U.S. SECURITIES AND 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: September 30, 2006
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from ___ to _____
COMMISSION FILE NUMBER 000-22281
---------------------------------------------
24HOLDINGS INC.
(Exact name of small business issuer as specified in its charter)
Delaware 33-0726608
- ------------------ -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
c/o Kirk M. Warshaw
47 School Avenue
Chatham, New Jersey 07928
- ------------------ -------------------
(Address of principal executive offices) (zip code)
Issuer's telephone number, including area code:
(973) 635-4047
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State the number of shares outstanding of issuer's common equity as of the last
practicable date: As of November 13, 2006, there were 769,179 shares of common
stock outstanding.
Transactional Small Business Disclosure Format (Check One): Yes [ ] No [X]
24HOLDINGS INC.
Quarterly Report on Form 10-QSB
Quarter Ended September 30, 2006
INDEX TO FINANCIAL STATEMENTS
PART I. FINANCIAL INFORMATION
PAGE
ITEM 1. FINANCIAL STATEMENTS ------
Balance Sheet as of September 30, 2006 (unaudited) 3
Statements of Operations for the Three and Nine Months Ended
September 30, 2006 and 2005 (unaudited) 4
Statements of Cash Flows for the Nine Months Ended
September 30, 2006 and 2005 (unaudited) 5
NOTES TO FINANCIAL STATEMENTS 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 9
ITEM 3. CONTROLS AND PROCEDURES 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS 12
SIGNATURES 13
FORWARD-LOOKING STATEMENTS
Certain statements made in this Quarterly Report on Form 10-QSB are
"forward-looking statements" regarding the plans and objectives of management
for future operations and market trends and expectations. Such statements
involve known and unknown risks, uncertainties and other factors that may cause
our actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. The forward-looking statements included herein are
based on current expectations that involve numerous risks and uncertainties. Our
plans and objectives are based, in part, on assumptions involving the continued
expansion of our business. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Although we believe that our assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and,
therefore, there can be no assurance that the forward-looking statements
included in this report will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by us
or any other person that our objectives and plans will be achieved. We undertake
no obligation to revise or update publicly any forward-looking statements for
any reason. The terms "we", "our", "us", or any derivative thereof, as used
herein refer to 24Holdings Inc., a Delaware corporation, and its predecessors.
2
PART I - FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
24HOLDINGS INC.
BALANCE SHEET
September 30, 2006
(unaudited)
ASSETS
--------
Current Assets
Cash and cash equivalents $ 37,564
------------
Total current Assets 37,564
------------
TOTAL ASSETS $ 37,564
============
LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------
Current Liabilities
Accrued expenses $ 4,202
------------
TOTAL CURRENT LIABILITIES 4,202
------------
TOTAL LIABILITIES 4,202
SHAREHOLDERS' EQUITY
Convertible Preferred stock; $0.001 par value,
5,000,000 authorized, 594,879 shares issued and oustanding
(liquidation value $249,628) 595
Common stock, $.001 par value; 100,000,000 shares
authorized, 769,179 shares issued and outstanding 769
Additional paid-in capital 10,647,239
Deficit accumulated during the development period (10,615,241)
------------
TOTAL SHAREHOLDERS' EQUITY 33,362
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 37,564
============
The accompanying notes are an integral part of these financial statements.
3
24HOLDINGS INC.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
--------------------------- ----------------------------
Revenues $ - $ - $ - $ -
Expenses
General and administrative 2,892 72,098 57,248 125,838
--------------------------- ----------------------------
Total operating expenses 2,892 72,098 57,248 125,838
Net Loss from continuing operations
Before Income Taxes (2,892) (72,098) (57,248) (125,838)
Provision for Income Taxes - - - -
--------------------------- ----------------------------
Loss from Continuing Operations (2,892) (72,098) (57,248) (125,838)
Income from discontinued operations, net of taxes - 354,816 - 25,803
--------------------------- ----------------------------
Net Income (Loss) $ (2,892) $ 282,718 $ (57,248) $ (100,035)
=========================== ============================
Net Income (loss) per share - continuing operations
basic and diluted $ (0.00) $ (0.09) $ (0.07) $ (0.16)
=========================== ============================
Net income per share - discontinued operations - basic $ - $ 0.46 $ - $ 0.03
=========================== ============================
Net income per share - discontinued operations - diluted $ - $ 0.34 $ - $ 0.02
=========================== ============================
Net Income (loss) per share - basic $ (0.00) $ 0.37 $ (0.07) $ (0.13)
=========================== ============================
Net Income (loss) per share - diluted $ - $ 0.27 $ - $ -
=========================== ============================
Weighted average number of common shares - basic 769,179 769,179 769,179 769,179
=========================== ============================
Weighted average number of common shares - diluted 769,179 1,044,855 769,179 1,044,855
=========================== ============================
The accompanying notes are an integral part of these financial statements.
