FORM 10-SB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) of 12(g) of the Securities Exchange Act of 1934
Great Wall Food and Beverage Corporation
(Name of Small Business Issuer in Its Charter)
Florida 59-2624574
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
1543 Bayview Avenue, Suite 409, Toronto, Ontario, Canada M4G 3B5
(Address of Principal Executive Offices) (Zip Code)
(416) 489-5490
Issuer's Telephone Number
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
None
Securities to be registered pursuant to Section 12(g) of the Act:
$.0001 Per Share Par Value Common Stock
<PAGE>
PART I
The Issuer, Great Wall Food and Beverage Corporation, a Florida corporation, is
electing to furnish the information required by Items 6-12 of Model B of Form
1-A under Alternative 2 of Form 10-SB.
Item 1A. Company Risk Factors.
- ------------------------------
The Issuer and its outstanding securities are subject to risks
including those set out in this Item 1A.
WE HAVE NO INCOME PRODUCING OPERATIONS OR ASSETS WHICH CAUSE A
CONTINUING DEPLETION OF OUR ASSETS. The Issuer presently has no material income
producing operations or assets. Unless the Issuer is successful in its efforts
to enter into a business combination or acquisition of assets resulting in
operational income, the Issuer's assets will be depleted.
WE HAVE NO PRESENT ARRANGEMENTS FOR A BUSINESS COMBINATION OR ASSET
ACQUISITION. The Issuer has no present arrangements for, or ongoing negotiations
with respect to any business combination or asset acquisition. Unless the Issuer
can enter into such an arrangement it will have to acquire additional capital or
cease operations.
THE FILING OF THIS REGISTRATION STATEMENT WILL INCREASE OUR OVERHEAD
AND ASSET DEPLETION. The cost of filing this registration statement and in
complying with the reporting requirements created by this filing will materially
increase the Issuer's administrative overhead and accelerate the depletion of
its assets.
WE HAVE NO PRESENT ARRANGEMENTS TO ACQUIRE ANY ADDITIONAL CAPITAL
NEEDED TO CONTINUE OUR EXISTENCE. The Issuer has no present arrangement under
which it might acquire any additional capital needed to continue its existence.
There is no assurance that it will be able to develop any such capital source.
WE HAVE NO ASSURANCE THAT ANY BUSINESS COMBINATION OR ASSET ACQUISITION
WE MIGHT MAKE WILL BE SUCCESSFUL. There is no assurance that any business
combination or asset acquisition entered into by the Issuer will result in
successful income producing operations.
Item 1. Description of the Business
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(Item 6 of Model B of Form 1A)
The Issuer was organized in 1980 as a Florida corporation named Ronnie
Interior Designs, Inc. (which was changed to Ronnie Systems, Inc. on 1997). It
was formed to engage in the interior design business. These business operations
became dormant in 1995.
In March of 1998, the Issuer was reorganized. Its Articles of
Incorporation were amended to: (i) change its name to Great Wall Food and
Beverage Corporation; (ii) change its authorized capital to its present
structure; and (iii) reverse split its then outstanding 100,000 shares of Common
Stock into 10,000 shares (one new share for each ten old shares). Ms. Patti
Cooke, President and a director of the Issuer, became its then sole officer and
director.
As part of the reorganization, the Issuer's Board of Directors
authorized the Issuer to acquire all of the outstanding 1,700,000 shares of Food
& Beverage Masters (China), Inc., an unaffiliated Delaware corporation in
exchange for 1,700,000 shares of the Issuer's Common Stock. It was represented
to the Issuer that the Delaware company owned 80% of a joint venture with the
Changzhou Dairy Company. This Chinese company owned and operated a dairy
processing plant. These facilities were located in Changzhou, China in the
Yangtze River Delta in the Jiangsu Province of China. The Chinese Joint Venture
was to produce and market bagged milk, yogurt, ice cream and related dairy
products in the Changzhou area. In addition, the proposed Delaware subsidiary
was exploring the formation of another venture with a different Chinese partner.
The purpose of the second proposed venture was to bottle and market low and
non-alcoholic drinks.
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The Issuer was also authorized to issue a total of 6,760,000 shares of
Common Stock to six other companies and individuals who were to furnish
assignments of intangible assets and services to the proposed Chinese
operations.
