U.S. Securities and Exchange Commission
Washington, D.C. 20549
Amendment No. 1 to
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
I-Tech Holdings Group, Inc.
---------------------------------------------
(Name of Small Business Issuer in its charter)
Colorado 84-1379282
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1629 York Street, Denver, Colorado 80206
------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (303) 436-1847
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered Each class is to be registered
None None
-------------------- ------------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock, no par value
--------------------------------------
(Title of class)
<PAGE>
PART I
Alternative 3
Item 1. Description of Business.
(a) Business Development.
I-Tech Holdings Group, Inc. (hereinafter referred to as the "Company"), was
organized under the laws of the State of Colorado on December 6, 1994. The
Company's executive offices are presently located at 1629 York Street, Denver,
Colorado 80206, and its telephone number is (303) 463-1847.
On June 15, 1995, the Company issued 380,000 shares of its common stock for
services rendered to the Company valued at an aggregate of $380.000 or $.001 per
share. The shares were issued pursuant to an exemption to registration contained
in Regulation D, Rule 504 of the Securities act of 1933, as amended (the
"Act"),and an exemption to registration under Section 11-51-308(1)(p) of the
Colorado Securities Act, as amended (hereinafter referred to as the "Colorado
Act"). On June 2, 1997, the Company completed an offering of 20,000,000 shares
of common stock at a price of $10,000 or $.005 per share. The offering was
conducted by the Company and the shares of common stock were sold pursuant to an
exemption to registration contained in Regulation D, Rule 504 of the Act, and an
exemption to registration under Section 11-51-308(1)(p) of the Colorado Act.
(b) Business of Issuer.
The Company was incorporated under the laws of the State of Colorado for
the purpose of engaging in the business of environmental technologies of all
types and manufacturing products related to environmental technologies. The
Company may also engage in any lawful activities or business for which
corporations may be formed under Articles 101 to 117 of Title 7 of the Colorado
Revised Statues, as designated by the board of directors of the corporation.
At the commencement of the Company in 1994, as noted above, environmental
issues in Colorado and the Denver area were of wide interest, as in fact they
continue to be, because of the impact of stream and water pollution in the Rocky
Mountains from errant discharge from old mines. Additionally, the resident
pollution from the nuclear wastes of present at the Rocky Mountain Arsenal in
immediately adjacent to Denver, Colorado. As a result of this interest, the then
management of the Company, as well as the then shareholders of the Company,
thought the Company might be in a position to bring to the forefront, through
publications and publicity, solutions devised by interested parties, educational
institutions, local governmental agencies, and others which might tend to
alleviate or at least ameliorate the onset of further pollution of the
underground water table within the flow structures near Rocky Mountain Arsenal.
It was envisioned, at the outset of the Company's formation that such
information about environmental solutions, if compiled in an orderly manner
suitable for republication, would offer a viable and profitable enterprise. Some
environmental engineers and other like parties were interested in the initial
concepts of the Company and had indicated a desire to examine a prospective
<PAGE>
association with the Company upon further work toward the initial Company goals.
Unfortunately, the initial concepts and goals of the Company did not bear
economic fruit and the Company languished inoperative until January 1997, when a
new thrust was determined in order to possibly make the Company into a viable
profit-making organization.
In January 1997, the Company determined that engaging in environmental
technologies had not emerged as a profit making enterprise and adopted a
resolution to engage in the business of business and industry consulting in
disciplines relating to the experience and professions of its two leading
directors and officers. As a result, at the date of this registration statement,
the Company is currently engaged in the business of designing and establishing
websites on the Internet for clients as well as conducting consulting services
appropriate to advising clients about establishing websites.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operations
- ------------------
With the emergence of the popularity of the Internet, many companies are
now placing information about their business of Internet sites. Developing and
establishing an Internet location and the techniques necessary to design and
complete the electronic signals and accompanying graphics is a sophisticated
process and needs the skills of a person experienced in computers, electronics
and graphics. As a result, those persons who have devoted their skills to this
new profession, are termed "webmasters."
The principals of the Company have had years of experience in computer
programing and in film and video production which gives the Company the
foundation of the Company's enterprise. The Company is engaged in the business
of producing, on a contract basis, customized Internet websites and pages for
its clients. In furtherance of the business plan the Company has established a
web site as its initial marketing thrust. The Company's internet web site may be
found on "www. bwn.net/i-tech" The Company also attracts prospective clients
through word of mouth, and using their respective business contacts in the
Denver, Colorado area. The Company's e-mail address is: "[email protected]"
The establishment of a web site on the Internet is a two-step sequence. The
first step is to design and produce the pages necessary to appear on the
Internet. This involves a combination of text and graphics, as well as "links"
to each of the successive page appearing after the initial or cover page. The
second step is to insert the pages of the product to actually appear on
internet, most generally on the world-wide web, commonly know as "www." In order
for the pages to appear on the web, enabling viewers to see them, the company
must establish a stand-alone computer containing the web pages, or, in the
alternative, engage a "host" which will establish the pages for the customer on
a contract basis. The Company does not act as a "host" for the web pages. There
are literally hundreds of web hosts operating around the world. A list of such
hosts are readily available on the world-wide web.
