SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A-2
(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.)
470 East 3900 South, Suite 205, Salt Lake City, Utah 84107
(Address of Principal Executive Offices)
(801) 281-0888
(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 March 31, 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 PLAN OF OPERATION........................................3
PART II
ITEM 5. OTHER INFORMATION.....................................................5
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. 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-8 and incorporated herein by this reference.
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS PAGE
Balance Sheets...............................................................F-1
Statements of Operations.....................................................F-2
Statements of Stockholders' Equity...........................................F-3
Statements of Cash Flows.....................................................F-4
Notes to Financial Statements................................................F-5
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS, INC.
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
Balance Sheet
September 30, 1996 (Unaudited) and December 31, 1995
September 30 December 31
1996 1995
----------- -----------
ASSETS
Current Assets
<S> <C> <C>
Cash ...................................... $ 0 $ 6,056
Total Current Assets ......................... 0 6,056
Other Assets
Investment - securities ................... 0 169,812
TOTAL ASSETS ................................. $ 0 $175,868
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accrued expenses ........................... $ 1,842 $ 52,089
Total Current Liabilites ...................... 1,842 52,089
--------- --------
Shareholders' Equity
Common stock par value $.0001; 200,000,000
shares authorized; 4,420,336 and 4,420,336
shares issued ............................. 442 442
Additional paid-in capital ................. 884,734 884,734
Deficit accumulated during development stage (887,018) (761,397)
--------- --------
Total Shareholders' Equity .................... (1,842) 123,779
--------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY .......................... $ 0 $ 175, 868
========= ========
See notes to financial statements.
F-1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS, INC.
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
STATEMENTS OF OPERATIONS
For The Three Months Ended September 30, 1996 and September 30, 1995 (Unaudited)
For The Nine Months Ended September 30, 1996 and September 30, 1995 (Unaudited)
Period From Date of Inception (January 7, 1982) Through September 30, 1996 (Unaudited)
Inception
Three Three Nine Nine Through
Months Months Months Months September 30,
1996 1995 1995 1995 1996
---------- ----------- -------- ----------- ----------
Revenue:
<S> <C> <C> <C> <C> <C>
Debt settlement .................................... $ -- $ -- $ -- $ 2,610 $ 2,610
Interest Income .................................... -- -- -- -- 61,208
----------- ----------- ----------- ----------- -----------
2,610 63,818
Expenses:
Investigation, evaluation and exploration of
prospective mineral properties ................. -- -- -- -- 424,416
General and administrative ......................... 89,718 53,389 97,320 87,557 433,484
Amortization and depreciation ...................... -- -- -- -- 1,000
Loss on investment securities ...................... 28,301 -- 28,301 -- 28,301
----------- ----------- ----------- ----------- -----------
118,019 53,389 125,621 87,557 887,201
----------- ----------- ----------- ----------- -----------
Income (Loss) before income taxes ....................... (118,019) (53,389) (125,621) (84,947) (887,201)
Income taxes ....................................... -- -- -- -- 183
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) ....................................... $ (118,019) $ (53,389) $ (125,621) $ (84,947) (887,018)
============ ============ ============ =========== ===========
NET INCOME (LOSS) PER COMMON SHARE ...................... $ (0.03) $ (0.26) $ (0.03) $ (0.41)
=========== =========== =========== ===========
average number of shares outstanding ................... 4,420,336 206,752 4,420,336 206,752
=========== =========== =========== ===========
See notes to financial statements.
F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS, INC.
