SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 (Fee required) for the fiscal year ended December 31, 1996.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) 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.)
1130 John Anderson Drive - Ormond Beach, Florida 32176
(Address of Principal Executive Offices)
(904) 441-1031
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(g) of the Exchange Act: Common Stock
$0.0001 Par Value
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 X
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
The issuer's total revenues for the year ended December 31, 1996, were $0.
The aggregate market value of the voting stock held by non-affiliates
computed by reference to the average bid and asked prices of such stock, as of
August 26, 1997, was $150,045.
The number of shares outstanding of the issuer's common stock, par value
$0.0001, as of August 26, 1997 was 3,943,187.
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1. DESCRIPTION OF BUSINESS ........................................... 3
ITEM 2. DESCRIPTION OF PROPERTY ........................................... 4
ITEM 3. LEGAL PROCEEDINGS ................................................. 4
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ............... 4
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS .......... 5
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION ......... 6
ITEM 7. FINANCIAL STATEMENTS .............................................. 6
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE ............................ 7
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT ................ 7
ITEM 10. EXECUTIVE COMPENSATION ........................................... 8
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ... 8
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ................... 9
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K ................................ 9
SIGNATURES ........................................................... 10
INDEX TO EXHIBITS .................................................... 11
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Business Development
As used herein the term "Company" refers to Eurotronics Holdings
Incorporated, a Utah corporation, and its predecessors unless the context
indicates otherwise. The Company was incorporated in Utah on July 7, 1982 as
Hamilton Exploration Co., Inc., to engage in the investigation, acquisition,
exploration, development and mining of mineral properties, with particular
emphasis on gold and other precious metals. Such activities were pursued from
incorporation until December 1989 when the Company ceased active operations.
Between 1989 and April 1995, the Company did not engage in operations of any
type. In early 1995, the Company began exploring opportunities to merge with or
acquire other viable business entities.
The present name of the Company was adopted in conjunction with a
subsequently rescinded December 20, 1995 merger with Eurotronics International
Incorporated, a Nevada corporation ("EII"). The merger provided that EII would
become a wholly-owned subsidiary of the Company. The only asset of EII consisted
of a subsidiary, Eurotronics Information Technology NV. Eurotronics Information
Technology NV is a computer information company that specializes in computer
software systems in Belgium. The Company intended that Eurotronics Information
Technology NV would continue its business as it had been operating, merge with
other businesses and add additional products.
On May 8, 1996, the Company, EII and EII's shareholders executed a
Rescission of the agreement and a Release of All Claims (the "EII Rescission").
The EII Rescission was made effective as of the date of the agreement, December
20, 1995. The decision to rescind the Agreement was reached because EII had not
been able to obtain the necessary audited financial statements related to
Eurotronics Information Technology NV and neither the Company nor EII had the
financial resources to continue to wait for audited financial statements from
this entity. For more information on the EII transaction, see the Company's Form
10-KSB for the fiscal year ended December 31, 1995.
After rescission of the EII transaction, the Company once again focused its
attention toward locating a viable merger or acquisition candidate. On July 16,
1996, the Company entered into a tax-free exchange of stock with InterConnect
West, Inc., a Utah corporation ("InterConnect")and Mark Tolman, who was
InterConnect's sole shareholder. This Agreement for the Exchange of Stock was
made effective July 30, 1996. InterConnect is the developer of Access Market
Square, an electonic shopping mall on the World Wide Web. InterConnect programs
and designs linked Internet web pages which allow businesses to advertise and
market their products over the Internet. For more information on InterConnect
and its business plan, see the Company's Form 10-QSB for quarter ended September
30, 1996.
Between July 1996 and February 1997, disputes arose concerning the
consideration which was to be paid to the parties as a result of the acquisition
of InterConnect. On February 11, 1997 and in order to resolve these disputes,
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
"Amended Agreement"). The Amended Agreement reduced the number of shares which
were to be issued as consideration for the acquisition of InterConnect and
decreased the dilution of shareholder equity which would have resulted from the
July 16, 1996 agreement. The Amended Agreement was subject to shareholder
approval and the Company filed a preliminary information statement and notice of
shareholders' meeting with the Securities Exchange Commission to notify
shareholders of the proposed transaction. However, neither the Amended Agreement
nor the acquisition of InterConnect was ultimately approved by the Company's
shareholders.
Between February and May 1997, the Company sought capital to finance the
acquisition of InterConnect. The Company had prepared to make a private
placement of debentures. However, due largely to the delays in effecting the
acquisition, the Company was unable to raise any capital through the intended
private offering. The Company sought alternative forms of financing, but could
not secure financing on terms which management believed were favorable to the
Company. Accordingly, the Company believed it had no practical way to generate
the capital necessary to make the acquisition of InterConnect successful.
