SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended September 30, 1996 .
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from _____________________ to
__________________.
Commission file number: 0-13409
Eurotronics Holdings Incorporated
(Name of Small Business Issuer in Its Charter)
Utah 87-0550824
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1095 East 2100 South, Salt Lake City, Utah 84106
(Address of Principal Executive Offices)
(801) 487-0888
(Issuer's Telephone Number, Including Area Code)
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 No XX
The number of shares outstanding of the issuer's common stock, par value
$0.0001, as of November 19, 1996 was 4,520,336.
Total Pages: 8
Exhibit Index on Page: 8
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS ................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............3
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ................................5
SIGNATURES.......................................................6
INDEX TO EXHIBITS................................................7
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
Unless otherwise indicated, the term "Company" refers to Eurotronics
Holdings Incorporated and its subsidiaries and predecessors. Consolidated,
unaudited interim financial statements including a balance sheet for the Company
as of the fiscal quarter ended September 30, 1996 and statements of operations
and statements of cash flows for the interim period up to the date of such
balance sheet and the comparable period of the preceding fiscal year are
attached hereto as Pages F-1 through F-4 and incorporated herein by this
reference.
PART I
ITEM 1. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS PAGE
Balance Sheets..............................................................F-1
Statements of Operations ...................................................F-2
Statements of Cash Flows ...................................................F-3
Condensed Notes to Financial Statements.....................................F-4
<PAGE>
EUROTRONICS HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
NOTE 1: Basis of Presentation
The accompanying consolidated unaudited condensed financial statements have been
prepared by management in accordance with the instructions in Form 10-QSB and
therefore, do not include all information and footnotes required by generally
accepted accounting principles and should therefore, be read in conjunction with
the Company's Annual Report to Shareholders on Form 10-KSB for fiscal year ended
December 31, 1995.
In management's opinion, the accompanying consolidated unaudited condensed
financial state contain all adjustments, consisting only of normal recurring
adjustments necessary for a fair statement of the results for the interim
periods presented. The interim operation results are not necessarily indicative
of the results for the fiscal year ending December 31, 1996.
NOTE 2: Acquisition of InterConnect West, Inc.
On July 16, 1996, the Company executed an Agreement for Exchange of Stock (the
"Agreement") with InterConnect West, Inc., a Utah corporation ("ICW"), and Mark
Tolman who prior to the Agreement owned 100% of the outstanding stock of ICW.
The Agreement was made effective July 31, 1996. Under the Agreement, the Company
acquired all outstanding shares of ICW, making ICW the Company's wholly-owned
subsidiary.
For financial accounting purposes the acquisition is treated as a reverse
acquisition and ICW is treated as acquiring the Company. The comparative figures
presented in the consolidated financial statements are those of ICW and the
limited assets and liabilities of Eurotronics have been recorded under the
purchase method of accounting at their historical costs. The financial
statements include the operations of ICW for all periods presented with the
operations of Eurotronics included from the date of recapitalization. The
operations of Eurotronics were immaterial prior to the recapitalization.
NOTE 3: Additional footnotes included by reference
Except as indicated in the footnotes above there has been no other material
change in the information disclosed in the notes to the financial statements
included in the Company Annual Report on Form 10-KSB for the year ended December
31, 1995. Therefore those footnotes are included herein by reference.
F-1
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS, INC.
