U.S. Securities and Exchange Commission
Washington D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
Commission File Number 33-70334-A
INTERNATIONAL ASSETS HOLDING CORPORATION
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(Exact name of small business issuer as specified in its charter)
Delaware 59-2921318
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
220 East Central Parkway, Suite 2060
Altamonte Springs, FL 32701
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(Address of principal executive offices)
(407) 741-5300
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(Issuer's telephone number)
NA
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ].
The number of shares outstanding of Common Stock was 2,375,575 as of August 7,
2002.
Transitional small business disclosure format Yes [ ] No [X]
INDEX
Page No.
-------
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of June 30,
2002 and September 30, 2001 3
Condensed Consolidated Statements of Operations for the
Nine Months ended June 30, 2002 and 2001 5
Condensed Consolidated Statements of Operations for the
Three Months ended June 30, 2002 and 2001 6
Condensed Consolidated Statements of Cash Flows for the
Nine Months ended June 30, 2002 and 2001 7
Notes to Condensed Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis or Plan of Operation 14
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 24
Item 6. Exhibits and Reports on Form 8-K 25
Signatures 26
2
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, September 30,
Assets 2002 2001
------ --------------- -----------------
Cash $ 100,442 $ 136,688
Cash and cash equivalents, deposited with clearing organization 1,932,122 874,613
Receivable from clearing organization, net 938,510 934,764
Other receivables 3,172 23,429
Loans to officers 112,687 126,541
Securities owned, at market value 10,413,427 6,011,939
Deferred income tax asset, net 540,766 1,397,489
Property and equipment, at cost:
Equipment, furniture and leasehold improvements 590,685 1,307,461
Less accumulated depreciation and amortization (419,527) (944,502)
--------------- -----------------
Net property and equipment 171,158 362,959
Software development, net of accumulated amortization
of $686,038 at June 2002 and $491,995 at
September 2001 359,759 553,802
Prepaid expenses and other assets, net of accumulated
amortization of $2,000 at June 2002 and $177,000
at September 2001 108,522 311,474
--------------- -----------------
Total assets $ 14,680,565 $ 10,733,698
=============== =================
See accompanying notes to condensed consolidated financial statements.
3
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets, Continued
(Unaudited)
June 30, September 30,
Liabilities and Stockholders' Equity 2002 2001
------------------------------------ ---------------- ----------------
Liabilities:
Foreign currency sold, but not yet purchased $ 1,877 $ 208,092
Securities sold, but not yet purchased, at market value 10,367,845 5,313,641
Accounts payable 136,709 312,673
Accrued employee compensation and benefits 82,537 307,500
Accrued expenses 118,765 139,094
Payable to Joint Venture - 2,032
Other liabilities 43,547 7,779
---------------- ----------------
Total liabilities 10,751,280 6,290,811
---------------- ----------------
Stockholders' equity:
Preferred stock, $.01 par value. Authorized 5,000,000
shares; issued and outstanding -0- shares - -
Common stock, $.01 par value. Authorized 8,000,000
shares; issued and outstanding 2,375,575 shares at June
2002 and 2,294,376 shares at September 2001 23,756 22,944
Additional paid-in capital 8,026,131 7,945,161
Accumulated deficit (4,120,602) (3,525,218)
---------------- ----------------
Total stockholders' equity 3,929,285 4,442,887
---------------- ----------------
Total liabilities and stockholders' equity $ 14,680,565 $ 10,733,698
================ ================
See accompanying notes to condensed consolidated financial statements.
4
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the Nine Months Ended June 30, 2002 and 2001
(Unaudited)
2002 2001
---------------- ----------------
Revenues:
Net dealer inventory and investment gains $ 2,956,210 888,224
Commissions (note 2) 406,175 2,492,643
Management and investment advisory fees (note 2) 6,292 81,516
Interest and dividends 154,127 183,521
Loss from joint venture - (20,353)
Other 19,829 2,149
---------------- ----------------
Total revenues 3,542,633 3,627,700
---------------- ----------------
Expenses:
Compensation and benefits $ 1,554,104 3,688,838
Clearing and related expenses 1,323,578 956,685
Promotion 170,465 619,903
Occupancy and equipment rental 308,341 382,490
Communications 77,418 211,191
Interest and dividends 150,690 56,032
Professional fees 368,110 184,606
Insurance 99,940 147,601
Depreciation and amortization 284,357 383,513
Technology 40,890 164,865
Other expenses 173,133 324,542
---------------- ----------------
Total expenses 4,551,026 7,120,266
---------------- ----------------
Loss before gain on sale of retail activity and income taxes (1,008,393) (3,492,566)
Gain on sale of retail activity (note 2) 413,009 0
--------------- ----------------
Loss before income taxes (595,384) (3,492,566)
Income tax benefit - (1,269,838)
---------------- ----------------
Net loss $ (595,384) (2,222,728)
================ ================
Loss per share:
Basic $ (0.25) (1.00)
================ ================
Diluted $ (0.25) (1.00)
================ ================
Weighted average number of common shares outstanding:
Basic 2,353,467 2,225,479
================ ================
Diluted 2,353,467 2,225,479
================ ================
See accompanying notes to condensed consolidated financial statements.
5
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the Three Months Ended June 30, 2002 and 2001
(Unaudited)
2002 2001
---------------- ----------------
Revenues:
Net dealer inventory and investment gains $ 1,132,822 421,320
Commissions (note 2) 1,675 724,448
Management and investment advisory fees (note 2) 0 5,613
Interest and dividends 109,935 68,675
Other 555 3,435
---------------- ----------------
Total revenues 1,244,987 1,223,491
---------------- ----------------
Expenses:
Compensation and benefits 425,576 1,229,205
Clearing and related expenses 442,557 410,464
Promotion 76,723 141,080
Occupancy and equipment rental 74,684 123,564
Communications 17,521 70,791
Interest and dividends 123,229 40,147
Professional fees 199,352 54,939
Insurance 30,137 47,236
Depreciation and amortization 86,884 148,878
Technology 2,351 45,935
Other expenses 40,565 84,282
---------------- ----------------
Total expenses 1,519,579 2,396,521
---------------- ----------------
Loss before income taxes (274,592) (1,173,030)
Income tax benefit 0 (432,667)
---------------- ----------------
Net loss $ (274,592) (740,363)
================ ================
Loss per share:
Basic $ (0.12) $ (0.33)
================ ================
Diluted $ (0.12) $ (0.33)
================ ================
Weighted average number of common shares outstanding:
Basic 2,375,575 2,239,725
================ ================
Diluted 2,375,575 2,239,725
================ ================
See accompanying notes to condensed consolidated financial statements.