<PAGE>
On June 3, 1997, the Company appointed Mel Fields and Paul Burke as
officers and directors of the Company. Upon the appointment of Mr. Fields and
Mr. Burke, Mark Tolman, Fred Muehlmann and Nick Nickerson all resigned from
their respective positions as officers and directors of the Company. On June 4,
1997, the Company executed a Rescission of Amended Agreement for the Exchange of
Stock and Mutual Release of all Claims (the "InterConnect Rescission"). None of
the shares to be issued as consideration for the acquisition of InterConnect
were ever issued. Pursuant to the InterConnect rescission, InterConnect and the
Company also released each other from substantially all of the claims that
either had against the other as a result of the failed acquisition of
InterConnect. The resignations of Tolman, Muehlmann and Nickerson were a result
of the Company's decision not to further pursue the acquisition of InterConnect
and were not the result of any disagreements with the Company, the Company's
management or any policies or practices of the Company.
Business of Issuer
Since the EII Rescission and the InterConnect Rescission, the Company has
been a dormant public company without any operations or any assets. The
Company's current business plan involves finding a suitable merger or
acquisition candidate who can provide the Company with a basis for successful
operations. The Company's management is in the process of prospecting for,
interviewing and performing the necessary due diligence to structure a
successful merger or acquisition. Since the Company does not have any liquid
assets, the Company intends to acquire business opportunities through the
issuance of its equity securities. This will likely result in future dilution of
the ownership interest enjoyed by the Company's current shareholders. However,
there can be no assurances that the Company will be able to negotiate a
corporate merger or acquisition or if such a combination is achieved, that it
will be profitable, worthwhile or sustainable.
The Company is currently negotiating with Sun Fun Products, Inc., a
manufacturer and distributor of sun tan products based in Daytona Beach, Florida
("Sun Fun"). The Company is attempting to acquire all outstanding capital stock
of Sun Fun through a subsidiary of the Company. Sun Fun is 100% owned by Paul
Burke, who was appointed as the Company's director on June 3, 1997 and Mr. Burke
has resigned from his positions as officer and director of the Company to
facilitate negotiations. The Company is also attempting to acquire the 28,500
square foot manufacturing facility in which Sun Fun conducts its operations from
Mr. Burke. All negotiations for the acquisition of Sun Fun are preliminary and
no definitive agreements have been executed as of the filing date of this Form
10-KSB.
The Company does not currently produce any goods or provide any services.
The Company does not have any employees, full or part-time, aside from its
officers and directors. (For more information on the Company's management, see
"Item 9 - Directors, Executive Officers, Promoters and Control Persons").
ITEM 2. DESCRIPTION OF PROPERTY
The Company does not own, directly, indirectly or partially, any interest
in any warehouses, offices, real estate or other properties.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matters before a vote of its shareholders
during the fourth quarter of 1996 or subsequent to that date.
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock began trading on the OTC Bulletin Board on
November 15, 1995 under the symbol "HMLD." In December of 1995, the symbol
changed to EUHI to reflect the change in the Company's name.
The table set forth below lists the range of high and low bids of the
Company's Common Stock for each quarter subsequent to the time trading commenced
on November 15, 1995 through June 30, 1997. The prices in the table reflect
inter-dealer prices, without retail markup, markdown or commission and may not
represent actual transactions.
Calendar Year Quarter High Low
1995 Fourth (partial period) .4375 .25
1996 First .75 .25
Second .75 .13
Third 1.31 .13
Fourth 1.31 .28
1997 First 1.37 .38
----
Second .81 .10
As of August 26, 1997, there were approximately 559 holders of record
holding a total of 3,943,187 shares of Common Stock. The Company has not
declared any cash dividends for the last two fiscal years. The Company does not
anticipate declaring any cash dividends in the near future. There are no
restrictions that limit the Company's ability to pay dividends, other than those
generally imposed by applicable state law. The future payment of dividends, if
any, on the Common Stock is within the discretion of the board of directors and
will depend on the company's earnings, capital requirements, financial
condition, and other relevant factors. The Company does not anticipate the
payment of future dividends.
Reverse Stock Split
On May 22, 1995, the Company's board of directors and owners of a majority
of the Common Stock approved a 1:1500 reverse stock split of the Common Stock,
effective on the same day. Prior to the Reverse Stock Split, there were
195,928,572 shares of Common Stock issued and outstanding, whereas after the
Reverse Stock Split 131,079 shares were outstanding. The Company issued one full
share to any person holding fractional shares as a result of the Reverse Stock
Split. The number of shares authorized for issuance remained at 200 million. For
more information on the Company's board of directors and controlling
shareholders, see "Item 9 - Directors, Executive Officers, Promoters and Control
Persons."
ITEM 6. MANAGEMENT'S PLAN OF OPERATION
The Company has not had revenues from operations in either of the last two
fiscal years. In July 1996, the Company executed an agreement to acquire a Utah
company known as InterConnect West, Inc. The Company executed this agreement
with the intention of contributing significant amounts of capital to
InterConnect and expanding InterConnect's marketing focus. For more information
on the Company's business plan with respect to InterConnect, see the Company's
Form 10-QSB for quarter ended September 30, 1996. The Company was relying upon
its ability to obtain outside financing to make the capital contributions
necessary to expand InterConnect's operations. Due largely to delays in the
consummation of the acquisition, the Company was unable to generate the capital
necessary to finance the successful acquisition of InterConnect. Under the
control of new management, the Company executed an agreement to terminate and
rescind the acquisition of InterConnect on June 4, 1997.