In general, at this time, most of the companies in the Denver metropolitan
area and in the state of Colorado, offering web site design are small and
comprised of one or two individuals. There are many sole practitioners in the
<PAGE>
business of web site design. This is not to say that these companies and
individuals are not extremely competent and offer a good deal of competition for
the Company. It is the goal of the Company to become one of the best, but not
the largest, web designers in Colorado.
The Company initially raised only a small amount of operating capital. The
Company registered its common shares under the provisions of the Securities
Exchange Act of 1934 to provide a central source where information on the
activities of the Company may be obtained by the general public. Except for the
shares owned by affiliates of the Company, the common shares of the Company are
freely tradeable having been issued under the exemption to registration provided
by Regulation D, Rule 504 of the Securities Act of 1933, as amended. The common
shares of the Company are not currently trading on any exchange or trading
medium. The Company has no plans at the date of this report to trade the common
shares of the Company.
The Company is currently designing websites for its clients utilizing the
graphics arts programs of MS Publisher, Word Perfect, and MS Word. The websites
design and execution also uses clipart programs of ClickArt, The Instant Image
Resource.
The Company, at the discretion of the Board of Directors, may attempt to
raise additional working capital, when required, in one or more of various means
including but not necessarily limited to debt instruments, convertible
debentures, equities and joint venture enterprises. However, there is no
assurance whatsoever that such working capital will be available to the Company
in any of the above various forms, and if available that the provisions of the
capital will be attractive to the Company.
Financial Condition, Capital Resources and Liquidity
- ----------------------------------------------------
The Company may be considered a start-up enterprise. At March 31, 1998, the
Company had assets totaling $7,076 and $1,400 in liabilities. Since the
Company's inception, it has received a total of $13,000.00 in cash and $380.00
in services paid as consideration for the issuance of Common and Preferred
Stock.
The Company has not projected any definite future revenues for the Company
based upon its proposed business activities of designing and establishing
Internet sites for clients. The Company charges approximately $1,000 plus $200
per page as the initial charge for the design and preparation of the pages for a
web site. In addition to these charges, specific and specialized art work and
graphics will carry an additional charge the amount of which will be determined
by the costs of artists supplying such graphics on a contractual basis.
The Company owns no computer equipment and will necessarily depend upon
utilization of equipment owned by the principals of the Company who have agreed
to allow the use of such computers at a modest rental fee of $50.00 per month
for two state-of-the-art computers capable of producing programing for Internet
websites. At present, the Company uses one (1) P-2,233, MMX, 64RAM, 512 Cache,
Zipdrive, 4.3gig hddrive, CDRom; and one (1) O-120,32RAM, 256 Cache, 3.5
F.Drive, 1.3 hddrive, CDRom;
<PAGE>
In the event the Company is slow to acquire client contracts to design and
produce Internet websites, the existing capital of the Company may not be
sufficient to carry on the stated purpose of the Company, or in the alternative
the development of the business will be delayed.
Year 2000 Issues. The business of the Company, the design and development
of internet web sites, may be impacted only slightly by the anticipated problems
of its computers being unable to categorically assemble the auto use and
implementation of the year "2000" in its internal computations. The business of
the Company requires no use of accounting or computation programs. It is
estimated that the business of the Company will be impacted only by any adverse
impact upon its clients and customers, the effect of which is not ascertainable
at this time. Web sites, as designed and installed by the Company for its
clients, are inherently a graphics arts endeavor, and are generally used as a
sales, advertising and information medium.
Item 3. Description of Property.
The Company owns no real or personal property and maintains its executive
offices at business offices located at 1629 York Street, Denver, Colorado
80206.Its telephone number is (303) 436-1847. The Company has agreed, commencing
February 1, 1997, to pay a minimum of $100 per month in rent on a month-to-month
basis for this office-sharing arrangement; which arrangement is expected to be
adequate to meet the Company's foreseeable future needs.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information as of March 31,
1998,regarding the ownership of the Company's Common Stock by each shareholder
known by the Company to be the beneficial owner of more than five percent of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Each of the shareholders has sole voting and investment
power with respect to the shares of Common Stock beneficially owned.
