U.S. Securities & Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended March 31, 1997
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ______ to ______
Commission File No. 0-17322
Globesat Holding Corp.
(Name of Small Business Issuer in its Charter)
Utah 87-0365154
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
Incorporation or Organization)
85 Skymark Drive, Suite 1703
Toronto, Canada M2H 3P2
(Address of Principal Executive Offices)
Issuer's Telephone Number: (416) 494-2013
Indicate by check mark whether the Registrant(1)has filed all reports
required to be filed by Sections 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.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
May 14, 1997
Common Voting Stock - 5,143,676
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Financial Statements of the Registrant required to be filed with this
10-QSB Quarterly Report were prepared in-house based on figures provided by
management, and commence on the following pages, together with Related Notes.
In the opinion of management, the Financial Statements fairly present the
financial condition of the Registrant.
GLOBESAT HOLDING CORP.
Consolidated Balance Sheets -Unaudited-
March 31, 1997 & September 30, 1996
March September
31, 1997 30, 1996
ASSETS
Current Assets
Cash $ 2,888 $ 14,744
Inventory 4,712 4,712
Total Current Assets 7,600 19,456
Property and Equipment
Office Equipment 3,444 3,864
Other Assets
Novatone License 62,500 67,500
Novacrete License 2,850 3,000
Total Other Assets 65,350 70,500
Total Assets $ 76,394 $ 93,820
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Royalties Payable $150,000 $ 75,000
Accounts Payable 1,389 853
Franchise Tax Payable 300 300
Accrued Interest Payable 15,291 8,744
Notes Payable 125,000 125,000
Total Current Liabilities 288,855 209,897
Stockholders' Equity
Common Stock, $0.01 Par Value,
15,000,000 Shares Authorized
5,143,676 Shares Issued and
Outstanding Retro-Actively
Restated 51,437 51,437
Additional Paid-In Capital 3,288,216 3,288,216
Accumulated Deficit (3,555,238) (3,455,730)
Total Stockholders' Equity (215,585) (116,077)
Total Liabilities and
Stockholders' Equity $ 76,394 $ 93,820
GLOBESAT HOLDING CORP.
Consolidated Statements of Operations -Unaudited-
March 31, 1997 & March 31, 1996
For the Six For the Three
Months Period Ended Months Period Ended
March March March March
31, 1997 31, 1996 31, 1997 31, 1996
Revenues $ 0 $ 0 $ 0 $ 0
Expenses
Professional Fees 1,809 85,303 181 52,368
General &
Administrative 10,922 68,001 4,568 67,577
Interest 6,907 0 3,782 0
Depreciation 420 0 210 0
Amortization 5,150 0 2,575 0
Royalties 75,000 0 50,000 0
Expense Recovery (700) (700)
Total Expenses 99,508 153,304 60,616 119,945
Net Loss from
Operations (99,508) (153,304) (61,316) (119,945)
Per Share Data
Net Loss (0.02) (0.06) (0.01) (0.01)
Weighted
Average Common
Shares
Outstanding 5,143,676 300,000 5,143,676 300,000
GLOBESAT HOLDING CORP.
Consolidated Statements of Cash Flows -Unaudited-
Six Months Ended March 31, 1997 & March 31, 1996
March March
31, 1997 31, 1996
Cash Flows from Operating Activities
Net Income (Loss) $ (99,508) $ (153,304)
Adjustments to Reconcile
Net (Loss) to Net Cash
(Used In) Operating Activities:
Increase in Inventory 0 (4,712)
Non Cash Expenses 0 34,827
Amortization 5,150 0
Depreciation 420 0
Changes in Operating Assets and
Liabilities
Increase in Accounts Payable 536 15,637
Payable
Increase in Accrued Interest 6,547 0
Increase in Royalties Payable 75,000 0
Net Cash (Used In) Operating
Activities (11,855) (107,552)
Cash Flows from Investing
Activities
Purchase of Novatone License (75,000)
Cash Flows from Financing
Activities
Increase in Notes Payable 125,000
Increase in Capital Stock 94,154
Net Cash Provided from Financing
Activities 0 219,134
Net Increase (Decrease) in Cash (11,855) 35,582
Cash at Beginning of Year 14,744 6,457
Cash at End of Period 2,888 43,039
Note: Numbers may not add due to rounding.
GLOBESAT HOLDING CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE #1 - Statement Preparation
The Registrant has prepared the accompanying financial statements with
interim financial reporting requirements promulgated by the Securities &
Exchange Commission. The information furnished reflects all adjustments which
are, in the opinion of management, necessary for a fair presentation of
financial position and results of operations.
The consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the
Registrant's 1996 10-KSB Report.
NOTE #2 - Novatone License
Pursuant to the terms of an agreement between Windsor Acquisition Corp.
("Windsor"), a wholly-owned subsidiary of the Registrant, and LA-NUR Inc.
("LA-NUR"), Windsor is obligated to pay to LA-NUR a minimum annual royalty
payment of $100,000 for the calendar year 1996 and $200,000 for the calendar
year 1997. To date, no funds have been advanced by Windsor in connection with
this obligation. Currently, Windsor seeks to modify the terms of the
agreement with LA-NUR to nullify or vary the minimum royalty amount.
