x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
for the
quarterly period ended: September 30, 2008
o
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
o
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
o
Accelerated
filer
o
Non-accelerated
filer
o
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
o
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 November 5, 2008.
24HOLDINGS INC.
Quarterly Report on Form 10-Q
For the Period Ended September 30, 2008
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 SHEETS
September 30,
2008
(unaudited)
December 31,
2007
ASSETS
Current Assets
Cash and cash equivalents
$
19,064
$
28,604
TOTAL CURRENT ASSETS
19,064
28,604
TOTAL ASSETS
$
19,064
$
28,604
LIABILITIES
AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accrued expenses
$
8,276
$
18,149
TOTAL CURRENT LIABILITIES
8,276
18,149
TOTAL LIABILITIES
$
8,276
$
18,149
STOCKHOLDERS’ 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
1,245
Additional Paid-in Capital
10,702,358
10,687,358
Deficit accumulated during the
developmental period
(10,692,815
)
(10,678,148
)
TOTAL STOCKHOLDERS’ EQUITY
10,788
10,455
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
19,064
$
28,604
The accompanying notes are an integral part
of these financial statements.
3
24HOLDINGS INC.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2008
2007
2008
2007
Revenues
$
—
$
—
$
—
$
—
Expenses
General and
administrative
4,762
7,975
14,666
31,086
Total
operating expenses
4,762
7,975
14,666
31,086
Net Loss
$
(4,762
)
$
(7,975
)
$
(14,666
)
$
(31,086
)
Net loss per
share - basic and fully diluted
$
(0.00
)
$
(0.01
)
$
(0.01
)
$
(0.02
)
Weighted
average number of common shares outstanding
1,244,902
1,244,902
1,244,902
1,244,902
The accompanying notes are an integral part
of these financial statements.
4
24HOLDINGS INC.
STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
September 30
2008
2007
CASH FLOWS
FROM OPERATING ACTIVITIES
Net loss
$
(14,666
)
$
(31,086
)
Decrease in
Accrued expenses
(9,873
)
(2,672
)
NET CASH
USED IN OPERATING ACTIVITIES
(24,540
)
(33,759
)
CASH FLOWS
FROM FINANCING ACTIVITIES
Contributed
capital
15,000
15,000
NET CASH
PROVIDED BY FINANCING ACTIVITIES
15,000
15,000
NET DECREASE
IN CASH AND CASH EQUIVALENTS
(9,540
)
(18,759
)
CASH AND
CASH EQUIVALENTS AT BEGINNING OF
PERIOD
28,604
29,635
CASH AND
CASH EQUIVALENTS AT END OF PERIOD
$
19,064
$
10,876
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
September 30, 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 September 30, 2008 and for the three and nine month
periods ended September 30, 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 September
30, 2008, results of operations for the three and nine months ended September
30, 2008 and 2007, and cash flows for the nine months ended September 30, 2008
and 2007, have been made. The results of operations for the three and nine
months ended September 30, 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
September 30, 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
September 30, 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
September 30, 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 September 30, 2008. The results of operations for the three
and nine months ended September 30, 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, 2007, 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 September 30, 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
September 30, 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 2008
and 2007, a stockholder contributed an additional $15,000 and $40,000,
respectively, to the Company.
8
24HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 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
September 30, 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.
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 AND NINE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007
We currently
do not have any business operations and did not have any revenues during the
nine month periods ended September 30, 2008 and 2007, respectively.
Total general
and administrative expenses for the three month periods ended September 30,
2008 and 2007 were $4,762 and $7,975, respectively. Total general and
administrative expenses for the nine month periods ended September 30, 2008 and
2007 were $14,666 and $31,086, respectively. These expenses are primarily constituted
by professional and filing fees. The decrease in expenses in 2008 is due to a
decline in our professional fees.
Liquidity and Capital Resources
At September
30, 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 September 30, 2008, 24Holdings had cash of $19,064 and
working capital of $10,788.
11
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.
Commitments
We do not have
any commitments which are required to be disclosed in tabular form as of
September 30, 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.
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