<PAGE>
In December 1995, the Company acquired Eurotronics International
Incorporated, a Nevada corporation which owned a computer information company
specializing in computer software systems in Belgium ("EII"). In May 1996, the
acquisition of EII was rescinded because EII could not deliver audited financial
information required to be delivered by EII pursuant to the acquisition
agreement. Because both the EII and the InterConnect agreements were rescinded,
the Company did not consolidate the financial statements of either InterConnect
or EII in the years 1995 and 1996.
Since the acquisition of InterConnect was rescinded, the Company has been
searching for a viable candidate for merger or acquisition. The Company lacks
any significant cash flow or assets and the Company's intent is therefore to
issue shares of its Common Stock as consideration for any subsequent merger or
acquisition. This will likely result in substantial future dilution of the
current ownership interest of the Company's shareholders. If the Company effects
a future merger or acquisition, it will need financing to satisfy the cash
requirements of its merger/acquisition partner. The nature and extent of these
requirements will depend upon the kind of business acquired by the Company.
Given the Company's limited cash flow and history of operating losses, there is
a substantial risk that the Company will not be able to raise the capital
necessary to make a subsequent merger or acquisition successful. The Company
intends to raise capital primarily through private offerings of its Common Stock
and can provide no assurances that it will be able to generate sufficient
capital in this manner. This is especially significant considering the Company's
inability to finance the acquisition of InterConnect.
The Company is currently in negotiations with Paul Burke to acquire Sun Fun
Products, Inc., a Florida corporation which manufactures sun tan lotions and
related products. Mr. Burke is a former director of the Company and is the sole
owner of Sun Fun Products. The Company is also in negotiations to purchase a the
manufacturing facility owned by Mr. Burke and currently utilized by Sun Fun in
the manufacture of its products. The building has an appraised value of
$675,000. No agreement for this acquisition has been executed by the Company as
of the filing date of this Form 10-KSB and the Company has no binding
obligations or rights stemming from this proposal. The Company anticipates that
if an agreement to acquire Sun Fun is ultimately executed by the Company, it
will require the Company to issue shares of Common Stock to, and execute
promissory notes in favor of, Mr. Burke as consideration for his transfer of the
manufacturing facility and sun tan products concern.
The Company does not currently have any full or part time employees, aside
from its officers and directors. The Company is substantially dependent upon the
services of its officers and directors, who have no formal compensation
arrangements with the Company. If the Company ultimately effects a merger of
acquisition, it will likely need to hire employees to perform the operations of
the acquired company. The number of employees will depend on the nature and
extent of the business acquired. If the Company ultimately acquires Sun Fun
Products, it will assume the employment arrangements currently existing between
Sun Fun and its employees.
ITEM 7. FINANCIAL STATEMENTS
Please see pages F-1 through F-9.
<PAGE>
Andersen Andersen & Strong 941 East 3300 South, Suite 202
Certified Public Accountant and Business Consultants Salt Lake City, Utah 84106
Member SEC Practice of the AICPA Telephone 801-486-0096
Fax 801-486-0098
E-mail [email protected]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors
of Eurotronics Holdings Incorporated (formerly
Hamilton Exploration Co., Inc.)
Salt Lake City, Utah
We have audited the balance sheet of Eurotronics Holdings Incorporated (a
development stage company) as of December 31, 1996 and the related statements of
operations, changes in stockholders' equity, and cash flows from the date of
inception (January 7, 1982) through December 31, 1996. 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 audits provide a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eurotronics Holdings
Incorporated as of December 31, 1996 and the results of its operations, its
changes in stockholders' equity and its cash flows from the date of inception
(January 7, 1982) through December 31, 1996, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, since its inception (January 7, 1982), the Company has
been in the development stage and has suffered recurring losses from operations,
raising substantial doubt about its ability to continue as a going concern. The
long term continuation of the Company as a going concern is dependent upon the
Company's ability to obtain additional capital. The financial statements do not
include any adjustments that might result if the Company is unable to obtain
additional capital.
/s/Andersen, Andersen & Strong
August 5, 1997
Salt Lake City, Utah
<PAGE>
EUROTRONICS HOLDINGS INCORPORATED
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
BALANCE SHEET
December 31, 1996
ASSETS
CURRENT ASSETS:
None ......................................................... $ --
Total current assets ........................................ $ --
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses ............................................. $ 145,780
Bank overdraft ............................................... 76
Total Current Liabilities .................................. 145,856
STOCKHOLDERS' EQUITY (Note 1):
Common stock, $.0001 par value;
Authorized, 200,000,000 shares;
Issued, 4,520,336 shares at
at December 31, 1996 ........................................ 452
Additional paid-in capital ................................... 914,724
Deficit accumulated during
development stage .......................................... (1,061,032)
(145,856)
$ --
The accompanying notes are an integral part of these financial statements.