4
24HOLDINGS INC.
STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
September 30, September 30,
2006 2005
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (57,248) $ (100,035)
Foreign currency translation - 84,345
Preferred shares issues for services 18,750 -
Realized Exchange variances - (76,490)
Gain on Sale of Subsidiary - discontinued operations - (391,358)
Gain on Sale of Intellectual Properties - (606,830)
Write-off of intercompany debt - 364,139
Changes in operating assets and liabilities
Accounts receivable 7,500 327,752
Loans receivable - 386,130
Prepaid expenses (83,594)
Inventory 195,409
Decrease in accrued expenses (31,438) (453,274)
------------------- -------------------
NET CASH USED IN OPERATING ACTIVITIES (62,436) (353,806)
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party loan - 258,773
------------------- -------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES - 258,773
------------------- -------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (62,436) (95,032)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 100,000 95,032
------------------- -------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 37,564 $ -
=================== ===================
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
INFORMATION
Interest paid $ - $ -
=================== ===================
Income taxes $ - $ -
=================== ===================
The accompanying notes are an integral part of these financial statements.
5
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2006
(unaudited)
NOTE 1 - DESCRIPTION OF COMPANY:
24Holdings Inc. is a Delaware corporation formerly known as Scoop, Inc.
("24Holdings" or the "Company"). In April 2001 Scoop, Inc. amended its
Certificate of Incorporation to change its name to 24Holdings Inc. Prior to
September 30, 2005, 24Holdings was a holding company which owned 100% of the
capital stock of 24STORE (Europe) Limited, a company incorporated under the laws
of England formerly known as 24STORE.com Limited ("24STORE"). 24STORE commenced
business operations in 1996 and focused on the sale of media products and
business information services. Commencing in July 1998, the Company underwent
voluntary reorganization under Chapter 11 of the United States Bankruptcy Code.
In accordance with the Plan of Reorganization approved by the Bankruptcy Court
in December 1999, InfiniCom, AB, a Swedish registered company, acquired 91% of
the outstanding stock of the Company in exchange for 100% of the stock of
24STORE. Subsequent to Infinicom, AB's acquisition in 1999 and until September
30, 2005, the business operations of 24STORE, which represented all of the
Company's operations, were devoted to supplying business customers with computer
and electronics products.
The interim financial information as of September 30, 2006 and for the three and
nine month periods ended September 30, 2006 and 2005 has been prepared without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (the "SEC"). Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although we believe that the disclosures made are adequate to
provide for fair presentation. These financial statements should be read in
conjunction with the financial statements and the notes thereto, included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2005,
previously filed with the SEC.
In the opinion of management, all adjustments (which include normal recurring
adjustments) necessary to present a fair statement of financial position as of
September 30, 2006, and results of operations and cash flows for the three and
nine months ended September 30, 2006 and 2005, as applicable, have been made.
The results of operations for the three and nine months ended September 30, 2006
are not necessarily indicative of the operating results that may be expected for
the full fiscal year or any future periods.