The Issuer then made a cash offering of shares of its Common Stock at
$.15 per share to raise capital for the pending Chinese operations. The offering
was made from March through August of 1998. A total of 2,666,664 shares were
sold for $399,999.60 in gross proceeds. The offering was made pursuant to the
exemption from the registration requirements of Section 5 of the Securities Act
of 1933 provided in Rule 504 of Regulation D adopted under that Act.
Following the offering the Issuer proceeded to pursue the proposed
transaction. However, during these efforts the Issuer learned that the Chinese
project, its assets and operations were not as represented. In October of 1998,
the Issuer terminated the proposed venture. None of the stock authorized for the
Chinese project was issued.
The Issuer spent approximately $315,000.00 on the Chinese project prior
to its termination. Included in these costs were $100,000.00 deposited on the
purchase of milk processing and bottling equipment which purchase was not
completed. The Issuer has negotiated an oral agreement on the refund of the
deposit in four or five monthly installments and is in the process of finalizing
and documenting the agreement.
In August of 1999, Hatchment Holdings, Ltd., a company wholly owned by
Bradley R. Wilson, an officer and director of the Issuer, purchased 1,000,000
shares of the Issuer's Common Stock for cash at $.05 per share for a total of
$50,000. As of August 31, 1999, this $50,000 in additional capital,
approximately $85,000 in remaining proceeds from the Rule 504 offering and the
claim for the refund of the $100,000 deposit are the only material assets of the
Issuer. At that date it had no material liabilities.
The Issuer's present business plan is to complete the registration of
its Common Stock under Section 12(g) of the Securities Exchange Act of 1934
("Exchange Act") through the filing of this Form 10-SB and to find a new
business opportunity. The Issuer will seek and attempt to enter into a business
combination or acquisition of assets by which it will become engaged in an
active business venture. It is likely that if such a transaction is made it will
involve control of the Issuer being acquired by the other party to the
transaction.
These are no present arrangements for, or ongoing negotiations with
respect to, such a business combination with the Issuer. The Issuer has no
present knowledge of any specific candidate for a business combination. Issuer's
management believes that it has sufficient funds to pursue its search for a
potential business combination for at least the period through September of
2000. It is not presently possible to predict if any business combination
entered into by the Issuer during that period will require the raising of
additional capital.
From March of 1998 through August of 1999, the Issuer had no paid
employees. During that period, a company owned by the President of the Issuer
was paid $17,000.00 for administrative services performed for the Issuer.
Commencing September 1, 1999, the President and Vice President became part-time
employees of the Issuer at a monthly salary of $1,000.00 each. Through September
of 2000 or until the Issuer enters into a business combination, it is
anticipated that they will be the only paid employees of the Issuer. During that
period its directors will serve without compensation for their services as such.
They will be reimbursed for expenses incurred in the performance of their
duties. It is not now possible to estimate what employees the Issuer may have if
it enters into a business combination during the year commencing September 1,
1999.
Item 2. Description of Property
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(Item 7 of Model B of Form 1A)
The Issuer has no materially important physical properties. Its only
material assets are its cash or cash equivalents and its claim for a refund of
$100,000 for an equipment deposit. See Item 1. above.
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The Issuer's present operations are conducted at the residence office
of its President and through the use of a mail drop at 1543 Bayview Avenue,
#409, Toronto, Ontario, Canada M4G3B5. The Issuer's President has not previously
and will not in the future charge the Issuer for its use of these facilities.
Item 3. Directors, Executive Officers and Significant Employees.
- ------- -------------------------------------------------------
(Item 8 of Model B of Form 1A)
The following table sets forth information regarding the directors and
executive officers of the Company.
Beginning
Name Age Positions of Term
---- --- --------- ---------
Patti Cooke 44 President and Director 3/98
Bradley R. Wilson 41 Vice President, Secretary, 8/99
And Director
There are no family relationships among any of the directors and/or
executive officers of the Issuer. The Issuer does not have any significant
employee who is not also an executive officer.