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
STATEMENTS OF STOCKHOLDER' EQUITY
Period From Date of Inception ( January 7, 1982) Through September 30, 1996 (Unaudited)
Additional
Common Stock Common Stock Paid-In Accumulated
Shares Amount Capital Deficit
Issuance of common stock to incorporators
<S> <C> <C> <C> <C>
for cash - 1992 ...................................... 15,000,000 $ 1,500 $ 28,500 --
Change in number of shares issued to
incorporators and price per share - 1983 ............. 2,142,857 214 (214) --
Issuance of common stock fr cash - 1983 ................ 14,285,715 1,429 23,571 --
Public stock offering for cash, net of $111,627
in underwriting expenses - 1984 ...................... 49,500,000 4,950 378,423 --
Sale of warrants ....................................... -- -- 100 --
Net loss for the period from date of inception
(January 7, 1982) through December 31, 1992 .......... -- -- -- (442,883)
Balance December 31, 1992 .............................. 80,928,572 8,093 430,830 (442,883)
----------- ----------- ----------- -----------
Results of operations year ended Dec 31, 1993 .......... -- -- --
----------- ----------- ----------- -----------
Balance December 31, 1993 .............................. 80,928,572 8,093 430,830 (442,883)
----------- ----------- ----------- -----------
Results of operations year ended Dec 31, 1994 .......... -- -- -- --
----------- ---------- ---------- -----------
Balance December 31, 1994 .............................. 80,928,572 8,093 430,830 (442,883)
----------- ---------- ---------- -----------
Reverse stock split, 80, 928, 572 to 54,412 ............ (80,874,160) (8,088) 8,088 --
Issuance of shares for no determinable
consideration - May 1995 ............................. 76,667 8 (8) --
Issuance of shares for cash - July 1995 ................ 172,500 17 17,233 --
Issuance of shares for services - July 1995 ............ 10,000 1 999 --
Issuance of shares for debt - July 1995 ................ 226,500 23 22,627 --
Issuance of shares for cash - November 1995 ............ 510,000 51 50,949 --
Issuance of shares for services - November 1995 ........ 112,000 11 11,189 --
Issuance of shares for cash - December 1995 ............ 222,222 22 39,978 --
Issuance of shares for services - December 1995 ........ 1,337,921 134 133,658 --
Issuance of shares for assets - December 1995 .......... 1,698,114 170 169,641 --
Results of operations year ended Dec 31, 1995 .......... -- -- -- (318,514)
----------- ---------- -------- ---------
Balance December 31, 1995 .............................. 4,420,336 $ 442 $ 884,734 $ (761,397)
----------- ---------- --------- --------
Results of operations nine months ended
September 30, 1996 .................................. -- -- -- (125,621)
Balance September 30, 1996 ............................. 4,420,336 $ 442 $ 884,734 $ (887,018)
========== =========== =========== ===========
See notes to financial statements.
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS, INC.
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 1996 and September 30, 1995 (Unaudited)
Period From Date of Inception ( January 7, 1982) Through September 30, 1996 (Unaudited)
Inception
Nine Nine Through
Months Months September 30,
1996 1995 1996
---------- ----------- ----------
CASH FLOWS FROM OPERATING ACTIVITES:
<S> <C> <C> <C>
Net (Loss) .............................................. $(125,621) $ (84,947) $(887,018)
Adjustments to reconcle net (loss) to net cash
used by operating activities:
Increase (decrease) in accrued liabilities .......... (50,247) 44,074 1,842
Services paid with common stock ..................... -- 23,650 145,992
Common stock issued for debt ........................ -- -- 22,650
Permanent decline in investments .................... 28,301 -- 28,301
Decrease in assets:
Investments ......................................... 141,511 -- 141,511
-------- -------- --------
Total Adjustments ......................................... 119,565 67,724 340,296
--------- --------- ---------
Net cash (used) by operating activities ................. (6,056) (17,223) (546,722)
--------- ---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions by incorporators .................. -- -- 55,000
Proceeds from public stock offering ..................... -- -- 383,473
Issuance of common stock for cash ....................... -- 17,250 108,249
---------- --------- --------
Net cash provided by financing activities ............... -- 17,250 546,722
--------- --------- ---------
Net increase in cash .................................... (6,056) 27 0
Cash, beginning ......................................... 6,056 0 0
--------- --------- ---------
Cash, ending ............................................ $ 0 $ 27 $ 0
========== ========= =========
See notes to financial statements.
F-4
</TABLE>
<PAGE>
EUROTRONICS HOLDINGS, INC.
(A Development Stage Company)
Formerly Hamilton Exploration Co., 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 statements contain all adjustments, consisting 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: Debt Settlement
Effective July 16, 1996, the Company settled all prior fees due to Canton
Financial Services Corporation ("CFS") in connection with its consulting
agreement by transferring the Companys's investment securities to CFS. This
transaction eliminated all of the Company's liabilites at the time and left the
Company with no assets.