The Company's authorized capitalization currently consists of 100,000,000 shares
of Common Stock ("Common Stock") and 5,000,000 shares of Series A Convertible
Preferred Stock ("Preferred Stock"). As a result of the Reverse Split (as
defined in Note 5 below), the Company now has adequate shares of Common Stock
available for issuance upon the conversion of all the issued and outstanding
shares of Preferred Stock into Common Stock. Prior to the Reverse Split,
$249,628 of indebtedness which was converted into Preferred Stock had been
recorded on our balance sheet as a long term liability because the Preferred
Stock would have converted into more shares of Common Stock than were authorized
and available for issuance.. As a result of the Reverse Split, as of September
30, 2006, this amount has been reclassified, pursuant to EITF 00-19, as
preferred equity.
CHANGE OF OWNERSHIP TRANSACTIONS
On May 26, 2005, the Company entered into a series of agreements with Infinicom,
AB ("Infinicom") pursuant to which the Company's sold themof all of the
outstanding stock of 24STORE (the "24STORE Sale"), assigned and transferred of
all rights and title to certain trademarks and domain names (the "IP Assets")
owned by the Company (the "IP Assignment"). Infinicom paid the Company $100,000
in the shares of 24STORE and in consideration for the IP Assets, allowed a
set-off against all outstanding and contingent liabilities the Company owed to
Infinicom, as of the closing date of the 24STORE Sale, which amounted to
$603,830.
On May 26, 2005, the Company also entered a Preferred Stock Purchase Agreement
with Infinicom (the "Preferred Stock Agreement") pursuant to which the Company
agreed to sell to Infinicom 344,595 shares of our Preferred Stock in exchange
for the discharge of $230,879 of outstanding debt owed to Infinicom. Each share
of Preferred Stock is convertible into 100 shares of Common Stock at the
holder's option.
6
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2006
(unaudited)
NOTE 1 - DESCRIPTION OF COMPANY (continued):
On May 26, 2005, Infinicom the Company, Moyo Partners, LLC ("Moyo") and R&R
Biotech Partners, LLC ("R&R", together with Moyo, the "Purchasers") entered into
a Common Stock Purchase Agreement (the "Common Stock agreement") pursuant to
which, Infinicom sold to the Purchasers an aggregate of 109,171,181 shares of
Common Stock (which included shares issuable upon conversion of the Preferred
Stock) which represented approximately 83.6% of the then issued and outstanding
shares of Common Stock (the "Infinicom Sale"). In turn, the Purchasers paid to
Infinicom (i) $500,000 in cash, and (ii) agreed to cause the issuance of shares
of Common Stock which would represent 1% of the issued and outstanding shares of
Common Stock on a fully diluted basis, upon the closing of a merger with one or
more as yet unidentified private unaffiliated operating companies. The
consummation of the Infinicom Sale was contingent on the contemporaneous closing
of the 24STORE Sale and the IP Assignment.
On September 30, 2005, the Company and Infinicom completed the transactions
contemplated in the 24STORE Sale, the IP Assignment and the Preferred Stock
Agreement as described above. Infinicomforgave $603,830 of debt the Company owed
to them in consideration of the IP Assignment.
Effective September 30, 2005, Infinicom completed the sale to the Purchasers of
74,711,681 shares of Common Stock (which represented 77.7% of the 96,147,395
shares of Common Stock then issued and outstanding) and 344,595 shares of
Preferred Stock, constituting 83.6% in the aggregate of the then issued and
outstanding Common Stock (assuming the conversion of the Preferred Stock into
34,459,500 shares of Common Stock). As a result, the Purchasers acquired control
of the Company from Infinicom, with R&R in the aggregate beneficially owning
87,336,945 shares of Common Stock (assuming the conversion by R&R of 275,676
shares of Preferred Stock into 27,567,600 shares of Common Stock) constituting
66.9% of the then issued and outstanding shares of Common Stock, and Moyo in the
aggregate beneficially owning 21,834,236 of Common Stock (assuming the
conversion by Moyo of 68,919 shares of Preferred Stock into 6,891,900 shares of
Common Stock) constituting 16.7% of the then issued and outstanding shares of
Common Stock.
