the six month period.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position was $44 as of October 31, 1999, as compared
with a zero balance as of year end April 30, 1999. Cash flows from activities
during the six months ended October 31, 1999 used cash of $22,956 due to the net
loss of $17,937 adjusted for an increase in current assets of $3,010 and a
decrease in current liabilities of $2,009.
The net cash provided by financing activities during the six months ended
October 31, 1999, consisted of long-term borrowings totaling $23,000. These
proceeds funded operating activities during the six month period.
9
<PAGE>
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
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.
10
<PAGE>
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. (2)
10(b) Copy of 6% Promissory Note Due June 8, 2001. (2)
10(c) Copy of 6% Promissory Note Due August 1, 2001.
10(d) Copy of 6% Promissory Note Due August 17, 2001.
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.
(2) Filed as an exhibit to the Company's Form 10QSB/A filed December 9,
1999 and incorporated herein by this reference.
(b) Reports on Form 8-K.
None.
11
<PAGE>
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: December 14, 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(c) Copy of 6% Promissory Note Due 2
August 1, 2001
10(d) Copy of 6% Promissory Note Due 3
August 17, 2001
1
Exhibit 10(c)
NOTE
$1,000 Date: August 2, 1999
FOR VALUE RECEIVED, Archer Systems Limited, Inc., the undersigned
("Payor"), hereby promises to pay to the order of Richard J. Margulies an
individual, ("Holder"), the principal amount of $1,000.00, 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 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/ Walter J. Krzanowski
--------------------
Walter J. Krzanowski
Secretary/Treasurer
2
Exhibit 10(d)
NOTE
$14,500 Date: August 18, 1999
FOR VALUE RECEIVED, Archer Systems Limited, Inc., the undersigned
("Payor"), hereby promises to pay to the order of Richard J. Margulies an
individual, ("Holder"), the principal amount of $14,500.00, 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/ Walter J. Krzanowski
--------------------
Walter J. Krzanowski
Secretary/Treasurer
3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0001088789
<NAME> Archer Systems Limited, Inc.
<MULTIPLIER> 1
<CURRENCY> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> MAY-01-1999
<PERIOD-END> OCT-31-1999
<EXCHANGE-RATE> 1
<CASH> 44
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,254
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,254
<CURRENT-LIABILITIES> 17,991
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (37,737)
<TOTAL-LIABILITY-AND-EQUITY> 3,254
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,667
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 281
<INCOME-PRETAX> (7,948)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,948)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