Patti Cooke has served as the President and a director of the Issuer
since March of 1998. From January of 1993 until February of 1996, Ms. Cooke was
the owner and President of Wellington Cooke Gallery, an art gallery in Toronto,
Ontario. Since February of 1996 she has been employed as the Secretary and
Administration Manager for Hatchment Holdings, Ltd., a financial services
company in Toronto, Canada and principal shareholder of the Issuer. Since March
of 1995 she has served as a director of Sagewood Resources LTD, a Toronto based
public company in the oil and gas business. Ms. Cooke has served as the
Secretary of Inet Commerce Conduit Corporation, a Florida corporation engaged in
the business of providing advice and sales and promotional services to retailers
of cosmetic products since January of 1998. Since March of 1999, she has served
as a director and the Secretary of Noble Brands, Inc., a Florida corporation
engaged in the cigar manufacturing and distribution business.
Bradley R. Wilson became an officer and director of the Issuer in
August of 1999. Since 1990, he has been the President, a director and the sole
shareholder of Hatchment Holdings, Inc., a Toronto based financial services
company. He has served as the president and a director of Sagewood Resources,
Ltd., a Toronto based public company in the oil and gas business, since March of
1995. He has been a director of Empire Alliance Properties, Inc., a Toronto
based public company in the real estate business, since February, 1998. From
September of 1986 to January of 1990, Mr. Wilson was employed as a real estate
broker for William Allan Real Estate Company. Limited in Toronto, Ontario. His
work there was concentrated in the commercial real estate area. From 1982 to
1986, Mr. Wilson worked as a registered stockbroker with E.A. Manning, Limited
in Toronto, Ontario. Upon leaving his position at E.A. Manning, Limited, Mr.
Wilson allowed his securities license to lapse to enable him to become a
registered real estate representative with Empire Alliance Properties, Inc.
Since January of 1998, Mr. Wilson has served as president and a director of Inet
Commerce Conduit Corporation, a Florida corporation engaged in the business of
providing advice and sales and promotional services to retailers of cosmetic
products. Since March of 1999, he has served as a director of Noble Brands,
Inc., a Florida corporation engaged in the cigar manufacturing and distribution
business.
It is anticipated that the present officers and directors will continue
to serve until the Issuer finds a new business opportunity. It is assumed that
upon completion of any such transaction, persons associated with the acquired
business or assets would become the Issuer's officers and directors.
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Item 4. Remuneration of Directors and Officers.
- ------- --------------------------------------
(Item 9 of Model B to Form 1A)
<TABLE>
<CAPTION>
Information with respect to the only remuneration paid to any of the
officers and directors of the Issuer during 1998 and from January 1, 1999
through August 31, 1999 is as follows:
<S> <C> <C> <C>
1998 Patti Cooke (1) Administrative Fee (1) $12,000.00
1/1/99 to 8/31/99 Patti Cooke (1) Administrative Fee (1) $ 5,000.00
----------
Total $17,000.00
</TABLE>
(1) These administrative fees were paid to Wellington Cooke Gallery for
services performed for the Issuer by Patti Cooke. She is the sole owner
of that company.
In addition, the Issuer paid cellular telephone charges for mobile
telephones used by its officers and directors during 1998 and from January 1,
1999 through August 31, 1999 as follows:
- --------------------------------------------------------------------------------
Period Name of Individual Telephone Charges (1)
- --------------------------------------------------------------------------------
1998 Patti Cooke $1,528.14
1998 Bradley R. Wilson $1,731.44
---------
Total 1998 $3,259.58
=========
- --------------------------------------------------------------------------------
1/1/99 to 8/31/99 Patti Cooke $2,248.87
1/1/99 to 8/31/99 Bradley R. Wilson $1,235.61
---------
Total 1/1/99 to 8/31/99 $3,484.48
=========
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(1) It is estimated that approximately 90% of these charges were for
calls on the Issuer's business. Accordingly, approximately $700.00
of the total paid of $6,744.06 could be deemed to be compensation
to the named officers and directors.
The arrangement under which Wellington Cooke Gallery performed
administrative services for the Issuer was terminated on August 31, 1999. On
September 1, 1999 Patti Cooke, President of the Issuer, became a part-time
employee of the Issuer at a monthly salary of $1,000.00. During the year
commencing September 1, 1999, she will devote such time as required to
administer the Issuer's activities. During that period the telephone charges to
be paid on the mobile telephone used by the Issuer's officers and directors are
estimated to be $2,000.00. The Issuer cannot now predict what remuneration will
be paid by the Issuer to its then officers and directors if it completes the new
business opportunity it is seeking and new management assumes control.
