UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2000
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EUROKIOSK INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-4054666
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1 ROCKEFELLER PLAZA - SUITE 1600
NEW YORK, NEW YORK 10020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number (212) 265-4600
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Check here whether the issuer (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.
Yes __X____ No_______
As of June 30, 2000, the following shares of the Registrant's
common stock were issued and outstanding:
1,065,000 shares of voting common stock
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . .3
CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .4
CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .5
STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .6
Note 1. NATURE OF BUSINESS AND SIGNIFICANT
ACCOUNTING POLICIES. . . . . . . . . . . . .8
Note 2. USE OF OFFICE SPACE. . . . . . . . . . . . .8
Note 3. EARNINGS PER SHARE . . . . . . . . . . . . .9
Note 4. LIQUIDITY . . . . . . . . . . . . . . . . . 9
Note 5. CONTRIBUTED SERVICES . . . . . . . . . . . .9
Note 6. SUBSEQUENT EVENTS . . . . . . . . . . . . . 9
Item 2. Management's Discussion And Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . .11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 16
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 16
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 16
Item 5. Other information. . . . . . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 16
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 17
PART I - FINANCIAL INFORMATION
To the Board of Directors of EUROKIOSK, INC.
We have reviewed the accompanying balance sheet of EUROKIOSK,
INC.,(a development stage company) as of June 30, 2000 and
the related statements of operations and accumulated deficit, and
cash flows for the three months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued
by the American Institute of Certified Public Accountants. All
information included in these financial statements is the
representation of the management of EUROKIOSK INC.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
Graf Repetti & Co., LLP
Dated: New York, New York
August 16, 2000
EUROKIOSK INC.
CONDENSED CONSOLIDATED BALANCE SHEET
As Of As Of
June 30, 2000 March 31, 2000
(Unaudited) (Audited)
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ASSETS
Current Assets
Cash $ 0 $ 0
Other Current Assets 0 0
_________ ________
Total Current Assets $ 0 $ 0
Other Assets 0 0
_________ ________
TOTAL ASSETS $ 0 $ 0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $0 $ 0
Accrued Expenses 3,584 2,822
_________ ________
Total Current Liabilities 3,584 2,822
_________ ________
Total Liabilities $ 3,584 2,822
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding
1,065,000 Shares 1,065 1,065
Additional Paid in Capital 75,809 68,209
Deficit Accumulated During the
Development Stage ( 80,458) (72,096)
_________ ________
Total Stockholders' Equity ( 3,584) ( 2,822)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 0
The accompanying notes and accountant's report are an integral
part of these financial statements.
EUROKIOSK INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
For the 3 Mos Ended For the 3 Mos Ended
June 30 Dec. 31
2000 1999 1999 1998
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TOTAL REVENUES: $ 0 $ 0 0 N/A
OPERATING EXPENSES:
Accounting 750 1,000 750 N/A
Legal (Note 4) 2,500 2,500 4,000
Rent Expense (Note 2) 600 600 600
Filing Fee 12 13 184
Contributed Svcs
(Note 3) 4,500 4,500 4,500
________ _______ ________ ________
NET LOSS ( 8,362) (8,613) (10,034) N/A
NET LOSS PER SHARE (.01) (.01) (.01)
Weighted Average
Number of Shares
Outstanding 1,065,000 1,000,000 1,000,000
The accompanying notes and accountant's report are an integral
part of these financial statements.
EUROKIOSK INC.
STATEMENT OF CASH FLOWS (unaudited)
For the 3 mos For the 3 mos
Ended Ended
to to
June 30, 2000 June 30, 1999
________________________________________
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $( 8,362) $(8,613)
Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Additional Paid in Capital
Contributed By Shareholders for:
Rent 600
Contributed Services 4,500
Legal Services 2,500
Changes in Assets and Liabilities
Decrease in Prepaid Expenses 0
Increase in Accounts Payable
And Accrued Expenses 762
Decrease in Due from Attorney
Escrow Account 4,940
Decrease in Accounts Payable and
Accrued Expenses (1,427)
________ _________
Total Adjustments 8,362 3,513
Net Cash Used in
Operating Activities 0 (5,100)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Additional Paid in Capital
Contributed by Shareholder 0 5,100
__________ __________
Net Cash Provided by
Financing Activities 0 5,100
Net Change in Cash 0 0
Cash at Beginning of Period 0 0
Cash at End of Period 0 0
Supplemental Disclosure of
Cash Flow Information
Cash Paid During the Period for
Interest Expense 0 0
Corporate Taxes $ 0 0
The accompanying notes and accountant's report are an integral
part of these financial statements.