F-1
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS INCORPORATED
(A Development Stage Company)
Formerly Hamilt on Exploration Co., Inc.
STATEMENT OF OPERATIONS
Years Ended December 31, 1996 and 1995
Period From Date Of Inception (January 7, 1982) To December 31, 1996
Inception
Through
Dec. 31,
1996 1995 1996
Revenue:
<S> <C> <C> <C>
Interest income ..................... $ -- $ -- $ 61,208
-- -- 61,208
Expenses:
Investigation, evaluation and
exploration of prospective
mineral properties ................. -- -- 424,416
Loss on investment securities ....... 28,302 -- 28,302
General and administrative .......... 271,333 321,124 670,949
Amortization and depreciation ....... -- -- 1,000
--------- --------- --------
299,635 321,124 1,124,667
Net loss before taxes and
extraordinary item .................. ( 299,635) ( 321,124) ( 1,063,459)
Tax expense ......................... -- -- 183
Loss before extraordinary item ........ ( 299,635) ( 321,124) ( 1,063,642)
Extraordinary item - debt
settlement (note 6) ................. -- 2,610 2,610
NET LOSS .............................. $ (299,635) $ (318,514) $(1,061,032)
=========== =========== ===========
NET INCOME (LOSS) PER COMMON SHARE
Loss before extraordinary item $( .07) $( 70)
Extraordinary item - .01
TOTAL $( .07) $( .69)
=========== ===========
Weighted average number of shares
outstanding 4,456,226 461,825
========== ==========
The accompanying notes are an inegral part of these financial statements
F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS INCORPORATED
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period From Date of Inception (January 7, 1982) Through December 31, 1996
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 - 1982 ........................................... 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 for 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 (no warrants exercised - expired 1989) .... -- -- 100 --
Net loss for the period from date of inception
(January 7, 1982) through December 31, 1994 ............... -- -- -- ( 442,883)
---------- ------------ ----------- -----------
Balance December 31, 1994 .................................. 80,928,572 8,093 430,380 ( 442,883)
---------- ------------ ---------- -----------
Reverse stock split l for 1,500 - 1995 ..................... (80,874,160) ( 8,088) 8,088 --
Issuance of shares for no determinable
consideration............................................... 76,667 8 (8) --
Issuance of shares for cash - 1995 ......................... 904,722 90 108,160 --
Issuance of shares for services - 1995 ..................... 1,459,921 146 145,846 --
Issuance of shares for assets - 1995 ....................... 1,698,114 170 169,641 --
Issuance of shares for debt - 1995 ......................... 226,500 23 22,627 --
Results of operations year ended December 31, 1995 ......... -- -- -- ( 318,514)
----------- ----------- ----------- -----------
Balance December 31, 1995 .................................. 4,420,336 442 884,734 ( 761,397)
---------- ---------- ----------- -----------
Issuance of shares for costs of proposed merger - 1996 ..... 100,000 10 29,990 --
Results of operations year ended December 31, 1996 ......... -- -- -- ( 299,635)
---------- --------- ----------- -----------
Balance December 31, 1996 .................................. 4,520,336 $ 452 $ 914,724 $(1,061,032)
========== ========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
EUROTRONICS HOLDINGS INCORPORATED
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1996 and 1995
Period From Date Of Inception (January 7, 1982) Through December 31, 1996
Inception
Through
Dec. 31,
1996 1995 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net (Loss) ................................... $ (299,635) $ (318,514) $(1,061,032)
Adjustments to reconcile net (loss) to net
cash used by operating activities:
Increase in accrued liabilities ........... 235,201 47,679 287,290
Services paid with common stock ........... 30,000 145,992 175,992
Common stock issued for debt .............. -- 22,650 22,650
Loss due to permanent decline in investment 28,302 -- 28,302
Total adjustments ......................... 293,503 216,321 514,234
Net cash (used) by operating activities ...... ( 6,132) ( 102,193) ( 546,798)
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions by incorporators ....... -- -- 55,000
Proceeds from public stock offering .......... -- -- 383,473
Issuance of common stock for cash ............ -- 108,249 108,249
Net cash provided by financing activities .... -- 108,249 546,722
Net increase (decrease) in cash ................ ( 6,132) 6,056 ( 76)
Cash, beginning ................................ 6,056 -- --
Cash (bank overdraft), ending .................. $ (76) $ 6,056 $ (76)
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Issuance of common stock for services ........ $ 30,000 $ 145,992 $ 175,992
Issuance of common stock for debt ............ $ -- $ 22,650 $ 22,650
Issuance of common stock for investments ..... $ -- $ 169,812 $ 169,812
Investments exchanged for debt settlements ... $ 141,510 $ -- $ 141,510
The accompanying notes are an integral part of these financial statments.
