<SEC-DOCUMENT>
<SEC-HEADER>
ACCESSION NUMBER: 0001057114-98-0000002
CONFORMED SUBMISSION TYPE: 10SB12G
PUBLIC DOCUMENT COUNT: 5
FILED AS OF DATE: March 5, 1998
SROS: NASD
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: The Financial Group Connection, Inc.
CENTRAL INDEX KEY: 0001057114
STANDARD INDUSTRIAL CLASSIFICATION: [6770]
IRS NUMBER: 88-0228665
STATE OF INCORPORATION: Nevada
FILING VALUES:
FORM TYPE: 10SB12G
SEC ACT: 1934 Act
SEC FILE NUMBER:
FILM NUMBER:
BUSINESS ADDRESS:
STREET 1: 2533 North Carson Street
CITY: Carson City
STATE: Nevada
ZIP: 89706
BUSINESS PHONE: (702) 883-8484
<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
---------------------
FORM 10-SB
---------------------
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
---------------------
THE FINANCIAL GROUP CONNECTION, INC.
_________________________________________
(Name of Small Business Issuer in its charter)
Nevada 88-0228665
____________________ _________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2533 North Carson Street
Carson City, Nevada 89706
_________________________________ ______________
(Address of principal executive offices) (Zip code)
Issuer's telephone number: (702) 883-8484
Securities to be registered pursuant to Section 12(b) of the Act:
none
Securities to be registered pursuant to Section 12(g) of the Act:
$.001 Common Stock
__________________
(Title of Class)
Page One of 54 Pages
Exhibit Index is Located at Page 34.
<PAGE>
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business. . . . . . . . . . . . . . . . . . . . . . .4
Item 2. Plan of Operation. . . . . . . . . . . . . . . . . . . . . . . . . .8
Item 3. Description of Property. . . . . . . . . . . . . . . . . . . . . . 13
Item 4. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . . . . . . . . . 14
Item 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . . . . . . . . . 14
Item 6. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 16
Item 7. Certain Relationships and
Related Transactions . . . . . . . . . . . . . . . . . . . . . . 17
Item 8. Description of Securities. . . . . . . . . . . . . . . . . . . . . 18
PART II
Item 1. Market for Common Equities and Related Stockholder
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Item 2. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 3. Changes in and Disagreements with Accountants. . . . . . . . . . . 21
Item 4. Recent Sales of Unregistered Securities. . . . . . . . . . . . . . 21
Item 5. Indemnification of Directors and Officers. . . . . . . . . . . . . 21
PART F/S
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 23
PART III
Item 1. Index to Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . 34
Item 2. Description of Exhibits. . . . . . . . . . . . . . . . . . . . . . 34
3.
<PAGE>
PART I
Item 1. Description of Business
The Financial Group Connection, Inc. (the "Company") was incorporated
on July 24, 198 under the laws of the State of Nevada to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers and
acquisitions. The Company has been in the developmental stage since inception
and has no operations to date. Other than issuing shares to its original
shareholders, the Company never commenced any operational activities. As such,
the Company can be defined as a "shell" company, whose sole purpose at this time
is to locate and consummate a merger or acquisition with a private entity. The
Board of Directors of the Company has elected to commence implementation of the
Company's principal business purpose described below under "Item 2 - Plan of
Operation."
The Company is filing this registration statement on a voluntary basis
because the primary attraction of the Company as a merger partner or acquisition
vehicle will be its status as a public company. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
In addition, the Company is filing this registration statement to
enhance investor protection and to provide information if a trading market
commences. On December 11, 1997, the National Association of Securities
Dealers, Inc. (NASD) announced that its Board of Governors had approved a series
of proposed changes for the Over The Counter ("OTC") Bulletin Board and the OTC
market. The principal changes, which are subject to approval by the Securities
and Exchange Commission allow only those companies that report their current
financial information to the Securities and Exchange Commission, banking, or
insurance regulators to be quoted on the Bulletin Board. The rule proposal will
provide for a phase-in period for those securities already quoted on the OTC
Bulletin Board. It will also require brokers, before they recommend a
transaction in an OTC security, to review current financial statements on the
company they are recommending. Further, prior to the initial purchase of an OTC
security, the changes will require that every investor receive a standard
disclosure statement (prepared by the NASD) emphasizing the differences between
OTC securities and other market-listed securities.
The proposed business activities described herein may classify the
Company as a "blank check" company. Many states have enacted statutes, rules
and regulations limiting the sale of securities of "blank check" companies in
their respective jurisdictions.
The Company's business is subject to numerous risk factors, including
the following:
4.<PAGE>
No Operating History or Revenue and Minimal Assets. The Company has
had no operating history nor any revenues or earnings from operations. The
Company has no significant assets or financial resources. The Company will, in
all likelihood, sustain operating expenses without corresponding revenues, at
least until the consummation of a business combination. This may result in the
Company incurring a net operating loss which will increase continuously until
the Company can consummate a business combination with a profitable business
opportunity. There is no assurance that the Company can identify such a
business opportunity and consummate such a business combination.
Speculative Nature of Company's Proposed Operations. The success of
the Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. While management intends to seek business combination(s) with
entities having established operating histories, there can be no assurance that
the Company will be successful in locating candidates meeting such criteria. In
the event the Company completes a business combination, of which there can be no
assurance, the success of the Company's operations may be dependent upon
management of the successor firm or venture partner firm and numerous other
factors beyond the Company's control.
Scarcity of and Competition for Business Opportunities and
Combinations. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of
established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be desirable target
candidates for the Company. Nearly all such entities have significantly greater
financial resources, technical expertise and managerial capabilities than the
Company and, consequently, the Company will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete in seeking merger
or acquisition candidates with numerous other small public companies.
No Agreement for Business Combination or Other Transaction - No
Standards for Business Combination. The Company has no arrangement, agreement
or understanding with respect to engaging in a merger with, joint venture with
or acquisition of, a private or public entity. There can be no assurance the
Company will be successful in identifying and evaluating suitable business
opportunities or in concluding a business combination. Management has not
identified any particular industry or specific business within an industry for
evaluation by the Company. There is no assurance the Company will be able to
negotiate a business combination on terms favorable to the Company. The Company
has not established a specific length of operating history or a specified level
of earnings, assets, net worth or other criteria which it will require a target
business opportunity to have achieved, and without which the Company would not
consider a business combination in any form with such business opportunity.
Accordingly, the Company may enter into a business combination with a business
opportunity having no significant operating history, losses, limited or no
potential for earnings, limited assets, negative net worth or other negative
characteristics.
5.<PAGE>
Continued Management Control, Limited Time Availability. While
seeking a business combination, management anticipates devoting up to ten hours
per month to the business of the Company. None of the Company's officers has
entered into a written employment agreement with the Company and none is
expected to do so in the foreseeable future. The Company has not obtained key
man life insurance on any of its officers or directors. Notwithstanding the
combined limited experience and time commitment of management, loss of the
services of any of these individuals would adversely affect development of the
Company's business and its likelihood of continuing operations. See "Item 5 -
Directors, Executive Officers, Promoters and Control Persons."
Conflicts of Interest - General. Officers and directors of the
Company may in the future participate in business ventures which could be deemed
to compete directly with the Company. Additional conflicts of interest and
non-arms length transactions may also arise in the future in the event the
Company's officers or directors are involved in the management of any firm with
which the Company transacts business. Management has adopted a policy that the
Company will not seek a merger with, or acquisition of, any entity in which
management serve as officers, directors or partners, or in which they or their
family members own or hold any ownership interest.
Reporting Requirements May Delay or Preclude Acquisition. Sections 13
and 5(d) of the Securities Exchange Act of 1934 (the "1934 Act"), require
companies subject thereto to provide certain information about significant
acquisitions, including certified financial statements for the company acquired,
covering one, two, or three years, depending on the relative size of the
acquisition. The time and additional costs that may be incurred by some target
entities to prepare such statements may significantly delay or essentially
preclude consummation of an otherwise desirable acquisition by the Company.
Acquisition prospects that do not have or are unable to obtain the required
audited statements may not be appropriate for acquisition so long as the
reporting requirements of the 1934 Act are applicable.
Lack of Market Research or Marketing Organization. The Company has
neither conducted, nor have others made available to it, results of market
research indicating that market demand exists for the transactions contemplated
by the Company. Moreover, the Company does not have, and does not plan to
establish, a marketing organization. Even in the event demand is identified for
a merger or acquisition contemplated by the Company, there is no assurance the
Company will be successful in completing any such business combination.
6.<PAGE>
Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a business
combination with a business opportunity. Consequently, the Company's activities
may be limited to those engaged in by business opportunities which the Company
merges with or acquires. The Company's inability to diversify its activities
into a number of areas may subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks associated with
the Company's operations. Regulation. Although the Company will be subject to
regulation under the 1934 Act, management believes the Company will not be
subject to regulation under the Investment Company Act of 1940, insofar as the
Company will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register
as an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences.
