RNS Number:6210K
EuroTelecom Communications Inc
16 May 2000
EUROTELECOM COMMUNICATIONS, INC
UNAUDITED QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE US SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
PART 1 - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
EUROTELECOM COMMUNICATIONS, INC AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, June 30,
2000 1999
(unaudited) (audited)
Assets
Current Assets:
Cash and cash $ 28,957 $ -
equivalents
Accounts receivable 1,268,048 884,381
Accounts receivable - - 56,913
related party
Other receivables - 185,358
Inventories 1,491,695 357,952
Prepaid expenses 60,089 27,803
Total Current Assets $ 2,848,759 $ 1,512,407
Property and equipment, net 608,054 90,718
Goodwill, net 571,606 381,868
Investments at cost 89,708 43,964
Total Assets $ 4,118,127 $ 2,028,957
See accompanying notes to Consolidated Financial Statements
EUROTELECOM COMMUNICATIONS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
March 31, June 30,
2000 1999
(unaudited) (audited)
Liabilities and Stockholders'
Deficit
Current Liabilities:
Bank facility $ 1,284,254 $ 375,261
Current maturities of long-term 46,321 470,627
obligations
Accounts payable 3,443,836 743,063
Accounts payable - related party 15,288 9,464
Accrued liabilities 170,731 207,554
Accrued income and other taxes 280,630 311,807
Total Current Liabilities $ 5,241,060 $ 2,117,776
Long-term liabilities:
Notes payable 155,463 941,240
Less: current maturities of long (46,321) (470,627)
term obligations
Total Long Term Liabilities $ 109,142 $ 470,613
Total Liabilities $ 5,350,202 $ 2,588,389
Stockholders' (deficit):
Preferred Stock $.01 par value.
Authorized
10,000,000 shares; none issued.
Common Stock, $.01 par value.
Authorized 20,000,000 shares;
17,946,222 and 8,988,102 shares
issued in March 31, 2000 and 179,463 89,882
June 30, 1999 respectively
Additional paid-in capital 27,120,361 23,556,427
Less subscriptions receivable - (131,788)
Accumulated deficit (28,615,663) (24,078,967)
Other comprehensive income 83,764 5,014
Total Stockholders' Deficit $ (1,232,075) $ (559,432)
Total Liabilities and $ 4,118,127 $ 2,028,957
Stockholders Deficit
See accompanying notes to Consolidated Financial Statements
EUROTELECOM COMMUNICATIONS INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
(unaudited)
Net revenues $ 1,515,000 395,523 $ 4,976,488 427,523
Cost of revenue 1,078,142 177,571 3,599,800 177,571
Gross Profit $ 436,858 217,952 $ 1,376,688 249,952
Expenses:
Selling and 1,562,719 765,074 4,725,159 1,274,282
administrative
Depreciation 13,921 16,423 37,736 27,595
Amortization of
intangible assets 37,890 - 108,770 -
Loss from closed - 123,928 - 415,851
subsidiary
Operating Loss $ (1,177,672) (687,473) $ (3,494,977) (1,467,776)
Other
Income/(expense):
Interest expense 26,808 17,013 122,137 58,991
Investment - - 44,597 -
writedown
Loan stock
beneficial - 918,750 - 918,750
conversion expense
Loss Before Income
Taxes $ (1,204,480) (1,623,236) $(3,661,711) (2,445,517)
Income tax expense - - - 100
Net loss for the (1,240,480) (1,623,236) (3,661,711) (2,445,617)
Period
Net loss per common
share (0.069) (0.239) (0.272) (0.381)
- basic
Weighted average
number of common
shares 17,946,222 6,788,040 13,461,662 6,417,441
Basic and diluted loss per share are the same due to any effect of warrants
outstanding being anti-dilutive.