Shares
Name and Address of Beneficially Percent
Beneficial Owner Owned of Class
- ----------------------------- ------------ ----------
Gerald H. Trumbule* 50,000 13%
1629 York Street
Denver, CO 80206
Clark Burch* 50,000 13%
529 Cherokee Street
Denver, CO 80204
All Executive Officers and Directors 100,000 26%
as a Group (two persons)
- ----------
<PAGE>
*Executive officer and member of the Board of Directors of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
Set forth below are the names, ages and positions with the Company and
business experience of the executive officers and directors of the Company.
Name Age Position(s) with Company
- ---- --- ------------------------
Gerald H. Trumbule* 56 President and Director
Clark Burch* 52 Secretary/Treasurer and Director
- ----------
*The above-named persons may be deemed to be "promoters" and "parents" of
the Company, as those terms are defined under the Rules and Regulations
promulgated under the Securities Act of 1933, as amended.
All directors hold office until the next annual meeting of the Company's
shareholders and until their successors have been elected and qualify. Officers
serve at the pleasure of the Board of Directors. It is anticipated that Messrs.
Trumbule and Burch will devote such time and effort as may be necessary to
participate in the day-to-day management of the affairs of the Company.
Family Relationships
No family relationship exists between the executive officers and directors
of the Company.
Business Experience
Gerald H. Trumbule, Ph.D. has been the President of the Company since
January 2, 1997. Since 1979, Dr. Trumbule has been and currently is the
President of The Education Centers of Colorado, a private company which supplies
corporate computer training and support. Dr. Trumbule was the founder and
director of the Western States Film Institute and has directed over
50commercials and documentaries in film and video. Dr. Trumbule was formerly the
founder and director of Sebastian House, Inc., a non-profit educational
corporation; Assistant Professor of Psychology, University of Toronto, Ontario;
Fellow, Institute of Neurological Sciences, University of Pennsylvania; and
Research Assistant, Walter Reed Army Institute of Research and NASA Space
Research Laboratory, College Park, MD. Dr. Trumbule's degrees include B.S.
Psychology - University of Maryland 1965, M.S. Experimental Psychology -
University of Pennsylvania 1966, and Ph.D. Physiological Psychology (ABD) -
University of Pennsylvania 1970.
Clark Burch has been the Secretary and a Director of the Company since
January 2, 1997, and prior to that he was the President of the Company from
inception. He is a video producer-director of television productions. Mr. Burch
has been, and currently is, the President of ArtsWorth, Inc., a music and video
<PAGE>
production company. Mr. Burch has produced and directed 110 half-hour programs
of "Comminatcha Live", a cable television series now in its third re-run. He has
produced the following video music productions: "Queen of the Night" - Julie
Young, performer 1985; "The Big Thompson" - Chuck Pyle, performer; and "Life
Explodes" - The Live Explodes Band. Mr. Burch obtained a Bachelor of Arts Degree
from Mankato State University in 1966. He is a member of the Rocky Mountain
Music Association, Denver, Colorado. From 1982 to 1985, Mr. Burch was actively
engaged as a licensed real estate agent.
Item 6. Executive Compensation.
<TABLE>
<CAPTION>
SUMMARY OF COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
--------------------------------------------------------------------------------------------
1. (b) (c) (d) (e) (f) (g) (h) (i)
Name Other Securities All
and Annual Restricted Underlying Other
Principal Compen- Stock SAR's LTIP Compen
Position Year Salary($) Bonus($) sation ($) Awards ($) (#) Payouts ($) sation($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
Gerald H. 1994 0 0 0 0 0 0 0
Trumbule 1995 0 0 0 0 0 0 0
President 1996 0 0 0 0 0 0
1997 0 0 0 0 0 0
Clark 1994 0 0 0 0 0 0
Burch 1995 0 0 0 0 0 0
Secretary 1996 0 0 0 0 0 0
1997 0 0 0 0 0 0
</TABLE>
Proposed Remuneration
- ---------------------
The Company proposes to compensate its officers and directors at a time
commencing when the revenues of the Company can adequately maintain such an
expenditure without encumbering the on-going continuation of the Company and its
business goals. The amount of such compensation has not been determined at the
time of this registration statement.
Item 7. Certain Relationships and Related Transactions.
The Company maintains its executive offices at business offices leased by
its president at 1629 York Street, Denver, Colorado 80206. The Company has
agreed to pay, commencing February 1, 1997, a minimum of $100 per month in rent
on a month-to-month basis for this office-sharing arrangement. The Company
believes that the terms of this arrangement are more favorable than those which
could have been obtained from an unaffiliated third party for comparable
arrangements in the Denver, Colorado, area.
<PAGE>
Item 8. Description of Securities.