Probable Change in Control and Management. A business combination
involving the issuance of the Company's Common Shares will, in all likelihood,
result in shareholders of a private company obtaining a controlling interest in
the Company. Any such business combination may require management of the
Company to sell or transfer all or a portion of the Company's Common Shares held
by them, or resign as members of the Board of Directors of the Company. The
resulting change in control of the Company could result in removal of one or
more present officers and directors of the Company and a corresponding reduction
in or elimination of their participation in the future affairs of the Company.
Reduction of Percentage Share Ownership Following Business
Combination. The Company's primary plan of operation is based upon a business
combination with a private concern which, in all likelihood, would result in
the Company issuing securities to shareholders of any such private company. The
issuance of previously authorized and unissued Common Shares of the Company
would result in reduction in percentage of shares owned by present and
prospective shareholders of the Company and may result in a change in control or
management of the Company.
Disadvantages of Blank Check Offering. The Company may enter into a
business combination with an entity that desires to establish a public trading
market for its shares. A business opportunity may attempt to avoid what it
deems to be adverse consequences of undertaking its own public offering by
seeking a business combination with the Company. Such consequences may include,
but are not limited to, time delays of the registration process, significant
expenses to be incurred in such an offering, loss of voting control to public
shareholders and the inability or unwillingness to comply with various federal
and state laws enacted for the protection of investors.
7.
<PAGE>
Taxation. Federal and state tax consequences will, in all likelihood,
be major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so as to
minimize the federal and state tax consequences to both the Company and the
target entity; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax- free reorganization
or that the parties will obtain the intended tax-free treatment upon a transfer
of stock or assets. A non- qualifying reorganization could result in the
imposition of both federal and state taxes which may have an adverse effect on
both parties to the transaction.
Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company believes that any potential business
opportunity must provide audited financial statements for review, for the
protection of all parties to the business combination. One or more attractive
business opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses associated with
preparing audited financial statements.
Item 2. Plan of Operation
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues in exchange for its
securities. The Company has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between the Company and
such other company as of the date of this registration statement.
The Company has no full time employees. The Company's President and
Secretary have agreed to allocate a portion of their time to the activities of
the Company, without compensation. These officers anticipate that the business
plan of the Company can be implemented by their devoting minimal time per month
to the business affairs of the Company and, consequently, conflicts of interest
may arise with respect to the limited time commitment by such officers. See
"Item 5 - Directors, Executive Officers, Promoters and Control Persons -
Resumes."
8.<PAGE>
General Business Plan
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to it by persons or firms who or which desire to seek the perceived advantages
of an Issuer who has complied with the 1934 Act. The Company will not restrict
its search to any specific business, industry, or geographical location and the
Company may participate in a business venture of virtually any kind or nature.
This discussion of the proposed business is purposefully general and is not
meant to be restrictive of the Company's virtually unlimited discretion to
search for and enter into potential business opportunities. Management
anticipates that it may be able to participate in only one potential business
venture because the Company has nominal assets and limited financial resources.
See Item F/S, "Financial Statements." This lack of diversification should be
considered a substantial risk to shareholders of the Company because it will not
permit the Company to offset potential losses from one venture against gains
from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity
in which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of an Issuer who has complied with the 1934
Act. Such perceived benefits may include facilitating or improving the terms on
which additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes), for all shareholders
and other factors. Potentially, available business opportunities may occur in
many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes the Company will be able to offer owners
of acquisition candidates the opportunity to acquire a controlling ownership
interest in an Issuer who has complied with the 1934 Act without incurring the
cost and time required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal and accounting
costs in connection with acquisition of a business opportunity, including the
costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The 1934 Act, specifically requires that any merger or
acquisition candidate comply with all applicable reporting requirements, which
include providing audited financial statements to be included within the
numerous filings relevant to complying with the 1934 Act. Nevertheless, the
officers and directors of the Company have not conducted market research and are
not aware of statistical data which would support the perceived benefits of a
merger or acquisition transaction for the owners of a business opportunity.
9.
<PAGE>
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officers and directors of the Company, none of
whom is a professional business analyst. Management intends to concentrate on
identifying preliminary prospective business opportunities which may be brought
to its attention through present associations of the Company's officers and
directors, or by the Company's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the perceived public recognition of acceptance of products, services, or trades;
name identification; and other relevant factors. Officers and directors of the
Company expect to meet personally with management and key personnel of the
business opportunity as part of their investigation. To the extent possible,
the Company intends to utilize written reports and personal investigation to
evaluate the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be obtained within a
reasonable period of time after closing of the proposed transaction.
Management of the Company, while not especially experienced in matters
relating to the new business of the Company, will rely upon their own efforts in
accomplishing the business purposes of the Company. It is not anticipated that
any outside consultants or advisors will be utilized by the Company to
effectuate its business purposes described herein. However, if the Company does
retain such an outside consultant or advisor, any cash fee by such party will
need to be paid by the prospective merger acquisition candidate, as the Company
has no cash assets with which to pay such obligation. There have been no
contracts or agreements with any outside consultants and none are anticipated in
the future.
10.<PAGE>
The Company will not restrict its search for any specific kind of
firms, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
corporate life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional capital, may desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer. However, the
Company does not intend to obtain funds in one or more private placements to
finance the operation of any acquired business opportunity until such time as
the Company has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. Because the Company has
no capital with which to pay these anticipated expenses, present management of
the Company will pay these charges with their personal funds, as interest free
loans to the Company or as capital contributions. However, if loans, the only
opportunity which management has to have these loans repaid will be from a pros-
pective merger or acquisition candidate. Management has agreed among themselves
that the repayment of any loans made on behalf of the Company will not impede,
or be made conditional in any manner, to consummation of a proposed transaction.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, the Company's
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of the Company's shareholders or may
sell their stock in the Company. Any terms of sale of the shares presently held
by officers and/or directors of the Company will be also afforded to all other
shareholders of the Company on similar terms and conditions. Any and all such
sales will only be made in compliance with the securities laws of the United
States and any applicable state.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from registration
under applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of its transaction, the Company may agree to
register all or a part of such securities immediately after the transaction is
consummated or at specified times thereafter. If such registration occurs, of
which there can be no assurance, it will be undertaken by the surviving entity
after the Company has successfully consummated a merger or acquisition and the
Company is no longer considered a "shell" company. The issuance of substantial
additional securities and their potential sale into any trading market which may
develop in the Company's securities may have a depressive effect on the value of
the Company's securities in the future, if such a market develops, of which
there is no assurance.
11.<PAGE>
While the actual terms of a transaction to which the Company may be a
party cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order
to obtain tax-free treatment under the Code, it may be necessary for the owners
of the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company, would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis of verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise. The manner in which the
Company participates in an opportunity will depend on the nature of the
opportunity, the respective needs and desires of the Company and other parties,
the management of the opportunity and the relative negotiation strength of the
Company and such other management.
With respect to any merger or acquisition, negotiations with target
company management is expected to focus on the percentage of the Company which
the target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
12.
<PAGE>
As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The
Company is subject to all of the reporting requirements included in the 1934
Act. Included in these requirements is the affirmative duty of the Company to
file independent audited financial statements as part of its Form 8-K to be
filed with the Securities and Exchange Commission upon consummation of a merger
or acquisition, as well as the Company's audited financial statements included
in its annual report on Form 10-K (or 10-KSB, as applicable). If such audited
financial statements are not available at closing, or within time parameters
necessary to insure the Company's compliance with the requirements of the 1934
Act, or if the audited financial statements provided do not conform to the
representations made by the candidate to be acquired in the closing documents,
the closing documents will provide that the proposed transaction will be
voidable, at the discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision providing for
the acquisition entity to reimburse the Company for all costs associated with
the proposed transaction.
Competition
The Company will remain an insignificant participant among the firms
which engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns which have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's combined extremely limited financial
resources and limited management availability, the Company will continue to be
at a significant competitive disadvantage compared to the Company's competitors.
Item 3. Description of Property
The Company has no properties and at this time has no agreements to
acquire any properties.
The Company operates from the offices of its resident agent at 2533 N.
Carson Street, Carson, Nevada 89701. This space is provided to the Company on a
rent free basis, and it is anticipated that this arrangement will remain until
such time as the Company successfully consummates a merger or acquisition.
Management believes that this arrangement will meet the Company's needs for the
foreseeable future.
13.
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners.
There is no beneficial ownership of the Company's voting securities
by any person known by the Company to be the beneficial owner of more than 5% of
such securities, as well as the securities of the Company beneficially owned by
all directors and officers of the Company.
The total of the Company's outstanding Common Shares are held by 34
persons.
(b) Security Ownership of Management.
The following table sets forth the beneficial ownership for each class of
equity securities of the Company beneficially owned by all directors and
officers of the Company.