6
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended June 30, 2002 and 2001
(Unaudited)
2002 2001
---------------- ----------------
Cash flows from operating activities:
Net loss $ (595,384) (2,222,728)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization 284,357 383,513
Deferred income taxes 856,723 (1,337,791)
Gain on sale of retail activity (413,009) -
Disposal of property and equipment
included in gain on sale of retail activity 139,024 -
Non-cash compensation - 198,657
Loss on disposals of property and equipment 491
Loss from Joint Venture - 20,353
Tax benefit from disqualifying dispositions of
incentive stock options - 11,001
Cash provided by (used in) changes in:
Receivable from clearing organization, net (3,746) (729,335)
Other receivables 14,717 47,674
Securities owned, at market value (4,401,488) (6,938,035)
Income taxes receivable - 452,032
Prepaid expenses and other assets 202,952 31,586
Foreign currency sold, but not yet purchased (206,215) 444,544
Securities sold, but not yet purchased, at market value 5,054,204 7,687,203
Payable to clearing organization, net - (24,330)
Accounts payable (175,964) (142,711)
Accrued employee compensation and benefits (224,963) (852,581)
Accrued expenses (20,329) (74,936)
Payable to Joint Venture (2,032) 308
Other liabilities 35,768 (60,612)
---------------- ----------------
Net cash provided by (used in) operating activities 545,106 (3,106,188)
---------------- ----------------
Cash flows from investing activities:
Proceeds from sale of retail activity 827,240 -
Cost of total assets on sale of retail activity (414,231) -
Collections from loans to officers 19,394 88,223
Costs of additional property, equipment and software
development (38,028) (557,421)
---------------- ----------------
Net cash provided by (used in) investing activities 394,375 (469,198)
---------------- ----------------
(continued)
7
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows, Continued
For the Nine Months Ended June 30, 2002 and 2001
(Unaudited)
2002 2001
---------------- ----------------
Cash flows from financing activities:
Exercise of employee stock options 1,782 -
Sale of common stock with sale of retail activity 80,000 -
---------------- ----------------
Net cash provided by financing activities 81,782 -
---------------- ----------------
Net increase (decrease) in cash and cash equivalents 1,021,263 (3,575,386)
Cash and cash equivalents at beginning of period 1,011,301 5,271,859
---------------- ----------------
Cash and cash equivalents at end of period $ 2,032,564 1,696,473
================ ================
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,745 2,265
================ ================
Supplemental disclosure of noncash financing activities:
During the nine months ended June 30, 2001 the Company
paid for the following transactions by issuance of
common stock:
================ ================
Software development services, 12,283 common shares $ - 70,020
================ ================
Employee bonus compensation, 15,000 common shares $ - 35,000
================ ================
Purchase promissory note due by an officer, 57,625
common shares $ - 163,657
================ ================
8
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 2002 and 2001
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions and requirements of Form
10-QSB and, therefore, do not include all information and footnotes
necessary for a fair presentation of financial position, results of
operations, and cash flows in conformity with accounting principles
generally accepted in the United States of America. In the opinion of
Management, such financial statements reflect all adjustments (consisting
of normal recurring items) necessary for a fair statement of the results of
operations, cash flows and financial position for the interim periods
presented. Operating results for the interim periods are not necessarily
indicative of the results that may be expected for the full year. These
condensed consolidated financial statements should be read in conjunction
with the Company's audited consolidated financial statements for the year
ended September 30, 2001, filed on Form 10-KSB (SEC File Number
33-70334-A).
Current Subsidiaries:
As used in this Form 10-QSB, the term "Company" refers, unless the context
requires otherwise, to International Assets Holding Corporation and its
four wholly owned subsidiaries; INTLTRADER.COM, INC. ("ITCI"),
International Asset Management Corp. ("IAMC"), International Financial
Products, Inc. ("IFP") and OffshoreTrader.com Ltd. ("OTCL"). All
significant intercompany balances and transactions have been eliminated in
consolidation.
Former Subsidiaries and Joint Venture Sold in December 2001:
On November 1, 2001 International Assets Advisory Corporation entered into
a merger with IAAC, LLC, a wholly owned subsidiary of International Assets
Holding Corporation. IAAC, LLC was a Florida limited liability company
formed by International Assets Holding Corporation in July 2001 for the
purpose of the anticipated merger that occurred on November 1, 2001. IAAC,
LLC was the surviving entity of the merger. Upon effectiveness of the
merger, the name of the surviving entity became International Assets
Advisory, LLC. The Company sold all of its membership interests in
International Assets Advisory, LLC on December 13, 2001.
On November 1, 2001 Global Assets Advisors, Inc. entered into a merger with
Global Assets Advisors, LLC, a wholly owned subsidiary of International
Assets Holding Corporation. Global Assets Advisors, LLC was a Florida
limited liability company formed by International Assets Holding
Corporation in July 2001 for the purpose of the anticipated merger that
occurred on November 1, 2001. Global Assets Advisors, LLC was the surviving
entity of the merger. The Company sold all of its membership interests in
Global Assets Advisors, LLC on December 13, 2001.
9
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, continued
On December 13, 2001 the Company sold its 50% interest in International
Assets New York, LLC, a 50/50 Joint Venture with Lakeside Investments, LLC
of New York.