The Company is authorized to issue 50,000,000 shares of its Common Stock,
no par value, and 5,000,000 shares of its Preferred Stock, no par value.
Description of Common Stock
- ---------------------------
Each share of Common Stock is entitled to share pro rata in dividends and
distributions with respect to the Common Stock when, as and if declared by the
Board of Directors from funds legally available therefor. No holder of any
shares of Common Stock has any pre-emptive right to subscribe for any of the
Company's securities. Upon dissolution, liquidation or winding up of the
Company, the assets will be divided pro rata on a share-for-share basis among
holders of the shares of Common Stock after any required distribution to the
holders of the preferred stock. All shares of Common Stock outstanding are fully
paid and nonassessable.
Each shareholder of Common Stock is entitled to one vote per share with
respect to all matters that are required by law to be submitted to share
holders. The shareholders are not entitled to cumulative voting in the election
of directors. Accordingly, the holders of more than 50% of the shares voting for
the election of directors will be able to elect all the directors if they choose
to do so.
Description of Preferred Stock
- ------------------------------
The Directors have assigned the following preferences to the issued and
outstanding shares of Preferred Stock: (i) the Preferred Stock shall be
non-voting, (ii) the holders of the Preferred Stock, as a group, shall have the
right to receive, pro rata, upon dissolution or winding up of the Company, 10%of
the assets of the Company prior to division and distribution of assets to the
holders of the Company's Common Stock.
Transfer Agent and Registrar. The Transfer Agent and Registrar for the
Company's Common and Preferred Stock is Corporate Stock Transfer, Inc., 370
17thStreet, Suite #2350, Denver, Colorado 80202.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
(a) Market Information.
There has been no established public trading market for the Common Stock
since the Company's inception on December 6, 1994.
(b) Holders.
<PAGE>
As of March 31, 1998, the Company had 43 (forty-three) shareholders of
record of its 20,380,000 issued and outstanding shares of Common Stock and
one(1) holder of 300,000 shares of Preferred Stock.
(c) Dividends. Company has never paid or declared any dividends on its
Common Stock and does not anticipate paying cash dividends in the foreseeable
future.
Item 2. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 3. Changes in and Disagreements with Accountants.
There has been no change in the Company's independent accountant, Kish,
Leake & Associates, P.C., 7901 East Belleview Avenue, Suite #220, Englewood,
Colorado 80111, during the Company's two most recent fiscal years ended
December31, 1995 and 1996 and the Period December 6, 1994 (Inception) through
September30, 1997.
Item 4. Recent Sales of Unregistered Securities.
The Company, in June 1997, sold and issued 300,000 shares of its Preferred
Stock in an aggregate amount of $3,000.00 under the exemption to registration
provided by Section 4(2) of the Securities Act of 1933, as amended (the
"1933Act") and 11-51-308(1)(i) of the Colorado Securities Act, as amended
(the"Colorado Act"). In June 1995 the Company sold and issued 380,000 shares of
Common Stock, in an aggregate amount of $380.00, under the exemption provided by
Regulation D, Rule 504 of the 1933 Act and Section 11-51-308(p) of the Colorado
Act. Subsequently on June 2, 1997, the Company sold and issued 20,000,000 shares
of its Common Stock in an aggregate amount of $10,000.00 under the exemption
provided by Regulation D, Rule 504 of the 1933 Act.
The facts relied upon by the Company to make the exemptions available
include the following: (i) the aggregate offering price for the offerings of the
shares of Common Stock did not exceed $1,000,000, less the aggregate offering
price for all securities sold within the twelve months before the start of and
during the offering of the shares in reliance on any exemption under Section3(b)
of, or in violation of Section 5(a) of, the Act; (ii) the required number of
manually executed originals and true copies of Form D, accompanied, in
connection with the Colorado notification of exemption, with the appropriate
exemption fee, were duly and timely filed with the U.S. Securities and Exchange
Commission and the Colorado Division of Securities; (iii) no general
solicitation or advertising was conducted by the Company in connection with the
offering of any of the shares; and (iv) the fact that the Company has not been
since its inception (a) subject to the reporting requirements of Section 13
or15(d) of the Securities Exchange Act of 1934, as amended; (b) an "investment
company" within the meaning of the Investment Company Act of 1940, as amended;
or (c) a development stage company that either has no specific business plan or
purpose or has indicated that its business plan is to engage in a merger or
acquisition with an unidentified company or companies, or other entity or
person.
<PAGE>
Item 5. Indemnification of Directors and Officers.
Article XIII of the Company's Articles of Incorporation contains provisions
providing for the indemnification of directors and officers of the Company as
follows:
The Board of Directors of the Corporation shall have the power to:
A. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation), by reason of the fact that he is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonable incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and, with
respect to any criminal action or proceedings, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement or conviction or upon a plea of nolo
contendere or its equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner which he reasonably believed to
be in the best interests of the Corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe the action was unlawful.
B. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of the Corporation, partnership, joint venture, trust or other or agent
of the Corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in the best
interests of the Corporation; but no indemnification shall be made in respect of
any claim, issue or matter as to which such person has been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the court in which such action or
suit was brought determines upon application that, despite the adjudication of
liability, but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnification for such expenses which such court
deems proper.
C. Indemnify a Director, officer, employee or agent of the Corporation to
the extent that such person has been successful on the merits in defense of any
action, suit or proceeding referred to in Subparagraph A or B of this Article or
in defense of any claim, issue, or matter therein, against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
therewith.
<PAGE>
D. Authorize indemnification under Subparagraph A or B of this
Article(unless ordered by a court) in the specific case upon a determination
that indemnification of the Director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in said Subparagraph A or B. Such determination shall be made by the Board
of Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or, if such a quorum is not
obtainable or even if obtainable a quorum of disinterested directors so directs,
by independent legal counsel in a written option, or by the shareholders.
E. Authorize payment of expenses (including attorney's fees) incurred in
defending a civil or criminal action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding as authorized in Subparagraph D
of this Article upon receipt of an undertaking by or on behalf of the Director,
officer, employee or agent to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the Corporation as
authorized in this Article.
F. Purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation or who is or was serving
at the request of the Corporation as a Director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the provision
of this Article.
The indemnification provided by this Article shall not be deemed exclusive
of any other rights to which those seeking indemnification may be entitled under
these Articles of Incorporation, and the Bylaws, agreement, vote of the
shareholders or disinterested directors or otherwise, and any procedure provided
for by any of the foregoing, both as to action in his official capacity and as
to action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a Director, officer, employee or agent and
shall inure to the benefit of heirs, executors and administrators of such a
person.
The Company has no agreements with any of its directors or executive
officers providing for indemnification of any such persons with respect to
liability arising out of their capacity or status as officers and directors.
At present, there is no pending litigation or proceeding involving a
director or executive officer of the Company as to which indemnification is
being sought.
PART F/S
The Financial Statements of I-Tech Holdings Group, Inc., required by
Regulation S-X commence on page F-1 hereof in response to Part F/S of this
Registration Statement on Form 10-SB and are incorporated herein by this
reference.
<PAGE>
PART III
Item 1. Index to Exhibits
Item
Number Description
- ------ -------------------------------
27. Financial Data Schedule
Item 2. Description of Exhibits
Financial Data Schedule filed as of March 31, 1998.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
I-TECH HOLDINGS GROUP, INC.
(Registrant)
Date: June 22, 1998 By: /s/ Clark Burch
------------------------------------
Clark Burch, Secretary
<PAGE>
I-Tech Holdings Group, Inc.
FINANCIAL STATEMENTS
with
Independent Auditors' Report
For the Years Ended December 31, 1997 and 1996
<PAGE>
I-Tech Holdings Group, Inc.
TABLE OF CONTENTS
Page
----
Independent Auditors' Report F-1
Financial Statements
Balance Sheet F-2
Statement of Operations F-3
Statement of Cash Flows F-4
Statement of Shareholder's Equity F-5
Notes to the Financial Statements F-6-F-8
<PAGE>
Kish * Liake & Associates, P.C.
Certified Public Accountants
J.D. Kish, C.P.A., M.B.A. 7901 E. Belleview Ave., Suite 220
James D. Leake, C.P.A., M.T. Englewood, Colorado 80111
- ----------------------- Telephone (303) 779-5006
Arleen R. Brogan, C.P.A. Facsimile (303) 779-5724
Independent Auditor's Report
----------------------------
We have audited the accompanying balance sheet of I-Tech Holdings Group, Inc. (a
Developmental Stage Company), at December 31, 1997 and 1996, and the related
statement of operations, shareholders' equity, and cash flows for the year ended
December 31, 1997 and 1996. 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 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 I-Tech Holdings Group, Inc. at
December 31, 1997 and 1996 and the results of its operations and its cash flows
for the years ended December 31, 1997 and 1996, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company is in the development stage and has no operations as of
December 31, 1997. The lack of sufficient working capital to operate as of
December 31, 1997 raises substantial doubt about its ability to continue as a
going concern. Management's plans concerning these matters are also described in
Note 4. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
/s/ Kish, Leake & Associates, P.C.