NOTE 3: Proposed Acquisition of InterConnect West, Inc.
On July 16, 1996, the Company executed an Agreement for Exchange of Stock 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. On February 11, 1997, the Company executed an
Amended Agreement for the Exchange of Stock ("Agreement") which superceded the
July 16, 1996 agreement between the parties. Under this Agreement, the Company
will acquire all outstanding shares of ICW, making ICW the Company's
wholly-owned subsidiary. The Agreement is subject to the approval of a majority
of the Company's shareholders and is not yet effective. All references to common
stock mentioned in this paragraph account for a 1 for 2 reverse stock split,
which is to be effected by Eurotronics at or before closing of theAgreement.
Under the Agreement the common stock of ICW (1,000 shares with a par value of
$1.00) will be transferred to the Company and the Company will issue 2,300,000
shares of its common stock to Mark Tolman. In addition, 316,620 shares of common
stock will be issued to CFS for services rendered to the Company in connection
with the Agreement. CFS is also due a payment of $100,000 cash payment within 90
days of the execution of the Agreement. Also, 15,000 shares of common stock will
be issued to James Titlon, the Company's former president and director for
services rendered in the negotiation of the Agreement.
NOTE 4: Pro forma Statements
For financial accounting purposes the proposed acquisition of ICW (see note 3)
will be treated as a reverse acquisition and ICW will be treated as acquiring
the Company. Pro forma statements presented herein 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 pro forma
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.
F-5
<PAGE>
<TABLE>
<CAPTION>
Pro Forma Combined Balance Sheet
September 30, 1996 and December 31, 1995
September 30, December 31,
1996 1995
--------- -----------
ASSETS
Current Assets
<S> <C> <C>
Cash ........................................... $ 21,272 $ 17,782
Accounts Receivable ............................ 89,375 17,770
--------- ---------
Total Current Assets ........................... 110,647 35,552
Equipment, net depreciation .......................... 37,317 23,638
TOTAL ASSETS ......................................... $ 147,964 $ 59,190
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable ............................... $ 22,074 $ 4,822
Accrued Expenses ............................... $ 106,842 $ 21,629
Current portion of long-term debt .............. -- 4,284
--------- ---------
Total Current Liabilities ...................... 128,916 30,735
Long Term Debt ....................................... 30,000 25,716
--------- ---------
TOTAL LIABILITIES .................................... 158,916 56,451
STOCKHOLDERS' EQUITY:
Common stock, $.0001 par value;
Authorized, 200,000,000 shares;
Issued, 4,841,788 shares at September 30, 1996 . 484 1,000
Additional paid-in capital ..................... 7,401 3,764
Accumulated Deficit ............................ (18,353) (2,025)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY ........................... (10,952) 2,739
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........... $ 147,964 $ 59,190
========= =========
</TABLE>
F-6
<PAGE>
<TABLE>
<CAPTION>
Pro Forma Combined 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 .......................................... 4,841,788 4,841,788 4,841,788 4,841,788
=========== =========== =========== ===========
F-7
</TABLE>
<PAGE>
NOTE 6: 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-8
<PAGE>
ITEM 2. MANAGEMENT'S PLAN OF OPERATION
On July 16, 1996, the Company executed an Agreement for the Exchange of
Stock with InterConnect and InterConnect's sole shareholder, Mark Tolman. The
Agreement was made effective July 30, 1996. On February 11, 1997, the Company
executed an Amended Agreement for the Exchange of Stock which superseded the
July 16, 1996 agreement between the parties (the Amended Agreement for the
Exchange of Stock shall hereinafter be referred to as the "Agreement"). Pursuant
to the Agreement and subject to shareholder approval, the Company will acquire
100% of InterConnect's outstanding capital stock, making InterConnect its
wholly-owned subsidiary. The acquisition was structured as a tax-free exchange
of stock under the Internal Revenue Code of 1986, as amended.
InterConnect is the developer of Access Market Square, an electronic
shopping mall on the World Wide Web. InterConnect designs web pages, known as
storefronts, for 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 on 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. InterConnect's principal offices are located at 470 East 3900 South, Suite
205, Salt Lake City, Utah 84107. InterConnect's telephone number is
801-281-0888.