<TABLE>
<CAPTION>
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
________________________________________________________________________________
<S> <C> <C> <C>
Common Edward W. Babic 32,500 3.25%
Unit 116
2565 E. Chapman Avenue
Fullerton, CA 92831
Common Terry Tiffany 27,500 2.75%
5402 Knoxville
Lakewood, CA 90713
Common Richard D. Bean 32,500 3.25%
Unit C
3315 Broadway
Long Beach, CA 90804
Common All Officers and 92,500 9.25%
Directors as a Group
(three [3] individuals)
</TABLE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
_______________ ___ _____________________________
<S> <C> <C>
Edward W. Babic 53 Director and President,
Terry Tiffany 51 Director and Vice-President
- Treasurer
Richard D. Bean 42 Director and Secretary
</TABLE>
14.<PAGE>
The above listed officers and directors will serve until the next
annual meeting of the shareholders or until their death, resignation,
retirement, removal, or disqualification, or until their successors have been
duly elected and qualified. Vacancies in the existing Board of Directors are
filled by majority vote of the remaining Directors. Officers of the Company
serve at the will of the Board of Directors. There is no family relationship
between any executive officer and director of the Company.
Resumes
Harold W. Babic
_______________
Mr. Babic has been an officer and director of the Company for the past 5
years. From 1987 to the present, he has been actively engaged in mergers and
acquisitions, both as an independent consultant and in various executive
management positions. In 1994, he formed an independent financial consulting
business and also is a principal in a wholesale bakery in Orange County,
California.
Terry Tiffany
_____________
Ms. Tiffany has been an officer and director of the Company for the past 5
years. From 1987 to the present, Mr. Tiffany has been involved in senior
management positions with various local and national mortgage companies. He is
a licensed real estate broker under the laws of the State of California.
Richard D. Bean
_______________
Mr. Bean has been an officer and director of the Company for the past 5
years. Mr. Bean is a licensed contractor under the laws of the State of
California. From 1966 to the present, he has owned and operate his own
construction and engineering firm and has been actively engaged in buying and
selling real estate, for his own account, since 1993. He is presently employed
by Tower Engineering in Los Angeles, California, as a construction and marketing
consultant.
Conflicts of Interest
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.
The officers and directors of the Company are now and may in the
future become shareholders, officers or directors of other companies which may
be engaged in business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in the future
with respect to such individuals acting on behalf of the Company or other
entities. Moreover, additional conflicts of interest may arise with respect to
opportunities which come to the attention of such individuals in the performance
of their duties or otherwise. The Company does not currently have a right of
first refusal pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to the Company's proposed business
operations.
15.<PAGE>
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all opportunities
contemplated by the Company's plan of operation which come to their attention,
either in the performance of their duties or in any other manner, will be
considered opportunities of, and be made available to the Company and the
companies that they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the officer or director.
If the Company or the companies in which the officers and directors are
affiliated with both desire to take advantage of an opportunity, then said
officers and directors would abstain from negotiating and voting upon the
opportunity. However, all directors may still individually take advantage of
opportunities if the Company should decline to do so. Except as set forth
above, the Company has not adopted any other conflict of interest policy with
respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933, as amended, and the 1934 Act, management believes the
Company will not be subject to regulation under the Investment Company Act of
1940 insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combina-
tions which result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation under the
Investment Company Act of 1940. In such event, the Company would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to the status of
the Company under the Investment Company Act of 1940 and, consequently, any
violation of such Act would subject the Company to material adverse
consequences. The Company's Board of Directors unanimously approved a
resolution stating that it is the Company's desire to be exempt from the
Investment Company Act of 1940 under Regulation 3a-2 thereto.
Item 6. Executive Compensation.
None of the Company's officers and/or directors receive any
compensation for their respective services rendered unto the Company, nor have
they received such compensation in the past. They all have agreed to act
without compensation until authorized by the Board of Directors, which is not
expected to occur until the Company has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this registration
statement, the Company has no funds available to pay directors. Further, none
of the directors are accruing any compensation pursuant to any agreement with
the Company.
16.<PAGE>
It is possible that, after the Company successfully consummates a
merger or acquisition with an unaffiliated entity, that entity may desire to
employ or retain one or a number of members of the Company's management for the
purposes of providing services to the surviving entity, or otherwise provide
other compensation to such persons. However, the Company has adopted a policy
whereby the offer of any post-transaction remuneration to members of management
will not be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this registration statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company for the
benefit of its employees.
Item 7. Certain Relationships and Related Transactions.
There have been no related party transactions, or any other
transactions or relationships required to be disclosed pursuant to Item 404 of
Regulation S-B.
17.<PAGE>
Item 8. Description of Securities.
The Company's authorized capital stock consists of 25,000,000 shares,
par value $.001 per share. There are 1,000,000 Common Shares issued and
outstanding as of the date of this filing.
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and non-assessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any. All shares of the Company's Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of the Common Stock are entitled to share
pro rata in dividends and distributions with respect to the Common Stock, as may
be declared by the Board of Directors out of funds legally available therefor.
18.
<PAGE>
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters.
There is no trading market for the Company's Common Stock at present
and there has been no trading market to date. There is no assurance that a
trading market will ever develop or, if such a market does develop, that it will
continue.
(a) Market Price. The Company's Common Stock is not quoted at the
present time.
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (I) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (I) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (I)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
The National Association of Securities Dealers, Inc. (the "NASD"),
which administers NASDAQ, has established criteria for continued NASDAQ
eligibility. In order to continue to be included on NASDAQ, a company must
maintain $2,000,000 in total assets, a $200,000 market value of its publicly
traded securities and $1,000,000 in total capital and surplus. In addition,
continued inclusion requires two market-makers and a minimum bid price of $1.00
per share, provided, however, that if a company falls below such minimum bid
price it will remain eligible for continued inclusion on NASDAQ if the market
value of its publicly-traded securities is at least $1,000,000 and the Company
has $2,000,000 in capital and surplus. The NASD is presently considering
increasing these standards, but as of the date of this Registration Statement,
no definitive action has been taken in this regard.
19.<PAGE>
Management intends to strongly consider undertaking a transaction with
any merger or acquisition candidate which will allow the Company's securities to
be traded without the aforesaid limitations. However, there can be no
assurances that, upon a successful merger or acquisition, the Company will
qualify its securities for listing on NASDAQ or some other national exchange, or
be able to maintain the maintenance criteria necessary to insure continued
listing. The failure of the Company to qualify its securities or to meet the
relevant maintenance criteria after such qualification in the future may result
in the discontinuance of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's securities may then
continue in the non-NASDAQ over-the-counter market. As a result, a shareholder
may find it more difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Company's securities.
(b) Holders.
There are thirty-four (34) holders of the Company's Common Stock. In
1987, the Company issued 1,000,000, as adjusted for the stock split, of its
Common Shares for cash. All of the issued and outstanding shares of the
Company's Common Stock were issued in accordance with the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933, as amended.
As of the date of this registration statement, 907,500 shares of the
Company's Common Stock are eligible for sale under Rule 144 promulgated under
the Securities Act of 1933, as amended, subject to certain limitations included
in said Rule. In general, under Rule 144, a person (or persons whose shares are
aggregated), who has satisfied a one year holding period, under certain circum-
stances, may sell within any three-month period a number of shares which does
not exceed the greater of one percent of the then outstanding Common Stock or
the average weekly trading volume during the four calendar weeks prior to such
sale. Rule 144 also permits, under certain circumstances, the sale of shares
without any quantity limitation by a person who has satisfied a two-year holding
period and who is not, and has not been for the preceding three months, an
affiliate of the Company.
(C) Dividends.
The Company has not paid any dividends to date, and has no plans to do
so in the immediate future.
20.<PAGE>
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the
Company.
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
The Company has not changed accountants since its formation and there
are no disagreements with the findings of said accountants.
Item 4. Recent Sales of Unregistered Securities.
The Company has not issued any of its securities during the three year
period preceding the date of this registration statement. All of the shares of
Common Stock of the Company previously issued have been issued for investment
purposes in a "private transaction" and are "restricted" shares as defined in
Rule 144 under the Securities Act of 1933, as amended. These shares may not be
offered for public sale except under Rule 144, or otherwise, pursuant to said
Act.
As of the date of this report, all of the issued and outstanding
shares of the Company's Common Stock are eligible for sale under Rule 144
promulgated under the Securities Act of 1933, as amended, subject to certain
limitations included in said Rule.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.
Item 5. Indemnification of Directors and Officers.