</TABLE>
F-4
<PAGE>
EUROTRONICS HOLDINGS INCORPORATED
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
NOTES TO FINANCIAL STATEMENTS
As of December 31, 1996 and 1995
1. BUSINESS ACTIVITY
The Company was incorporated as a Utah corporation on January 7, 1982 for the
primary purpose of investigating and evaluating prospective mineral properties
for possible acquisition. On January 27, 1982, the Company sold 15,000,000
shares of its $.001 par value common stock for investment purposes to two
corporations and four individuals at $.002 per share for a total of $30,000. On
July 27, 1983, the Company adjusted the number of shares issued to reflect a
purchase price of $.00175 per share instead of $.002 per share. On August 5,
1983, the Company sold an additional 14,285,714 shares at $.00175 to two
affiliated corporations and two individuals for $25,000. During 1984, the
Company sold 49,500,000 shares of its common stock to the public at $.01 per
share and received net proceeds of $383,373. On May 22, 1995 the Company adopted
a 1,500 for 1 reverse stock split. On May 23, 1995 the Company issued 76,667
shares of common stock for services of undetermined value. Also during 1995 an
additional 4,289,257 shares were issued: 904,722 for cash, 1,459,921 for
services, 226,500 for debt, and 1,698,114 for other assets. During 1996, 100,000
shares were issued for costs associated with a proposed merger.
The Company's unpatented mining claims and mineral leases which were acquired in
1987 have been lost because the Company had insufficient capital to pay the
mineral lease requirements and to perform the required minimum assessment work.
Between 1987 and April, 1994, the Company's activity was largely restricted to
maintaining its corporate legal status. The Company's current business plan is
to merge with or acquire another business entity.
On December 20, 1995, the Company approved an Agreement and Plan of Exchange
between the Company, Eurotronics International Incorporated (EII) and EII's
shareholders. The agreement stipulated that the Company issue and exchange
shares of its common stock for all of the issued and outstanding shares of the
common stock of EII. On May 8, 1996, the Company, EII and EII's shareholders
executed a rescission of the agreement. The rescission was made effective as of
the date of the original agreement. On July 30, 1996 the Company approved an
Agreement and Plan of Exchange between the Company, InterConnect West, Inc.
(InterConnect), and InterConnect's shareholders. The agreement stipulated that
the Company issue and exchange shares of its common stock for all of the issued
and outstanding shares of the common stock of InterConnect. This agreement was
later amended on February 3, 1997. On June 3, 1997 the Company, InterConnect and
InterConnect's shareholders executed a rescission of the agreement. The
rescission was made effective as of the date of the original agreement.
<PAGE>
EUROTRONICS HOLDINGS INCORPORATED
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
NOTES TO FINANCIAL STATEMENTS - Continued
As of December 31, 1996 and 1995
1. BUSINESS ACTIVITY - Continued
Consistent with the effective dates of the rescissions, these transactions have
been considered void from inception and, therefore, are not reflected in the
financial statements, except for the costs incurred.
2. GOING CONCERN
The Company is in the development stage and has suffered recurring losses since
inception. Its continuation as a going concern will ultimately depend upon
obtaining additional capital or completing a merger with a "going concern"
entity. The Company believes it can sustain its existence for the next twelve
months.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization Costs
Organization costs were capitalized and amortized over 60-month period on a
straight-line basis.
Exploration Expenses
Exploration expenditures were charged to expense as incurred. No mineral
reserves feasible for development were discovered.
Income (Loss) Per Share
The computation of income (loss) per common share is based on the average number
of shares outstanding during the period. A reverse stock split in May 1995 is
considered to have occurred retroactively for all periods shown in statements of
operations.
4. INCOME TAXES
Effective January 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. The cumulative effect of the
change in accounting principle is immaterial. At December 31, 1996 the Company
had a net operating loss ("NOL") carryforward for United States income tax
purposes of approximately $1,032,000. The NOL carryforward expires in increments
beginning in 1999. The Company has a capital loss carryover of approximately
$28,000 expiring in 2001. The Company's ability to utilize its net NOL
carryforward is subject to the realization of taxable income in future years,
and under certain circumstances, the Tax Reform Act of 1986 restricts a
corporation's use of its NOL carryforward.
<PAGE>
EUROTRONICS HOLDINGS INCORPORATED
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
NOTES TO FINANCIAL STATEMENTS - Continued
As of December 31, 1996 and 1995
4. INCOME TAXES - Continued
Furthermore, due to the Company's issuance of additional stock in 1995 and 1996,
the use of its NOL carryforward could be substantially limited. The Company
believes that there is at least a 50% chance that the carryforward will expire
unused, therefore, no tax benefit has been reported in the financial statements.
5. RELATED PARTY TRANSACTIONS
On June 29, 1995 the Company entered into a consulting agreement with Canton
Financial Services Corporation (CFSC). At the time the consulting agreement was
executed, Richard Surber was the sole officer and sole director of CFSC and also
a director and vice president of the Company. On April 1, 1996 the Company
executed a new consulting agreement with CFSC which replaced the previous one.
The new agreement expired on March 7, 1997. Mr. Surber is no longer associated
with the Company as an officer or director. During 1995 the Company issued a
total of 112,000 shares of its common stock to CFS for services rendered in the
amount of $11,200. The Company also issued 92,800 shares to Richard Surber for
services rendered in the amount of $9,280, and 333,000 shares for services
rendered in the amount of $33,300.
