UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the quarterly period ended: March 31, 2008
[ ] 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 registrant as specified in its charter)
Delaware 33-0726608
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
47 School Avenue
Chatham, NJ 07928
(Address of principal executive offices)
973-635-4047
(Issuer's telephone number)
(Former name, former address and former fiscal year,
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 [_]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated filer [_] Accelerated filer [_]
Non-accelerated filer [_] Smaller reporting company [X]
Indicate by check mark whether the issuer is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes [X] No [_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: There were a total of 1,244,902
shares of the issuer's common stock, par value $.001 per share, outstanding as
of April 24, 2008.
24HOLDINGS INC.
Quarterly Report on Form 10-Q
For the Period Ended March 31, 2008
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
PAGE
ITEM 1. FINANCIAL STATEMENTS
Balance Sheet as of March 31, 2008 (unaudited) 3
Statements of Operations for the Three Months Ended
March 31, 2008 and 2007 (unaudited) 4
Statements of Cash Flows for the Three Months Ended
March 31, 2008 and 2007 (unaudited) 5
NOTES TO FINANCIAL STATEMENTS (unaudited) 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION 11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 12
ITEM 4T. CONTROLS AND PROCEDURES 12
PART II OTHER INFORMATION
ITEM 6. EXHIBITS 12
SIGNATURES 13
FORWARD-LOOKING STATEMENTS
Certain statements made in this Quarterly Report on Form 10-Q 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
March 31, 2008
(unaudited)
ASSETS
------
Current Assets
Cash and cash equivalents $ 24,446
------------
TOTAL CURRENT ASSETS 24,446
------------
TOTAL ASSETS $ 24,446
============
LIABILITIES AND STOCKHOLDER'S DEFICIT
-------------------------------------
Current Liabilities
Accrued expenses $ 19,145
------------
TOTAL CURRENT LIABILITIES 19,145
------------
TOTAL LIABILITIES 19,145
STOCKHOLDER'S EQUITY
Convertible Preferred stock; $0.001 par value, 5,000,000
authorized, no shares issued and outstanding --
Common stock, $.001 par value; 100,000,000 shares
authorized, 1,244,902 shares issued and outstanding 1,245
Additional paid-in capital 10,687,358
Accumulated deficit (10,683,302)
------------
TOTAL STOCKHOLDER'S EQUITY 5,301
------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 24,446
============
The accompanying notes are an integral part of these financial statements.
3
24HOLDINGS INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
--------------------------
2008 2007
---------- ----------
Revenues
$ -- $ --
---------- ----------
Expenses
General and administrative 5,154 12,657
---------- ----------
Total operating expenses 5,154 12,657
---------- ----------
Net Loss $ (5,154) $ (12,657)
========== ==========
Weighted average number of
common shares outstanding 1,244,902 1,244,902
========== ==========
Net loss per share - basic and
fully diluted $ (0.0) $ (0.01)
========== ==========
The accompanying notes are an integral part of these financial statements.
4
24HOLDINGS INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31
2008 2007
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,154) $ (12,657)
Decrease in Accrued expenses 996 (10,732)
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (4,158) (23,389)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Contributed capital -- 15,000
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES -- 15,000
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,158) (8,389)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 28,604 29,635
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 24,446 $ 21,246
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Interest paid $ -- $ --
========== ==========
Income taxes paid
$ -- $ --
========== ==========
The accompanying notes are an integral part of these financial statements.
5
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(unaudited)
NOTE 1 - DESCRIPTION OF COMPANY:
We are a Delaware corporation formerly known as Scoop, Inc. In April 2001,
Scoop, Inc. amended its Certificate of Incorporation to change its name to
24Holdings Inc. ("we", "our", "us" or "24Holdings"). Prior to September 30,
2005, 24Holdings was a holding company that conducted its business operations
through its wholly owned subsidiary 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, we 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 ("Infinicom"), acquired 91% of our outstanding stock in exchange for
100% of the stock of 24STORE. Subsequent to Infinicom's acquisition in 1999 and
until September 30, 2005, the business operations of 24STORE, which represented
all of our operations, were devoted to supplying business customers with
computer and electronics products.
On October 23, 2006 (the "Effective Date"), we implemented a 1 for 125 reverse
stock split (the "Reverse Split") of our common stock par value $0.001 per share
(the "Common Stock"). Pursuant to the Reverse Split, each 125 shares of Common
Stock issued and outstanding as of the Effective Date was converted into one (1)
share of Common Stock. The Reverse Split also reduced the number of shares of
Common Stock into which each share of Series A Convertible Preferred Stock, par
value $.001 per share (the "Preferred Stock") could be converted from 100 shares
to 0.8 shares. All per share data herein has been retroactively restated to
reflect the Reverse Split.