Except for acts or omissions which involve intentional misconduct,
fraud or known violation of law or for the payment of dividends in violation of
Nevada Revised Statutes, there shall be no personal liability of a director or
officer to the Company, or its stockholders for damages for breach of fiduciary
duty as a director or officer. The Company may indemnify any person for
expenses incurred, including attorneys fees, in connection with their good faith
acts if they reasonably believe such acts are in and not opposed to the best
interests of the Company and for acts for which the person had no reason to
believe his or her conduct was unlawful. The Company may indemnify the officers
and directors for expenses incurred in defending a civil or criminal action,
suit or proceeding as they are incurred in advance of the final disposition of
the action, suit or proceeding, upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount of such expenses if it is
ultimately determined by a court of competent jurisdiction in which the action
or suit is brought determined that such person is fairly and reasonably entitled
to indemnification for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to officers, directors or persons controlling the Company pursuant
to the foregoing, the Company has been informed that in the opinion of the U.S.
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is therefore unenforceable.
21<PAGE>
PART F/S
Financial Statements.
The following financial statements are attached to this report and
filed as a part thereof. See page 23.
1) Table of Contents - Financial Statements
2) Report of Independent Auditor
3) Balance Sheet
4) Statement of Cash Flows
5) Statement of Shareholders' Equity
6) Notes to Financial Statements
Financial:10-SB
<PAGE>
AUDITED FINANCIAL STATEMENTS
For the Years Ended December 31, 1996 and 1995
and the Period through November 30, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
Page
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . .F-1
Financial Statements
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . .F-2
Statement of Operations . . . . . . . . . . . . . . . . . . . . . .F-3
Statement of Cash Flow. . . . . . . . . . . . . . . . . . . . . . .F-4
Statement of Shareholders' Equity . . . . . . . . . . . . . . . . .F-6
Notes to the Financial Statements . . . . . . . . . . . . . F-7 to F-8
<PAGE>
/Letterhead/ Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, Suite 300
Salt Lake City, Utah 84111
(801) 521-2392 Phone
Darrell T. Schvaneveldt, C.P.A.
Independent Auditors Report
____________________________
Board of Directors
The Financial Group Connection, Inc.
(A Development Stage Company)
I have audited the accompanying balance sheets of The Financial Group
Connection, Inc., as of November 30, 1997, December 31, 1996 and 1995, and the
related statements of operations, stockholders' equity, and cash flows for the
period July 24, 1987, (Inception) to November 30, 1997, the period January 1,
1997, to November 30, 1997, and the years ended December 31, 1996 and 1995.
These financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatements. 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 significant
estimates made by management, as well as evaluating the overall financial
statements presentation. I believe that my audit provides a reasonable basis
for my opinion.
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 has an accumulated deficit and a negative net
worth at November 30, 1997. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note #4. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
In my opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of The Financial Group Connection,
Inc., as of November 30, 1997, December 31, 1996 and 1995, and the results of
its operations and its cash flows for the period July 24, 1987, (Inception) to
November 30, 1997, the period January 1, 1997, to November 30, 1997, and the
years ended December 31, 1996 and 1995, in conformity with generally accepted
accounting principles.
/S/ Darrell T. Schvaneveldt
Salt Lake City, Utah
December 16, 1997
F-1
<PAGE>
The Financial Group Connection, Inc.
(A Development Stage Company)
Balance Sheets
November 30, 1997, December 31, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Assets
Current Assets $ -0- $ -0- $ -0-
------------ ------------ ------------
Total Assets $ -0- $ -0- $ -0-
============ ============ ============
Liabilities & Stockholders' Equity
Current Liabilities
- -------------------
Accounts Payable $ -0- $ 300 $ 200
Stockholders' Equity
- --------------------
Common Stock Authorized 25,000,000
Shares,$0.001 Par Value:
1,000,000 Shares Issued &
Outstanding 1,000 1,000 1,000
Paid In Capital 960 200 200
Accumulated Deficit (1,960) (1,500) (1,400)
------------ ------------ ------------
Stockholders' Equity -0- (300) (200)
------------ ------------ ------------
Total Liabilities &
Stockholders' Equity $ -0- $ -0- $ -0-
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
F-2
<PAGE>
The Financial Group Connection, Inc.
Statements of Operations
(A Development Stage Company)
Accumulated for the Period July 24, 1987 (Inception) to November 30, 1997
& the Period January 1, 1997 to November 30, 1997
& the Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Accumulated 1997 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
- --------
Expenses
- --------
Filing Fees 1,650 150 100 100
Office Expenses 90 90 -0- -0-
Professional Fees 220 220 -0- -0-
------------ ------------ ------------ ------------
Total Expenses 1,960 460 100 100
------------ ------------ ------------ ------------
Net Loss $ (1,960) $ (460) $ (100) $ (100)
============ ============ ============ ============
Loss Per Share $ (.00) $ (.00) $ (.00)
Weighted Average
Shares Outstanding 1,000,000 1,000,000 1,000,000
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
The Financial Group Connection, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
For the Period July 24, 1987 (Inception) to November 30, 1997
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, July 24, 1987 -0- $ -0- $ -0- $ -0-
Shares Issued for Cash
Retroactively Restated 550,000 550
Net Loss for Period Ended
December 31, 1987 (550)
----------------------------------------------------
Balance, December 31, 1987 550,000 550 (550)
Net Loss for Period Ended
December 31, 1988 (85)
----------------------------------------------------
Balance, December 31, 1988 550,000 550 (635)
Net Loss for Period Ended
December 31, 1989 (85)
----------------------------------------------------
Balance, December 31, 1989 550,000 550 (720)
Net Loss for Period Ended
December 31, 1990 (85)
----------------------------------------------------
Balance, December 31, 1990 550,000 550 (805)
Net Loss for Period Ended
December 31, 1991 (85)
----------------------------------------------------
Balance, December 31, 1991 550,000 550 (890)
Net Loss for Period Ended
December 31, 1992 (85)
----------------------------------------------------
Balance, December 31, 1992 550,000 550 (975)
Shares Issued for Cash
Retroactively Restated 450,000 450 200
Net Loss for Period Ended
December 31, 1993 (225)
----------------------------------------------------
Balance, December 31, 1993 1,000,000 1,000 200 (1,200)
Net Loss for Period Ended
December 31, 1994 (100)
----------------------------------------------------
Balance, December 31, 1994 1,000,000 1,000 200 (1,300)
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
The Financial Group Connection, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity -Continued-
For the Period July 24, 1987 (Inception) to November 30, 1997
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
----------------------------------------------------
<S> <C> <C> <C> <C>
Net Loss for the Period Ended
December 31, 1995 (100)
----------------------------------------------------
Balance, December 31, 1995 1,000,000 1,000 200 (1,400)
Net Loss for the Year Ended
December 31, 1996 (100)
----------------------------------------------------
Balance, December 31, 1996 1,000,000 1,000 200 (1,500)
Contributed Capital 760
Net Loss for the Period Ended
November 30, 1997 (460)
----------------------------------------------------
Balance, November 30, 1997 1,000,000 $ 1,000 $ 960 $ (1,960)
====================================================
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE>
The Financial Group Connection, Inc.
(A Development Stage Company)
Statement of Cash Flows
Accumulated for the Period July 24, 1987 (Inception) to November 30, 1997
& the Period January 1, 1997 to November 30, 1997
& the Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Accumulated 1997 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash Flows from Operating
Activities
- -------------------------
Net Loss $ (1,960) $ (460) $ (100) $ (100)
Changes in Operating Assets
& Liabilities
Increase (Decrease) in
Accounts Payable -0- (300) 100 100
------------ ------------ ------------ ------------
Net Cash Used by
Operating Activities (1,960) (760) -0- -0-
Cash Flows from Investing
Activities -0- -0- -0- -0-
- ------------------------- ------------ ------------ ------------ ------------
Cash Flows from Financing
Activities
- -------------------------
Sale of Common Stock 1,200 -0- -0- -0-
Contributed Capital 760 760 -0- -0-
------------ ------------ ------------ ------------
Net Cash Provided by
Financing Activities 1,960 760 -0- -0-
------------ ------------ ------------ ------------
Increase (Decrease)
In Cash -0- -0- -0- -0-
------------ ------------ ------------ ------------
Cash at Beginning
of Period -0- -0- -0- -0-
------------ ------------ ------------ ------------
Cash at End of Period $ -0- $ -0- $ -0- $ -0-
============ ============ ============ ============
Disclosures from Operating
Activities
- --------------------------
Interest $ -0- $ -0- $ -0- $ -0-
Taxes -0- -0- -0- -0-
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
<PAGE>
The Financial Group Connection, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Corporate History
- ---------------------------
The Company was organized on July 24, 1987, under the laws of the state of
Nevada, using the name The Financial Connection, Inc. On October 22, 1997, the
Company requested reinstatement but the name "The Financial Connection, Inc."
was not available. A Certificate amending its Articles of Incorporation was
filed changing the name to The Financial Group Connection, Inc. The voting
common stock authorized was changed to 25,000,000 with a $0.001 per share par
value.
The purposes for which the Corporation was organized are to manufacture
purchase, or otherwise acquire, own, mortgage, pledge, sell assign and transfer
or otherwise dispose of, to invent, trade, deal in and deal with, goods, wares
and merchandise and real and personal property of every class and description,
and all other acts authorized by law.