During 1995 the Company issued 141,900 shares of its common stock to Ken Kurtz,
the former president of the Company, for services rendered in the amount of
$14,190. The Company also issued 83,792 shares to Park Street Investments for
services relating to the Eurotronics International acquisition in the amount of
$8,379. Mr. Kurtz is president of Park Street Investments.
In December of 1995, the Company executed several stock exchange and stock
purchase agreements with companies which are under common control. All shares of
stock issued pursuant to these agreements are restricted as regulated by Rule
144 under the Securities Act. The stock exchange and purchase agreements were
executed between the Company and: BRIA Communications, OMAP Holdings
Incorporated, and Tianrong Building Material Holdings, Ltd. At the time of the
of the exchanges, the Company's president was also an officer and director of
each of the other three corporations.
<PAGE>
EUROTRONICS HOLDINGS INCORPORATED
(A Development Stage Company)
Formerly Hamilton Exploration Co., Inc.
NOTES TO FINANCIAL STATEMENTS - Continued
As of December 31, 1996 and 1995
6. DEBT SETTLEMENT
During 1995, the Company settled a debt with its transfer agent for cash,
resulting in a gain of $2,610. Also during 1995 and 1996 the Company settled
other debt through the issuance of equity shares with no gain or loss, since the
value of shares issued was considered to be equal to the amount of the debt.
7. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company estimates that the fair value of all financial instruments at
December 31, 1996 does not differ materially from the aggregate carrying values
of its financial instruments recorded in the accompanying balance sheet.
8. SUBSEQUENT EVENTS
Refer to Note 1. for a discussion of the rescinded transactions with Eurotronics
International Incorporated and InterConnect West, Inc.
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 9. DIRECTORS,EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors, Executive Officers Promoters and Control Persons
The current officers and directors of the Company are set forth in the
following table.
Name Age Position(s) and Office(s)
Melvin Fields 72 President, Director
Joe Betras 50 Director
Melvin Fields, was appointed president and a director on June 3, 1997
and has been a real estate agent, insurance broker and a jobber for a privately
owned T-shirt company over much of his career including the past five years. He
is a limited partner in four different car agencies and owns a leather leaf farm
in Costa Rica.
Joe Betras, has been a director of the Company since July 27, 1997. For
the past five years, Mr. Betras has been the owner and chairman of the board of
Betras Plastics, a privately held company grossing $17 million in annual sales
over the last several years.
Legal Proceedings of Potential Control Person
Allen Wolfson may be deemed to have significant influence and "control"
(as defined in Rule 12b-2 of the Securities Exchange Act of 1934) over the
affairs of the Company by virtue of his indirect ownership of approximately 20%
of the Company's issued and outstanding shares of Common Stock. Mr. Wolfson is
the sole shareholder of A-Z Professional Consultants, Inc., a Utah corporation
which provides general business consulting services. A-Z is the registered owner
of 754,129 restricted shares of Common Stock which it acquired in December 1995.
In 1986, Mr. Wolfson was convicted of violating 18 U.S.C. ss.371; 18 U.S.C.
ss.ss.1001 and 1002; and 18 U.S.C. ss.ss.1014 and 1002 in the U.S. District
Court for the Middle District of Florida, Tampa Division (the "Florida Court").
Mr. Wolfson was on probation for these offenses until May 1995. In February
1995, a complaint was filed with the Florida Court alleging that Mr. Wolfson had
violated the terms of the probation. The Florida Court changed the jurisdiction
of the matter to the U.S. District Court for the District of Utah, Central
Division (the "Utah Court"). The Utah Court heard the matter in August 1995 and
on October 20, 1995, the Court ruled that a violation of the original terms of
the probation had occurred. This finding effectively revoked Mr. Wolfson's
probation. The Utah Court judge signed a written order containing new terms of
probation, including a term which prohibits Mr. Wolfson from engaging in
directly in any transaction, including the purchase and sale of stock, in
connection with stock promotion or any stock offering.
<PAGE>
<TABLE>
<CAPTION>
On October 9, 1996, Allen Wolfson was charged with securities law
violations. This criminal matter was filed in the U.S. District Court for the
Southern District of New York. The complaint alleges that Mr. Wolfson violated
Section 10b of the Securities Exchange Act of 1934 by making payment to an
undercover agent of the Federal Bureau of Investigation, who was posing as a
broker, for the purchase of stock in an unaffiliated corporation. As of the date
of this filing, no court date has been set with respect to the criminal charges.
On October 10, 1996, the Securities and Exchange Commission initiated
administrative proceedings against Wolfson. This administrative action is
premised upon the same allegations contained in the complaint pending in the
Southern District of New York. An administrative hearing has been scheduled for
May 12, 1997. The Company has been informed that Mr. Wolfson has not yet been
charged for any of the actions alleged in the criminal complaint.