(2) Sale of Certain Operations
On December 13, 2001 the Company sold its two wholly-owned subsidiaries,
International Assets Advisory, LLC and Global Assets Advisors, LLC, and its
50% membership interest in International Assets New York, LLC (IANY) to
Lakeside Assets, LLC. In connection with the disposition transaction,
Lakeside Assets, LLC also purchased 80,000 shares of the Company's common
stock. The Company received total proceeds of $907,240 for these sale
transactions. The Company allocated $827,240 of the proceeds to the sale of
the two wholly owned subsidiaries and the 50% interest in IANY. The Company
allocated $80,000 of the proceeds to the sale of common shares. The Company
had a book basis of $414,231 related to the sale of the two wholly owned
subsidiaries and IANY. The $413,009 gain on sale of retail activity
recorded in December 2001 was determined by deducting the book basis of
$414,231 from the sales proceeds of $827,240.
Commission revenues from retail private client securities brokerage
activity amounted to $406,175 and $2,492,643 for the nine months ended June
30, 2002 and 2001, respectively and $1,675 and $724,448 for the three
months ended June 30, 2002 and 2001, respectively. Though certain costs
associated with this activity are distinct and clearly identifiable; many
are not and management has not historically operated, monitored or
specifically allocated expenses to this activity in such a manner as to
determine profitability by activity. In the same sale transaction,
International Assets Holding Corporation agreed to sell its money
management activity, which had revenues from management and investment
advisory fees of $6,292 and $81,516 for the nine months ended June 30, 2002
and 2001, respectively and $5,613 for the three months ended June 30, 2001.
The money management activity was primarily related and tied into the
retail private client activity including the same sales staffing,
operations and research support. It was separated for purposes of
securities licensing and regulation.
(3) Related Party Transactions
On February 1, 2002 the Company executed a contract for investor relations
services from an outside firm that is owned and managed by a cousin of the
CEO of the Company. The contract is for a term of six months at a cost of
$5,000 per month plus reimbursement for reasonable expenses related to the
performance of the service contract.
On August 28, 2000 the Company made a loan to a Vice President of the
Company including the execution and receipt of a $66,000 promissory note
due August 27, 2001. The Board of Directors of the Company has granted an
extension of the due date of the promissory note to August 31, 2002. The
promissory note includes interest of 6.27 percent per annum. As of June 30,
2002 the remaining principal balance of the promissory note including
accrued interest is $70,178.
10
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, continued
On January 4, 2000 the Company, after approval by the Board of Directors,
made a loan to the CEO of the Company including the execution and receipt
of a $250,000 promissory note due January 3, 2001. The Board of Directors
of the Company granted an extension of the due date of the promissory note
to December 31, 2001. At the Board of Directors meeting held on February
15, 2002 the CEO requested an extension to repay the balance by mid
calendar year 2002, which request was consented to by the Board of
Directors. The promissory note includes interest of 6 percent per annum. As
of June 30, 2002 the remaining principal balance of the promissory note
including accrued interest is $42,509. Subsequently, on August 7, 2002 the
CEO repaid the entire loan balance including principal and accrued interest
of $42,724.
(4) Reclassifications
Certain prior period amounts have been reclassified to conform to current
period presentation. These changes had no impact on previously reported
results of operations or stockholders' equity.
(5) Basic and Diluted Loss Per Share
Basic loss per share for the nine months and three months ended June 30,
2002 and 2001 have been computed by dividing net loss by the weighted
average number of common shares outstanding.
Diluted loss per share for the nine months and three months ended June 30,
2002 and 2001 are the same as basic loss per share because of the
anti-dilutive impact of the potential common shares, due to the net loss
for each of the periods. No options to purchase shares of common stock were
considered in the calculation of diluted loss per share for the nine months
and three months ended June 30, 2002 and 2001 because of the anti-dilutive
impact of the potential common shares, due to the net loss for the periods.
For the Nine Months Ended June 30, 2002 2001
------------- -------------
Diluted Loss Per Share
Numerator:
Net loss $ (595,384) $ (2,222,728)
Denominator:
Weighted average number of common shares and dilutive
potential common shares outstanding 2,353,467 2,225,479
------------- -------------
Diluted loss per share $ (0.25) $ (1.00)
For the Three Months Ended June 30, 2002 2001
------------- -------------
Diluted Loss Per Share
Numerator:
Net loss $ (274,592) $ (740,363)
Denominator:
Weighted average number of common shares and dilutive
potential common shares outstanding 2,375,575 2,239,725
------------- -------------
Diluted loss per share $ (0.12) $ (0.33)
11
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, continued
(6) Securities Owned and Securities Sold, But Not Yet Purchased, at market
value
Securities owned and Securities sold, but not yet purchased at June 30,
2002 and September 30, 2001 consist of trading and investment securities at
quoted market values as follows:
Sold, but not
Owned yet purchased
------------ -------------
June 30, 2002:
Common stock and American Depository Receipts 1,031,688 924,123
Foreign ordinary stock paired with its
respective American Depository Receipt 9,231,472 9,437,335
Corporate and municipal bonds 54,387 -
Foreign government obligations 2,246 -
Unit investment trusts, mutual funds and other
investments 93,634 6,387
------------ -------------
Total $ 10,413,427 10,367,845
============ =============
September 30, 2001:
Common stock and American Depository Receipts 1,203,294 694,047
Foreign ordinary stock paired with its
respective American Depository Receipt 4,618,006 4,619,594
Corporate and municipal bonds 68,949 -
Foreign government obligations 3,954 -
Unit investment trusts, mutual funds and other
investments 117,736 -
------------ -------------
Total $ 6,011,939 5,313,641
============ =============
(7) Receivable From and Payable to Clearing Organization
Amounts receivable from and payable to clearing organization at June 30,
2002 and September 30, 2001 consist of the following:
Receivable Payable
------------ --------------
June 30, 2002:
Open transactions, net $ 1,004,268 -
Clearing fees and related charges payable - 65,758
------------ --------------
$ 1,004,268 65,758
============ ==============
September 30, 2001:
Open transactions, net $ 926,703 -
Clearing fees and related charges payable - 23,722
Commission income receivable 31,783 -
------------ --------------
$ 958,486 23,722
============ ==============
As these amounts are short-term in nature, the carrying amount is a
reasonable estimate of fair value.