In exchange for the proposed acquisition of InterConnect, the Company
agreed to issue shares of Common Stock to James Tilton, Canton Financial
Services Corporation, a Nevada corporation ("CFSC"), and Mark Tolman. Mr.
Tilton, the Company's former president and director, will receive 15,000 shares
of Common Stock. The shares to be issued to Mr. Tilton under the Agreement are
consideration for services rendered by Mr. Tilton in the negotiation of the
Agreement. The resale of these shares is restricted pursuant to Rule 144 ("Rule
144") under the Securities Act of 1933 (the "Act").
CFSC, who served as a financial consultant to the Company from April 1995
to March 1997, will be issued shares of Common Stock as a finder's fee for
introducing the Company to InterConnect and for financial services CFSC rendered
to the Company in connection with the Agreement. CFSC will receive 316,620
shares of Common Stock. The Company is obligated to register all shares to be
issued to CFSC pursuant to an appropriate registration statement under the Act.
The 316,620 shares of Common Stock are to be issued as follows: (1) 79,155
shares shall be issued as soon after the execution of the Agreement as is
practicable; (2) 79,155 shares shall be issued within 90 days of the execution
of the Agreement; (3) 79,155 shares shall be issued within 180 days of the
execution of the Agreement; and (4) 79,155 shares shall be issued within 270
days of the execution of the Agreement. CFSC shall also receive a $100,000 cash
payment within 90 days of the execution of the Agreement.
Finally, the Company will issue to Mark Tolman 2.3 million shares of Common
Stock, all of which shall be restricted pursuant to Rule 144. Mr. Tolman, the
sole shareholder of InterConnect, shall receive these shares as consideration
for his transfer of 100% of InterConnect's capital stock to the Company. After
the Agreement is effective, Mr. Tolman will own a controlling interest in the
Company's outstanding stock. Mr. Tolman was appointed as the Company's president
and director in connection with the Company's pending acquisition of
InterConnect.
<PAGE>
The Agreement is subject to the approval of a majority of the Company's
shareholders and is not yet effective. The Company will hold an annual meeting
of shareholders at which the Agreement will be discussed and submitted to
shareholder ballot. The Company is planning to hold the meeting after it has
sent a definitive information statement to all of its shareholders pursuant to
Regulation 14C of the Securities Exchange Act. If the Agreement is approved, the
Company will conduct all of its operations through InterConnect. The Company has
no other operations, and has not recorded any revenue from operations during the
last two fiscal years. An understanding of the Company's financial condition is
therefore not possible without reference to the operations and financial
condition of InterConnect. Accordingly, even though the Agreement with
InterConnect is not yet effective, the following paragraphs will treat the
Agreement as if it were effective for purposes of discussing the Company's plan
of operation.
Assuming the Company's shareholders approve the Agreement, the Company's
focus will be to increase InterConnect's revenues by expanding InterConnect's
operations. Pursuant to this objective, the Company will attempt to implement an
aggressive marketing plan. Beginning in 1997, InterConnect intends to hire two
sales professionals to augment its current staff of five. 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.
To complement its anticipated future 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 seek 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 during the next fiscal year. 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 InterConnect. InterConnect 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
InterConnect'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 InterConnect recorded on its most
recent audited financial statements, and will therefore put increased strain on
InterConnect's liquidity. However, the Company believes that such expenditures
will result in revenues for InterConnect that greatly exceed its previous
revenues. Therefore, the Company has estimated that much of the cash flow
necessary to implement the marketing plan can be generated through revenues.
These estimates are based on a business plan formulated by the Company's
management. 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. The Company
can provide no assurances that InterConnect's revenues will be sufficient to
cover its marketing costs or that other means of raising capital will be
available to InterConnect.
If the Agreement is approved by a majority of the Company's shareholders,
the Company anticipates spending an additional $50,000 on computer equipment and
Internet connection fees to improve its current facilities. The Company believes
that these capital expenditures are necessary for InterConnect to maintain its
current service level in light of anticipated increases in the scope of
InterConnect's operations. Management believes that the cash needed for this
equipment can also be generated through InterConnect's revenues or through an
offering of the Company's securities.