The interim financial information as of March 31, 2008 and for the three month
periods ended March 31, 2008 and 2007 has been prepared without audit, pursuant
to the rules and regulations of the United States 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 our
Annual Report on Form 10-KSB for the year ended December 31, 2007, previously
filed with the SEC.
In the opinion of management, all adjustments (which include normal recurring
adjustments) necessary to present a fair statement of our financial position as
of March 31, 2008, and results of operations and cash flows for the three months
ended March 31, 2008 and 2007, as applicable, have been made. The results of
operations for the three months ended March 31, 2008 are not necessarily
indicative of the operating results that may be expected for the full fiscal
year or any future periods.
CHANGE OF OWNERSHIP TRANSACTIONS
On May 26, 2005, we entered into a series of agreements with Infinicom in
connection with our sale of all of the outstanding stock of 24STORE (the
"24STORE Sale") and separately, the assignment of all rights and title to
certain trademarks and domain names (the "IP Assets") that we held (the "IP
Assignment"). Pursuant to the terms of the 24STORE Sale, Infinicom paid us
$100,000 for our 24STORE shares and pursuant to the IP Assignment, we paid for
the IP Assets through a set-off against all outstanding and contingent
liabilities we owed to Infinicom determined as of the closing date of the
24STORE Sale, which amounted to $603,830.
On May 26, 2005, we also entered into a Preferred Stock Purchase Agreement with
Infinicom (the "Preferred Stock Agreement") pursuant to which we sold 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 the Preferred
Stock is convertible into 0.8 shares of our Common Stock at the holder's option.
On May 26, 2005, Infinicom, 24Holdings, Moyo Partners, LLC ("Moyo") and R&R
Biotech Partners, LLC ("R&R", and together with Moyo, the "Purchasers") entered
into a Common Stock Purchase Agreement (the "Infinicom Sale Agreement") pursuant
to which, Infinicom agreed to sell to the Purchasers an aggregate of 873,369
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 return, the
Purchasers (i) paid to Infinicom $500,000 in cash, and (ii) agreed that upon the
occurrence of one of several post-closing events, including a merger with one or
more as yet unidentified private unaffiliated operating companies, to cause
24Holdings to issue to Infinicom shares of Common Stock representing 1% of the
then issued and outstanding
6
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(unaudited)
NOTE 1 - DESCRIPTION OF COMPANY (continued):
shares of Common Stock on a fully diluted basis (the "Infinicom Additional
Shares"). The consummation of the Infinicom Sale was contingent on the
contemporaneous closing of the 24STORE Sale and the IP Assignment.
On September 30, 2005, 24Holdings and Infinicom completed the transactions
contemplated in the 24STORE Sale, the IP Assignment and the Preferred Stock
Agreement as described above. Infinicom forgave the $603,830 of debt 24Holdings
owed to them in consideration of the IP Assignment.
Effective September 30, 2005, Infinicom completed the sale to the Purchasers,
under the Infinicom Sale Agreement, of 597,693 shares of Common Stock (which
represented 77.7% of the 769,226 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 275,676 shares of Common Stock). As a
result, the Purchasers acquired control of 24Holdings from Infinicom, with R&R
beneficially owning 698,696 shares of Common Stock (assuming the conversion by
R&R of 275,676 shares of Preferred Stock into 220,541 shares of Common Stock)
constituting 66.9% of the then issued and outstanding shares of Common Stock,
and Moyo in the aggregate beneficially owning 174,674 shares of Common Stock
(assuming the conversion by Moyo of 68,919 shares of Preferred Stock into 55,135
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 our president and a
director but remained our chief executive officer. Also, effective September 30,
2005, Larsake Sandin resigned as a director and each of Arnold P. Kling and Kirk
M. Warshaw were appointed as directors of 24Holdings. On November 21, 2005,
effective with the filing of our Form 10-Q for the quarter ended September 30,
2005, Mr. von Euler resigned as chief executive officer and Mr. Kling was
appointed president and treasurer and Mr. Warshaw was appointed chief financial
officer and secretary. As of that same date, 24Holdings relocated its
headquarters to Chatham, New Jersey.
On November 25, 2005, the Infinicom Sale Agreement was amended to provide, among
other criteria, that the fair market value of the Infinicom Additional Shares
would be no less than $400,000 nor more than $600,000 at the time such shares
are required to be issued to Infinicom.
On February 1, 2006, a total of 250,000 shares of Preferred Stock were
authorized for issuance to two individuals who provided services to us. On May
12, 2006, we issued 150,000 and 100,000 shares, respectively, of Preferred Stock
to Arnold P. Kling and Kirk M. Warshaw for their services as our 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.