12
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, continued
(8) Leases
The Company occupies leased office space of approximately 5,100 square feet
at 220 E. Central Parkway, Altamonte Springs, Florida. The commencement
date of this lease was February 1, 2002, with six months free rent, and a
seven-year term to July 31, 2009.
The Company is obligated under various noncancelable operating leases for
the rental of its office facilities and certain office equipment. Rent
expense associated with operating leases amounted to $52,911 and $271,561
for the nine months ended June 30, 2002, and 2001, respectively. The future
minimum lease payments under noncancelable operating leases are as follows:
Fiscal Year (12 month period) Ending September 30,
--------------------------------------------------
2002 84,750
2003 153,900
2004 132,700
2005 132,700
2006 132,200
Thereafter 318,600
--------
Total future minimum lease payments $954,850
========
(9) Stock Option Plan
During the nine months ended June 30, 2002, 176,000 options were granted to
employees and directors. There were 1,199 incentive stock options exercised
at a strike price of $1.486 per share during the nine months ended June 30,
2002. In addition, 272,417 incentive stock options were forfeited due to
the termination of former employees of the Company or its subsidiaries. The
total options forfeited included approximately 186,000 options related to
former employees that were part of the sale of the retail brokerage
operation and the remainder was due to other terminated former employees.
As of June 30, 2002 the Company had 566,493 options outstanding.
Incentive Stock Options (Granted during the nine months ended June 30, 2002)
-----------------------
Options Exercise Expiration
Granted Grant Date Price Date Exercisable
------- ---------- ----- ---- -----------
50,000 10/05/01 $0.90 10/05/11 (a)
25,000 10/05/01 $0.99 10/05/11 (a)
20,000 12/22/01 $0.60 12/22/11 (a)
22,000 01/03/02 $0.65 01/03/12 (b)
14,000 04/11/02 $1.40 04/11/12 (b)
------
131,000
=======
13
INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, continued
Nonqualified Stock Options (Granted during the nine months ended June 30,
--------------------------
2002)
Options Exercise Expiration
Granted Grant Date Price Date Exercisable
------- ---------- ----- ---- -----------
45,000 10/05/01 $0.90 10/05/11 (a)
(a) Exercisable at 33.3% after year one, 33.3% after year two and 33.4%
after year three. These options are 100% exercisable upon a change in
control of the Company.
(b) Exercisable at 33.3% after year one, 33.3% after year two and 33.4%
after year three.
As the strike price on the date of grant for each option was equal to the
fair market value of a share of common stock on that date, the Company did
not recognize any compensation cost associated with such grants.
(10) Commitments and Contingent Liabilities
The Company is party to certain litigation as of June 30, 2002, which
relates primarily to matters arising in the ordinary course of business.
While the Company cannot absolutely predict the outcome of these actions at
this time, it is the opinion of management, given the probability of
success by the Company, that the resolution of these matters will not have
a material adverse effect on the consolidated financial condition of the
Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in this
report. Certain statements in this discussion may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve
known and unknown risks including, but not limited to, changes in general
economic and business conditions, interest rate and securities market
fluctuations, competition from within and from outside the investment
brokerage industry, new products and services in the investment brokerage
industry, changing trends in customer profiles and changes in laws and
regulation applicable to the Company. Although the Company believes that
its expectations with respect to the forward-looking statements are based
upon reasonable assumptions within the bounds of its knowledge of its
business and operations, there can be no assurances that the actual
results, performance or achievement of the Company will not differ
materially from any future results, performance or achievements expressed
or implied by such forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. Readers
are cautioned that any such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties and that actual
results may differ materially from those indicated in the forward-looking
statements as a result of various factors.
14
Readers are cautioned not to place undue reliance on these forward-looking
statements.
The Company's principal operating activities, market-making and trading in
international securities are highly competitive and extremely volatile. The
earnings of the Company are subject to wide fluctuations since many factors
over which the Company has little or no control, particularly the overall
volume of trading and the volatility and general level of market prices,
may significantly affect its operations.
Results of Operations:
On December 13, 2001 the Company sold its full service private client
retail brokerage and money management activities. Accordingly, these
activities are no longer a source of revenues or expense for the Company
after December 13, 2001. While the revenues (commissions and management and
investment advisory fees) and certain costs associated with the business
activities which have been sold are readily identifiable, many costs
associated with these activities are not. The costs that are not
identifiable were included in prior legal entity financial statements
combined with other business activities that were operated together for
previous strategic, regulatory and synergistic purposes.
In December 2001 the Company reported a gain on the sale of retail activity
of $413,009 included in the nine months ended June 30, 2002. The gain is
based on sale proceeds of $827,240 less the book cost basis of $414,231,
for the transaction costs and for the book value of the assets that were
included in the sale of this business activity.
As of June 30, 2002 the Company had 18 full time employees.
Nine Months Ended June 30, 2002 as Compared to
the Nine Months Ended June 30, 2001
The Company's revenues were derived primarily from trading revenue (net
dealer inventory and investment gains) as well as commissions earned on the
sale of securities. For the nine months ended June 30, 2002, 83% of the
Company's revenues were derived from trading revenue and 11% of revenues
were derived from commissions. For the nine months ended June 30, 2001, 24%
of the Company's revenues were derived from trading revenue and 69% of
revenues were derived from commissions. Total revenues decreased 2% to
$3,542,633 for the nine months ended June 30, 2002 from $3,627,700 for the
same period in 2001.
Trading revenue (net dealer inventory and investment gains) increased by
approximately 233% to $2,956,210 for the nine months ended June 30, 2002
from $888,224 in 2001. This increase in trading revenue was due in large
measure to our trading department's ongoing efforts to provide reliable
market making for our trading clients with high quality customer service
and trade execution in the international securities trading market. The
Company has been successful in developing new clients as well as in
retention of existing trading clients.