Unaudited Balance Sheet
September 30, 1996 and December 31, 1995
September 30, December 31,
1996 1995
----------- -----------
ASSETS
Current Assets
<S> <C> <C>
Cash ......................................... $ 21,272 $ 23,838
Accounts Receivable .......................... 89,375 17,770
--------- ---------
Total Current Assets ......................... 110,647 41,608
Equipment, net depreciation ........................ 37,317 23,638
Investments - securities ........................... -- 169,812
TOTAL ASSETS ....................................... $ 147,964 $ 235,058
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable ............................. $ 22,074 $ 56,911
Accrued Expenses ............................. $ 106,842 $ 21,629
Current portion of long-term debt ............ -- 4,284
--------- ---------
Total Current Liabilities .................... 128,916 82,824
Long Term Debt ..................................... 30,000 25,716
--------- ---------
TOTAL LIABILITIES .................................. 158,916 108,540
STOCKHOLDERS' EQUITY:
Common stock, $.0001 par value;
Authorized, 200,000,000 shares;
Issued, 19,935,717 shares at September 30,
1996 and December 31, 1995 ................... 1,993 1,993
Additional paid-in capital ................... 3,176 126,550
Accumulated Deficit .......................... (14,128) (2,025)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY ......................... (10,952) 126,518
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......... $ 147,964 $ 235,058
========= =========
</TABLE>
F-2
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS, INC.
Unaudited Statement of Operations
For The Three Months Ended September 30, 1996 and September 30, 1995
For the Nine Months Ended September 30, 1996 and September 30, 1995
Three Three Nine Nine
Months Months Months Months
1996 1995 1996 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenue $ 84,560 $ 63,020 $ 253,762 $ 81,999
Cost of Revenue $ 29,165 $ 31,133 $ 99,713 $ 46,568
--------------- -----------------------------------------------------
Gross Profit 55,395 31,887 154,049 35,431
Expenses:
General and administrative 124,760 22,029 166,739 32,312
Amortization and depreciation 1,213 - 3,638 -
--------------- --------------- --------------- ---------------
125,973 22,029 170,377 32,312
--------------- --------------- --------------- ---------------
Income (Loss) before income taxes: (70,578) 9,858 (16,328) 3,119
Income taxes - - - -
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) $ (70,578) $ 9,858 $ (16,328) $ 3,119
=============== =============== =============== ===============
NET INCOME (LOSS) PER COMMON SHARE $ - $ - $ - $ -
=============== =============== =============== ===============
Weighted average number of shares
outstanding 19,935,717 19,935,717 19,935,717 19,935,717
=============== =============== =============== ===============
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS, INC.
Unaudited Statement of Cash Flows
Nine Months Ended September 30, 1996 and September 30, 1995
Nine Nine
Months Months
1996 1995
--------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income (Loss) $ (16,328) $ 3,119
--------------- ---------------
Adjustments to reconcile net income (loss) to
net cash used by operating activities:
(Increase) decrease in accounts receivable (71,605) (8,363)
Increase (decrease) in accounts payable (34,837) 17,786
Increase (decrease) in accrued liabilities & current portion 84,913 652
--------------- ---------------
Total adjustments (21,529) 10,075
--------------- ---------------
Net cash (used) by operating activities (37,857) (6,956)
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (13,678)
Net cash provided (used) by investing activities (13,678) -
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net effect of recapitalization $ 48,831 $ -
Net cash provided by financing activities 48,831 -
--------------- ---------------
Net increase (decrease) in cash and equivalents (2,704) (6,956)
Cash and equivalents, beginning 23,838 -
--------------- ---------------
Cash and equivalents, ending $ 21,134 $ (6,956)
=============== ===============
F-4
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
On July 16, 1996, the Company executed an Agreement for Exchange of Stock
(the "Agreement") with InterConnect West, Inc., a Utah corporation ("ICW"), and
Mark Tolman who prior to the Agreement owned of 100% of the outstanding capital
stock of ICW. The Agreement was made effective June 17, 1996. Under the
Agreement, the Company acquired all outstanding shares of ICW, making ICW the
Company's wholly-owned subsidiary. For a description of the terms of the
Agreement, see the Company's Form 10-QSB for the period ended June 30, 1996.