Effective September 30, 2005 Urban von Euler resigned as President and Director
but remained the Chief Executive Officer of the Company. Also, effective
September 30, 2005, Larsake Sandin resigned as a Director and each of Arnold
Kling and Kirk Warshaw were appointed as Directors of the Company. On November
21, 2005, effective with the filing of the Company's quarterly report on Form
10-Q for the period ended September 30, 2005, Mr. von Euler resigned as Chief
Executive Officer, Mr. Kling was appointed President and Mr. Warshaw was
appointed Chief Financial Officer and Secretary of the Company. As of that same
date, the Company relocated our headquarters to Chatham, New Jersey.
On February 1, 2006, a total of 250,000 shares of Preferred Stock were
authorized for issuance to two individuals who provided services to the Company.
On May 12, 2006, the Company issued 150,000 and 100,000 shares of the Preferred
Stock to Arnold Kling and Kirk Warshaw for their services as the Company's
President and Chief Financial Officer, respectively. Each share of Preferred
Stock is immediately convertible, at the holder's option, into 0.8 shares of
Common Stock. Mr. Kling's services were valued at $11,250 and Mr. Warshaw's
services were valued at $7,500.
THE COMPANY TODAY
Since September 30, 2005, our purpose has been to serve as a vehicle to acquire
an operating business and is currently considered a "shell" or blank check
company inasmuch as we are not generating revenues, do not own an operating
business, and have no specific plan other than to engage in a merger or
acquisition transaction with a yet-to-be identified company or business. We have
no employees and no material assets.
Commencing with the quarter ended June 30, 2004, all of the Company's computer
related business services activities have been accounted for as Discontinued
Operations. As such, all of the prior activity has been shown in the financials
as one line item that is labeled "Income (Loss) from Discontinued Operations,
net of taxes." The activities of the Company since September 2005 are shown in
the income statement under the section labeled "Loss from Continuing
Operations." These amounts are for expenses incurred since September 30, 2005
and are of the nature we expect to incur in the future, whereas the Income
(loss) from Discontinued Operations are from activities we are no longer engaged
in.
7
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2006
(unauditied)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Company's accounting policies are in accordance with accounting principles
generally accepted in the United States of America (U.S.). Outlined below are
those policies considered particularly significant.
(a) Principles of Consolidation:
The accompanying consolidated financial statements include the
accounts of 24Holdings Inc. and subsidiary. All significant
intercompany transactions and accounts have been eliminated. The
financial statements of the entities owned outside the U.S. are
generally measured using the local currency as the functional
currency.
Accordingly, assets and liabilities are translated at year-end
exchange rates and operating statement items are translated at average
exchange rates prevailing during the year. The resulting translation
adjustments are recorded as other comprehensive income. Exchange
adjustments resulting from foreign currency are included in the
determination of net income (loss).
As discussed, the Company sold its subsidiary on September 30, 2005
and is reporting consolidated information for the reporting periods of
2005 only.
NOTE 3 - SHAREHOLDERS' DEFICIT
On February 1, 2006, a total of 250,000 shares of Preferred Stock were
authorized for issuance to two individuals who provided services to the Company.
On May 12, 2006, the Company filed a Certificate of Amendment to the Certificate
of Designation for the Preferred Stock with the Secretary of State of the State
of Delaware, increasing the number of shares designated as Preferred Stock from
500,000 to 600,000 shares. As a result of this filing, the Company issued
150,000 and 100,000 shares of the Preferred Stock to Arnold Kling and Kirk
Warshaw for their services as the Company's President and Chief Financial
Officer, respectively. Each share of Preferred Stock is convertible, at the
holder's option, into 100 shares of Common Stock. Mr. Kling's services were
valued at $11,250 and Mr. Warshaw's services were valued at $7,500.
Effective October 23, 2006, a reverse stock split of the common stock of the
Company took effect. Pursuant to this reverse stock split, each 125 shares of
common stock of the Company issued and outstanding as of the date following the
reverse stock split was converted into one (1) share of the Company's common
stock. This reverse stock split reduced the number of common shares into which
each share of Series A Preferred Stock could be converted from 100 shares to .8
shares. All per share data has been retroactively restated to reflect this
reverse stock split.
