U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 10-QSB/A NO. 1
-----------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
-----------------------
Amending Part I - Item 1. Financial Statements
and Exhibit 27 - Financial Data Schedule
Commission file number 0-26202
EASTBROKERS INTERNATIONAL INCORPORATED
(Exact name of small business issuer as specified in its charter)
-----------------------
DELAWARE 52-1807562
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
15245 SHADY GROVE ROAD, SUITE 340, ROCKVILLE, MARYLAND 20850
(Address of principal executive offices) (Zip Code)
(301) 527-1110
(Registrant's telephone number, including area code)
CZECH INDUSTRIES, INC.
(Former name, if changed since last report)
-----------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Transitional Small Business Disclosure Format: Yes [ ] No [X]
The total number of shares of the registrant's Common Stock, $.01 par value,
outstanding on August 1, 1996, was 14,355,000.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CZECH INDUSTRIES, INC.
(A DELAWARE CORPORATION)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30 JUNE 30
1996 1995
(UNAUDITED) (UNAUDITED)
------------- -------------
(AS RESTATED)
ASSETS
<S> <C> <C>
Current Assets
Cash $5,027,968 $11,276,921
Accounts receivable -- 367,200
Loan receivable to unconsolidated affiliate 1,500,000
Inventories 29,883 92,888
Prepaid Expenses 296,030 24,011
Available for sale securities -- 502,879
Net assets of discontinued operations 9,323,897 --
----------- ------------
Total Current Assets 16,177,778 12,263,899
----------- ------------
Property and Equipment
Buildings -- 18,726,156
Furniture and Fixtures 24,700 441,190
Less Accumulated Depreciation -- (310,323)
----------- ------------
Net Property and Equipment 24,700 18,857,023
----------- ------------
Other Assets
Deferred Income Tax -- 151,139
Other 10,389 98,618
Real estate held for resale -- 465,116
----------- ------------
Total Other Assets 10,389 714,873
----------- ------------
Total Assets $16,212,867 $31,835,795
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable Trade $ 28,247 $134,010
Notes Payable -- 4,543,647
Accrued Expenses 103,564 34,857
----------- ------------
Total Current Liabilities 131,811 4,712,514
Long Term Debt (net of current portion) 2,027,176 4,548,330
----------- ------------
Total Liabilities 2,158,987 9,260,844
----------- ------------
Minority interest in Consolidated Subsidiaries -- 8,035,015
----------- ------------
Shareholders' Equity
Common Stock; $.01 per value; 50,000,000 shares
authorized, 8,905,000 issued and outstanding in 1996
and 1995 89,050 89,050
Additional Paid-In Capital 13,693,733 13,719,269
Retained Earnings (accumulated deficit) 271,097 (79,034)
Cumulative Translation Adjustment -- 810,651
----------- ------------
Total Stockholders' Equity 14,053,880 14,539,936
----------- ------------
Total Liabilities and Stockholders' Equity $16,212,867 $ 31,835,795
=========== ============
</TABLE>
SEE NOTE TO CONSOLIDATED FINANCIAL STATEMENTS.
-2-
<PAGE>
CZECH INDUSTRIES, INC.
(A DELAWARE CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDING JUNE 30
1996 1995
(UNAUDITED) (UNAUDITED)
----------- ------------
(AS RESTATED)
<S> <C> <C>
Revenues
Hotel Room Rentals $ -- $748,274
Hotel Food and Beverage Sales -- 23,653
Other income 275,720 46,023
----------- ------------
275,720 817,950
----------- ------------
Expenses
Cost of Sales -- 270,150
Payroll and Related 94,200 282,231
General and Administrative 128,738 75,541
Interest 92,070 123,543
Depreciation and Amortization -- 68,630
Loss on Currency Fluctuation 38,444 --
----------- ------------
Total Expenses 353,452 820,095
Income (loss) before income and taxes and minority
interests in earnings of subsidiaries (77,732) (2,145)
Provision for (benefit from) income taxes -- (44,410)
Minority interest in earnings of subsidiaries -- (69,077)
----------- ------------
Income from continuing operations ($77,732) ($26,812)
Discontinued operations
Income from discontinued operations (net of
income taxes of $0 for the period ended
June 30, 1996) 5,774 --
Gain on sale of discontinued operations -- --
----------- ------------
Net income (loss) ($71,958) ($26,812)
=========== ============
Weighted average number of shares outstanding 8,905,000 8,905,000
=========== ============
Income from continuing operations per share -0.009 -0.003
=========== ============
Net income (loss) per share -0.008 -0.003
=========== ============
</TABLE>
SEE NOTE TO CONSOLIDATED FINANCIAL STATEMENTS.
