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 January 31, 2000
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 March 14, 2000, 520,496,750 shares of the Common Stock
were outstanding.
<PAGE>
Archer Systems Limited, Inc.
(A Development Stage Company)
Form 10-QSB Index
January 31, 2000
PART I
Page
..........................................................................Number
Item 1. Financial Statements (Unaudited):
Balance Sheet at January 31, 2000........................... 3
Statements of Operations and Accumulated Deficit for the quarter
and nine months ended January 31, 2000 and cumulative since
inception to January 31, 2000............................... 4
Statements of Cash Flows for the nine months ended January 31, 2000
and cumulative since inception to January 31, 2000.......... 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
January 31, 2000
(Unaudited)
ASSETS
January 31, 2000
Current Assets:
Cash..................................................... $ 149
Prepaid Expenses and Other Current Assets................ 1,410
------------
Total Current Assets................................. 1,559
------------
Total Assets............................................. $ 1,559
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Liabilities...................................... $ 661
Accounts Payable......................................... 21,746
------------
Total Current Liabilities............................ 22,407
Long-term Liabilities:
Long-term Debt........................................... 24,600
------------
Total Long-term Debt................................. 24,600
------------
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..... (45,448)
------------
Total Liabilities & Stockholder's Deficit................ $ 1,559
============
See Accompanying Notes to Financial Statements.
3
<PAGE>
ARCHER SYSTEMS LIMITED, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended Cumulative
January 31, 2000 January 31, 2000 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 4,800 4,800
General and Administrative Expenses......................... 5,531 20,187 40,187
Interest Expense............................................ 380 661 661
Net Loss During Reactivation from Dormancy.................. (7,711) (25,648) (45,648)
Extraordinary Item
Sale of Operating Name
Computer Technology International, Inc...................... 0 0 200
Net Loss After Extraordinary Item........................... (7,711) (25,648) (45,448)
Accumulated Deficit - Beginning............................. (37,737) (19,800) 0
Accumulated Deficit - Ending................................ (45,448) (45,448) (45,448)
Net Loss Per Share Before and After
Extraordinary Item (Based on Shares
Outstanding of 520,496,750)............................... $(.000015) $ (.000049) $(.000087)
</TABLE>
See Accompanying Notes to Financial Statements.
4
<PAGE>
ARCHER SYSTEMS LIMITED, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended Cumulative
January 31, 2000 From
(Unaudited) Inception
----------------- -------------
<S> <C> <C>
Cash Flows From Operations:
Net Loss After Extraordinary Item........................... $ (25,648) $ (45,448)
Adjustments to Reconcile Net Increase to
Net Cash Provided by Operations
Increase in Current Assets.................................. 1,210 1,410
Increase in Current Liabilities............................. (2,407) 22,407
----------------- -------------
Net Cash Used in Operations................................. 24,451 24,451
Cash Flows from Financing Activities:
Proceeds from Long-term Borrowings.......................... 24,600 24,600
----------------- -------------
Net Cash Provided by Financing Activities................... 24,600 24,600
Net Increase (Decrease) in Cash............................. 149 149
Cash Balance Beginning of Period............................ 0 0
----------------- -------------
Cash Balance End of Period.................................. $ 149 $ 149
================ =============
</TABLE>
See Accompanying Notes to Financial Statements.
5
<PAGE>
Archer Systems Limited, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
January 31, 2000
(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.
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.
6
<PAGE>
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 January 31,
2000.
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.
On November 19, 1999, the Company issued a promissory note to an officer of
the Company in the principal amount of $1,600, 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 nine months
ended January 31, 2000.
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.
8
<PAGE>
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
$24,600 have been obtained from a third party and an officer of the Company 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.
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 eight months of expenditures totaling $4,800
as of January 31, 2000.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the quarter and the nine months
ended January 31, 2000 amounted to $5,531 and $20,187, respectively. Cumulative
expenses since inception totaled $40,187 of which $20,000 was incurred for audit
fees.
INTEREST EXPENSE
Interest expense for the quarter and the nine months ended January 31, 2000
totaled $380 and $661, respectively, due to borrowings during the nine month
period.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position was $149 as of January 31, 2000, as compared
with a zero balance as of year end April 30, 1999. Cash flows from activities
during the nine months ended January 31, 2000 used cash of $24,451 due to the
net loss of $25,648 adjusted for an increase in current assets of $1,210 and an
increase in current liabilities of $2,407.
The net cash provided by financing activities during the nine months ended
January 31, 2000, consisted of long-term borrowings totaling $24,600. These
proceeds funded operating activities during the nine 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. (3)
10(d) Copy of 6% Promissory Note Due August 17, 2001. (3)
10(e) Copy of 6% Promissory Note Due November 18, 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.
(3) Filed as an exhibit to the Company's Form 10QSB/A filed December 14,
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: March 14, 2000
ARCHER SYSTEMS LIMITED, INC.
By: /s/ Richard J. Margulies
--------------------
Richard J. Margulies
President
By: /s/ Walter J. Krzanowski
--------------------
Walter J. Krzanowski
Secretary/Treasurer
12
EXHIBIT INDEX
Exhibit No Description Page
10(e) Copy of 6% Promissory Note Due 2
November 18, 2001
1
Exhibit 10(e)
NOTE
$1,600 Date: November 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 $1,600.00, 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
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<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> JAN-31-2000
<EXCHANGE-RATE> 1
<CASH> 149
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,410
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,559
<CURRENT-LIABILITIES> 22,407
<BONDS> 24,600
0
0
<COMMON> 0
<OTHER-SE> (45,448)
<TOTAL-LIABILITY-AND-EQUITY> 1,559
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,331
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 380
<INCOME-PRETAX> (7,711)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,711)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