NOTE #3 - Notes Payable
Windsor has issued two notes payable, in the principal amount of $50,000 and
$75,000, respectively, to a shareholder of the Registrant. Each note bears
interest at a variable interest rate as charged by The Bank of Nova Scotia,
in Canada. Both notes were due on January 17, 1997. To date, Windsor has made
no payments of principal or interest in connection with these notes. Windsor
has accrued an aggregate of $15,291 in interest. Currently, the Registrant
seeks to modify the terms of the notes to, among other
is report.
Item 2. Management's Discussion And Analysis or Plan of Operation.
The following discussion should be read in conjunction with the Consolidated
Financial Statements of the Registrant and notes thereto contained in Item 1
as well as the Registrant's 1996 10-KSB Report.
PLAN OF OPERATION
During the six month period ended March 31, 1997, and for the fiscal year
which ended September 30, 1996, the Registrant has had no revenue and has not
attempted to market or produce any of its products. Operations during the
past fiscal year have consisted principally of the acquisition of development
stage envirostructure related products and technologies. To date, the
development of these products and technologies has not proceeded as expected
by management and the Registrant lacks sufficient financial resources.
Financing for the Registrant's business activities have, to date, been
unsuccessful.
Management has determined that it is in the best interest of the Registrant
and its shareholders to seek out other business opportunities. The Registrant
is currently considering a number of proposals which could result in a change
of control of the Registrant in addition to a change in the business of the
Registrant.
Consumer Products
As at March 31, 1997, Windsor Acquisition Corp. ("Windsor") had debts
outstanding in excess of $290,000. Windsor holds an exclusive global license
to market and distribute a cosmetic product known as the Novatone Facial
Toner (the "Novatone"). Prior to marketing the Novatone in the United States,
approval must be obtained from the United States Food and Drug Administration
(the "FDA"). The Registrant has submitted an application to the FDA in order
to seek such approval. To date, FDA approval has not been recieved and their is
no gurantess that such approval will be received. The Registrant lacks the
financial resources to continue to retain legal counsel to prepare the
necessary filings and respond to requests for information from the FDA.
Cementitious Products
Globesat Infrastructure Technologies ("Globesat I.T.") holds certain
distribution rights to a certain technology and an additive for enhancing
cementitious products (hereinafter referred to as "Novacrete").
Novacrete is marketed and is to be manufactured by Stratford Acquisition
Corp. ("Stratford"), a Minnesota company based in Burlington, Ontario,
Canada. Stratford granted to Globesat I.T. exclusive distribution rights to
Novacrete in Mexico, Chile and Argentina.
Globesat I.T.'s also obtained rights to distribute Novacrete in the United
States by way of an assignment of such rights by BGS Promotions Inc. ("BGS").
In consideration of its assignment of Novacrete rights, an aggregate sum of
$1,000,000 over a period of five years is required to be paid to BGS by
Globesat I.T. The first payment is due on July 31, 1997.
To date, to the best of the Registrant's knowledge, Stratford has not
manufactured any Novacrete in commercial volumes for distribution in any
jurisdiction as contemplated in the above noted agreements. In addition,
Stratford has advised Globesat I.T. that it does not intend to honor Globesat
I.T.'s distribution rights and that it regards BGS as never having had
rights to assign to Globesat I.T. Management of the Registrant is confident
that Stratford does not have valid grounds upon which to terminate these
agreements. Management has attempted to resolve this dispute with management
of Stratford, but, to date, such efforts have been unsuccessful. Management
recognizes that the ability of Globesat I.T. to successfully distribute
Novacrete will depend, to the greatest extent, upon the assistance and
cooperation of Stratford. As at the date hereof, management is not confident
that Stratford will manufacture Novacrete in a timely manner or that Globesat
I.T.'s disputes with Stratford will be resolved in a timely manner.
II
In light of the foregoing, management has commenced discussions with BGS in
an effort to amend the agreement with BGS.
Waste to Commodity Technologies
The Registrant entered into a joint venture agreement with Startech
Environmental Corp. ("Startech"), a Colorado company based in Wilton,
Connecticut on February 19, 1996. Since that time, the Registrant has had
limited dealings with Startech in respect of the implementation of this joint
venture. Management believes it to be unlikely that this joint venture will
be implemented, as the Registrant lacks sufficient financial resources to
satisfy its commitments to finance the joint venture company at this time. The
agreement with Startech provides that neither company shall have any recourse
against the other in the event that the joint venture is not implemented,
regardless of the reason for such non-implementation.
Results of Operations
The Company discontinued its operations in approximately June, 1993.
It sustained a net loss of $99,508 for the six months ended March 31, 1997.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None, not applicable.
Item 2. Changes in Securities
None, not applicable
Item 3. Defaults Upon Senior Securities
The Company has issued two notes payable, in the principal amount of $50,000
and $75,000, respectively, to a shareholder of the Company. Each note bears
interest at a variable interest rate as charged by The Bank of Nova Scotia,
in Canada. Both notes were due on January 17, 1997. To date, the Company has
made no payments of principal or interest in connection with these notes.
The Company has accrued an aggregate of $15,291 in interest. Currently, the
Company is seeking to modify the terms of the notes.
Item 4. Submission of Matters to a Vote of Security Holders
None, not applicable
Item 5. Other Information
None, not applicable
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
None
(B) Reports on Form 8-K
None
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GLOBESAT HOLDING CORP.
Date: May 14, 1997 By: /s/ Mel B. Greenspoon
Chairman and Chief Executive
Officer
Date: May 14, 1997 By: /s/ Lee A. Greenspoon
President and Chief Operating
Officer