15
The increase in trading revenues for the nine months ended June 30, 2002
comes after the Company had to rehire and rebuild the entire trading
department since the disruption of the Company's trading operations caused
by the abrupt departure of the Company's head of capital markets and his
related recruitment of the entire trading department to his own firm in
December 2000. This matter was previously discussed in the Company's 10-QSB
for the period ended December 31, 2000 as well as its Form 8-K filed as of
December 29, 2000.
Commission revenue decreased by approximately 84% to $406,175 for the nine
months ended June 30, 2002 from $2,492,643 in 2001. Commission revenues for
the nine months ended June 30, 2002 include retail brokerage commissions
earned for the period October 1, 2001 through December 13, 2001. On
December 13, 2001 the Company sold its membership interests in
International Assets Advisory, LLC. These retail brokerage commission
revenues are no longer a source of revenue for the Company after December
13, 2001 due to the sale of this retail brokerage activity. During January
2002, the Company sold substantially all of its' retail online accounts to
Ameritrade Holding Corporation and ceased offering its online retail
brokerage operation. The elimination of these retail activities has allowed
the Company to focus all of its resources on its core market making trading
operation.
Revenues from management and investment advisory fees decreased by
approximately 92% to $6,292 for the nine months ended June 30, 2002 from
$81,516 in 2001. These revenues from management and investment advisory
fees are no longer a source of revenue for the Company after December 13,
2001 due to the sale of this business.
Interest and dividend revenue decreased by 16% to $154,127 for the nine
months ended June 30, 2002 from $183,521 in 2001. This decrease is due to
lower balances of interest producing assets, including money market
balances and fixed income securities and decreased interest returns on
these short-term liquid assets during the nine months ended June 30, 2002
compared to the same period in 2001. Interest income decreased $108,521 for
the nine months ended June 30, 2002 compared to the same period in 2001.
Partly offsetting this decrease is a $79,127 increase in dividend income.
The increase in dividend income is derived from the Company's American
Depositary Receipt (ADR) conversion strategy where the Company holds paired
and offsetting long and short foreign ordinary and ADR positions. When
these paired positions are held over a dividend record date the Company has
offsetting dividend income and dividend expense. Dividend income of
$140,904 for the nine months ended June 30, 2002 is offset by the $148,945
of dividend expense for the same period.
Loss from joint venture was $20,353 for the nine months ended June 30,
2001. The loss from joint venture ended in March 2001 when the Company
wrote off its investment in joint venture in accordance with the equity
method of accounting. The loss from the Company's joint venture represented
the Company's 50% share of the operating loss from the activity of
International Assets New York, LLC, a
16
50/50 joint venture with Lakeside Investments, LLC of New York. On December
13, 2001 the Company's interest in International Assets New York, LLC was
sold.
Other revenues were $19,829 for the nine months ended June 30, 2002 up from
$2,149 for the same period in 2001. Other revenues in 2002 includes $14,800
collected for the sale proceeds from the retail online accounts sold to
Ameritrade.
The major expenses incurred by the Company relate to direct costs of its
securities operations such as compensation and benefits, clearing and
related expense, occupancy and equipment rental expense and professional
fees. Total expenses decreased by approximately 36% to $4,551,026 for the
nine months ended June 30, 2002, from $7,120,266 for the same period in
2001. This decrease in total expenses is mainly due to reductions in
compensation and benefits, promotions, communications, technology and other
operating expenses. The decrease in total expenses reflects the cost
decreases related to the sale of the retail brokerage activity and the
additional cost reductions the Company began to implement in August 2001.
Compensation and benefits expense decreased by $2,134,734 or 58% to
$1,554,104 for the nine months ended June 30, 2002 from $3,688,838 in 2001
due to lower commission expense caused by lower commission revenues and a
decrease in base salaries due to an overall reduction in the number of
employees. Included in the total $1,554,104 compensation and benefits
expense for 2002 is $165,854 related to commission expense that will no
longer be an ongoing expense for the Company after December 13, 2001, due
to the sale of the related retail private client activity.
Clearing and related expenses increased 38% to $1,323,578 for the nine
months ended June 30, 2002, up from $956,685 in 2001. This increase is
related to the volume increase in the number of trades processed and
increased costs for American Depository Receipt (ADR) conversions due to
the necessity of these conversions as a trading strategy to facilitate
liquidity within the Company's overall investment portfolio. Also, included
in the total $1,323,578 clearing and related expenses for 2002 is $35,416
related to retail private client activities that will no longer be an
ongoing expense for the Company after December 13, 2001, due to the sale of
the related activity.
Total promotion expense decreased by approximately 73% to $170,465 for the
nine months ended June 30, 2002 compared to $619,903 for 2001. This
decrease is primarily due to decreases in retail promotional activity,
public relations, and travel and entertainment due to cost saving
initiatives undertaken. Future promotion expense will be determined by
incremental promotions that are undertaken to support the Company's current
and ongoing operations.
Occupancy and equipment rental expense decreased by 19% to $308,341 for the
nine months ended June 30, 2002 from $382,490 in 2001. Decreases in rental
expense were related to the Company's decreased leased office space. As of
February 1, 2002 the Company relocated to a new, smaller and less costly
leased
17
office space. Offsetting a portion of this savings are several new
equipment leases for phone system and network equipment. The net savings
from this office relocation are currently anticipated to be over $150,000
on an annualized basis.
Communications expense decreased by $133,773, or 63% to $77,418 for the
nine months ended June 30, 2002 from $211,191 for the nine months ended
June 30, 2001. This decrease is due to reduced telephone, postage and
printing expense related to the sale of the retail brokerage activity.