See accompanying notes to Consolidated Financial Statements
EUROTELECOM COMMUNICATIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31,
2000 1999
(Unaudited)
Net Loss $ (3,661,711) $ (2,445,617)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities
Non-cash items:
Depreciation and amortization 146,506 27,595
Investment write down 44,597 -
Write off subscription 131,788 -
receivable
Stock issued for services 696,240 356,456
Loan stock beneficial - 918,750
conversion
Changes in current assets and
liabilities
Receivables (326,724) (218,466)
Inventories (1,133,743) (24,678)
Other current assets 153,072 (90,124)
Accrued expenses (36,823) 161,082
Accounts payable 2,658,089 122,411
Other liabilities (31,176) (233,401)
Net cash provided by (used in)
operating
Activities (1,359,885 (1,425,992)
Cash flows from Investing Activities
Purchase of investments (90,341) -
Purchase/Disposal of fixed (527,502) 13,778
assets
Net cash (used in) provided by
investing
Activities (617,843) 13,778
Cash flow from Financing
Activities
Fees associated with company (880,000) -
stock issue
Repayment of debt (13,347) (48,000)
Proceeds from line of credit 908,993 273,871
Proceeds from issuance of 1,907,275 211,250
common stock
Proceeds from issuance of debt - 975,093
Net cash provided by financing
Activities 1,922,921 1,412,214
Effect of exchange rate changes 83,764 -
on cash
Increase in cash
Cash and cash equivalents at - -
beginning of period
Cash and cash equivalents at 28,957 -
end of period
EUROTELECOM COMMUNICATIONS INC., AND SUBSIDIARIES
Consolidated Statement of Stockholders' Deficit
From January 1, 2000 to March 31, 2000
Shares Amount Paid in Accumulated Accumulated
Capital Deficit Other
Comprehensive
Income
Balance
January 1, 2000 17,946,222 $ 179,463 $ 27,120,361 $(26,531,185) $ 50,126
Net loss for the period
ended
March 31, 2000 - - - (1,204,480) -
Currency translation
differences on foreign - - - - -
currency net investments
Fees associated with
the Company's (880,000) 33,638
Regulation S common
stock issue
17,946,222 179,463 27,120,361 (28,615,663) 83,764
Consolidated Statement of Comprehensive Loss
Net loss for the period ended ($1,204,480)
March 31, 2000
Currency translation differences
on foreign currency net 33,638
investments
Fees associated with the
Company's Regulation S (880,000)
common stock issue
Comprehensive loss ($2,050,842)
EUROTELECOM COMMUNICATIONS INC. AND SUBSIDIARIES
Notes to the Unaudited Consolidated Financial Statements
For the Three Months ended March 31, 2000
BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared by the
Company without audit in accordance with generally accepted accounting
principles for interim financial statements and with instructions to Form 10-Q.
In the opinion of management, all adjustments (consisting only of
normal recurring accruals) considered necessary for a fair presentation
have been included.
The accompanying consolidated financial statements do not include certain
footnotes and financial presentations normally required under generally accepted
accounting principles and, therefore should be read in conjunction with the
audited financial statements included in the company's Form 10-SB as of June 30,
1999.
On July 1, 1999 the unsecured convertible loan notes in the amounts of $80,000,
$360,000 and $360,000 issued at the beginning of 1999 were converted into
550,000, 2,475,000 and 2,475,000 shares of common stock respectively.
In August 1999 the Company purchased RTC, Inc (RTC) for 150,000 shares of
common stock valued at $250,000. RTC was purchased to gain access to its brand
name and key personnel. No other assets or liabilities were acquired. The
Company has allocated the $250,000 as follows: brand name $50,000, Workforce:
$50,000 and goodwill: $150,000. The amortization period for each item is
five years. RTC is incorporated in the State of Maryland and operates as a
full service technical marketing, sales and consulting firm specializing
in electronic communication.
In the three months ended December 31, 1999 the Company raised additional equity
through issuing Common Stock pursuant to Regulation S. The Company issued
2,998,120 shares for $2,297,340 to non US persons representing a mixture of cash
and services provided to the Company.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 2000
This Form 10-Q contains certain forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward looking statements
involve risks and uncertainties that could cause actual results to differ
materially from those expressed in, or implied by, the forward looking
statements. Factors that might cause such a difference include, but are not
limited to, those relating to: general economic conditions in which the Company
operates, dependence on suppliers, third party manufacturers and channels of
distribution; customer and product concentration; fluctuations in customer
demand, maintaining access to external sources of capital; ability to execute
management's margin improvement; overall management of the company's expansion;
and other risk factors detailed from time to time in the Company's filings with
the Securities and Exchange Commission.
RESULTS OF OPERATIONS
COMPARISON OF THIRD QUARTER AND FIRST NINE MONTHS OF 1999/2000 TO EQUIVALENT
PERIODS IN 1998/1999
The Company's financial year end is 30 June.
The third quarter therefore refers to the three months ended March 31, 2000 and
the first nine months refers to the nine months ended March 31, 2000.
Net Revenue
Revenues increased by $1,119,477 from $395,523 for the three months ended March
31, 1999 to $1,515,000 for the three months ended March 31, 2000, an increase of
183%.
The increase is due to increased volume of sales in the period.
The third quarter of 1999 show the continued development of the Company. For
the nine months ended March 31, 2000, revenues totalled $4,976,488, an increase
of $4,548,965 from $427,523 for the nine month period ended March 31, 1999, an
increase of 1064%.
The individual divisions of the Company showed revenue growth for the quarter.
Easy IP Limited contributed net revenues for the three months ended March 31,
2000 of $626,418 this being the third full quarter of contribution since
acquisition in April 1999 with no revenues for the three months ended March 31,
1999.
