<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the fiscal year Commission file number
ended December 31, 1995 33-80855
GATEWAY BANCSHARES, INC
(Name of small business issuer in its charter)
Georgia 58-2202210
(State of Incorporation) (I.R.S. Employer Identification No.)
5102 Alabama Highway
Ringgold, Georgia 30736
(Address of principal executive offices)
(706) 965-5500
(Issuer's telephone number, including area code)
Securities Registered pursuant to Section 12 (b) of the Act: None
Securities Registered pursuant to Section 12 (g) of the Act: None
Check whether Issuer (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 No X
----- -----
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained herein, and no disclosure will be contained, to the
best of Registrant's knowledge, in definitive Proxy or Information Statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
Registrant's revenues for its fiscal year ended December 31, 1995 were none.
Registrant was a developmental stage enterprise that as of December 31, 1995
had no active business operations other than in connection with its initial
offering of the shares of its common stock.
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at December 31, 1995 was none.
Documents Incorporated By Reference: None
Financial statements are attached for period ended December 31, 1995 in
accordance with Rule 15d-2.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page number
-----------
<S> <C>
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . . . . . 3
CONSOLIDATED BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . 4
CONSOLIDATED STATEMENT OF OPERATIONS . . . . . . . . . . . . . . . . 5
CONSOLIDATED STATEMENT OF CASH FLOWS . . . . . . . . . . . . . . . . 6
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY . . . . . . . . . . . 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . 8
</TABLE>
2
<PAGE> 3
(LOGO)
HENSLEY, LAND & ASSOCIATES, P.C. OTHER OFFICES:
CERTIFIED PUBLIC ACCOUNTANTS
540 NORTH MAIN STREET
JASPER, GEORGIA 30143
(706) 692-3468
15 SOUTH MAIN STREET P.O. BOX 1349
ELLIJAY, GEORGIA 30540 BLUE RIDGE, GEORGIA 30513
(706) 276-3700 (706) 632-3731
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of Gateway Bancshares, Inc.
We have audited the accompanying balance sheet of Gateway Bancshares, Inc., (a
development stage company), and its proposed subsidiary as of December 31,
1995, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the period from July 11, 1995 (inception), to
December 31, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gateway Bancshares, Inc., (and
its proposed subsidiary) as of December 31, 1995, and the results of its
operation and its cash flows for the period from July 11, 1995, to December 31,
1995, in conformity with generally accepted accounting principles.
HENSLEY, LAND & ASSOCIATES, P.C.
Ellijay, Georgia
March 13, 1996
3
MEMBERS OF GEORGIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS *
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
AICPA PRIVATE COMPANIES PRACTICE SECTION
<PAGE> 4
GATEWAY BANCSHARES, INC.
(a development stage company)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
ASSETS
<TABLE>
<S> <C>
Cash in bank $ 196
Premises and equipment 5,000
Deferred stock offering costs (Note 2) 14,376
Organization costs 56,936
-------
$76,508
=======
LIABILITIES AND STOCKHOLDER'S DEFICIT
Liabilities:
Note payable to organizers $40,500
Note payable - First Tennessee Bank,
including accrued interest (Note 3) 37,755
-------
Total liabilities 78,255
-------
Commitments and contingent liabilities (Note 4)
Stockholder's deficit (Note 2):
Common stock ($5 par value; 10,000,000 shares
authorized, 1 share issued and outstanding) 5
Additional paid-in-capital 5
Deficit accumulated during the pre-opening stage (1,757)
-------
Total stockholder's deficit (1,747)
-------
$76,508
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
GATEWAY BANCSHARES, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
For The Period July 11, 1995 (inception) to December 31, 1995
<TABLE>
<S> <C>
Income: $ -
Expenses:
Personnel expense $ -
Occupancy expense -
Interest expense 255
Other pre-opening expenses 1,502
-------
--
Net loss $(1,757)
=======
Net loss per common share (based on 1 share
outstanding on December 31,1995) $(1,757)
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
GATEWAY BANCSHARES, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
For The Period July 11,1995 (inception) to December 31, 1995
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,757)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Increase in accounts payable and accrued expenses 255
Increase in organization costs (56,936)
Increase in deferred stock offering costs (14,376)
--------
NET CASH USED BY OPERATING ACTIVITIES (72,814)
--------
NET CASH USED IN INVESTING ACTIVITIES:
Capital expenditures (5,000)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from organizers 40,500
Borrowing under line of credit 37,500
Proceeds from issuance of common stock 10
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 78,010
--------
Net increase in cash 196
Cash, beginning of year -
--------
Cash, end of year $ 196
========
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid $ -
Taxes paid $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
GATEWAY BANCSHARES, INC.
(a development stage company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the Period July 11, 1995 (inception) to December 31, 1995
<TABLE>
<CAPTION>
Common Additional Accumulated Total
Stock Paid in capital Deficit Equity (Deficit)
------ --------------- ------- ---------------
<S> <C> <C> <C> <C>
July 11, 1995 $ - $ - $ - $ -
Net loss - July 11, 1995 to
December 31, 1995 - - (1,757) (1,757)
October 6, 1995 - Common Stock
Issue 5 5 - 10
------ ------ ------- -------
December 31, 1995 $ 5 $ 5 $(1,757) $(1,747)
====== ====== ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
GATEWAY BANCSHARES, INC.
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization
Gateway Bancshares, Inc., (the "Company") was formed to become a bank holding
company to acquire all the stock of a planned new bank in Ringgold, Georgia, to
be called Gateway Bank & Trust, (the "Bank").