<PAGE>
If the Agreement is not ultimately approved, the Company will likely resume
its quest for a suitable merger or acquisition candidate. Since the Company does
not have any current sources of revenue, it is likely that any future merger or
acquisition would involve the Company issuing shares of its Common Stock. The
Company will also need to raise additional funds to satisfy its cash
requirements if the Agreement is not approved.
ITEM 5. OTHER INFORMATION
On February 11, 1997, the Company's board of directors voted to recommend
to its shareholders that the Company effect a 1-for-2 reverse stock split of the
Company's issued and outstanding Common Stock. The board recommended the reverse
split because they believed that the number of issued and outstanding shares of
Common Stock was disproportionately large compared to the Company's revenue, net
income and net worth. The reverse stock split has not been approved by the
Company's shareholders but will be voted upon at a meeting of shareholders. The
Company intends to hold this shareholders' meeting upon completing the
dissemination of a definitive information statement to its shareholders pursuant
to Regulation 14C of the Securities Exchange Act of 1934.
The Company will send a notice of annual meeting to its shareholders when the
date of the meeting is known.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(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 its behalf by the undersigned, thereunto duly
authorized, this 7TH day of April 1997.
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 and on
the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Mark Tolman President and Director April 7, 1997
- --------------------
Mark Tolman
/s/ Frank Muehlmann Secretary-Treasurer April 7, 1997
- -------------------
Frank Muehlmann
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION OF EXHIBIT
10(a) * 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.)
10(b) 13 Amended Agreement of Exchange of Stock signed on February 11,
1997 by and between the Company and InterConnect West, Inc.,
Mark Tolman, James Tilton and Canton Financial Services
Corporation
28(a) F-1 Audited Financial Statements for InterConnect West, Inc. for
fiscal year end December 31, 1995
28(b) 11 Response to January 9, 1997, Comment Letter issued by the
Securities and Exchange Commission
* These exhibits appear in the manually signed original copies of the respective
filings made by the Company with the Commission as indicated.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of
InterConnect West, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheet of InterConnect West, Inc. (an S
Corporation), as of December 31, 1995, and the related statements of operations,
stockholders' equity and cash flows for the period April 21, 1995 (date of
inception) to December 31, 1995. 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 audit.
We conducted our audit 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 InterConnect West, Inc. (an S
Corporation) as of December 31, 1995, and the results of its operations and cash
flows for the period April 21, 1995 (date of inception) to December 31, 1995, in
conformity with generally accepted accounting principles.
/s/Andersen, Andersen & Strong
- -----------------------------
October 31, 1996
Salt Lake City, Utah
<PAGE>
AGREEMENT FOR THE EXCHANGE OF STOCK
THIS AGREEMENT FOR THE EXCHANGE OF STOCK ("Agreement") is executed this
3RD day of February 1997 by and between Eurotronics Holdings Incorporated, a
Utah corporation ("EHI"), InterConnect West, Inc., a Utah corporation ("ICW"),
Mark Tolman, an individual, Canton Financial Services Corporation, a Nevada
corporation ("CFSC"), and James Tilton, an individual.
RECITALS
Whereas, ICW and its sole shareholder, Mark Tolman (collectively
hereinafter referred to as "ICW"), desire to exchange and transfer all of ICW's
capital stock to EHI and EHI desires to acquire any and all rights and interests
in and to all of the issued and outstanding capital stock of ICW in exchange for
certain shares of EHI's common stock;
Whereas, the parties desire to make this transaction a tax-free
exchange of stock under the Internal Revenue Code of 1986, as amended (the
"Code").
Whereas, the parties desire to utilize the services of CFSC in
connection with this Agreement.
Whereas, the parties hereto were either parties to, or the
beneficiaries of, a predecessor to this Agreement, executed on July 16, 1996,
and the parties wish to modify certain consideration terms of that previous
agreement.
AGREEMENT
NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by this reference, and for and in consideration of the mutual covenants
and agreements contained herein, and in reliance on the representations and
warranties set forth in this Agreement, the benefits to be derived herein and
for other valuable consideration, the sufficiency of which is hereby expressly
acknowledged, the Parties agree as follows:
1. Consideration and Exchange of Shares. At the closing, as defined in Section 7
("Closing"), ICW agrees to exchange, assign, transfer and convey exclusively to
EHI all of the issued and outstanding shares of capital stock of ICW ("ICW
Shares").