The Company has not engaged in any activities to produce significant revenues
and remains a development stage company.
NOTE #2 - Significant Accounting Policies
- -----------------------------------------
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period when
the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average number
of shares outstanding at the dates of the financial statements. Fully
Diluted Earnings Per Shares shall be shown on stock options and other
convertible issues that may be exercised within ten years of the financial
statement dates.
E. Inventories: Inventories are stated at the lower of cost, determined by
the FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. The cost of leasehold
improvements is depreciated (amortized) over the lesser of the length of
the related assets or the estimated lives of the assets. Depreciation is
computed on the straight line method for reporting purposes and for tax
purposes.
G. Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
F-7
<PAGE>
The Financial Group Connection, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #3 - Taxes
- ---------------
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expenses. Net operating losses would create possible tax assets in
future years. Due to the uncertainty as to the utilization of net operating
loss carryforwards an evaluation allowance has been made to the extent of any
tax benefits that net operating losses may generate.
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These losses are
as follows:
<TABLE>
<CAPTION>
Year of Loss Amount Expiration Date
------------- ------------- ----------------
<C> <C> <C>
1987 $ 550 2002
1988 85 2003
1989 85 2004
1990 85 2005
1991 85 2006
1992 85 2007
1993 225 2008
1994 100 2009
1995 100 2010
1996 100 2011
1997 460 2012
</TABLE>
<TABLE>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Current Tax Asset Value of Net Operating
Loss Carryforwards at Current Prevailing
Federal Tax Rate $ 294 $ 225 $ 210
Evaluation Allowance (294) (225) (210)
Net Tax Asset $ -0- $ -0- $ -0-
========= ========= =========
Current Income Tax Expense -0- -0- -0-
Deferred Income Tax Benefit -0- -0- -0-
</TABLE>
NOTE #4 - Going Concern
- -----------------------
The Company currently has no operating capital and no operations that provide
cash flows. It is dependent upon capital contributions and loans from its
Officers for funds to meet its on going expenses. The Company seeks a merger or
business acquisition that will provide operating capital.
F-8
<PAGE>
PART III
Item 1. Exhibit Index
Sequential
___________
No. Page No.
____________________________________________________________________________
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation 36.
3.2 Bylaws 38.
(4) Instruments Defining the Rights of Holders
(23) Consents - Experts
23.1 Consent of Schvaneveldt and Company 54.
(27) Financial Data Schedule
27.1 Financial Data Schedule 55.
34.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
THE FINANCIAL GROUP CONNECTION, INC.
__________________________
(Registrant)
Date: February 27, 1998
By: /s/Edward S. Babick
___________________________
Edward W. Babic
President
35.
RESTATED ARTICLES OF INCORPORATION
__________________________________
OF
__
THE FINANCIAL GROUP CONNECTION, INC.,
______________________________________
a Nevada Corporation
____________________
Edward W. Babic and Richard D. Bean certify that:
1. They are the duly elected and acting President and Secretary,
respectively, of the corporation named above.
2. The Articles of Incorporation of the corporation shall be amended and
restated to read in full as follows:
First: The name of the corporation is The Financial Group Connection, Inc.
Second: The period of duration is perpetual.
Third: The purpose or purposes for which the corporation is organized are
to manufacture, purchase, or otherwise acquire, own, mortgage, pledge, sell,
assign, and transfer, or otherwise dispose of, to invest, trade, deal in and
deal with, goods, wares and merchandise and real and personal property of every
class and description, and all other acts authorized by law.
Fourth: The total authorized capital stock of the corporation will be
Twenty-Five Thousand Dollars ($25,000). This will consist of twenty-five
million (25,000,000) shares of $.001 par value common stock. Such stock may
be issued from time to time without any action by the stockholders for such
consideration as may be fixed from time to time by the Board of Directors,
and shares so issued, the full consideration for which has been paid or
delivered, shall be deemed the fully paid up stock, and the holder of such
shares shall not be liable for any further payment thereof. Each share of
stock shall have voting privileges and will be eligible for dividends.
On the amendment of this Article Fourth to read as hereinabove set forth
and the restating of the Articles of Incorporation, each outstanding share that
was issued and outstanding as of October 22, 1997 is split up, divided, and
converted into 100 shares of common stock.
36
<PAGE>
Fifth: The corporation shall not commence business until at least Fifty
Dollars have been received by it as consideration for the issuance of shares.
Sixth: The resident agent is Laughlin Associates, inc., 2533 North Carson
Street, Carson City, Nevada 89701.
Seventh: The address of the original principal place of business is 2961
Industrial Road, Suite 642, Las Vegas, Nevada 89109.
Eighth: The number of directors constituting the initial board of directors
of the corporation is one, and the name and address of the person who is to
serve as director until the first annual meeting of shareholders or until his
successors are elected and shall qualify is:
Mark Mathias 6917 Camino Revualtos
San Diego, California 92111
Ninth: The name and address of each incorporator is:
Mark Mathias 6917 Camino Revualtos
San Diego, California 92111
Dated: 7/17/87
MARK MATHIAS
(Originally Executed)
3. The foregoing amendment of Article Fourth and this certificate have
been approved by the Board of Directors of the corporation.
4. The foregoing amendment of Article Fourth and the Restated Articles of
Incorporation as restated with deletions of Articles Sixth, Seventh and Eighth
and the consecutive renumbering of the remaining Articles from the original
Articles of Incorporation, was approved by the required vote of the shareholders
of the corporation in accordance with the Nevada Business Corporation Act. The
total number of outstanding shares entitled to vote with respect to the
foregoing amendment was 10,000 shares (or 1,000,000 shares giving effect to
the amendment of October 22, 1997) and the number of shares so voting in
favor of the foregoing amendment equaled or exceeded the vote required, such
required vote being a majority of the outstanding shares of common stock.
37.<PAGE>
We further declare under penalty of perjury under the laws of the State of
Nevada that the matter set forth in this certificate are true and correct of our
knowledge.
Dated: February 2, 1998
/S/ Edward W. Babic
_________________________
Edward W. Babic
President
/S/ Richard D. Bean
__________________________
Richard D. Bean
Secretary
38.
<PAGE>
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
___________
On this 2nd day of February, 1998, personally
appeared before me, a Notary Public in and for said
County and State, EDWARD W. BABIC and RICHARD D.
BEAN, each acknowledged that they executed the above
instrument freely and voluntarily for the uses and
purposes therein mentioned.
SUBSCRIBED and SWORN to before me
this 2nd day of February, 1998.
/S/ Neal R. Lewis
_________________________________
NOTARY PUBLIC, in and for said
County and State
/Seal/
NEAL R. LEWIS
COMM. #1150609
NOTARY PUBLIC - CALIFORNIA
LOS ANGELES COUNTY
Comm. Exp. Aug. 9., 2001
39.
<PAGE>
BY-LAWS
_______
OF
__
THE FINANCIAL GROUP CONNECTION, INC.
____________________________________
ARTICLE I
_________
OFFICES
________
Section 1. PRINCIPAL OFFICE. The principal office for the transaction
of business of the corporation shall be fixed or may be changed by approval of a
majority of the authorized Directors, and additional offices may be established
and maintained at such other place or places as the Board of Directors may from
time to time designate.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any
time be established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
DIRECTORS - MANAGEMENT
_______________________
Section 1. RESPONSIBILITY OF BOARD OF DIRECTORS. Subject to the
provisions of applicable law and to any limitations in the Articles of
Incorporation of the corporation relating to action required to be approved by
the Shareholders, or by the outstanding shares, the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised by or
under the direction of the Board of Directors. The Board may delegate the
management of the day-to-day operation of the business of the corporation to an
executive committee or others, provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board.
Section 2. STANDARD OF CARE. Each Director shall perform the duties of
a Director, including the duties as a member of any committee of the Board upon
which the Director may serve, in good faith, in a manner such Director believes
to be in the best interests of the corporation, and with such care, including
reasonable inquiry, as an ordinary prudent person in a like position would use
under similar circumstances.
Section 3. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized
number of Directors shall be three (3) until changed by a duly adopted amendment
to the Articles of Incorporation or by an amendment to this by-law adopted by
the vote or written consent of holders of a majority of the outstanding shares
entitled to vote.
40.<PAGE>
Section 4. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall
be elected at each annual meeting of the Shareholders to hold office until the
next annual meeting. Each Director, including a Director elected to fill a
vacancy, shall hold office until the expiration of the term for which elected
and until a successor has been elected and qualified.