For information on an advisory and consulting fee of $40,000.00 paid to
Hatchment Holdings, Inc., a corporation owned by Bradley R. Wilson, in 1998
prior to the time he became an officer and director of the Issuer, see Item 6.
following.
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Item 5. Security Ownership of Management and Certain Securityholders.
- ------- ------------------------------------------------------------
(Item 10 to Model B of Form 1A)
The following table sets forth information as of September 24, 1999 with respect
to the ownership of the Issuer's Common Stock by each of its officers and
directors, its officers and directors as a group and any shareholder owning more
than 10% of the Issuer's Common Stock:
Title Name and Number of Percent
of Address Shares of
Class of Owner Owned Class
----- -------- --------- -------
Common Stock Patti Cooke 7,000 .2%
715 Millwood Road, #301
Toronto, Ontario M4G1V7
Canada
Common Stock Bradley R. Wilson (1) 1,000,000 (1) 27% (1)
615 Merton Street
Toronto, Ontario
Canada
All Officers & Directors as
a Group 1,007,000 27.2%
(1) These shares are held of record by Hatchment Holdings, Inc., an
Ontario corporation wholly owned by Mr. Wilson.
There are no shares of the Issuer's Preferred Stock outstanding and
there are no outstanding options warrants or other rights to acquire shares of
either its Common or Preferred Stock.
Item 6. Interest of Management and Others in Certain Transactions.
- ------- ---------------------------------------------------------
(Item 11 to Model B of Form 1A)
In August of 1999, Hatchment Holdings, Inc., a company wholly owned by
Bradley R. Wilson, an officer and director of the Issuer, purchased 1,000,000
shares of the Issuer's Common Stock for cash at $.05 per share for a total of
$50,000. The shares were acquired by the purchaser for investment and not with a
view to distribution. They were issued as "restricted securities" as defined
under the Securities Act of 1933, as amended ("Securities Act"). They were
issued in reliance upon the exemption from the registration requirements of
Section 5 of the Securities Act provided in Section 4(2) of that statute.
In the fall of 1998, the Issuer paid an advisory and consulting fee of
$40,000.00 to Hatchment Holdings, Inc. This fee was paid for services rendered
in connection with the reorganization of the Issuer and the proposed transaction
with the Chinese venture. (see Item 1 above). At the time the services were
rendered, Mr. Wilson, the owner of Hatchment Holdings, Inc., was not an officer,
director or principal shareholder of the Issuer.
Item 7. Description of Securities.
- ------ -------------------------
(Item 12 of Model B of Form 1A)
The Issuer's authorized capitalization consists of 80,000,000 shares of
$.0001 par value common stock ("Common Stock") and 20,000,000 shares of $.0001
par value preferred stock ("Preferred Stock"). As of September 24, 1999, there
were 3,676,664 shares of Common Stock outstanding, no shares of Preferred Stock
outstanding and there are no outstanding options, warrants or other rights to
acquire shares of either Common or Preferred Stock. Under applicable Florida law
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and its Articles of Incorporation, the Issuer's Board of Directors may issue
additional shares of its stock up to a total amount of authorized Common and/or
Preferred Stock without approval of its shareholders.
Information is set forth in the following subsections concerning the
Common Stock, and the Preferred Stock.
COMMON STOCK. The shares of Common Stock currently outstanding are
fully paid and non-assessable. The holders of Common Stock do not have any
preemptive rights to acquire shares of any capital stock of the Company. In the
event of liquidation of the Company, assets then legally available for
distribution to the holders of Common Stock (assets remaining after payment or
provision for payment of all debts and of all preferential liquidation payments
to holders of any outstanding Preferred Stock) will be distributed in pro rata
shares among the holders of Common Stock and the holders of any outstanding
Preferred Stock with liquidation participation rights in proportion to their
stock holdings.
Each stockholder is entitled to one vote for each share of Common Stock
held by such shareholder. A quorum for a meeting of the stockholders is one-half
of the shares of capital stock entitled to vote at that meeting. There is no
right to cumulate votes for the election of directors. This means that holders
of more than 50% of the shares voting for the election of directors can elect
100% of the directors if they choose to do so; and, in such event, the holders
of the remaining shares voting for the election of directors will not be able to
elect any person or persons to the Board of Directors.
Holders of Common Stock are entitled to dividends when, and if,
declared by the Board of Directors out of funds legally available therefore; and
then, only after all preferential dividends have been paid on any outstanding
Preferred Stock. The Company has not had any earnings and it does not presently
contemplate the payment of any cash dividends in the foreseeable future.