At Closing, EHI will issue to Mark Tolman 2.3 million (2,300,000)
shares of common stock, par value $0.0001 ("Common Stock"), which shall be
issued pursuant to Rule 144 ("Rule 144") under the Securities Act of 1933, as
amended (the "Act") (the "Shares"). The Shares shall be issued after EHI
completes a 1-for-2 reverse stock split to be effected by EHI at or before
Closing. EHI warrants that the 1-for-2 reverse split shall constitute the only
stock division to be conducted by EHI for a period of at least one year after
the execution of this Agreement. From and after Closing, ICW will become a
wholly-owned subsidiary of EHI, and the name of EHI will duly be changed, with
the assistance of CFSC, to "Access Market Square, Inc" as soon as is
practicable.
As consideration for services CFSC has performed related to the
negotiation and execution of this Agreement, EHI shall issue to CFSC an
aggregate of 316,620 shares of Common Stock which shall be issued pursuant of a
Form S-8 Registration Statement or other available registration statement under
the Act .
The registered shares of Common Stock under this Paragraph shall be issued to
CFSC as follows:
79,155 registered shares shall be issued on or before Closing,
but shall be held in escrow for 90 days by an escrow agent
to be mutually selected by EHI and CFSC.
79,155 registered shares shall be issued on or before 90 days
after Closing..
79,155 registered shares shall be issued on or before 180 days
after Closing.
79,155 registered shares shall be issued on or before 270 days
after Closing.
All shares to be issued to CFSC shall account for a 1-for-2 reverse stock split
to be effected by EHI at or before Closing. If EHI shall fail, without good
cause, to issue any shares according to the schedule set forth above, interest
of eight per cent per annum shall accrue on the fair market value of such
undelivered shares.
In addition to the Common Stock specified above, CFSC shall receive
from EHI $100,000 payable in cash at a date to be mutually agreed upon but which
date shall not be more than 90 days after the execution of this Agreement. Any
amounts which remain unpaid after 90 days shall be paid, at CFSC's option,
through the issuance of registered shares of EHI Common Stock. For purposes of
this Paragraph, such shares shall be valued at one-half the average bid and
asked prices and the day such shares are actually issued.
EHI hereby agrees to issue 15,000 shares of Common Stock, restricted
pursuant to Rule 144, to James Tilton, EHI's former president and director, in
exchange for services Mr. Tilton performed in negotiating and executing the
Agreement. The Common Stock to be issued to Mr. Tilton shall be issued
subsequent to the 1-for-2 reverse stock split.
2. Performance by CFSC. CFSC hereby covenants as follows:
a. At Closing, CFSC shall deliver to EHI for cancellation any and
right, title and interest then held by CFSC in 677,149 shares of
EHI's Common Stock currently represented by certificate numbers
5507 and 5510.
b. At Closing, CFSC shall release EHI from EHI's obligation to
compensate CFSC for consulting services CFSC has performed to EHI
through Closing.
3. Representation and Warranties of ICW. ICW represents and warrants that:
a. Its shareholder, Mark Tolman ("Shareholder"), is a citizen of the
United States of America.
b. The Shareholder is acquiring the Shares for his own account and not
with a view to any distribution within the meaning of the Act. The
Shareholder acknowledges that he has been advised and made aware that
(i) EHI is relying upon an exemption under the Act predicated upon his
representations and warranties contained in this Agreement, and (ii)
the Shares issued to the Shareholder pursuant to this Agreement will be
"restricted stock" within the meaning of Rule 144 of the Act. Unless,
and until the Shares are registered under the Act, they will be subject
to limitations upon resale set forth in Rule 144.