RTC Inc. contributed net revenues of $92,101 for the three months ended March
31, 2000 this being an acquisition in August 1999, with no revenues for the
three months ended March 31, 1999.
The commercial security division in Mexborough contributed net revenues of
$204,499 for the three months ended March 31, 2000.
The defence division in Blandford contributed net revenues of $1,004,293 for the
three months ended March 31, 2000 with no revenues for the three months ended
March 31, 1999.
The air conditioning subsidiary, Chunlan Limited, contributed net revenues of
$110,423 for the three months ended March 31, 2000 with no revenues for the
three months ended March 31, 1999.
Gross Profit
Gross profit for the three months ended March 31, 2000 increased to $436,858
compared with the three months ended March 31, 1999 of $217,952, an increase of
100%. The nine month period ended March 31, 2000 showed a gross profit of
$1,376,688 compared with a gross profit of $249,952 for the nine months ended
March 31, 1999, an increase of 450%.
This increase was due to the increased volume of sales.
Selling and Administrative Expenses
Selling and administrative expenses increased by $797,645 from $765,074 for the
three months ended March 31, 1999 to $1,562,719 for the three months ended March
31, 2000, an increase of 104%. Selling and administrative expenses increased
by $3,450,877 from $1,274,282 for the nine months ended March 31, 1999 to
$4,725,159 for the nine months ended March 31, 2000, an increase of 271%
The increase was due to the Company's continuing expansion plans; employing more
staff, the increased overheads associated with the additional offices opened and
additional overheads to service the increased sales. Wages and salaries
increased from $108,704 for the three months ended March 31, 1999 to $739,651
for the three months ended March 31, 2000, an increase of 580%. Advertising
and sales promotions increased from $0 for the three months ended March 31 1999
to $72,721 in the three months ended March 31, 2000. Motor expenses increased
from $44,111 for the three months ended March 31, 1999 to $371,712 for the three
months ended March 31, 2000, an increase of 742% due to the increase in the
number of employees employed in the period.
Amortization of Intangible assets
The amount of amortization of intangible assets has increased by $37,890 in the
three months ended March 31, 2000 from $0 in the three months ended March 31,
1999. The charge relates to the goodwill and other intangible assets
associated with the acquisitions of RTC Inc and Easy IP Limited.
Interest Expense
The interest expense increased to $26,808 in the three months ended March 31,
2000 from $17,013 in the three months ended March 31, 1999 and to $122,137 in
the nine months ended March 31, 2000 from $58,991 in the nine months ended
March 31, 1999.
The increase is due to obtaining additional lines of bank credit in the period.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operations during the nine months ended March 31, 2000 amounted
to $(1,359,885) and consisted of the $(3,661,711) net loss decreased by the
$2,301,826 decrease in working capital and other non cash items.
Accounts payable and accruals were a source of funding to the extent of
$2,621,266.
Accounts receivable used $108,258 of funds due to increased revenues.
The bank line of credit was $1,284,254 at March 31, 2000.
The Company has a credit facility with National Westminster Bank of $560,000
repayable on demand. The line of credit has been extended by informal
agreement with the bank.
INVESTING ACTIVITIES
Capital expenditure of $617,843 for the three months ended March 31, 2000
consisted primarily of fixed asset additions.
FINANCING ACTIVITIES
Cash received from the private placement sales of common stock in the second
quarter amounted to 2,000,000 shares for $1,601,100 and increased borrowings
under the credit facility with National Westminster Bank plc.
LIQUIDITY
The company has to date not generated positive cash flow from operations.
Accordingly, the Company has required additional capital to fund activities
and to provide for increased working capital requirements which arise from
increased sales activities. Since June 30, 1999, the Company's working
capital requirements have been met by collections of accounts receivable
and by borrowings under the revolving credit facility together with additional
sales of common stock. The Company is currently actively pursuing other
sources of capital, including the issuance of additional equity.
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The company does not invest in risk sensitive instruments, such as derivative
financial instruments, other financial instruments or derivative commodity
instruments, either for trading or non trading purposes. Most of the Company's
activities are conducted in the United Kingdom in British Pounds Sterling; a
smaller part of its activities are conducted in the United States through the
Company's subsidiary, RTC, Inc., in United States Dollars. The Pound Sterling
to Dollar exchange rate has remained stable for the past few years at about 1
Pound to 1.6 Dollars. Variations in the Pound Sterling to Dollar exchange rate
could effect a proportional change in asset value and income.
The full text of this SEC filing can be found at www.sec.gov.
END
QRTILFFDEFIELII
Eurotelecom 'a' (LSE:ETMA)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Eurotelecom 'a' (LSE:ETMA)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