EUROKIOSK INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. Description of Company
EUROKIOSK INC.,("the Company") was organized on October 27, 1998
under the laws of the State of Delaware, having the stated
purpose of engaging in any lawful act or activity for which
corporations may be organized.
The Company is a developmental stage company. The directors are
now determined that the Company should become active in
seeking potential operating businesses and business
opportunities with the intent to acquire or merger with such
businesses or to form an alliance. The Company has begun to
consider and investigate potential business opportunities.
B. Basis of Presentation
Financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and
expenses when incurred.
C. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from these estimates. Significant estimates in the
financial statements include the assumption that the Company will
continue as a going concern. See Note 5.
NOTE 2 - USE OF OFFICE SPACE
The Company occasionally uses 100 square feet of space for its
executive offices at One Rockefeller Plaza, Suite 1600, New York,
New York which it receives from one of its shareholders at no
cost. The fair market value of this office is $200 per month,
which is reflected as an expense with a corresponding credit to
additional paid-in capital.
NOTE 3 - CONTRIBUTED SERVICES
Two of the Company's officers render services on behalf of the
company at no cost. The fair market value is $1,000 for one
officer and $500 for the other. Each amount is reflected
as an expense with a corresponding credit to additional paid in
capital.
NOTE 4 - EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED
JUNE 30, 2000
Net Loss Per Share $ (0.01)
NOTE 6 - LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company established its office in New York, New York on
November 1, 1998 when it began the initial development of its
business plan. The Company's limited operating history,
including its losses and no revenues, primarily reflect the
operations of its early stage.
As a result, the Company had from time of inception to June
30, 2000 no revenue and a net loss from operations of $(80,458).
As of June 30, 2000, the Company had net capital deficiency of
$(3,584).
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with its
operations. It is not anticipated that the Company will be able
to meet its financial obligations through internal net revenue in
the foreseeable future. The Company does not have a working
capital line of credit with any financial institution.
Therefore, future sources of liquidity will be limited to the
Company's ability to obtain additional debt or equity funding.
The Company anticipates that its existing capital resources will
enable it to maintain its current implemented operations for at
least 12 months; however, full implementation of its business
plan is dependent upon its ability to raise substantial funding.
Management's plan is to move the Company toward profitability
within five years and to seek additional capital to fund further
expansion of its operations.
NOTE 6 - NON-CASH FINANCIAL TRANSACTIONS
Non-cash financing transactions consisting of the cost of
contributed services, legal services, rent and the related
additional paid in capital contributed by shareholders have been
included in expenses and additional paid in capital,
respectively, in the accompanying financial statements at a value
of $7,600.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
RESULTS OF OPERATIONS
The Company is a development stage company. The Company has
no assets and no recent operating history. The Company's
original goal was to develop an "internet-pay telephone" kiosk
system throughout Australia and to develop a system of smart
cards which would be used in its internet kiosks and which would
be compatible in regular pay telephones and ATM/debit machines.
The Company has failed in its efforts to develop such a system
and has now ceased pursuing its original business plan. The
Company's main objective now is to locate and consummate a merger
or acquisition with a private entity. Because of the Company's
current status having no assets and no recent operating history,
in the event the Company does successfully acquire or merge with
an operating business opportunity, it is likely that the
Company's present shareholders will experience substantial
dilution and there will be a probable change in control of the
Company. Substantial dilution would result as the total
outstanding shares of the Company would be combined with that of
any subsequently merged or acquired entity. The resulting entity
would therefore have a greater amount of shareholders resulting
in dilution to the Company's current shareholders. Additionally,
there will likely be a change in control of the Company as
current management would not be in a position to actively
participate in an newly merged or acquired company of whose
business plan or operations current management would have little
knowledge of.
After the Company's original business plan ceased, the Company
became a "blank check" company as defined by the Securities and
Exchange Commission. The SEC defines a blank check company as
one which has no specific business or plan other than to
consummate an acquisition of or merge into another business or
entity. A number of states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check"
companies in their respective jurisdictions. Additionally, some
states prohibit the initial offer and sale as well as any
subsequent resale of securities of shell companies to residents
of their states.
Once the Company has acquired or merged with another entity, the
Company will no longer be considered a "blank check" company.
Shareholders of the Company have not entered into any "lock-up"
letter agreement, which would prevent them from selling their
respective shares of the Company's common stock until such time
as the Company consummates a merger with or acquisition of
another company.
Any targeted alliance or merger candidate will become subject to
the same reporting requirements as the Company upon consummation
of any such business combination. Thus, in the event that the
Company successfully completes an acquisition or merger with
another operating business, the resulting combined business must
provide audited financial statements for at least the two most
recent fiscal years or, in the event that the combined operating
business has been in business less than two years, audited
financial statements will be required from the period of
inception of the target acquisition or merger candidate.