<PAGE>
c. The Shareholder has received all of the information he considers
necessary and appropriate for determining whether to acquire the Shares
pursuant to this Agreement. The Shareholder is familiar with the
business, affairs, risks and properties of EHI. The Shareholder has had
an opportunity to ask questions of and receive answers from EHI and its
officers, directors and other representatives regarding EHI and the
terms and conditions of the exchange of the Shares. The Shareholder has
had the opportunity to obtain any additional information EHI possesses
or could acquire without unreasonable effort or expense, necessary to
verify the accuracy of the information furnished.
d. The Shareholder has such knowledge and expertise in financial and
business matters that he is capable of evaluating the merits and
substantial risks of an investment in the Shares and is able to bear
the economic risks relevant to the acquisition of the Shares hereunder.
e. The Shareholder is relying solely upon independent consultation with
his professional, legal, tax, accounting and any other advisors as he
deems to be appropriate in purchasing the Shares; the Shareholder has
been advised by, and has consulted with, his professional tax and legal
advisors with respect to any tax consequences of investing in EHI.
f. The Shareholder recognizes that an investment in the securities of EHI
involves substantial risk and understands all of the risk factors
related to the acquisition of the Shares.
g. The Shareholder understands that there may be no market for the Shares.
h. The Shareholder's financial condition is such that he is under no
present or contemplated future need to dispose of any portion of Shares
to satisfy any existing or contemplated undertaking, need or
indebtedness.
i. Without in any way limiting the representation set forth above, the
Shareholder further agrees not to make any disposition of all or any
portion of the Shares unless and until:
(1) There is then in effect a registration statement or exemption
under the Act covering such proposed disposition and such
disposition is made in accordance with the requirements of such
registration statement or exemption; or
(2) He shall have notified EHI of the proposed disposition and
shall have furnished EHI with a detailed statement of the
circumstances surrounding the proposed disposition, and if
requested by EHI, the Shareholder shall have furnished EHI with an
opinion of counsel, reasonably satisfactory to EHI and its
counsel, that such disposition is proper under the applicable
rules and regulations promulgated under the Act.
j. It is understood that the certificates evidencing the Shares will bear
substantially the following legend:
"The securities evidenced hereby have not been registered under
the Securities Act of 1933, as amended (the "Act"), nor qualified
under the securities laws of any states, and have been issued in
reliance upon exemptions from such registration and qualification
for non-public offerings. Accordingly, the sale, transfer, pledge,
hypothecation, or other disposition of any such securities or any
interest therein may not be accomplished except pursuant to an
effective registration statement or exemption under the Act and
qualification under applicable State securities laws, or pursuant
to an opinion of counsel, satisfactory in form and substance to
the Issuer to the effect that such registration or exemption and
qualification are not required."
<PAGE>
k. ICW confers full authority upon EHI (i) to instruct its transfer agent
not to transfer any of the Shares until it has received written
approval from EHI and (ii) affix the legend in Subparagraph j above to
the fact of the certificate or certificates representing the Shares.
l. The Shareholder understands that EHI is relying upon his
representations and warranties as contained in this Agreement in
consummating the sale and transfer of the Shares without registering
them under the Act or any law. Therefore, the Shareholder agrees to
indemnify EHI against, and hold it harmless from, all losses,
liabilities, costs, penalties and expenses (including attorney's fees)
which arise as a result of a sale, exchange or other transfer of the
Shares other than as permitted under this Agreement. The Shareholder
further understands and agrees that EHI will make an appropriate
notation on its transfer records of the restrictions applicable to
these Shares.
m. The Shareholder has fully disclosed his financial condition as required
by law in connection with the Shares to EHI or its agent. At Closing,
the Shareholder and management of ICW will deliver a certificate
attesting, among other things, that there will have been no material
changes in the condition of the business or its finances as reflected
in its financial statements, which shall be audited in accordance with
generally accepted accounting principles; that all corporate authority
has been duly taken to enter into and close this transaction; that
there are no material undisclosed liabilities, claims, or judgments
against ICW; and that all legal and governmental regulations or
authorities will have been complied with, or arrangements made for
compliance, including arrangements for any such outstanding
liabilities, claims, or judgments.
4. Representations and Warranties of EHI. EHI represents and warrants that:
a. It is a corporation duly organized, and validly existing under the laws
of the State of Utah, United States of America.
b. Prior to the execution of this Agreement and/or any predecessors of
this Agreeement, EHI had no assets, liabilities or outstanding
contracts except as may be expressly mentioned in this Agreement.
c. It has all necessary corporate power and authority under the laws of
Utah and all other applicable provisions of law to own its properties
and other assets now owned by it, to carry on its business as now being
conducted, and to execute and deliver and carry out the provisions of
this Agreement.
d. All corporate action on its part required for the lawful execution and
delivery of this Agreement and the issuance, execution and delivery of
the Shares have been duly and effectively taken. Upon execution and
delivery, this Agreement will constitute its valid and binding
obligation, enforceable in accordance with its terms, except as the
enforceability may be limited by applicable bankruptcy, insolvency or
similar laws and judicial decisions affecting creditors' rights
generally. 5. Survival of Representations, Warranties and Covenants.