- ----------------------------------
Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
May 8, 1998
F - 1
<PAGE>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Balance Sheet
- --------------------------------------------------------------------------------
December
31, 1997
--------
ASSETS
Current Assets - Cash $ 7,883
========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES - Due To Related Entity For Rent $ 1,100
--------
SHAREHOLDERS' EQUITY
Common Stock, No Par Value
Authorized 50,000,000 shares; Issued And
Outstanding 20,380,000 Shares 10,480
Preferred Stock, No Par Value,
Non Voting, Authorized 5,000,000 shares;
Issued And Outstanding 300,000 Shares 3,000
(Deficit) Accumulated During The Development Stage (6,697)
--------
TOTAL SHAREHOLDERS' EQUITY 6,783
--------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 7,883
========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F - 2
<PAGE>
<TABLE>
<CAPTION>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Statement Of Operations
- -----------------------------------------------------------------------------------------
December
6, 1994
(Inception)
Year Ended Year Ended Through
December December December
31, 1997 31, 1996 31, 1997
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
------------ ------------ ------------
Consulting 0 0 380
Fees 265 0 265
Legal & Accounting 3,750 0 3,750
Office 122 0 122
Rent 1,100 0 1,200
Stock Transfer 980 0 980
------------ ------------ ------------
Total Expenses 6,217 0 6,697
------------ ------------ ------------
Net (Loss) ($ 6,217) $ 0 (6,697)
============ ============ ============
Basic (Loss) Per Common Share ($ 0.00) $ 0.00
============ ============
Weighted Average Common Shares Outstanding 13,713,333 380,000
============ ============
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F - 3
</TABLE>
<PAGE>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Statement Of Cash Flow
- --------------------------------------------------------------------------------
December
6, 1994
(Inception)
Year Ended Year Ended Through
December December December
31, 1997 31, 1996 31, 1997
-------- -------- --------
Net (Loss) ($ 6,217) $ 0 ($ 6,697)
-------- -------- --------
Plus Items Not Affecting Cash Flow: 0 0 0
Stock Issued For Services 380
Increase In Accounts Payable 1,100 0 1,100
-------- -------- --------
Net Cash Flows From Operations (5,117) 0 (5,217)
-------- -------- --------
Cash Flows From Investing Activities:
Net Cash Flows From Investing: 0 0 0
-------- -------- --------
Cash Flows From Financing Activities:
Common Stock Issued For Cash 10,000 0 10,000
Contributed Capital 0 0 100
Preferred Stock Issued For Cash 3,000 0 3,000
-------- -------- --------
Net Cash Flows From Financing: 13,000 0 13,100
-------- -------- --------
Net Increase (Decrease) In Cash 7,883 0 7,883
Cash At Beginning Of Period 0 0 0
-------- -------- --------
Cash At End Of Period $ 7,883 $ 0 $ 7,883
======== ======== ========
Summary Of Non-Cash Investing And Financing
Activities:
Common Stock Issued For Services $ 0 $ 0 $ 380
======== ======== ========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F - 4
<PAGE>
<TABLE>
<CAPTION>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Statement Of Shareholders' Equity
- -----------------------------------------------------------------------------------------------------------------------------
Net (Loss)
Accumulated
Number Of Number Of During The
Shares Shares Common Preferred Development
Common Preferred Stock Stock Stage Total
------ --------- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance At December 6, 1994 0 0 $ 0 $ 0 $ 0 $ 0
June 15, 1995 issued
380,000 Shares Of No Par Value
Common Stock for services valued
at $380 or $.001 per share 380,000 0 380 0 380
Additional Capital Contribution 100 100
Net (Loss) (380) (380)
----------- ----------- ----------- ----------- ----------- -----------
Balance At December 31, 1995 380,000 0 480 0 (380) 100
Net (Loss) (100) (100)
----------- ----------- ----------- ----------- ----------- -----------
Balance At December 31, 1996 380,000 0 480 0 (480) 0
January 2, 1997 issued
300,000 Shares Of No Par Value
Preferred Stock for $3,000 or
$.01 per share 0 300,000 0 3,000 3,000
March & May, 1997 issued
20,000,000 Shares Of No Par Value
Common Stock for $10,000 or
$.0005 per share 20,000,000 0 10,000 0 10,000
Net (Loss) (6,217) (6,217)
----------- ----------- ----------- ----------- ----------- -----------
Balance At December 31, 1997 20,380,000 300,000 $ 10,480 $ 3,000 ($ 6,697) $ 6,783
=========== =========== =========== =========== =========== ===========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F - 5
</TABLE>
<PAGE>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Notes to Financial Statements
At December 31, 1997 and 1996
- -----------------------------
Note 1 - Organization and Summary of Significant Accounting Policies
- --------------------------------------------------------------------
Organization:
- -------------
On December 6, 1994, I-Tech Holdings Group, Inc. ("the Company") was
incorporated under the laws of Colorado, to engage in the business of
environmental technologies of all types and manufacturing products related to
environmental technologies. The Company may also engage in any business which is
permitted by the Colorado Business Corporation Act, as designated by the board
of directors of the Company. In January 1997, the Company elected to engage in
the business of consulting services to develop web sites for business and
industry.