The Issuer's Common Stock does not have any mandatory redemptive
provisions, sinking fund provisions or conversion rights.
PREFERRED STOCK. The Preferred Stock of the Issuer may be issued from
time to time by the board of directors as in one or more series. The description
of shares of each series of Preferred Stock will be set forth in resolutions
adopted by the board of directors and a certificate of designation to be filed
as required by Nevada law prior to issuance of any shares of the series. The
certificate of designation will set the number of shares to be included in each
series of Preferred Stock and set the designations, preferences, conversion or
other rights, voting powers, restrictions, limitations as to distribution,
qualifications, or terms and conditions of redemption relating to the shares of
each series. However, the board of directors is not authorized to change the
right of the Common Stock to vote one vote per share on all matters submitted
for shareholder action. The authority of the board of directors with respect to
each series of preferred Stock includes, but is not limited to, setting or
changing the following:
o The designation of the series and the number of shares
constituting the series, provided that the aggregate number of
shares constituting all series of preferred shares may not exceed
20,000,000;
o The annual distribution rate on shares of the series, whether
distributions will be cumulative and, if so, from which date or
dates;
o Whether the shares of the series will be redeemable and, if so,
the terms and conditions of redemption, including the date or
dates upon and after which the shares will be redeemable, and the
amount per share payable in case of redemption, which amount may
vary under different conditions and at different redemption
dates;
o The obligation, if any, of the Issuer to redeem or repurchase
shares of the series pursuant to a sinking fund;
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o Whether shares of the series will be convertible into, or
exchangeable for, shares of stock of any other class or classes
and, if so, the terms and conditions of conversion or exchange,
including the price or prices or the rate or rates of conversion
or exchange and the terms of adjustment, if any;
o Whether the shares of the series will have voting rights, in
addition to the voting rights provided by law, and, if so, the
terms of the voting rights;
o The rights of the shares of the series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the
Issuer; and
o Any other relative rights, powers, preferences, qualifications,
limitations or restrictions thereof relating to the series which
may be authorized or permitted under Florida law.
The shares of Preferred Stock of any one series will be identical with
each other in all other respects except as to the dates from and after
which dividends thereon will cumulate, if cumulative.
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PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Related Shareholder Matters.
- --------------------------------------------------------------------------------
The Issuer's Common Stock has been quoted on the OTC Bulletin Board
under the symbol GWFB since March of 1998. To the knowledge of the Issuer there
have been very few trading transactions in its Common Stock
The following table sets forth high and low bid prices of the Common
Stock on the OTC Bulletin Board for the periods indicated. The bid prices
represent prices between dealers, which do not indicate retail markups,
markdowns or commissions and the bid prices may not represent actual
transactions:
Quarter Ending: High Low
-------------- ---- ---
January - March, 1998 6 3/8 6 1/4
April - June, 1998 6 1/8 6 1/8
July - September, 1998 6 1/8 6 3/4
October - December, 1998 6 23/32 6 3/8
January - March, 1999 6 3/8 6 1/4
April - June, 1999 6 1/8 6 1/8
The number of record holders of Common Stock of the Issuer at September
24, 1999 was 13. Additional owners of the Common stock hold their shares at
street name with various brokerage and depository firms (there are five such
firms included in the list of record owners).
The holders of Common Stock are entitled to receive dividends as may be
declared by the Board of Directors out of funds legally available; and after
payment of adequate provisions for payment of any preferential dividends due on
any then outstanding Preferred Stock. The Issuer had never had any material
earnings and does not presently have any capability to generate any such
earnings. The Issuer has never declared any dividend. It does not anticipate
declaring and paying any cash dividend in the foreseeable future. See Item 7 in
Part I.
Item 2. Legal Proceedings.
- ------- -----------------
Neither the Issuer nor any of its property is a party or subject to any
pending legal proceeding. The Issuer is not aware of any contemplated or
threatened legal proceeding against it by any governmental authority or other
party.
As set forth in Item 1 of Part 1 above, the Issuer is in the process of
attempting to recover a $100,000 cash deposit which was placed on a proposed
purchase of equipment which was terminated. The holder of the deposit has
acknowledged a responsibility to return a portion of the deposit, but has
claimed a right to offset certain expenses incurred in alleged performance under
the proposed equipment purchase. In the opinion of the Issuer's management, it
is entitled to the return of substantially all the deposit. The Issuer is in the
process of retaining counsel to pursue collection action including instigation
of litigation, if required.