The representations, warranties and covenants made respectively by EHI
and the Shareholder in this Agreement shall survive the Closing and the
exchange of the respective Shares called for hereunder.
<PAGE>
6. Miscellaneous.
a. In the event any one or more of the provisions contained in this
Agreement are for any reason held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not effect any other provisions of this
Agreement. This Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
b. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, legal representatives, successors
and permitted assigns. The parties may not transfer or assign all or
any part of their rights or obligations except to the extent expressly
permitted by this Agreement or otherwise agreed to in writing by both
parties.
c. This Agreement constitutes the entire agreement and understanding
between the parties, and may not be modified or amended except as in
writing signed by both parties.
d. No term or condition of this Agreement shall be deemed to have been
waived nor shall there be any estoppel to enforce any provision of this
Agreement except by written instrument of the party charged with such
waiver or estoppel.
e. This Agreement shall be interpreted by laws of the State of Utah.
f. The parties hereby agree that, subject to applicable law, any dispute
arising under this Agreement shall be submitted to binding arbitration.
The prevailing party in such arbitration proceeding shall be entitled
to reimbursement of any and all costs directly or indirectly related to
such proceeding from the other party or parties subject to the
proceeding.
g. This Agreement may be executed in one or more counterparts, including
electronic mail or facsimile, each of which may be considered an
original copy hereof.
7. Closing. The Closing hereunder shall take place immediately after the
Agreement is approved by the shareholders of EHI and after EHI successfully
disseminates an information statement pursuant to Regulation 14C of the
Securities Exchange Act of 1934. Closing shall consist of the parties delivering
the securities, monies and other consideration contemplated hereunder, as well
as any documents necessary to effect this Agreement.
8. Tax-free Exchange. Insofar as possible, the parties agree that the exchange
of shares called for hereunder shall be a tax-free exchange under the tax laws
and the Code, and not an acquisition of assets.
9. Conditions to Closing. The Closing called for hereunder shall be subject to,
among other things:
a. The delivery to EHI at Closing of the ICW share certificates and the
accounting information called for herein, pursuant to generally
accepted accounting principles;
<PAGE>
b. The conduct of due diligence of ICW by EHI or its agent, satisfactory
to the management of EHI that the books, records, and assets of ICW are
in fact as have been represented;
c. Resolutions by the boards of directors of EHI and ICW ratifying this
transaction;
d. An opinion of counsel satisfactory to EHI that ICW is a validly
existing corporation, in good standing in its place of domicile, and
that all corporate actions called for hereunder have been duly taken,
and that, to such counsel's knowledge, there are no outstanding or
threatened adverse legal actions, claims, or judgments, or the like,
other than may have been duly disclosed in writing by management of
ICW, and that all shares issued and outstanding in ICW are legally
being transferred to EHI, free of any claims or liens of any kind or
nature;
e. Duly notarized affidavits from the Shareholder that it has valid right,
title and interest in and to the shares being transferred, free of any
and all claims or liens thereon.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
"EHI" - EUROTRONICS HOLDINGS INCORPORATED "ICW" - INTERCONNECT WEST, INC.
/s/ Michael Brodsky /s/ Mark A. Tolman
Michael Brodsky, Vice President Mark A. Tolman, President
"CFSC" - CANTON FINANCIAL SERVICES MARK TOLMAN
/s/ Richard Surber /s/ Mark Tolman
Richard Surber, President Mark Tolman
JAMES TILTON
/s/ James Tilton
James Tilton
<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-31-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
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442
0
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<TOTAL-LIABILITY-AND-EQUITY> 175,868
<SALES> 0
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<CGS> 0
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<OTHER-EXPENSES> 125,621
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<INCOME-PRETAX> (125,621)
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