ICW is the developer of Access Market Square, an electronic shopping mall
on the World Wide Web. ICW designs web pages, known as storefronts, to
businesses interested in advertising and marketing their products and services
via the Internet. Through Access Market Square, Internet users can browse
through a business entity's catalog and place orders electronically. Hundreds of
businesses currently have storefronts in Access Market Square and those
storefronts are visited over 60,000 times daily. The median cost for a
storefront on Access Market Square is approximately $2,500 per year.
On July 30, 1996, a majority of the Company's shareholders consented to,
approved and ratified the Agreement to acquire ICW pursuant to a written consent
executed in lieu of a shareholders' meeting. Of the 4,420,336 shares of common
stock, par value $0.0001 ("Common Stock"), outstanding on that date, the holders
of 2,996,824 shares, or 67%, voted to approve the Agreement. The shareholders
also voted to change the Company's name to Access Market Square, Inc. and
approved a 1-for 10 reverse split of the Company's Common Stock.
Pursuant to Regulation 14C under the Securities Exchange Act of 1934 (the
"Act"), the Company is in the process of disseminating an information statement
to all shareholders who did not sign the written shareholders' consent. The
Company is preparing proforma financial information required to be included in
the information statement. The Company intends file a preliminary information
statement within 1-2 weeks of the filing of this Form 10-QSB. The Company
anticipates that it will file a definitive information statement 10 days after
the preliminary version is filed. Neither the Agreement, the name change nor the
reverse stock split will be effective until 20 days after the definitive
information statement is filed.
The Company conducts all of its operations through ICW and has no other
operations. An understanding of the Company's financial condition is therefore
not possible without reference to the operations and financial condition of ICW.
Moreover, the Company believes that the acquisition of ICW is effective under
relevant state law. Therefore, even though the Agreement with ICW is not yet
effective for purposes of the Act, the Company has consolidated the operations
of ICW into the financial statements that accompany this Form 10-QSB, and the
following discussion treats the acquisition of ICW as effective.
The Company's focus is to increase ICW's revenues by increasing the scope
of ICW's operations. Pursuant to this objective, the Company is attempting to
implement an aggressive marketing plan. Beginning in late 1996, ICW intends to
hire two sales professionals to augment their current staff. If hired, these
employees will be responsible for making sales calls to targeted businesses.
They will also receive incoming sales calls from leads generated by Access
Market Square's printed and online advertising. The Company also intends to hire
a marketing professional to work with pricing, advertising, product definition
and other key marketing tenets.
<PAGE>
To complement its telemarketing, the Company intends to employ a direct
mailing campaign. This will consist of postage cards to be disseminated to
approximately 20,000 individuals per month. This advertising will be targeted to
individuals who desire programming and graphic art work in connection with the
development of a personal web page. The goal of this direct mail marketing plan
is to generate leads for the sale of Access Market Square storefronts. The
Company is also planning to conduct a series of seminars to be held throughout
North America. The goal of the seminars is two-fold. First, the Company will
conduct face to face marketing of its storefronts to business entities suitable
to market products and services via Access Market Square. Second, the Company
will market business opportunities to individuals interested in selling Access
Market Square storefronts on behalf of ICW. ICW has been involved in these
seminars in the past and found them very lucrative.
The Company hopes to implement this marketing plan as a means of increasing
ICW's revenues and market penetration. The Company has estimated the annual cost
of this new marketing plan at approximately $1,408,000. This amount greatly
exceeds the $67,825 in expenses which ICW incurred during the 1995 fiscal year,
and will therefore put increased strain on ICW's liquidity. However, the Company
believes that such expenditures will result in revenues for ICW that greatly
exceed those of 1995. Therefore, the Company has estimated that much of the cash
flow necessary to implement the marketing plan can be generated through
revenues. The Company is currently investigating additional methods of potential
financing, including a potential future private offering of debt securities
and/or a public or private offering of its Common Stock. No material steps
toward obtaining such financing have been taken and the Company can provide no
assurances that ICW's revenues will be sufficient to cover its marketing costs
or that other means of raising capital will be available to ICW.