Item 3. Changes in and Disagreements with Accountants.
- ------- ----------------------------------------------
No principal independent accountant of the Issuer or any subsidiary
thereof has ever resigned, been dismissed or declined to stand for re-election.
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Item 4. Recent Sales of Unregistered Securities.
- ------- ----------------------------------------
Information with respect to all securities sold by the Issuer since
September 1, 1996, the offer and sale of which was not subject to an effective
registration statement filed under the Securities Act is as follows:
1. (a) During the period from March 12, 1998 through August 30,
1998, the Issuer sold 2,669,664 shares of its $.0001 par value
Common Stock.
(b) No person acted as a principal underwriter for the sale of
these shares. The Common Stock was offered directly by the Issuer
through its officers and directors. The Common Stock was offered
in Ontario, Canada to investors meeting the qualifications and
able to make the representations set on in paragraph 2 and 3 of
Exhibit (12)(a) filed herewith; and each of whom supplied the
Issuer with a completed and executed form of Subscriber
Questionnaire filed herewith as Exhibit (12)(b).
(c) The 2,669,664 shares of the Common Stock were sold for cash
at $0.15 per share (U.S. Funds) for gross proceeds of
$399,999.60. No commissions or discounts were paid on any of the
sales.
(d) In the sale of these shares of Common Stock the Issuer relied
upon the exemption from the registration requirements of Section
5 of the Securities Act provided in Rule 504 of Regulation D
adopted by the Securities and Exchange Commission. The Issuer was
not then an Issuer of the types specified in subsection (a)(1)(2)
and (3) of Rule 504 and thus eligible to use the exemption. The
applicable provisions of Rules 501 and 502 were met by the Issuer
on offering the subject shares. The aggregate-offering price of
the offered shares was $600,000 (4,000,000 shares at $0.15 per
share). The Issuer did not sell any other securities during the
12-month period before the start of or during this Rule 504
offering.
2. (a) On August 31, 1999 the Issuer sold 1,000,000 shares of its
$.0001 par value Common Stock.
(b) No person acted as principal underwriter with respect to the
offer or sale of these shares. The Issuer sold these 1,000,000 to
Hatchment Holdings, Inc., an Ontario corporation wholly owned by
Bradley R. Wilson, a director and executive officer of the
Issuer.
(c) The 1,000,000 shares were sold for cash at $0.05 per share
for total proceeds of $50,000.00. No commission was paid on the
sale.
(d) In this sale the Issuer relied upon the exemption from the
registration requirements of Section 5 of the Securities Act
provided in Section 4(2) as a transaction by an Issuer not
involving a public offering. The purchaser of the shares is owned
by an officer or director of the Issuer and thoroughly familiar
with it and its operations. The purchaser acquired the shares for
investment and under the restrictive terms and conditions and
representations set out in the form of subscription letter
attached hereto as Exhibit 12(c). The shares were issued as
"restrictive securities" as such are defined under the Securities
Act. An appropriate restrictive legend was placed in the
certificate representing these shares and a stop transfer order
on them was placed with the Issuer's Transfer Agent.
Item 5. Indemnification of Directors and Officers.
- ------- -----------------------------------------
Section 607.085 of the Florida Business Corporation Act provides:
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(1) A corporation shall have power to indemnify any person who was or is a
party to any proceeding (other than an action by. or in the right of the
corporation by reason of the fact that he or she is or was a director,
officer, employees, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise
against liability in connection with such proceeding. including any appeal
thereof. if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and. with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, or conviction
or upon a plea of nolo contendere or its equivalent shall not, in or of
itself, create a presumption that the person did not act in good faith and
in a manner which he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation or, with respect to any unlawful
action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
(2) A corporation shall have power to indemnify any person, who was or is
a party to any proceeding by or in the right of the corporation to procure
a judgement in its favor by reason of the fact that the person is or was a
director, officer, employee, or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture, trust, or
other enterprise, against expenses and amounts paid in settlement nor
exceeding, in the judgement of the board of directors, the estimated
expenses of litigating the proceeding to the conclusion, actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
cooperation, except that no indemnification shall be made under this
subsection in respect to any claim, issue or manner as to which such person
shall have been adjudged to be liable unless, and only to the extent that,
the court in which such proceeding was brought, or any other court of
competent jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case,
such person is fairly and reasonably entitled to indemnify for such
expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful in the merits or otherwise in defense of
any proceeding referred to in subsection (1) or subsection (2), or in
defense of any claim, issue, or manner therein, he or she shall be
indemnified against expenses actually and reasonably incurred by him or her
in connection therewith.