-3-
<PAGE>
CZECH INDUSTRIES, INC.
(A DELAWARE CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDING JUNE 30
-------------------------------
1996 1995
(UNAUDITED) (UNAUDITED)
----------- ------------
(AS RESTATED)
<S> <C> <C>
Cash Flows from Operating Activities
Net (loss) ($71,958) ($26,812)
Adjustments to reconcile net income (loss) to net cash (used) by
operating activities
Minority Interest in Earnings of Consolidated Subsidiary -- 60,067
Depreciation -- 68,630
Changes in Assets and Liabilities
Accounts Receivable 325,942 (32,988)
Loan receivable from unconsolidated affiliate (1,500,000) --
Inventories 52 48,619
Prepaid Expenses (37,947) 164,526
Other Assets 193,136 (85,059)
Accounts Payable (88,226) (248,379)
Accrued Expenses 37,988 (215,717)
----------- ------------
Net Cash (used) by operating activities (1,141,013) (267,113)
----------- ------------
Cash flows from investing activities
Available for sale securities -- 65,957
Sale of Investment in Moravacentrum, a.s. 1,677,623 --
Acquisition of property and equipment (19,185) (230,579)
----------- ------------
1,658,438 (164,622)
----------- ------------
Cash flows from financing activities
Net proceeds of secondary public offering -- 12,180,872
Repayment of notes payable -- (953,789)
Change in notes payable 744 --
----------- ------------
Net cash provided by financing activities 744 11,227,083
----------- ------------
Effects of foreign exchange changes (680,787) 131,307
----------- ------------
Net increase in cash (162,618) 10,926,655
Cash beginning of period 5,190,586 350,266
----------- ------------
Cash end of period $5,027,968 $11,276,921
=========== ============
Supplemental disclosure of cash flow
information:
Cash paid during the period for interest $ 92,070 $ 123,543
=========== ============
</TABLE>
SEE NOTE TO CONSOLIDATED FINANCIAL STATEMENTS.
-4-
<PAGE>
CZECH INDUSTRIES, INC.
(A Delaware Corporation)
Note To Consolidated Financial Statements (Unaudited)
For the Three Months Ending June 30, 1996 and June 30, 1995
CONSOLIDATIONS
For the three months ended June 30, 1996, the accompanying financial
statements include the financial position and results of operations of the
parent company as of and for the three months ended June 30, 1996 and the
financial position and results of operations of its subsidiary as of and for the
three months ended March 31, 1996.
For the three months ended June 30, 1995, the accompanying financial
statements include the financial position and results of operations of the
parent company and its subsidiary for the three months ended June 30, 1995.
DISCONTINUED OPERATIONS
As noted in the Form 10-KSB for the transitional period from January 1,
1996 to March 31, 1996, the Company believes that its continued involvement in
the Hotel Fortuna a.s. does not fit its core business, and therefore, intends to
sell its interest in the Hotel Fortuna a.s. as soon as practicable.
As of August 14, 1996, the Company has no agreements with any third party
to purchase its ownership interest in Hotel Fortuna a.s. The Company believes
that it should be able to structure the sale of its interest in the Hotel
Fortuna a.s. such that no loss will be recognized on the sale. Since there is no
agreement with any third party to sell the Company's ownership interest in Hotel
Fortuna a.s., the Company has reflected no gain or loss related to this
prospective sale.
In accordance with current accounting standards, the Company has restated
the financial statements to reflect its investment in discontinued operations at
the estimated net realizable value on disposition. Accordingly, in the course of
restating the financial statements, the minority interest in consolidated
subsidiaries has been eliminated. This elimination reflects the investment in
the Hotel Fortuna a.s. as the sole subsidiary of the Company as of June 30,
1996.
-5-
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) This Report contains the following Exhibits as required by Item 601 of
Regulation S-B.
Exhibit No. Description
- ------------ -----------------
(2) Stock Purchase Agreement and Exhibits A through J dated June
14, 1996 between the Company and Eastbrokers Beteiligungs AG
incorporated by reference from Form 8-K dated August 1, 1996.
(3)(ii) Bylaws, as amended, as existing prior to the amendments
effective as of August 1, 1996, are incorporated by reference
from Form 10-QSB for the quarter ended March 31, 1995. (a)
(3)(ii) Amendments to the Bylaws, effective as of August 1, 1996.