The Company in February 2000 retained various consultants for the
purpose of advising the Company on its efforts to locate a merger
candidate and on the Company's business development. As the
Company does not have any liquid assets, credit line or cash to
compensate these consultants, the Company offered shares of
common stock in the Company as payment. Registration of these
shares were exempt pursuant to S-8 of the Securities Act of 1933.
The selection of a business opportunity in which to participate
is highly complex and highly risky. Additionally, as the Company
has only limited resources, it may be difficult to find favorable
opportunities. There can be no assurance that the Company will
be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its
shareholders. The Company will select any potential business
opportunity based on management's business judgment.
Because the Company lacks funds, it may be necessary for the
officers and directors to either advance funds to the Company or
to accrue expenses until such time as the Company begins to
generate sufficient income to cover such expenses. Management
intends to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, the Company's
directors will forego any compensation until such time as the
Company begins to generate sufficient income to cover such
expenses. However, if the Company engages outside advisors or
consultants in search for business opportunities, it may be
necessary for the Company to attempt to raise additional funds.
There is no assurance that the Company will be able to obtain
additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to the Company.
In the opinion of management, inflation has not and will not have
a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition or
merger. At that time, management will evaluate the possible
effects of inflation on the Company as it relates to its business
and operations following a successful acquisition or merger.
In the event the Company consummates a merger transaction, the
Company believes that there will be a change in control in the
Company. The Company believes that any merger would include the
new issuance of common stock in the Corporation to a potential
merger candidate followed by a reverse split of the Company's
issued common stock thereby effectively passing control of the
Company to the merged candidate.
The Company will not borrow funds for the purpose of funding
payments to the Company's promoters, management or their
affiliates or associates. Any funds borrowed by the Company will
be utilized to pay statutory, legal and accountant fees expended
by the Company.
The Company does not foresee that any terms of sale of the shares
presently held by officers and/or directors of the Company will
also be afforded to all other shareholders of the Company on
similar terms and conditions.
Management does not anticipate actively negotiating or otherwise
consenting to the purchase of any portion of their common stock
as a condition to or in connection with a proposed merger or
acquisition. In such an instance, all shareholders are to be
treated equally. This policy is upheld by the inclusion of a
resolution of the Board of Director's of the Company, contained
in the Company's minutes. In the event management wishes to
actively negotiating or otherwise consenting to the purchase of
any portion of their common stock as a condition to or in
connection with a proposed merger or acquisition, this would need
to be disclosed to the Board of Directors and entered into the
Company's minutes. The Company's shareholders will be afforded
an opportunity to approve or consent to any particular stock buy-
out transaction or merger.
There is always a present potential that the Company may acquire
or merge with a business or company in which the Company's
promoters, management, affiliates or associates directly or
indirectly have an ownership interest. However, at this time
there is no immediate serious potential for the Company to
acquire or merge with any business. There is no formal existing
corporate policy regarding such transactions, however, in the
event such a potential arises, the Company shall disclose any
conflict of interest to its directors and shareholders for
purposes of determining whether to acquire or merge with such a
business. Management does not foresee or is aware of any
circumstances under which this policy may be changed.
The Company, to date, has not utilized any notices or
advertisements in its search for business opportunities as the
Company cannot afford to expend monies for such purposes. The
Company seeks business opportunities through the means of
personal networking and inquiries by current management.
The Company's current officers, directors and affiliates have not
used in the past any particular consultants or advisers on a
regular basis. At the current time, the Company does not foresee
hiring any independent consultants to assist the company in its
search for a merger or business opportunities.
The company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with
development of its operations. It is not anticipated that
the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. The
Company does not have a working capital line of credit with any
financial institution. Therefore, future sources of liquidity
will be limited to the Company's ability to obtain additional
debt or equity funding.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are currently no pending legal proceedings against the
company.
Item 2. Changes in Securities
There has been no change in the Company's securities since the
filing of its Form 10-12G.
Item 3. Defaults upon Senior Securities
There has been no default in the payment of principal, interest,
sinking or purchase fund installment.
Item 4. Submission of Matters to a Vote of Security Holders
No matter has been submitted to a vote of security holders during
the period covered by this report.
Item 5. Other information
There is no other information to report which is material to the
company's financial condition not previously reported.
Item 6. Exhibits and Reports on Form 8-K
There are no Exhibits or reports on Form 8-K attached hereto.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
EUROKIOSK, INC.
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(Registrant)
Date: August 18, 2000
By: /s/ Shane H. Sutton
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President