(4) Any indemnification under subsection (1) or subsection (2), unless
pursuant to a determination by a court, shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper in
the circumstances because he or she has met the applicable standard of
conduct set forth in subsection (1) or subsection (2). Such determination
shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable, by a
majority vote of a committee duly designated by the board of directors
who are parties may participate, consisting solely of two or more
directors nor at the time parties to the proceeding;
(c) By independent legal counsel:
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<PAGE>
1. Selected by the board of directors prescribed in paragraph
(a) or the committee prescribed in paragraph (b); or
2. If a quorum of the directors cannot be obtained for
paragraph (a) and the committee cannot be designated under
paragraph (b), selected by majority vote of the full board of
directors (in which directors who are parties may participate; or
(d) By the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to such proceeding or, if no such
quorum is obtainable, by a majority vote of the shareholders who were
not parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification be made in the same manner as the determination that
indemnification is permissible. However, if the determination of
permissibility is made by independent legal counsel person specified by
paragraph (4)(c) shall evaluate the reasonableness of expenses and may
authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation on advance on the final
disposition of such preceding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount of he or she is
ultimately found not to e entitled to indemnification by the corporation
pursuant to this section. Expenses incurred by other employees and agents
may be paid in advance upon such terms or conditions that the board of
directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant to
this section are not exclusive, and a corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in
his or her official capacity and as to action in another capacity while
holding such office. However, indemnification or advancement of expenses
shall not be made to or on behalf of any director, officer, employee or
agent if a judgement or other final adjudication establishes that his or
her actions, or omissions to act, were material to the cause of action so
adjudicated and constitute:
(a) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his or her conduct
was lawful or had nor reasonable cause to believe his or her conduct
was unlawful.
(b) A transaction from which the director, officer, employee, or
agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of ss.607.0834 are applicable; or
(d) Willful misconduct or a conscious disregard for the best interest
of the corporation in a proceeding by or in the right of the
corporation to procure a judgement in its favor or in a proceeding by
or in the right of the shareholder.
(8) Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee,
or agent and shall incur to the benefit of the heirs, executors, and
administrators of such a person, unless otherwise provided when authorized
or ratified.
12
<PAGE>
(9) Unless the corporation's articles of incorporation provide otherwise,
notwithstanding the failure of a corporation to provide indemnification,
and despite any contrary determination of the board or of the shareholders
in the specific case, a director, officer, employee, or agent of the
corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court
conducting the proceeding, to the circuit court, or to any other court of
competent jurisdiction. On receipt of an application, the court, after
giving any notice that it considers necessary, may order indemnification
and advancement of expenses, including expenses incurred in seeking
court-ordered indemnification or advancement of expenses, if it determines
that:
(a) The director, officer, employee, or agent is entitled to
mandatory indemnification under subsection (3), in which case the
court shall also order the corporation to pay the director reasonable
expenses incurred in obtaining court-ordered indemnification or
advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the
exercise by the corporation of its power pursuant to subsection (7);
or
(c) The director, officer, employee, or agent is fairly and
reasonably entitled to indemnification or advancement of expenses, or
both, in view of all the relevant circumstances, regardless of whether
such person met the standard of conduct set forth in subsection (1),
subsection (2), or subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation
(including and constituent of a constituent) absorbed in a consolidation or
merger, so that any person who is or was a director, officer, employee, or
agent of a constituent corporation, or is or was serving at the request of
a constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, or other
enterprise, is in the same position under this section with respect to the
resulting or surviving corporation as he or she would have with respect to
such constituent corporation if its separate existence had continued.