On November 29, 2006, the holders of all the issued and outstanding shares of
Preferred Stock elected to convert all of their Preferred Stock into shares of
Common Stock. As a result, the 594,595 shares of Preferred Stock outstanding
were exchanged for 475,676 shares of Common Stock.
As of March 31, 2008, our authorized capital stock consists of 100,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock of which
1,244,902 shares of Common Stock, and no shares of Preferred Stock, are issued
and outstanding. All shares of Common Stock currently outstanding are validly
issued, fully paid and non-assessable.
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.
7
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(unaudited)
NOTE 2 - BASIS OF PRESENTATION
The condensed financial statements have been prepared by us, without audit,
pursuant to the rules and regulations of 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. In the opinion of management,
the accompanying condensed financial statements include all adjustments
(consisting of normal, recurring adjustments) necessary to make our, results of
operations and cash flows not misleading as of March 31, 2008. The results of
operations for the three and nine months ended March 31, 2008 are not
necessarily indicative of the results of operations for the full year or any
other interim period. These financial statements should be read in conjunction
with the financial statements and the notes thereto, included in our Annual
Report on Form 10-KSB for the year ended December 31, 2006, previously filed
with the SEC.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
Fair Value of Financial Instruments - Pursuant to SFAS No. 107, "Disclosures
About Fair Value of Financial Instruments," we are required to estimate the fair
value of all financial instruments included on our balance sheet as of March 31,
2008. We consider the carrying value of accrued expenses in the financial
statements to approximate their face value.
Statements of Cash Flows - For purposes of the statements of cash flows we
consider all highly liquid investments purchased with a remaining maturity of
three months or less to be cash equivalents.
NOTE 4 - STOCKHOLDERS' EQUITY
On February 1, 2006, a total of 250,000 shares of Preferred Stock were
authorized for issuance to two individuals who provided services to us. On May
12, 2006, we 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, we issued 150,000 and 100,000 shares
of the Preferred Stock to Arnold Kling and Kirk Warshaw for their services as
our 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.
On October 23, 2006, we effected a reverse stock split of our Common Stock.
Pursuant to this reverse stock split, each 125 shares of Common Stock issued and
outstanding as of the date following the reverse stock split was converted into
one (1) share of Common Stock. This reverse stock split reduced the number of
shares of Common Stock into which each share of 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.
On November 29, 2006, the holders of all the issued and outstanding shares of
Preferred Stock elected to convert all of their Preferred Stock into shares of
Common Stock. As a result, the 594,595 shares of Preferred Stock outstanding
were exchanged for 475,676 shares of Common Stock.
As of March 31, 2008, our authorized capital stock consists of 100,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock, of which
1,244,902 shares of Common Stock, and no shares of Preferred Stock, are issued
and outstanding. All shares of Common Stock currently outstanding are validly
issued, fully paid and non-assessable.
During 2007, a stockholder contributed an additional $40,000 to the Company.
8
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(unaudited)
NOTE 5 - NEW ACCOUNTING PRONOUNCEMENTS
FASB 141(revised 2007) - Business Combinations
In December 2007, the FASB issued FASB Statement No. 141 (revised 2007),
Business Combinations. This Statement replaces FASB Statement No. 141, Business
Combinations. This Statement retains the fundamental requirements in Statement
141 that the acquisition method of accounting (which Statement 141 called the
purchase method) be used for all business combinations and for an acquirer to be
identified for each business combination. This Statement defines the acquirer as
the entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. This Statement's scope is broader than that of Statement 141,
which applied only to business combinations in which control was obtained by
transferring consideration. By applying the same method of accounting--the
acquisition method--to all transactions and other events in which one entity
obtains control over one or more other businesses, this Statement improves the
comparability of the information about business combinations provided in
financial reports.
This Statement requires an acquirer to recognize the assets acquired, the
liabilities assumed, and any non-controlling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions specified in the Statement. That replaces Statement 141's
cost-allocation process, which required the cost of an acquisition to be
allocated to the individual assets acquired and liabilities assumed based on
their estimated fair values.
This Statement applies to all transactions or other events in which an entity
(the acquirer) obtains control of one or more businesses (the acquirer),
including those sometimes referred to as "true mergers" or "mergers of equals"
and combinations achieved without the transfer of consideration, for example, by
contract alone or through the lapse of minority veto rights. This Statement
applies to all business entities, including mutual entities that previously used
the pooling-of-interests method of accounting for some business combinations. It
does not apply to: (a) The formation of a joint venture, (b) The acquisition of
an asset or a group of assets that does not constitute a business, (c) A
combination between entities or businesses under common control, (d) A
combination between not-for-profit organizations or the acquisition of a
for-profit business by a not-for-profit organization.
This Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. An entity may not apply it
before that date. Management believes this Statement will have no impact on the
financial statements of the Company once adopted.