Section 5. VACANCIES. Vacancies in the Board of Direc-tors may be
filled by a majority of the remaining Directors, though less than a quorum, or
by a sole remaining Director, except that a vacancy created by the removal of a
Director by the vote or written consent of the Shareholders or by court order
may be filled only by the vote of a majority of the shares entitled to vote
represented at a duly held meeting at which a quorum is present, or by the
written consent of holders of a majority of the outstanding shares entitled to
vote. Each Director so elected shall hold office until the next annual meeting
of the Shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to exist
in the event of the death, resignation, or removal of any Director, or if the
Board of Directors by resolution declares vacant the office of a Director who
has been declared of unsound mind by an order of court or convicted of a felony,
or if the authorized number of Directors is increased, or if the Shareholders
fail, at any meeting of Shareholders at which any Director or Directors are
elected, to elect the number of Directors to be voted for at that meeting.
The Shareholders may elect a Director or Directors at any time to fill any
vacancy or vacancies not filled by the Directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
Any Director may resign effective on giving written notice to the Chairman
of the Board, the President, the Secretary, or the Board of Directors, unless
the notice specifies a later time for that resignation to become effective. If
the resignation of a Director is effective at a future time, the Board of
Directors may elect a successor to take office when the resignation becomes
effective.
No reduction of the authorized number of Directors shall have the effect of
removing any Director before that Directors' term of office expires.
Section 6. REMOVAL OF DIRECTORS. Subject to applicable law, the entire
Board of Directors or any individual Director may be removed from office. In
such case, the remaining Board members may elect a successor Director to fill
such vacancy for the remaining unexpired term of the Director so removed.
41.<PAGE>
Section 7. NOTICE, PLACE AND MANNER OF MEETINGS. Meetings of the Board
of Directors may be called by the Chairman of the Board, or the President, or
any Vice President, or the Secretary, or any two (2) Directors and shall be held
at the principal executive office of the corporation, unless some other place is
designated in the notice of the meeting. Members of the Board may participate
in a meeting through use of a conference telephone or similar communications
equipment so long as all members participating in such a meeting can hear one
another. Accurate minutes of any meeting of the Board or any committee thereof,
shall be maintained by the Secretary or other Officer designated for that
purpose.
Section 8. ORGANIZATIONAL MEETINGS. The organizational meetings of the
Board of Directors shall be held immediately following the adjournment of the
Annual Meetings of the Share-holders.
Section 9. OTHER REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at the corporate offices, or such other place as may be
designated by the Board of Directors, as follows:
Time of Regular Meeting: 9:00 A.M.
Date of Regular Meeting: Last Friday of every month
If said day shall fall upon a holiday, such meetings shall be held on the
next succeeding business day thereafter. No notice need be given of such
regular meetings.
Section 10. SPECIAL MEETINGS - NOTICES - WAIVERS. Special meetings of
the Board may be called at any time by the President or, if he or she is absent
or unable or refuses to act, by any Vice President or the Secretary or by any
two (2) Directors, or by one (1) Director if only one is provided.
At least forty-eight (48) hours notice of the time and place of special
meetings shall be delivered personally to the Directors or personally
communicated to them by a corporate Officer by telephone or telegraph. If the
notice is sent to a Director by letter, it shall be addressed to him or her at
his or her address as it is shown upon the records of the corporation, or if it
is not so shown on such records or if not readily ascertainable, at the place in
which the meetings of the Directors are regularly held. In case such notice is
mailed, it shall be deposited in the United States mail, postage prepaid, in the
place in which the principal executive officer of the corporation is located at
least four (4) days prior to the time of the holding of the meeting. Such
mailing, telegraphing, telephoning or delivery as above provided shall be due,
legal and personal notice to such Director.
When all of the Directors are present at any Directors' meeting, however,
called or noticed, and either (i) sign a written consent thereto on the records
of such meeting, or, (ii) if a majority of the Directors is present and if those
not present sign a waiver of notice of such meeting or a consent to holding the
meeting or an approval of the minute thereof, whether prior to or after the
holding of such meeting, which said waiver, consent or approval shall be filed
with the Secretary of the corporation, or, (iii) if a Director attends a meeting
without notice but without protesting, prior thereto or at its commencement, the
lack of notice, then the transactions thereof are as valid as if had at a
meeting regularly called and noticed.
42.<PAGE>
Section 11. DIRECTORS' ACTION BY UNANIMOUS WRITTEN CONSENT. Any action
required or permitted to be taken by the Board of Directors may be taken without
a meeting and with the same force and effect as if taken by a unanimous vote of
Directors, if authorized by a writing signed individually or collectively by all
members of the Board. Such consent shall be filed with the regular minutes of
the Board.
Section 12. QUORUM. A majority of the number of Directors as fixed by
the Articles of Incorporation or By-Laws shall be necessary to constitute a
quorum for the transaction of business, and the action of a majority of the
Directors present at any meeting at which there is a quorum, when duly
assembled, is valid as a corporate act; provided that a minority of the
Directors, in the absence of a quorum, may adjourn from time to time, but may
not transact any business. A meeting at which a quorum is initially present may
continue to transact business, notwithstanding the withdrawal of Directors, if
any action taken is approved by a majority of the required quorum for such
meeting.
Section 13. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given to absent Directors if the time
and place be fixed at the meeting adjourned and held within twenty-four (24)
hours, but if adjourned more than twenty-four (24) hours, notice shall be given
to all Directors not present at the time of the adjournment.
Section 14. COMPENSATION OF DIRECTORS. Directors, as such, shall not
receive any stated salary for their services, but by resolution of the Board a
fixed sum and expense of attendance, if any, may be allowed for attendance at
each regular and special meeting of the Board; provided that nothing herein
contained shall be construed to preclude any Director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 15. COMMITTEES. Committees of the Board may be appointed by
resolution passed by a majority of the whole Board. Committees shall be
composed of two (2) or more members of the Board and shall have such powers of
the Board as may be expressly delegated to it by resolution of the Board of
Directors, except those powers expressly made non-delegable by applicable law.
43.<PAGE>
Section 16. ADVISORY DIRECTORS. The Board of Directors from time to
time may elect one or more persons to be Advisory Directors who shall not by
such appointment be members of the Board of Directors. Advisory Directors shall
be available from time to time to perform special assignments specified by the
President, to attend meetings of the Board of Directors upon invitation and to
furnish consultation to the Board. The period during which the title shall be
held may be prescribed by the Board of Directors. If no period is prescribed,
the title shall be held at the pleasure of the Board.
Section 17. RESIGNATIONS. Any Director may resign effec-tive upon
giving written notice to the Chairman of the Board, the President, the Secretary
or the Board of Directors of the Corpo-ration, unless the notice specifies a
later time for the effec-tiveness of such resignation. If the resignation is
effective at a future time, a successor may be elected to take office when the
resignation becomes effective.
ARTICLE III
OFFICERS
_________
Section 1. OFFICERS. The Officers of the corporation shall be a
President, a Secretary, and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board of Directors, a Chairman of the Board, one
or more Vice Presidents, one or more Assistant Secretaries, or one or more
Assistant Treasurers, and such other Officers as may be appointed in accordance
with the provisions of Section 3 of this Article. Any number of offices may be
held by the same person.
Section 2. ELECTION. The Officers of the corporation, except such
Officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article, shall be chosen annually by the Board of Directors,
and each shall hold office until he or she shall resign or shall be removed or
otherwise disqualified to serve or a successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors may
appoint such other Officers as the business of the corporation may require, each
of whom shall hold office for such period, have such authority and perform such
duties as are provided by the By-Laws or as the Board of Directors may from time
to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of any Officer under any contract of employment, any Officer may be
removed, either with or without cause, by the Board of Directors, at any regular
or special meeting of the Board, or except in case of an Officer chosen by the
Board of Directors by any Officer upon whom such power of removal may be
conferred by the Board of Directors.
Any Officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the Officer is a
party.
44.<PAGE>
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filed in the
manner prescribed in the By-Laws for regular appointment to that office.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such
an officer be elected, shall, if present, preside at meetings of the Board of
Directors and exercise and perform such other powers and duties as may be from
time to time assigned by the Board of Directors or prescribed by the By-Laws.
If there is no President, the Chairman of the Board shall in addition be the
Chief Executive Officer of the corporation and shall have the powers and duties
prescribed in Section 7 of this Article.
Section 7. PRESIDENT/CHIEF EXECUTIVE OFFICER. Subject to such
supervisory powers, if any, as may be given by the Board of Directors to the
Chairman of the Board, if there be such an Officer, the President shall be the
Chief Executive Officer of the corporation and shall, subject to the control of
the Board of Directors, have general supervision, direction and control of the
business and Officers of the corporation. He or she shall preside at all
meetings of the Shareholders and in the absence of the Chairman of the Board, or
if there be none, at all meetings of the Board of Directors. The President
shall be ex officio a member of all the standing committees, including the
Executive Committee, if any, and shall have the general powers and duties of
management usually vested in the office of President of a corporation, and shall
have such other powers and duties as may be prescribed by the Board of Directors
or the By-Laws.
Section 8. VICE PRESIDENT. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by the
Board of Directors, or if not ranked, the Vice President designated by the Board
of Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to, all the restrictions upon, the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Directors or the By-Laws.