Interest and dividend expense increased by $94,658, or 169% to $150,690 for
the nine months ended June 30, 2002 from $56,032 for the nine months ended
June 30, 2001. This increase is due to increased dividend expense related
to the Company's American Depositary Receipt (ADR) conversion strategy
where the Company holds paired and offsetting long or short foreign
ordinary and ADR positions. When these paired positions are held over a
dividend record date the Company has offsetting dividend expense and
dividend income. Dividend expense of $148,945 for the nine months ended
June 30, 2002 is largely offset by the $140,904 of dividend income for the
same period.
Professional fees increased by approximately 99% to $368,110 for the nine
months ended June 30, 2002 as compared to $184,606 in 2001. This increase
is primarily due to legal fees related to the arbitration and injunction
matters further discussed in Part II, Item 1 of this Form 10-QSB.
Insurance expense decreased by approximately 32% to $99,940 for the nine
months ended June 30, 2002 as compared to $147,602 in 2001. This decrease
is primarily due to decreases in health, life, disability and workers
compensation insurances due to reductions in total employment headcount and
the related and reduced payroll expense.
Depreciation and amortization expense decreased approximately 26% to
$284,357 for the nine months ended June 30, 2002 as compared to $383,513 in
2001. The decrease in 2002 is due to lower depreciation expense associated
with the disposition of fixed assets related to the sale of the retail
private client activity in December 2001.
Technology expense was down approximately 75% to $40,890 for the nine
months ended June 30, 2002 from $164,865 in 2001. The decrease is due to
the completion of technology enhancements to increase the quote system and
trading platform's capacity as well as reduced technology expenditures for
web site content due to the elimination of the retail online brokerage
activity in January 2002.
Other operating expenses decreased approximately 47% to $173,133 for the
nine months ended June 30, 2002 as compared to $324,542 in 2001. This
decrease is due to cutbacks and reductions in director's fees and expense,
office supplies and expense, training expense and annual report expense.
18
The Company has reported a loss before gain on sale of retail activity and
income taxes of $1,008,393 for the nine months ended June 30, 2002 compared
to a loss of $3,492,566 for 2001. The gain on the sale of retail activity
is $413,009 for the nine months ended June 30, 2002. The gain is based on
sales proceeds of $827,240 less the book cost basis of $414,231, for the
transaction costs and the book value of the assets that were included in
the sale of this business activity.
The Company has reported a net loss of $595,384 for the nine months ended
June 30, 2002 compared to a net loss of $2,222,728 for the nine months
ended June 30, 2001.
The Company did not record an income tax benefit for the nine months ended
June 30, 2002 due to a valuation allowance applied to the deferred tax
asset related to the net operating loss generated during the nine months.
The Company's effective income tax benefit rate was approximately 36% for
the nine months ended June 30, 2001.
Three Months Ended June 30, 2002, as Compared to
the Three Months Ended June 30, 2001
For the three months ended June 30, 2002, 91% of the Company's revenues
were derived from trading revenue. For the three months ended June 30,
2001, 59% of the Company's revenues were derived from commissions and 34%
were derived from trading revenue. Total revenues increased 2% to
$1,244,987 for the three months ended June 30, 2002 from $1,223,491 for the
same period in 2001.
Trading revenue (net dealer inventory and investment gains) increased to
$1,132,822 for the three months ended June 30, 2002 from $421,320 in 2001.
This increase in trading revenue was due to the trading department's
ongoing efforts to provide reliable market making for our trading clients
with high quality customer service and trade execution in the international
securities trading market. The increase in trading revenues for the three
months ended June 30, 2002 comes after the Company had to rehire and
rebuild the entire trading department since the disruption of the Company's
trading operations caused by the abrupt departure of the Company's head of
capital markets and his related recruitment of the entire trading
department to his own firm in December 2000.
Commission revenues decreased to $1,675 for the three months ended June 30,
2002 from $724,448 in 2001. On December 13, 2001 the Company sold its
membership interests in International Assets Advisory, LLC. The retail
brokerage commission revenues previously generated by International Assets
Advisory, LLC are no longer a source of revenue for the Company after
December 13, 2001, due to the sale of this retail brokerage activity.
Commission revenues of $1,675 for the three months ended June 30, 2002
include rebate commissions earned during the three months ended June 30,
2002. During December 2001 and January 2002 the Company sold substantially
all of it retail brokerage and retail online accounts. The
19
elimination of these retail activities has allowed the Company to focus all
of its resources on its core market making trading operation.
Revenues from management and investment advisory fees decreased to $0 for
the three months ended June 30, 2002 compared to $5,613 for the same
quarter in 2001. These revenues from management and investment advisory
fees are no longer a source of revenue for the Company after December 13,
2001 due to the sale of this business.
Interest and dividend revenue increased by 60% to $109,935 for the three
months ended June 30, 2002 from $68,675 in 2001. Dividend income increased
$62,058 for the three months ended June 30, 2002 compared to the same
period in 2001. The increase in dividend income is derived from the
Company's American Depositary Receipt (ADR) conversion strategy where the
Company holds paired and offsetting long and short foreign ordinary and ADR
positions. When these paired positions are held over a dividend record date
the Company has offsetting dividend income and dividend expense. Dividend
income of $106,820 for the three months ended June 30, 2002 is offset by
the $122,851 of dividend expense for the same period. Partly offsetting
this increase in dividend income is a $20,798 decrease in interest income
for the three months ended June 30, 2002 compared to the same period in
2001. This decrease is primarily due to lower balances of interest
producing assets, including money market balances and fixed income
securities as well as decreased interest returns on these short-term liquid
assets during the three months ended June 30, 2002 compared to the same
period in 2001.
Other revenues were $555 for the three months ended June 30, 2002 down from
$3,435 for the same period in 2001.
The major expenses incurred by the Company relate to direct and indirect
costs of its securities operations such as compensation and benefits,
clearing and related expense, professional fees and interest and dividend
expense. Total expenses decreased by approximately 37% to $1,519,579 for
the three months ended June 30, 2002, from $2,396,521 for the same period
in 2001. This decrease in total expenses is mainly related to reductions in
compensation and benefits, promotions, depreciation and amortization,
communications and occupancy and equipment rental. The decrease in total
expenses reflects the cost decreases related to the sale of the retail
brokerage activity and the additional cost reductions the Company began to
implement in August 2001.