(10.1) Employment Agreement between the Company and Wolfgang M.
Kossner dated August 1, 1996, the form of such employment
agreement is incorporated by reference from Form 8-K dated
August 1, 1996.
(10.1) Employment Agreement between the Company and August A. de
Roode dated August 1, 1996, the form of such employment
agreement is incorporated by reference from Form 8-K dated
August 1, 1996.
(10.1) Employment Agreement between the Company and Peter Schmid
dated August 1, 1996, the form of such employment agreement is
incorporated by reference from Form 8-K dated August 1, 1996.
(10.2) Form of Restrictive Covenant of Wolfgang M. Kossner, such
covenant executed on August 1, 1996. (a)
(10.2) Form of Restrictive Covenant of August A. de Roode, such
covenant executed on August 1, 1996. (a)
(10.2) Form of Restrictive Covenant of Peter Schmid, such covenant
executed on August 1, 1996. (a)
-6-
<PAGE>
(10.3) Stock Option Agreement between the Company and Wolfgang M.
Kossner dated August 1, 1996, the form of such stock option
agreement is incorporated by reference from Form 8-K dated
August 1, 1996.
(10.3) Stock Option Agreement between the Company and August A. de
Roode dated August 1, 1996, the form of such stock option
agreement is incorporated by reference from Form 8-K dated
August 1, 1996.
(10.3) Stock Option Agreement between the Company and Peter
Schmid dated August 1, 1996, the form of such stock option
agreement is incorporated by reference from Form 8-K dated
August 1, 1996.
(10.3) Stock Option Agreement between the Company and Sumichrast
Enterprises, Inc. dated August 1, 1996, the form of such stock
option agreement is incorporated by reference from Form 8-K
dated August 1, 1996.
(10.4) Letter Agreement between the Company and Randall F. Greene,
Director of the Company, for advisory services dated July 26,
1996. (a)
(27) Financial Data Schedule (Electronic Filing Only)
(b) On May 7, 1995, the Company filed with the Securities and Exchange
Commission (the "Commission") a Current Report on Form 8-K dated April 22, 1996
containing information relating to Item 5, Changes in Control of Registrant.
The Company filed an amendment to this Report on May 16, 1996.
Also on May 16, 1996, the Company filed with the Commission a Current
Report on Form 8-K dated May 13, 1996 containing information relating to Item 6,
Changes in Fiscal Year.
On August 8, 1996, the Company filed with the Commission a Current
Report on Form 8-K dated August 1, 1996 containing information relating to Item
2, Acquisition or Disposition of Assets, and Item Item 7, Financial Statements
and Exhibits. This Report contained financial statements.
- --------------------------
(a) As previously filed
-7-
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this amendment to this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EASTBROKERS INTERNATIONAL INCORPORATED
----------------------------------------
(Registrant)
August 11, 1997 /s/ Martin A. Sumichrast
------------------- ----------------------------------------
Date (Signature)
Martin A. Sumichrast,
Vice Chairman
-8-
<PAGE>
EXHIBITS INDEX
EXHIBIT NUMBER DOCUMENT PAGE
- -------------- ----------------- ------
3(ii) Amendments to the Bylaws,
effective as of August 1, 1996 (a)
10.2 Form of Restrictive Covenant (a)
10.4 Letter Agreement between the Company
and Randall F. Greene (a)
27 Financial Data Schedule (Electronic Filing Only).
- --------------------------
(a) As previously filed
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 5,027,968
<SECURITIES> 0
<RECEIVABLES> 1,500,000
<ALLOWANCES> 0
<INVENTORY> 29,883
<CURRENT-ASSETS> 16,212,867
<PP&E> 24,700
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,212,867
<CURRENT-LIABILITIES> 131,811
<BONDS> 2,027,176
0
0
<COMMON> 89,050
<OTHER-SE> 13,964,830
<TOTAL-LIABILITY-AND-EQUITY> 16,212,867
<SALES> 0
<TOTAL-REVENUES> 275,720
<CGS> 0
<TOTAL-COSTS> 353,452
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 92,070
<INCOME-PRETAX> (77,732)
<INCOME-TAX> 0
<INCOME-CONTINUING> (77,732)
<DISCONTINUED> 5,774
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (71,958)
<EPS-PRIMARY> (.008)
<EPS-DILUTED> (.008)
</TABLE>