Section 9. SECRETARY. The Secretary shall keep, or cause to be kept, a
book of minutes at the principal office or such other place as the Board of
Directors may order, of all meetings of Directors and Shareholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at Directors'
meetings, the number of shares present or represented at Shareholders' meetings
and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office or
at the office of the corporation's transfer agent, a share register, or
duplicate share register showing the names of the Shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the meetings
of the Shareholders and of the Board of Directors required by the By-Laws or by
law to be given. He or she shall keep the seal of the corporation in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by the Board of Directors or by the By-Laws.
45.<PAGE>
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall
keep and maintain, or cause to be kept and maintained in accordance with
generally accepted accounting principles, adequate and correct accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
earnings (or surplus) and shares. The books of accounts shall at all reasonable
times be open to inspection by any Director.
This Officer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the Board of Directors. He or she shall disburse the funds of the corporation
as may be ordered by the Board of Directors, shall render to the President and
Directors, whenever they request it, an account of all of his or her
transactions and of the financial condition of the corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or the By-Laws.
ARTICLE IV
SHAREHOLDERS' MEETINGS
_______________________
Section 1. PLACE OF MEETINGS. All meetings of the Shareholders shall
be held at the principal executive office of the corporation unless some other
appropriate and convenient location be designated for that purpose from time to
time by the Board of Directors.
Section 2. ANNUAL MEETINGS. The annual meetings of the Shareholders
shall be held, each year, at the time and on the day following:
Time of Meeting: 10:00 A.M.
Date of Meeting: April 20th
If this day shall be a legal holiday, then the meeting shall be held on the
next succeeding business day, at the same hour. At the annual meeting, the
Shareholders shall elect a Board of Directors, consider reports of the affairs
of the corporation and transact such other business as may be properly brought
before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the Shareholders may
be called at any time by the Board of Directors, the Chairman of the Board, the
President, a Vice President, the Secretary, or by one or more Shareholders
holding not less than one-tenth (1/10) of the voting power of the corporation.
Except as next provided, notice shall be given as for the annual meeting.
Upon receipt of a written request addressed to the Chairman, President,
Vice President, or Secretary, mailed or delivered personally to such Officer by
any person (other than the Board) entitled to call a special meeting of
Shareholders, such Officer shall cause notice to be given, to the Shareholders
entitled to vote, that a meeting will be held at a time requested by the person
or persons calling the meeting, not less than thirty-five (35) nor more than
sixty (60) days after the receipt of such request. If such notice is not given
within twenty (20) days after receipt of such request, the persons calling the
meeting may give notice thereof in the same manner provided by these By-Laws.
46.<PAGE>
Section 4. NOTICE OF MEETINGS-REPORTS. Notice of meetings, annual or
special, shall be given in writing not less than ten (10) nor more than sixty
(60) days before the date of the meeting to Shareholders entitled to vote
thereat. Such notice shall be given by the Secretary or the Assistant
Secretary, or if there be no such Officer, or in the case of his or her neglect
or refusal, by any Director or Shareholder.
Such notices or any reports shall be given personally or by mail and shall
be sent to the Shareholder's address appearing on the books of the corporation,
or supplied by him or her to the corporation for the purpose of the notice.
Notice of any meeting of Shareholders shall specify the place, the day and
the hour of meeting, and (1) in case of a special meeting, the general nature of
the business to be trans- acted and no other business may be transacted, or (2)
in the case of an annual meeting, those matters which Board at date of mailing,
intends to present for action by the Shareholders. At any meetings where
Directors are to be elected notice shall include the names of the nominees, if
any, intended at date of notice to be presented by management for election.
If a Shareholder supplies no address, notice shall be deemed to have been
given if mailed to the place where the principal executive office of the
corporation is situated, or published at least once in some newspaper of general
circulation in the County of said principal office.
Notice shall be deemed given at the time it is delivered personally or
deposited in the mail or sent by other means of written communication. The
Officer giving such notice or report shall prepare and file an affidavit or
declaration thereof.
When a meeting is adjourned for forty-five (45) days or more, notice of the
adjourned meeting shall be given as in case of an original meeting. Save, as
aforesaid, it shall not be necessary to give any notice of adjournment or of the
business to be transacted at an adjourned meeting other than by announcement at
the meeting at which said adjournment is taken.
Section 5. WAIVER OF NOTICE OR CONSENT BY ABSENT SHARE- HOLDERS. The
transactions of any meeting of Shareholders, however called and notice, shall be
valid as through had at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the Shareholders entitled to vote, not present in person or
by proxy, sign a written waiver of notice, or a consent to the holding of such
meeting or an approval shall be filed with the corporate records or made a part
of the minutes of the meeting. Attendance shall constitute a waiver of notice,
unless objection shall be made as provided in applicable law.
Section 6. SHAREHOLDERS ACTING WITHOUT A MEETING - DIRECTORS. Any
action which may be taken at a meeting of the Shareholders, may be taken without
a meeting or notice of meeting if authorized by a writing signed by all of the
Shareholders entitled to vote at a meeting for such purpose, and filed with the
Secretary of the corporation, provided, further, that while ordinarily Directors
can be elected by unanimous written consent, if the Directors fail to fill a
vacancy, then a Director to fill that vacancy may be elected by the written
consent of persons holding a majority of shares entitled to vote for the
election of Directors.
47.<PAGE>
Section 7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided
for under applicable law or the Articles of Incorporation, any action which may
be taken at any annual or special meeting of Shareholders may be taken without a
meeting and without prior notice, if a consent in writing, setting forth the
action so taken, signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize to take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
Unless the consents of all Shareholders entitled to vote have been
solicited in writing,
(1) Notice of any Shareholder approval without a meeting by
less than unanimous written consent shall be given at least ten (10) days before
the consummation of the action authorized by such approval, and
(2) Prompt notice shall be given of the taking of any other
corporate action approved by Shareholders without a meeting be less than
unanimous written consent, to each of those Shareholders entitled to vote who
have not consented in writing.
Any Shareholder giving a written consent, or the Share-holder's
proxyholders, or a transferee of the shares of a personal representative of the
Shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
Section 8. QUORUM. The holder of a majority of the shares entitled to
vote thereat, present in person, or represented by proxy, shall constitute a
quorum at all meetings of the Shareholders for the transaction of business
except as otherwise provided by law, by the Articles of Incorporation, or by
these By-Laws. If, however, such majority shall not be present or represented
at any meeting of the Shareholders, the shareholders entitled to vote thereat,
present in person, or by proxy, shall have the power to adjourn the meeting from
time to time, until the requisite amount of voting shares shall be present. At
such adjourned meeting at which the requisite amount of voting shares shall be
represented, any business may be transacted which might have been transacted at
a meeting as originally notified.
If a quorum be initially present, the Shareholders may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum, if any action taken is approved by a
majority of the Shareholders required to initially constitute a quorum.
Section 9. VOTING. Only persons in whose names shares entitled to vote
stand on the stock records of the corporation on the day of any meeting of
Shareholders, unless some other day be fixed by the Board of Directors for the
determination of Share-holders of record, and then on such other day, shall be
entitled to vote at such meeting.
48.<PAGE>
Provided the candidate's name has been placed in nomination prior to the
voting and one or more Shareholders has given notice at the meeting prior to the
voting of the Shareholder's intent to cumulate the Shareholder's votes, every
Shareholder entitled to vote at any election for Directors of any corporation
for profit may cumulate their votes and give one candidate a number of votes
equal to the number of Directors to be elected multiplied by the number of votes
to which his or her shares are entitled to, or distribute his or her votes on
the same principle among as many candidates as he or she thinks fit.
The candidates receiving the highest number of votes up to the number of
Directors to be elected are elected.
The Board of Directors may fix a time in the future not exceeding thirty
(30) days preceding the date of any meeting of Shareholders or the date fixed
for the payment of any dividend or distribution, or for the allotment of rights,
or when any change or conversion or exchange of shares shall go into effect, as
a record date for the determination of the Shareholders entitled to notice of
and to vote at any such meeting, or entitled to receive any such dividend or
distribution, or any allotment of rights or to exercise the rights in respect to
any such change, conversion or exchange of shares. In such case only
Shareholders of record on the date so fixed shall be entitled to notice of and
to vote at such meeting, to receive such dividends, distribution or allotment of
rights, or to exercise such rights, as the case may be notwithstanding any
transfer of any share on the books of the corporation after any record date
fixed as aforesaid. The Board of Directors may close the books of the
corporation against transfers of shares during the whole or any part of such
period.
Section 10. PROXIES. Every Shareholder entitled to vote, or to execute
consents, may do so, either in person or by written proxy, executed in
accordance with the provisions of applicable law filed with the Secretary of the
corporation.