FASB 160 - Non-controlling Interests in Consolidated Financial Statements - an
amendment of ARB No. 51
In December 2007, the FASB issued FASB Statement No. 160 - Non-controlling
Interests in Consolidated Financial Statements - an amendment of ARB No. 51.
This Statement applies to all entities that prepare consolidated financial
statements, except not-for-profit organizations, but will affect only those
entities that have an outstanding non-controlling interest in one or more
subsidiaries or that deconsolidate a subsidiary. Not-for-profit organizations
should continue to apply the guidance in Accounting Research Bulletin No. 51,
Consolidated Financial Statements, before the amendments made by this Statement,
and any other applicable standards, until the Board issues interpretative
guidance.
This Statement amends ARB 51 to establish accounting and reporting standards for
the non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this Statement was issued,
limited guidance existed for reporting non-controlling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This Statement improves
comparability by eliminating that diversity.
A non-controlling interest, sometimes called a minority interest, is the portion
of equity in a subsidiary not attributable, directly or indirectly, to a parent.
The objective of this Statement is to improve the relevance, comparability, and
transparency of the financial
9
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(unaudited)
Note 5 - New Accounting Pronouncements (continued):
information that a reporting entity provides in its consolidated financial
statements by establishing accounting and reporting standards that require: (a)
The ownership interests in subsidiaries held by parties other than the parent be
clearly identified, labeled, and presented in the consolidated statement of
financial position within equity, but separate from the parent's equity, (b) The
amount of consolidated net income attributable to the parent and to the
non-controlling interest be clearly identified and presented on the face of the
consolidated statement of income, (c) Changes in a parent's ownership interest
while the parent retains its controlling financial interest in its subsidiary be
accounted for consistently. A parent's ownership interest in a subsidiary
changes if the parent purchases additional ownership interests in its subsidiary
or if the parent sells some of its ownership interests in its subsidiary. It
also changes if the subsidiary reacquires some of its ownership interests or the
subsidiary issues additional ownership interests. All of those transactions are
economically similar, and this Statement requires that they be accounted for
similarly, as equity transactions, (d) When a subsidiary is deconsolidated, any
retained non-controlling equity investment in the former subsidiary be initially
measured at fair value. The gain or loss on the deconsolidation of the
subsidiary is measured using the fair value of any non-controlling equity
investment rather than the carrying amount of that retained investment, (e)
Entities provide sufficient disclosures that clearly identify and distinguish
between the interests of the parent and the interests of the non-controlling
owners.
This Statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009,
for entities with calendar year-ends). Earlier adoption is prohibited. This
Statement shall be applied prospectively as of the beginning of the fiscal year
in which this Statement is initially applied, except for the presentation and
disclosure requirements. The presentation and disclosure requirements shall be
applied retrospectively for all periods presented. Management believes this
Statement will have no impact on the financial statements of the Company once
adopted.
Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.
FASB 161 - Disclosures about Derivative Instruments and Hedging Activities -
Issued March 2008
Management does not believe that this standard will have a material effective on
the accompanying financial statements once effective.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
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 definitive agreements or
understandings with any prospective business combination candidates and there
are no 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. 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 ENDED MARCH 31, 2008 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 2007
We currently do not have any business operations and have not had any revenues
during the three month periods ended March 31, 2008 and 2007, respectively.
Total general and administrative expenses for the three month periods ended
March 31, 2008 were $5,154 as compared to $12,657 for the same periods in 2007.
These expenses are primarily constituted by professional and filing fees. The
decrease in expenses in 2007 is due to a decline in our professional fees.
Liquidity and Capital Resources
- -------------------------------
At March 31, 2008, 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 stockholders and/or management and there can be no assurances that
its present stockholders or management will make any loans or capital
contributions to 24Holdings. At March 31, 2008, 24Holdings had cash of $24,446
and working capital of $5,301.
24Holdings's present material commitments are professional and administrative
fees and expenses associated with the preparation of its filings with the SEC
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 professional commitments.
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Commitments
- -----------
We do not have any commitments which are required to be disclosed in tabular
form as of March 31, 2008.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
A smaller reporting company is not required to provide the information required
by this Item.
ITEM 4T. CONTROLS AND PROCEDURES.
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management, with the participation of both 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, both of our president and chief financial officer 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 our 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.
PART II. - OTHER INFORMATION
ITEM 6. EXHIBITS
Exhibit No. Description
----------- -----------
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 Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
24Holdings Inc
Dated: April 24, 2008 /s/ Arnold P. Kling
--------------------------------------------
Arnold P. Kling, President
(Principal Executive Officer)
Dated: April 24, 2008 /s/ Kirk M. Warshaw
--------------------------------------------
Kirk M. Warshaw, Chief Financial Officer
(Principal Financial and Accounting Officer)
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