Compensation and benefits expense decreased by $803,629 or 65% to $425,576
for the three months ended June 30, 2002 from $1,229,205 in 2001. The
decrease is primarily due to $0 commission expense for the three months
ended June 30, 2002 compared to $391,361 for the same quarter in 2001. This
commission expense and the related commission revenues will no longer be an
ongoing expense and revenue for the Company after December 13, 2001, due to
the sale of the retail private client activity. The decrease in
compensation and benefits expense is also due to a decrease in base
salaries due to an overall reduction in the number of employees.
20
Clearing and related expenses increased 8% to $442,557 in the three months
ended June 30, 2002, up from $410,464 in 2001. This increase is primarily
related to increased costs for American Depository Receipt (ADR)
conversions due to the necessity of these conversions as a trading strategy
to facilitate liquidity within the Company's overall investment portfolio.
The increase in clearing expense is also related to trading volume
increases in the number of trades processed.
Total promotion expense decreased by approximately 46% to $76,723 for the
three months ended June 30, 2002 compared to $141,080 for 2001. This
decrease is primarily due to decreases in retail promotional activity and
travel and entertainment decreases due to cost saving initiatives
undertaken. Future promotion expense will be determined by incremental
promotions that are undertaken to support the Company's current and ongoing
operations.
Occupancy and equipment rental expense decreased by 40% to $74,684 for the
three months ended June 30, 2002 from $123,564 in 2001. Decreases in rental
expense were related to the Company's decreased leased office space. As of
February 1, 2002 the Company relocated to a new, smaller and less costly
leased office space. Offsetting a portion of this savings are several new
equipment leases for phone system and network equipment. The net savings
from this office relocation are currently anticipated to be over $150,000
on an annualized basis.
Communications expense decreased by $53,270, or 75% to $17,521 for the
three months ended June 30, 2002 from $70,791 for the three months ended
June 30, 2001. This decrease is due to reduced telephone, postage and
printing expense related to the corresponding decreases in operating
revenue.
Interest and dividend expense increased by $83,082, or 207% to $123,229 for
the three months ended June 30, 2002 from $40,147 for the three months
ended June 30, 2001. This increase is due to increased dividend expense
related to the Company's American Depositary Receipt (ADR) conversion
strategy where the Company holds paired and offsetting long or short
foreign ordinary and ADR positions. When these paired positions are held
over a dividend record date the Company has offsetting dividend expense and
dividend income. Dividend expense of $122,851 for the three months ended
June 30, 2002 is largely offset by the $106,819 of dividend income for the
same period.
Professional fees increased by approximately 263% to $199,352 for the three
months ended June 30, 2002 as compared to $54,939 in 2001. This increase is
primarily due to legal fees related to the arbitration and injunction
matters further discussed in Part II, Item 1 of this Form 10-QSB.
Insurance expense decreased by approximately 36% to $30,137 for the three
months ended June 30, 2002 as compared to $47,236 in 2001. This decrease is
primarily due to decreases in health, life, disability and workers
compensation insurances due
21
to reductions in total employment headcount and the related and reduced
payroll expense.
Depreciation and amortization expense decreased approximately 42% to
$86,884 for the three months ended June 30, 2002 as compared to $148,878 in
2001. The decrease in 2002 is due to lower depreciation expense associated
with the disposition of fixed assets related to the sale of the retail
private client activity in December 2001.
Technology expense was down approximately 95% to $2,351 for the three
months ended June 30, 2002 from $45,935 in 2001. The decrease is due to the
completion of technology enhancements to increase the quote system and
trading platform's capacity as well as reduced technology expenditures for
web site content due to the elimination of the retail online brokerage
activity in January 2002.
Other operating expenses decreased approximately 52% to $40,565 for the
three months ended June 30, 2002 as compared to $84,282 in 2001. This
decrease is due to cutbacks and reductions in director's fees and expense,
office supplies and expense and training expense.
The Company has reported a net loss of $274,592 for the three months ended
June 30, 2002 compared to a net loss of $740,363 for the three months ended
June 30, 2001.
The Company did not record an income tax benefit for the three months ended
June 30, 2002 due to a valuation allowance applied to the deferred tax
asset related to the net operating loss generated during the three months.
The Company's effective income tax benefit rate was approximately 37% for
the three months ended June 30, 2001.
Liquidity and Capital Resources
Substantial portions of the Company's assets are liquid with the majority
of the assets consisting of securities inventories which fluctuate
depending on the levels of customer business. At June 30, 2002,
approximately 91% of the Company's assets consisted of cash, cash
equivalents, receivable from clearing organization and marketable
securities. All assets are financed by the Company's equity capital,
short-term borrowings from securities sold, not yet purchased and other
payables.
Distributions to the Company from INTLTRADER.COM, INC., the Company's
primary source of liquidity, are restricted as to amounts which may be paid
by applicable law and regulations. The Net Capital Rules are the primary
regulatory restrictions regarding capital resources. The Company's rights
to participate in the assets of any subsidiary are also subject to prior
claims of the subsidiary's creditors, including customers of
INTLTRADER.COM, INC.
INTLTRADER.COM, INC., a wholly owned registered securities broker-dealer
subsidiary, is subject to the requirements of the SEC and the NASD relating
to
22
liquidity and net capital levels. At June 30, 2002, INTLTRADER.COM INC. had
adjusted net capital of $1,730,059, which was $1,375,559 in excess of its
minimum net capital requirement at that date.
The Company's total assets and liabilities and the individual components
thereof may vary significantly from period to period because of changes
relating to customer needs and economic and market conditions. The
Company's total assets at June 30, 2002 and September 30, 2001, were
$14,680,565 and $10,733,698, respectively. The Company's operating
activities generate or utilize cash resulting from net income or loss
earned during the period and fluctuations in its assets and liabilities.