Compliance with Section 16(a) of the Exchange Act
The Company is aware that Melvin Fields, the Company's president and a
director, failed to timely file Form 3 as required by Section 16(a) of the
Securities and Exchange Act of 1934. However, the Company is in the process of
preparing the required forms for filing with the SEC.
The Company is aware that Joe Betras, a director of the Company, failed
to timely file Form 3 as required by Section 16(a) of the Securities and
Exchange Act of 1934. However the Company is in the process of preparing the
required forms for filing with the SEC.
ITEM 10. EXECUTIVE COMPENSATION
No compensation has ever been awarded to, earned by, or paid to any
executive officer or director of the Company. In addition, no stock options or
stock appreciation rights ("SARs") regarding the Company's common stock have
ever been granted to or exercised by any employee of the Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information concerning the stock
ownership as of August 5, 1997, with respect to (i) each person who is known to
the Company to be a beneficial owner of more than 5 percent of the Company's
common stock; (ii) all directors; (iii) each of the executive officers; and (iv)
all directors and executive officers as a group:
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership of class
- -------------- ------------------- -------------------- --------
<S> <C> <C> <C>
Common Stock A-Z Professional Consultants, Inc 754,129 19.12%
($0.0001 par value) 268 West 400 South, Suite 300
Salt Lake City, UT 84101
Common Stock BRIA Communications Corporation 566,038 14.35%
($0.0001 par value) 82-66 Austin Street
Kew Gardens, NY 11415
<PAGE>
Common Stock Richard Surber 1,442,436(1) 36.58%
($0.0001 par value) 268 West 400 South, Suite 302
Salt Lake City, UT 84101
Common Stock Canton Financial Services Corporation 308,507 7.82%
($0.0001 par value) 268 West 400 South, Suite 300
Salt Lake City, UT 84101
Directors and Executive Officers
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership* of class
- -------------- ------------------- --------------------- --------
Common Stock All Directors and Executive -0- -0-
($0.0001 value) Officers as a Group (1 Person)
</TABLE>
_______________________
1 Includes the 754,129 shares beneficially owned by A-Z Professional
Consultants, Inc., a Utah corporation of which Mr. Surber is President and sole
officer and director. Also includes the 308,507 shares owned by Canton Financial
Services Corporation, a Nevada corporation of which Mr. Surber is president and
director. Mr. Surber disclaims beneficial ownership of these shares.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 20, 1995, the Company entered into separate Stock Exchange
Agreements with BRIA Communications Corporation, Tianrong Building Material
Holdings, Inc. ("TBMH") and OMAP Holdings Incorporated (n/k/a China Food and
Beverage Company). Pursuant to these Agreements, the Company acquired a quantity
of common stock in each company equivalent to $300,000 divided by the average
bid and asked prices for the stock of each company on the date of issuance. In
return, the Company issued each public entity a quantity of Common Stock
equivalent to $300,000 divided by the average bid and asked prices for the
Common Stock on the date of issuance. Due to the fact that the shares of stock
transferred were restricted as to resell and due to the illiquid trading markets
for the stock transferred, the Company valued the stock in each of the three
companies at $56,604 in its financial statements for fiscal year ended December
31, 1995. James Tilton, Aster De Schrijver, and Jane Zheng were the Company's
officers and directors when these transactions occurred. At the same time,
Tilton, De Schrijver, and Zheng also served as officers and directors of BRIA,
TBMH, and OMAP. Accordingly, these Stock Exchange Agreements may not have been
negotiated at arm's length.
On July 16, 1996, the Company executed an Agreement for the Exchange of
Stock with InterConnect West, Inc. and Mark Tolman, the sole owner of
InterConnect. The purpose of that agreement was for the Company to acquire all
outstanding capital stock of InterConnect, a Utah corporation which operates an
Internet mall. Mark Tolman was not a director of the Company at the time when
this Agreement was executed, but became a director immediately after execution
of the Agreement while approval of the Agreement was still pending. Under the
July 16, 1996 agreement, Mr. Tolman was to be issued a quantity of the Company's
shares equaling 90% of its total issued and outstanding Common Stock at the time
the Agreement became effective. These shares were to be restricted pursuant to
Rule 144.
On February 11, 1997, an Amended Agreement for the Exchange of Stock
was executed by and between the Company, InterConnect, and consultants who were
to receive finder's fees under the July 16, 1996 agreement. Under the amended
agreement, Mr. Tolman was to receive a quantity of shares equaling 51% of the
Company's issued and outstanding Common Stock at the time the Agreement became
effective. The amended agreement was not approved by the Company's shareholders
and was rescinded pursuant to a June 4, 1997 agreement with InterConnect. Mr.
Tolman did not receive any compensation under either the July 16, 1996 or
February 11, 1997 agreements.
<PAGE>
ITEM 13. 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 14 of this
Form 10-KSB, which is incorporated herein by reference.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter ended December 31, 1996.
[THIS SPACE LEFT INTENTIONALLY BLANK]
<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 day of August 28, 1997.