Developmental Stage:
The Company is currently in the developmental stage and has no significant
operations to date.
Income Taxes:
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and tax basis
of assets and liabilities for financial and income tax reporting. The deferred
tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset federal income taxes. Due to the Company's
net operating loss there are no income taxes currently due. Also, there were no
material differences between recorded book basis and tax basis at December 31,
1997 and 1996.
Statement of Cash Flows:
For purposes of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Cash paid for interest and taxes in the period ended December 31, 1997 and 1996
was $-0-.
F - 6
<PAGE>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Notes to Financial Statements
At December 31, 1997 and 1996
- -----------------------------
Net (Loss) Per Common Share:
The net (loss) per common share is computed by dividing the net (Loss) for the
period by the weighted average number of shares outstanding at December 31,
1997, 1996.
Note 2 - Capital Stock
- ----------------------
Common Stock:
The Company initially authorized 50,000,000 shares of no par value common stock.
On June 15, 1995 380,000 shares of no par common stock were issued for services
valued at $380 or $.001 per share. In March and May 1997 the Company issued an
additional 20,000,000 shares of common stock for $10,000 or $.0005 per share.
Preferred Stock
The Company initially authorized 5,000,000 shares of no par value, non-voting
preferred stock.
On January 22, 1997, the Company issued 300,000 shares of its no par value
preferred stock for $3,000 or $.01 per share. The Directors have assigned the
following preferences to the issued and outstanding shares of Preferred Stock:
(I) the Preferred Stock shall be non-voting, (ii) the holders of the stock as a
group have the right to receive, prorata, upon dissolution or winding up of the
Company, 10% of the assets of the Company prior to division and distribution of
assets to the holders of the Company's Common Stock.
The Company has declared no dividends through December 31, 1997.
F - 7
<PAGE>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Notes to Financial Statements
At December 31, 1997 and 1996
- -----------------------------
Note 3 - Related Party Events
- -----------------------------
The Company presently maintains its principal offices at an address provided by
a related party at a monthly rental of $100 per month, plus any expenses of
telephone, fax, and secretarial services, commencing February 1, 1997. The
office is located at 1629 York Street, Denver, Colorado 80206.
Note 4 - Basis Of Presentation
- ------------------------------
In the course of its development activities, the Company has sustained
continuing losses and expects such losses to continue in the foreseeable future.
The Company plans to continue financing its operations with stock sales and in
the longer term, revenues from its operations. The Company's ability to continue
as a going concern is dependent upon the successful completion of its offering
of common stock, additional financing and, ultimately, upon achieving profitable
operations.
F - 8
<PAGE>
I-Tech Holdings Group, Inc.
FINANCIAL STATEMENTS
Unaudited
For the Three Month Period Ended
March 31, 1998
<PAGE>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Balance Sheet
- --------------------------------------------------------------------------------
Unaudited Audited
March December
31, 1998 31, 1997
-------- --------
ASSETS
Current Assets - Cash $ 7,076 $ 7,883
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES - Due To Related Entity For Rent $ 1,400 $ 1,100
-------- --------
SHAREHOLDERS' EQUITY
Common Stock, No Par Value
Authorized 50,000,000 shares; Issued And
Outstanding At May 31, 1997 (Unaudited)
20,380,000 Shares At December 31, 1996
380,000 Shares 10,480 10,480
Preferred Stock, No Par Value,
Non Voting, Authorized 5,000,000 shares;
Issued And Outstanding 300,000 Shares 3,000 3,000
Deficit Accumulated During
The Development Stage (7,804) (6,697)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 5,676 6,783
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 7,076 $ 7,883
======== ========
The Accompanying Notes Are An Integral Part
Of These Unaudited Financial Statements.
F-1
<PAGE>
<TABLE>
<CAPTION>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Unaudited Statement Of Operations
- -----------------------------------------------------------------------------------------
Unaudited
December
Unaudited Unaudited 6, 1994
Three Months Three Months (Inception)
Ended Ended Through
March March March
31, 1998 31, 1997 31, 1998
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
------------ ------------ ------------
Consulting 0 0 380
Fees 0 265 265
Legal & Accounting 0 1,000 3,750
Office 544 86 666
Rent 300 200 1,500
Stock Transfer 263 0 1,243
------------ ------------ ------------
Total Expenses 1,107 1,551 7,804
------------ ------------ ------------
Net (Loss) (1,107) (1,551) (7,804)
============ ============ ============
Basic (Loss) Per Common Share ($ 0.00) ($ 0.00) ($ 0.00)
============ ============ ============
Weighted Average Common Shares Outstanding 20,380,000 380,000 20,380,000
============ ============ ============
The Accompanying Notes Are An Integral Part Of These Unaudited Financial Statements.