Our authorized capitalization currently consists of 100,000,000 common shares
and 5,000,000 preferred shares. As a result of the aforementioned reverse stock
split we now have adequate shares to facilitate the conversion of all the
preferred shares outstanding into the number of shares of common stock into
which they are convertible. Previously, because such conversion terms of the
Series A Preferred Stock would have required more common shares to be issued
than were authorized, $249,628 of indebtedness converted to Series A Preferred
Stock had been recorded on our balance sheet as a long term liability. As a
result of the reverse stock split this amount has been reclassified, pursuant to
EITF 00-19, as preferred equity as of September 30, 2006.
As a result, as of September 30, 2006, the Company has authorized 5,000,000
shares of preferred stock, par value $0.001 of which there are issued and
outstanding 594,879 shares. The Company has authorized 100,000,000 shares of
common stock, par value $0.001 per share of which there are issued and
outstanding 769,179 shares of common stock, after giving effect to the reverse
stock split. All shares of preferred stock and common stock currently
outstanding are validly issued, fully paid and non-assessable.
NOTE 4 - NEW ACCOUNTING PRONOUNCEMENTS
FASB 157 - Fair Value Measurements
In September 2005, the FASB issued FASB Statement No. 157. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is a
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change
8
current practices. This Statement is effective for financial statements for
fiscal years beginning after November 15, 2007. Earlier application is permitted
provided that the reporting entity has not yet issued financial statements for
that fiscal year. Management believes this Statement will have no impact on the
financial statements of the Company once adopted.
NOTE 5 - SUBSEQUENT EVENT
On October 23, 2006, the Company effected a reverse stock split of its Common
Stock pursuant to which each 125 shares of Common Stock issued and outstanding
on the record date of the reverse stock split was converted into one (1) new
share of Common Stock ("Reverse Split"). As a result of the Reverse Split,
holders of certificates representing pre-split shares of Common Stock have the
right to receive upon surrender of those shares, new certificates representing
post-split shares at the ratio of one (1) share of post-split Common Stock for
every 125 shares of pre-split shares of Common Stock. Fractional shares of
post-split common stock were not issued as a result of the reverse split;
instead, fractional shares were rounded to the nearest whole share after the
Reverse Split. As of November 13, 2006 there were 769,179 shares of Common Stock
issued and outstanding.
9
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
Since September 30, 2005 our purpose is to effect a business combination with an
operating business which we believe has significant growth potential. We are
currently considered to be a "shell" company in as much as we have no
operations, revenues or employees. We have no plans, arrangements or
understandings with any prospective business combination candidates and have not
targeted any business for investigation and evaluation nor are there any
assurances that we will find a suitable business with which to combine. The
implementation of our business objectives is wholly contingent upon a business
combination and/or the successful sale of securities in 24Holdings. We intend to
utilize the proceeds of any offering, any sales of equity securities or debt
securities, bank and other borrowings or a combination of those sources to
effect a business combination with a target business which we believe has
significant growth potential. While we may, under certain circumstances, seek to
effect business combinations with more than one target business, unless and
until additional financing is obtained, we will not have sufficient proceeds
remaining after an initial business combination to undertake additional business
combinations.
A common reason for a target company to enter into a merger with a shell company
is the desire to establish a public trading market for its shares. Such a
company would hope to avoid the perceived adverse consequences of undertaking a
public offering itself, such as the time delays and significant expenses
incurred to comply with the various Federal and state securities law that
regulate initial public offerings.
As a result of our limited resources, we expect to have sufficient proceeds to
effect only a single business combination. Accordingly, the prospects for our
success will be entirely dependent upon the future performance of a single
business. Unlike certain entities that have the resources to consummate several
business combinations or entities operating in multiple industries or multiple
segments of a single industry, we will not have the resources to diversify our
operations or benefit from the possible spreading of risks or offsetting of
losses. A target business may be dependent upon the development or market
acceptance of a single or limited number of products, processes or services, in
which case there will be an even higher risk that the target business will not
prove to be commercially viable.
Our officers are only required to devote a small portion of their time (less
than 10%) to our affairs on a part-time or as-needed basis. We expect to use
outside consultants, advisors, attorneys and accountants as necessary, none of
which will be hired on a retainer basis. We do not anticipate hiring any
full-time employees so long as we are seeking and evaluating business
opportunities.