Eurotronics Holdings Incorporated
/s/Melvin Fields
------------------------
Melvin Fields, 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/Melvin Fields President and Director August 28, 1997
- ---------------
Melvin Fields
/s/Joe Betras Director August 23, 1997
- ---------------
Joe Betras
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION OF EXHIBIT
3(i)(a) * Amendment to the Articles of Incorporation of the Company
(Incorporated herein by reference from Exhibit 3(i)(a) to the
Company's Form 10-KSB for the fiscal year ended December 31,
1995).
3(i)(b) * Articles of Incorporation of the Company (Incorporated herein
by reference from Exhibit 3(i)(b) to the Company's Form
10-KSB for the fiscal year ended December 31, 1995).
3(ii) * By-Laws of the Company. (Incorporated herein by reference
from Exhibit No. 3(ii) to the Company's S-18 Registration
Statement filed on November 30, 1983.)
MATERIAL CONTRACTS
10(i)(a) * Agreement and Plan of Exchange dated December 20, 1995
between the Company and Eurotronics International
Incorporated (Incorporated herein by reference from Exhibit
2(i)(a) to a Current Report on Form 8-K filed by the Company
on April 23, 1996).
10(i)(b) * Amended Agreement and Plan of Exchange, dated March 30, 1996
but effective December 20, 1995 between the Company and
Eurotronics International Incorporated (Incorporated herein
by reference from Exhibit 2(i)(b) to a Current Report on Form
8-K filed by the Company on April 23, 1996).
10(i)(c) * Rescission of Agreement and Plan of Exchange and Release of
All Claims effective December 20, 1995 between the Company,
Eurotronics International Incorporated, and the shareholders
of Eurotronics International Incorporated (Incorporated
herein by reference from Exhibit 10(i)(d) to the Company's
Form 10-KSB for the fiscal year ended December 31, 1995).
10(i)(d) * July 16, 1996 Agreement for the Exchange of Stock executed by
and between the Company, InterConnect West, Inc. and Mark
Tolman (Incorporated herein by reference from Exhibit
10(i)(c) to the Company's Form 10-QSB for the fiscal quarter
ended March 31, 1996).
10(i)(e) 14 February 11, 1997 Amended Agreement for the Exchange of Stock
executed by and between the Company, InterConnect West, Inc.,
Mark Tolman and other parties.
10(i)(f) 21 June 3, 1997 Rescission of Amended Agreement for the Exchange
of Stock and Mutual Release of all Claims executed by and
between the Company, InterConnect West, Inc. and Mark Tolman.
* These exhibits appear in the original copies of the respective filings made by
the Company with the Commission as indicated.
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.
<PAGE>
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.
<PAGE>
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.
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 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
RESCISSION OF AMENDED AGREEMENT FOR THE EXCHANGE
OF STOCK AND MUTUAL RELEASE OF ALL CLAIMS
An Amended Agreement for the Exchange of Stock dated February 3, 1997
(the "Agreement") was entered by Eurotronics Holdings, Inc., a Utah corporation
("Eurotronics"), InterConnect West, Inc., a Utah corporation ("InterConnect
West"), Mark Tolman, an individual, and certain other consultants who brought
these parties together (Eurotronics, InterConnect West and Tolman are
hereinafter collectively referred to as the "Parties"). Pursuant to the
Agreement, Eurotronics was to acquire from Tolman all issued and outstanding
shares of InterConnect West, which would have made InterConnect West its wholly
owned subsidiary. Eurotronics was to issue 2,300,000 shares of its common stock,
par value $0.0001, to Tolman as consideration for his delivery of all of
InterConnect West's common shares. These transfers and issuances have not
transpired due to the lack of proper funding, delays in obtaining regulatory
approval, all of which precluded the proper approval by the shareholders of
Eurotronics.
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree to rescind and terminate ab initio
the February 3, 1997 Amended Agreement for the Exchange of Stock because
material conditions in the Agreement have not been fulfilled and the Parties
have determined that the terms set forth in the Agreement are no longer in the
best interests of any of the Parties. The Parties agree not to be bound by the
terms of the Agreement, and further agree to hold one another harmless, release
any and all claims against one another stemming from the Agreement, and
indemnify one another with respect to any obligations arising pursuant to or
from the Agreement. These releases do not include expenditures Tolman has made
on behalf of Eurotronics, which amounts are still payable to Tolman by
Eurotronics and referenced in the attached Exhibit A.
All Parties agree to waive any interests in any shares that have not
been issued and transferred, particularly the Eurotronics shares to Tolman and
the InterConnect West shares to Eurotronics. The recission contemplated in this
document is complete upon the signing of the Parties.
/s/ Mel Fields /s/ Paul Burke
Mel Fields, Director Paul Burke, Director
Eurotronics Holdings, Inc. Eurotronics Holdings, Inc.
/s/ Mark Tolman /s/ Mark Tolman
Mark Tolman Mark Tolman, President
InterConnect West, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED AUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE COMPANY'S
DECEMBER 31, 1996 ANNUAL REPORT ON FORM 10-KSB AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000734089
<NAME> EUROTRONICS HOLDINGS INCORPORATED
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<PERIOD-END> DEC-30-1996
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