Section 11. ORGANIZATION. The President, or in the absence of the
President, any Vice President, shall call the meeting of the Shareholders to
order, and shall act as Chairman of the meeting. In the absence of the
President and all of the Vice Presidents, Shareholders shall appoint a Chairman
for such meeting. The Secretary of the corporation shall act as Secretary of
all meetings of the Shareholders, but in the absence of the Secretary at any
meeting of the Shareholders, the presiding Officer may appoint any person to act
as Secretary of the meeting.
Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders, the Board of Directors may, if they so elect, appoint inspectors
of election to act at such meeting or any adjournment thereof. If inspectors of
election be not so appointed, or if any persons so appointed fail to appear or
refuse to act, the chairman of any such meeting may, and on the request of any
Shareholder or his or her proxy shall, make such appointment at the meeting in
which case the number of inspectors shall be either one (1) or three (3) as
determined by a majority of the Shareholders represented at the meeting.
49.<PAGE>
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
_____________________________________
Section 1. CERTIFICATES FOR SHARES. Certificates for shares shall be
of such form and device as the Board of Directors may designate and shall state
the name of the record holder of the shares represented thereby; its number;
date of issuance; the number of shares for which it is issued; a statement of
the rights, privileges preferences and restriction, if any; a statement as to
the redemption or conversion, if any; a statement of liens or restrictions upon
transfer or voting, if any; if the shares be assessable or, if assessments are
collectible by personal action, a plain statement of such facts.
All certificates shall be signed in the name of the corporation by the
Chairman of the Board or Vice Chairman of the Board or the President or Vice
President and by the Chief Finan-cial Officer or an Assistant Treasurer or the
Secretary or any Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the Shareholder.
Any or all of the signatures on the certificate may be facsimile. In case
any Officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to be that Officer,
transfer agent, or registrar before that certificate is issued, it may be issued
by the corporation with the same effect as if that person were an Officer,
transfer agent, or registrar at the date of issuance.
Section 2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost or destroyed shall make an affidavit or
affirmation of that fact and shall, if the Directors so require, give the
corporation a bond of indemnity, in form and with one or more sureties
satisfactory to the Board, in at least double the value of the stock represented
by said certificate, whereupon a new certificate may be issued in the same
tender and for the same number of shares as the one alleged to be lost or
destroyed.
Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
appoint one or more transfer agents or transfer clerks, and one or more
registrars which shall be an incorporated bank or trust company, either domestic
or foreign, who shall be appointed at such times and places as the requirements
of the corporation may necessitate and the Board of Directors may designate.
Section 5. CLOSING STOCK TRANSFER BOOKS - RECORD DATE. In order that
the corporation may determine the Shareholders entitled to notice of any meeting
or to vote or entitled to receive payment of any dividend or other distribution
or allotment of any rights or entitled to exercise any rights in respect to any
other lawful action, the Board may fix, in advance, a record date, which shall
not be more than sixty (60) days nor less than ten (10) days prior to the date
of such meeting nor more than sixty (60) days prior to any other action.
50.<PAGE>
If no record date is fixed; the record date for determining Shareholders
entitled to notice of or to vote at a meeting of Shareholders shall be at the
close of business on the business day next preceding the day on which notice is
given or if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held. The record date for determining
Shareholders entitled to give consent to corporate action in writing without a
meeting, when no prior action by the Board is necessary, shall be the day on
which the first written consent is given.
The record date for determining Shareholders for any other purpose shall be
at the close of business on the day on which the Board adopts the resolution
relating thereto, or the sixtieth (60th) day prior to the date of such other
action, whichever is later.
ARTICLE VI
RECORDS - REPORTS - INSPECTION
________________________________
Section 1. RECORDS. The corporation shall maintain, in accordance with
generally accepted accounting principles, adequate and correct accounts, books
and records of its business and properties. All of such books, records and
accounts shall be kept at its principal executive office as fixed by the Board
of Directors from time to time.
Section 2. INSPECTION OF BOOKS AND RECORDS. All books and records
shall be open to inspection of the Directors and Shareholders from time to time
and in the manner provided under applicable law.
Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a
copy of these By-Laws, as amended or otherwise altered to date, certified by the
Secretary, shall be kept at the corporation's principal executive office and
shall be open to inspection by the Shareholders at all reasonable times during
office hours.
Section 4. CHECK, DRAFTS, ETC. All checks, drafts, or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as shall be determined from time to time by the Board
of Directors.
Section 5. CONTRACT, ETC. -- HOW EXECUTED. The Board of Directors,
except as in the By-Laws otherwise provided, may authorize any Officer or
Officers, agent or agents, to enter into any contract or execute any instrument
in the name of and on behalf of the corporation. Such authority may be general
or confined to specific instances. Unless so authorized by the Board of
Directors, no Officer, agent or employee shall have any power or authority to
bind the corporation by any contract or agreement, or to pledge its credit, or
to render it liable for any purpose or to any amount except as may be provided
under applicable law.
ARTICLE VII
ANNUAL REPORTS
_______________
51.<PAGE>
Section 1. REPORT TO SHAREHOLDERS, DUE DATE. The Board of Directors
shall cause an annual report to be sent to the Shareholders not later than one
hundred twenty (120) days after the close of the fiscal or calendar year adopted
by the corporation. This report shall be sent at least fifteen (15) days before
the annual meeting of Shareholders to be held during the next fiscal year and in
the manner specified in Section 4 of the Article IV of these By-Laws for giving
notice to Shareholders of the corporation. The annual report shall contain a
balance sheet as of the end of the fiscal year and an income statement and
statement of changes in financial position for the fiscal year, accompanied by
any report of independent accountants or, if there is no such report, the
certificate of an authorized officer of the corporation that the statements were
prepared without audit from the books and records of the corporation.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
______________________
Section 1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or
these By-Laws may be amended or repealed by the vote or written consent of
holders of a majority of the out-standing shares entitled to vote; provided,
however, that if the Articles of Incorporation of the corporation set forth the
number of authorized Directors of the corporation, the authorized number of
Directors may be changed only by an amendment of the Article of Incorporation.
52.<PAGE>
Section 2. POWERS OF DIRECTORS. Subject to the right of the
Shareholders to adopt, amend or repeal By-Laws, as provided in Section 1 of this
Article VIII, and the limitations, if any, under law, the Board of Directors may
adopt, amend or repeal any of these By-Laws other than a By-Law or amendment
thereof changing the authorized number of Directors.
Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law
is adopted, it shall be copied in the book of By-Laws with the original By-Laws,
in the appropriate place. If any By-Law is repealed, the fact of repeal with
the date of the meeting at which the repeal was enacted or written assent was
filed shall be stated in said book.
ARTICLE IX
CORPORATE SEAL
_______________
Section 1. Seal. The corporate seal shall be circular in form, and
shall have inscribed thereon the name of the corpo-ration, the date and State of
incorporation.
ARTICLE X
MISCELLANEOUS
______________
Section 1. REPRESENTATION OF SHARES IN OTHER CORPORA-TIONS. Shares of
other corporations standing in the name of this corporation may be voted or
represented and all incidents thereto may be exercised on behalf of the
corporation by the Chairman of the Board, the President or any Vice President
and the Secretary or an Assistant Secretary.
Section 2. SUBSIDIARY CORPORATIONS. Shares of this corporation owned
by a subsidiary shall not be entitled to vote on any matter. A subsidiary for
these purposes is defined as a corporation, the shares of which possessing more
than 25% of the total combined voting power of all classes of shares entitled to
vote, are owned directly or indirectly through one (1) or more subsidiaries.
Section 3. INDEMNITY. Subject to applicable law, the corporation may
indemnify any Director, Officer, agent or employee as to those liabilities and
on those terms and conditions as appropriate. In any event, the corporation
shall have the right to purchase and maintain insurance on behalf of any such
persons whether or not the corporation would have the power to indemnify such
person against the liability insured against.
Section 4. ACCOUNTING YEAR. The accounting year of the corporation
shall be fixed by resolution of the Board of Directors.
53.
/Letterhead/
Schvaneveldt & Company
Certified Public Company
275 East South Temple, #300
Salt Lake City, Utah 84111
801-521-2392 phone
Darrell T. Schvaneveldt, C.P.A.
Consent of Darrell T. Schvaneveldt
Independent Auditor
I consent to the use, of our report dated December 16, 1997, on the
financial statements, dated November 6, 1997, included herein and to the
reference made to me.
/S/ Darrell T. Schvaneveldt
Salt Lake City, Utah
March 5, 1998
54.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the audited
financial statements for the fiscal year ended December 31, 1997, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001057114
<NAME> THE FINANCIAL GROUP CONNECTION, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 0
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<RECEIVABLES> 0
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<INVENTORY> 0
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0
1,000
<COMMON> (1,000)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 460
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (460)
<INCOME-TAX> 0
<INCOME-CONTINUING> (460)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (460)
<EPS-PRIMARY> 00
<EPS-DILUTED> 00
</TABLE>