Prior to the Company's incorporation on October 3, 1995, organizational and
pre-opening activities were conducted by the organizers through a general
partnership. Commitments described in Notes 2 through 4 entered into by the
partnership were subsequently assumed or will be assumed by the Company.
Activities since inception (July 11, 1995) have consisted of organizational and
pre-opening activities necessary to obtain regulatory approvals and to
otherwise prepare to commence business as a financial institution.
In October 1995, the Company issued 1 share of common stock to an organizing
director for $10 in connection with the organization of the Company.
Premises and Equipment
Premises and equipment are stated at cost. No depreciation has been taken
during the development and construction stage of the Company.
Pre- opening, organization and stock offering costs
Organization costs are primarily consulting, legal and regulatory fees related
to the incorporation and initial organization of the Company and the Bank.
Pre-opening costs are initial expenses incurred to prepare the Bank to commence
business as a financial institution. Organization costs have been capitalized
and will be amortized on a straight-line basis over five years once the Bank
commences operation. Stock offering costs have been deferred and will be
charged to additional paid-in capital when the stock offering is completed.
Additional stock offering, organizational and pre-opening costs are expected to
be incurred.
8
<PAGE> 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Income taxes
The Company and the Bank are subject to federal and state income taxes. No
taxes have been accrued or paid because of operating losses incurred during the
pre-opening stage.
Net loss per common share
Net loss per common share is based on the number of shares outstanding at
December 31, 1995.
NOTE 2- PROPOSED STOCK OFFERING:
The Company intends to sell to its organizers and the public, by subscription,
a minimum of 625,000 shares of its $5 par value common stock up to a maximum
of 700,000 shares for a purchase price of $10 per share. The organizers intend
to purchase 14.8% of the shares under the minimum offering and 13.2% of the
shares if the maximum offering is sold. The existing organizers and directors
may, but are not obligated to purchase additional shares if such purchases are
necessary to complete the minimum offering. The maximum aggregate number of
shares that these organizers and directors may purchase is 312,500 shares or
50% of the minimum offering and 44.6% of the maximum offering.
The net proceeds of the stock offering will be used to repay the line of credit
borrowings (Note 3), fund pre-opening expenses and capitalize the Bank. The
Bank will use proceeds to construct a building, reimburse the Company for pre-
opening expenses and provide working capital for the commencement of business.
NOTE 3- NOTE PAYABLE:
Organization and pre-opening expenses have been partially funded with
borrowings under a $40,500 loan from the organizers at no interest. The
Company also has established a line of credit with an independent bank for
$250,000 at the prime rate. It is the intent of the Company's organizers to
extend this line of credit if necessary until the time the Company's stock is
sold.
9
<PAGE> 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (concluded)
NOTE 4- COMMITMENTS AND RELATED PARTY TRANSACTIONS:
Organization and pre-opening expenses have been funded with a loan from the
organizers to the Company, as described in Note 3.
On August 9, 1995, the organizers entered into an Option Agreement For Lease of
Real Estate (the "Lease Agreement") to lease vacant property located at 5102
Alabama Highway for 20 years with two options to renew the lease for 10 years
for each option. Pursuant to the Lease Agreement, the initial annual rental
for the property shall not exceed 10% of the fair market value of the property
as determined by qualified appraisers selected by the Company. The annual
rental will be increased each year by the increase in the Consumer Price Index
as set forth in The Wall Street Journal or other nationally recognized
publication. The initial annual rental will not exceed $25,000.
The organizers of the Bank obtained two appraisals of the property, the size of
which is approximately 210 feet by 310 feet. The first, dated July 20, 1995,
appraised the property at $3.75 per square foot. The second appraisal, dated
August 8, 1995, appraised the property at $3.44 per square foot. Copies of the
appraisals of the property were filed with the Bank's application to the
Department of Banking and the FDIC. A proposed director of the Company is a
co-owner of the property. In the opinion of the organizers, the terms of this
Lease Agreement are at least as favorable to the Company as terms available
from unrelated third parties.
The organizers plan to have a 12,000 sq. foot, two-story building constructed
on the property. There will be six teller stations and four drive-through
stations.
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on August 12, 1996.
GATEWAY BANCSHARES, INC.
By: /s/ Robert G. Peck .
-------------------------------
Robert G. Peck
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on August 12, 1996.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C> <C>
/s/ Robert G. Peck . President (Principal Executive Officer) and Director
- - - -----------------------------------
Robert G. Peck
/s/ Harle B. Green . Chairman of the Board, Director
- - - ----------------------------------- Principal Financial Officer
Harle B. Green
/s/ Boyd M. Steele . Executive Vice-President, Director
- - - -----------------------------------
Boyd M. Steele
/s/ Walter Lee Jackson . Director
- - - -----------------------------------
Walter Lee Jackson
/s/ William H. Clark . Director
- - - -----------------------------------
William H. Clark
/s/ Patricia Yvonne Cochran . Director
- - - -----------------------------------
Patricia Yvonne Cochran
</TABLE>
11
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-11-1995
<PERIOD-END> DEC-31-1995
<CASH> 196
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 76,508
<DEPOSITS> 0
<SHORT-TERM> 78,255
<LIABILITIES-OTHER> 0
<LONG-TERM> 0
0
0
<COMMON> 5
<OTHER-SE> (1,752)
<TOTAL-LIABILITIES-AND-EQUITY> 76,508
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 255
<INTEREST-INCOME-NET> (255)
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> (1,502)
<INCOME-PRETAX> (1,757)
<INCOME-PRE-EXTRAORDINARY> (1,757)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,757)
<EPS-PRIMARY> (1,757)
<EPS-DILUTED> (1,757)
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