We expect our present management to play no managerial role in 24Holdings
following a business combination. Although we intend to scrutinize closely the
management of a prospective target business in connection with our evaluation of
a business combination with a target business, our assessment of management may
be incorrect. We cannot assure you that we will find a suitable business with
which to combine.
RESULTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTH PERIODS ENDED
SEPTEMBER 30, 2006 COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2005
We currently do not have any business operations and have not had any revenues
during the three and nine month periods ended September 30, 2006 and 2005.
Total general and administrative expenses from Continuing Operations for the
three month period ended September 30, 2006 decreased to $2,892 as compared to
$72,098 for the same period in 2005. These expenses primarily constitute
professional and filing fees .
Total general and administrative expenses from Continuing Operations for the
nine month period ended September 30, 2006 decreased to $57,248 as compared to
$125,938 for the same period in 2005. These expenses primarily constituted
professional and filing fees. The decrease in general and administrative
expenses is mainly attributable to a relative lack of business activity during
2006 compared to 2005.
Liquidity and Capital Resources
At September 30, 2006, 24Holdings did not have any revenues from operations.
Absent a merger or other combination with an operating company 24Holdings does
not expect to have any revenues from operations. No assurance can be given that
such a merger or other combination will occur or that 24Holdings can engage in
any public or private sales of its equity or debt securities to raise working
capital. 24Holdings is dependent upon future loans or capital contributions from
its present shareholders and/or management and there can be no assurances that
its present shareholders or management will make any loans or capital
contributions to 24Holdings. At September 30, 2006, 24Holdings had cash of
$37,564 and working capital of $33,362.
10
24Holdings's present material commitments are professional and administrative
fees and expenses associated with the preparation of its filings with the
Securities and Exchange Commission and other regulatory requirements. In the
event that 24Holdings engages in any merger or other combination with an
operating company, it will have additional material commitments, although
24Holdings presently is not engaged in any discussions regarding any merger or
other combination with an operating company and cannot offer any assurances that
it will engage in any merger or other combination with an operating company
within the next twelve months.
Subsequent Event
Effective October 23, 2006 we effected a reverse split of our common stock
pursuant to which each 125 shares of common stock 24Holdings issued and
outstanding as of the record date of the reverse stock split was converted into
one (1) share of common stock. As a result of the reverse split, holders of
certificates representing pre-split shares of common stock have the right to
receive upon surrender of their shares, new certificates representing post-split
shares at the ratio of one (1) share of post-split common stock for every 125
shares of pre-split common stock. Fractional shares of post-split common stock
were not issued as a result of the reverse split; instead, fractional shares
were rounded to the nearest whole share after the reverse stock split. As of
November 13, 2006 there were 769,179 common shares issued and outstanding.
Commitments
We do not have any commitments which are required to be disclosed in tabular
form as of September 30, 2006.
ITEM 3. CONTROLS AND PROCEDURES.
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management, with the participation of our president and chief financial
officer, carried out an evaluation of the effectiveness of our "disclosure
controls and procedures" (as defined in the Securities Exchange Act of 1934 (the
"Exchange Act") Rules 13a-15(e) and 15-d-15(e)) as of the end of the period
covered by this report (the "Evaluation Date"). Based upon that evaluation, the
president and chief financial officer, who are our sole officers and directors,
concluded that as of the Evaluation Date, our disclosure controls and procedures
are effective to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act (i) is recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms and (ii) is accumulated and communicated to our
management, including our president and chief financial officer, as appropriate
to allow timely decisions regarding required disclosure.
(B) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal controls over financial reporting that
occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.
11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS
EXHIBITS:
EXHIBIT NO. DESCRIPTION
3.1 Certificate of Amendment of the Certificate of Incorporation
31.1 Certification of the President pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of the President pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
24Holdings Inc
Dated: November 13, 2006 /s/ Arnold P. Kling
-----------------------------------------
Arnold P. Kling, President
(Principal Executive Officer)
Dated: November 13, 2006 /s/ Kirk M. Warshaw
-----------------------------------------
Kirk M. Warshaw, Chief Financial Officer
(Principal Financial and Accounting Officer)
13