The most significant fluctuations have resulted from changes in the level
of customer activity and securities inventory changes resulting from
proprietary arbitrage trading strategies dictated by prevailing market
conditions.
In addition to normal operating requirements, capital is required to
satisfy financing and regulatory requirements. The Company's overall
capital needs are continually reviewed to ensure that its capital base can
appropriately support the anticipated capital needs of the operating
subsidiaries. The excess regulatory net capital of the Company's
broker-dealer subsidiary may fluctuate throughout the year reflecting
changes in inventory levels and/or composition and balance sheet
components.
In the opinion of management, the Company's existing capital and cash flow
from operations will be adequate to meet the Company's capital needs for at
least the next twelve months in light of known and reasonably estimated
trends. At this time additional private financing is being sought for
trading capital, technology, staffing and promotional efforts based upon
the Company's strategic plan. This plan has an operational emphasis on
technology driven international securities order flow. In conjunction with
the Company's strategic plan, the Company has engaged UBS Warburg as its
financial advisor to arrange and negotiate a private placement of
securities issued by the Company or to find a strategic partner. UBS
Warburg has been engaged to use its best efforts in connection with a
private placement and does not have any obligation to purchase any
securities issued by the Company or to provide financing of any kind to the
Company.
Cash Flows
For the nine months ended June 30, 2002, cash and cash equivalents
increased by $1,021,263 since the end of the last fiscal year ending
September 30, 2001. Funds provided by operating activities were $545,106
for the period ending June 30, 2002. During the nine months ended June 30,
2002, the Company had cash provided by investing activities of $394,375.
Net cash provided by financing activities were $81,782, which was comprised
of $80,000 provided by the sale of common stock with the sale of the retail
brokerage activity and $1,782 from the exercise of one employee stock
option.
23
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is party to certain litigation as of June 30, 2002, which
relates primarily to matters arising in the ordinary course of business.
While the Company cannot absolutely predict the outcome of these actions at
this time, it is the opinion of management, given the probability of
success by the Company, that the resolution of these matters will not have
a material adverse effect on the consolidated financial condition of the
Company.
On January 4, 2001 the Company filed an arbitration matter with the NASD
regarding several breaches (including but not limited to raiding, unfair
competition and misappropriation of trade secrets) related to the sudden
departure, on December 19, 2000, of the head of the foreign trading desk
and his related recruitment of the entire Company's trading staff. This
arbitration claim was filed against the broker/dealer who became the
employer of the recruited employees, two principals of the broker/dealer,
two affiliated securities firms of the broker/dealer and four principals of
the parent firm. On March 14, 2001 the broker/dealer who became the
employer and two of its principals responded and filed a counterclaim
against the Company. On March 19, 2001 the two affiliated securities firms
of the broker/dealer also filed a counterclaim as well as a claim for
attorney's fees. The Company disputes the counterclaims and intends to
vigorously defend them. The NASD arbitration for this matter, which was
originally scheduled for the week beginning April 29, 2002, has been
continued (delayed) until November 2002. The parties involved in the
arbitration have agreed to participate in a mediation scheduled for
September 2002.
On April 1, 2002, the Company filed suit and a motion for temporary
injunction, which was granted, in Circuit Court in Orange County, Florida.
The suit and motion were filed against a New York Stock Exchange listed
company for breach of a confidentiality agreement and misappropriation of
trade secrets. The Company was required to post a $50,000 cash bond with
the court as a condition of the temporary injunction. On April 9, 2002, the
Court denied a motion to dissolve the temporary injunction. On April 12,
2002 the defendant filed an appeal of the denial of the motion. That appeal
has not yet been resolved. On April 29, 2002 the defendant filed three
motions with the Circuit Court in Orange County, Florida to; 1) dissolve
the temporary injunction, 2) to compel an NASD arbitration and 3) to
dismiss the claims. Also on April 29, 2002 the defendant filed an NASD
arbitration claim seeking damages in excess of $450,000. On May 30, 2002
the Circuit Court of Orange County, Florida; 1) denied a motion to dissolve
the temporary injunction, 2) reserve ruling on the motion to compel
arbitration and 3) granted a motion to dismiss the original claim; however,
the Company was given 10 days to amend the complaint. This amended
complaint was filed on August 1, 2002.
The Company plans to defend its position against the appeal of the
injunction and defend its position that the circuit court rather than the
NASD has jurisdiction to decide this matter.
24
The foregoing discussion contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve various risks and uncertainties
with respect to current legal proceedings. Although the Company believes
that its expectations with respect to the forward-looking statements are
based upon reasonable assumptions within the bounds of its knowledge of its
business and operations, there can be no assurances that the actual
results, performance or achievement of the Company will not differ
materially from any future results, performance or achievements expressed
or implied by such forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. Readers
are cautioned that any such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties and that actual
results may differ materially from those indicated in the forward-looking
statements as a result of various factors. Readers are cautioned not to
place undue reliance on these forward-looking statements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a). Exhibits
(10.18) The Company's Employment Agreement, entered into as of
January 1, 2002, between the Company and Edward R.
Cofrancesco, dated June 4, 2002.
(99.1) The Company's Certification of President/CEO, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
(99.2) The Company's Certification of Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
b). Form 8-K
No reports were filed on Form 8-K during the three months
ended June 30, 2002.
25
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INTERNATIONAL ASSETS HOLDING CORPORATION
Date 08/12/2002 /s/ Diego J. Veitia
---------- -------------------
Diego J. Veitia
President and Chief Executive Officer
Date 08/12/2002 /s/ Jonathan C. Hinz
---------- --------------------
Jonathan C. Hinz
Chief Financial Officer and Treasurer
26
Exhibit Index
Exhibit
Number Description
------ -----------
10.18 The Company's Employment Agreement, entered into as of January 1,
2002, between the Company and Edward R. Cofrancesco, dated June 4,
2002.
99.1 The Company's Certification of President/CEO, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 The Company's Certification of Chief Financial Officer, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
Sarbanes-Oxley Act of 2002.