The Company anticipates spending an additional $50,000 on computer
equipment and Internet connection fees to supplement its current facilities. The
Company believes that these capital expenditures are necessary for ICW to
maintain its current service level in light of anticipated increases in the
scope of ICW's operations. Management believes that the cash needed for this
equipment can also be generated through ICW's revenues or through an offering of
the Company's securities.
Results of Operations
Gross revenues for the nine months ended September 30, 1996 were $253,762
compared to $81,999 for the same period in 1995. During the three months ended
September 30, gross revenue was $84,560 for 1996 and $63,020 for 1995.
Costs of revenues increased from $46,568 during the first nine months of
1995 to $98,713 for the same period in 1996. Costs of revenues for the third
quarter in 1996 were $29,165 compared to 31,133 for the same period in 1995.
Gross profit was $154,059 for the nine months ended September 30, 1996 and
$35,431 for the quarter ended the same date. Gross profit as a percentage of
revenues was 60.1% and 43.2%, respectively. Selling, general, and administrative
expenses were $170,337 from January 1 through September 30, 1995 and $32,312 for
the comparable period in 1996. For the quarter ended September 30, selling,
general, and administrative expenses were $22,029 for 1995 and $125,973 for
1996.
Net loss was $16,328 during the nine months ended September 30, 1996
compared to a net profit of $3,119 during the comparable period in 1995. For the
quarter ended September, the Company recorded a net loss in the amount of
$70,578 in 1996 compared to a net profit of $9,858 in 1995.
<PAGE>
Capital Resources and Liquidity
The Company had a net working capital deficit of $18,269 as of September
30, 1996 compared to a working capital deficit of $16,717 at the end of
September 1995. The main reason behind this working capital decrease is an
increase in accrued expenses from operations.
Net stockholders' equity in the Company was $126,518 at the end of December
1995, as compared to a deficit of $126,518 as of September 30, 1996. This
decrease is primarily due to the acquisition of ICW.
PART II
ITEM 6.
(a) Exhibits. Exhibits required to be attached by Item 601 of Regulation
S-B are listed in the Index to Exhibits beginning on page 6 of this
Form 10-QSB, which is incorporated herein by reference.
(b) Reports on Form 8-K. The Company did not file any reports on Form 8-K
during the fiscal quarter ended September 30, 1996.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant
caused this report to be signed on ts behalf by the undersigned, thereunto duly
authorized, this 19th day of November 1996.
Eurotronics Holdings Incorporated
/S/ Mark Tolman
Mark Tolman, President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities on the
dates indicated.
Signature Title Date
/s/ Mark Tolman President, Director November 19, 1996
Mark Tolman
/s/Michael Bodsky Secretary Treasurer and Director November 19, 1996
Michael Brodsky
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION OF EXHIBIT
10(i)(c) * Agreement of Exchange of Stock signed on July 15,
1996, effective June 17, 1996, by and between the
Company and InterConnect West, Inc. (Incorporated
herein by reference from the Company's Form 10-QSB
filed with the Commission on July 18, 1996.)
* These exhibits appear in the manually signed original copies of the respective
filings made by the Company with the Commission as indicated.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED UNAUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE COMPANY'S
SEPTEMBER 30, 1996 QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000734089
<NAME> EUROTRONICS HOLDINGS INCORPORATED
<MULTIPLIER> 1
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 21,272
<SECURITIES> 0
<RECEIVABLES> 89,375
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 37,317
<DEPRECIATION> 0
<TOTAL-ASSETS> 147,964
<CURRENT-LIABILITIES> 128,916
<BONDS> 0
0
0
<COMMON> 1,993
<OTHER-SE> (12,945)
<TOTAL-LIABILITY-AND-EQUITY> 147,964
<SALES> 0
<TOTAL-REVENUES> 253,762
<CGS> 99,713
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 170,377
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,328)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,328)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,328)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