F-2
</TABLE>
<PAGE>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Unaudited Statement Of Cash Flow
- --------------------------------------------------------------------------------
Unaudited
December
Unaudited Unaudited 6, 1994
Three Months Three Months (Inception)
Ended Ended Through
March March March
31, 1998 31, 1997 31, 1998
-------- -------- --------
Net (Loss) ($ 1,107) ($ 1,551) ($ 7,804)
-------- -------- --------
Plus Items Not Affecting Cash Flow: 0 0 0
Stock Issued For Services 380
Increase In Accounts Payable 300 200 1400
-------- -------- --------
Net Cash Flows From Operations (807) (1,351) (6,024)
-------- -------- --------
Cash Flows From Investing Activities:
Net Cash Flows From Investing: 0 0 0
-------- -------- --------
Cash Flows From Financing Activities:
Common Stock Issued For Cash 0 0 10,000
Contributed Capital 0 0 100
Preferred Stock Issued For Cash 0 3,000 3,000
-------- -------- --------
Net Cash Flows From Financing: 0 3,000 13,100
-------- -------- --------
Net Increase (Decrease) In Cash (807) 1,649 7,076
Cash At Beginning Of Period 7,883 0 0
-------- -------- --------
Cash At End Of Period $ 7,076 $ 1,649 $ 7,076
======== ======== ========
Summary Of Non-Cash Investing And
Financing Activities: $ 0 $ 0 $ 380
======== ======== ========
The Accompanying Notes Are An Integral Part
Of These Unaudited Financial Statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
I-Tech Holdings Group, Inc.
(A Development Stage Company)
Unaudited Statement Of Shareholders' Equity
- -----------------------------------------------------------------------------------------------------------------------------
Net (Loss)
Accumulated
Number Of Number Of During The
Shares Shares Common Preferred Development
Common Preferred Stock Stock Stage Total
------ --------- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance At December 6, 1994 0 0 $ 0 $ 0 $ 0 $ 0
June 15, 1995 issued
380,000 Shares Of No Par Value
Common Stock for services valued at
$380 or $.001 per share 380,000 0 380 380
Additional Capital Contribution 100 100
Net (Loss)
(380) (380)
----------- ----------- ----------- ----------- ----------- -----------
Balance At December 31, 1995 380,000 0 480 0 (380) 100
Net (Loss) (100) (100)
----------- ----------- ----------- ----------- ----------- -----------
Balance At December 31, 1996 380,000 0 480 0 (480) 0
January 2, 1997 issued
300,000 Shares Of No Par Value
Preferred Stock for $3,000 or
$.01 per share 0 300,000 0 3,000 3,000
March & May, 1997 issued
20,000,000 Shares Of No Par Value
Common Stock for $10,000 or
$.0005 per share (Unaudited) 20,000,000 0 10,000 10,000
Net (Loss) (6,217) (6,217)
----------- ----------- ----------- ----------- ----------- -----------
Balance At December 31, 1997 20,380,000 300,000 $ 10,480 $ 3,000 ($ 6,697) $ 6,783
Unaudited Net (Loss) (1,107) (1,107)
----------- ----------- ----------- ----------- ----------- -----------
Unaudited Balance At March 31, 1998 20,380,000 300,000 $ 10,480 $ 3,000 ($ 7,804) $ 5,676
=========== =========== =========== =========== =========== ===========
The Accompanying Notes Are An Integral Part Of These Unaudited Financial Statements.
F-4
</TABLE>
<PAGE>
I-Tech Holdings Group, Inc.
Notes To Unaudited Financial Statements
For The Three Month Period Ended March 31, 1998
- -----------------------------------------------
Note 1 - Unaudited Financial Information
- ----------------------------------------
The unaudited financial information included for the three month periods ended
March 31, 1998 and March 31, 1997 were taken from the books and records without
audit. However, such information reflects all adjustments (consisting only of
normal recurring adjustments, which are of the opinion of management, necessary
to reflect properly the results of interim periods presented). The results of
operations for the three month period ended March 31, 1998 are not necessarily
indicative of the results expected for the year ended December 31, 1998.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 7,076
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,076
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,076
<CURRENT-LIABILITIES> 1,400
<BONDS> 0
0
3,000
<COMMON> 10,480
<OTHER-SE> (7,804)
<TOTAL-LIABILITY-AND-EQUITY> 7,076
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,107
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,107)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,107)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,107)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