(11) For purposes of this section:
(a) The term "other enterprises" includes employee benefit plans:
(b) The term "expenses" includes counsel fees, including those for
appeal:
(c) The term "liability" includes obligations to pay a judgement,
settlement, penalty, fine (including an excise tax assessed with
respect to any employee benefit plan), and expenses actually and
reasonably incurred with respect to an proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil,
criminal, administrative, or investigative and, whether formal or
informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation" includes any
service as a director, officer, employee, or agent of the corporation
that imposes duties or such persons, including duties related to an
employee benefit plan and its participants or beneficiaries; and
13
<PAGE>
(g) The term "not opposed to the best interests of the corporation"
describes the actions of a person who acts in good faith and in a
manner he or she reasonably believes to be in the best interests of
the participants and beneficiaries of an employee benefit plan.
(12) A corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee, or
agent of the corporation or is or was serving as the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
any liability asserted against the person and incurred by him or her in any
capacity or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify that person against such
liability under the provisions of this section.
ARTICLE VIII of the Issuer's Articles of Incorporation provides:
"DIRECTOR AND OFFICER INDEMNIFICATION
------------------------------------
(a) Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal or administrative, (hereinafter a
"Proceeding"), or is contacted by any governmental or regulatory body
in connection with any investigation or inquiry (hereinafter an
"Investigation"), by reason of the fact that such person is or was a
director or executive officer (as such term is utilized pursuant to
interpretations under Section 16 of the Securities Exchange Act of
1934) of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans
(hereinafter an "Indemnitee"), whether the basis of such Proceeding or
Investigation is alleged action in an official capacity or in any other
capacity as set forth above shall be indemnified and held harmless by
the corporation to the fullest extent authorized by the Florida
Business Corporation Act, as the same exists or may hereafter be
amended (but, in the case of any such amendment. only to the extent
that such amendment permits the corporation to provide broader
indemnification rights than such law permitted the corporation to
provide prior to such amendment), against all expense, liability and
loss (including attorneys' fees, judgments, fines, ERISA excise taxes
or penalties and amounts paid in settlement) or the costs of reasonable
settlement made with a view to curtailment of the cost of litigation
reasonably incurred or suffered by such Indemnitee in connection
therewith and such indemnification shall continue as to an Indemnitee
who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the Indemnitee's heirs, personal
representatives, executors and administrators; provided, however, that
except as provided in paragraph (b) hereof with respect to Proceedings
to enforce rights to indemnification, the corporation shall indemnify
any such Indemnitee in connection with a proceeding (or part thereof)
initiated by such Indemnitee only if such proceeding (or part thereof)
was authorized by the board of directors of the corporation. The right
to indemnification conferred in this Article shall be a contract right
and shall include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "Advancement of Expenses"); provided,
however, that the Advancement of Expenses shall be made only upon
delivery to the corporation of a personal guarantee by or on behalf of
such Indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is
no further right to appeal that such Indemnitee is or was not entitled
to be indemnified for such expenses under this Article or otherwise
(hereinafter a "Guarantee").
(b) If a claim under paragraph (a) of this Article is not paid
in full by the corporation within sixty (60) days after a written claim
has been received by the corporation, except in the case of a claim for
14
<PAGE>
an Advancement of Expenses in which case the applicable period shall be
twenty (20) days, the Indemnitee may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim. If
successful, in whole or in part, in any such suit or in a suit brought
by the corporation to recover an Advancement of Expenses pursuant to
the terms of a Guarantee, the Indemnitee shall be entitled to be paid
also the expense of prosecuting or defending such suit. In (1) any suit
brought by the Indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the Indemnitee to enforce a
right to an Advancement of Expenses) it shall be a defense that the
Indemnitee has not met the applicable standard of conduct set forth in
the Florida Business Corporation Act; and (2) in any suit by the
corporation to recover an Advancement of Expenses, pursuant to the
terms of a Guarantee, the corporation shall be entitled to recover such
expenses upon a final adjudication that the Indemnitee has not met the
applicable standard of conduct set forth in the Florida Business
Corporation Act, neither the failure of the corporation (including its
board of directors, independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such suit that
indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct set
forth in the Florida Business Corporation Act, nor an actual
determination by the corporation (including its board of directors,
independent legal counsel, or its stockholders) that the Indemnitee has
not met such applicable standard of conduct (or in the case of such a
suit brought by the Indemnitee) shall be a defense to such suit. In any
suit brought by the Indemnitee to enforce a right hereunder, or by the
corporation to recover an Advancement of Expenses pursuant to the terms
of a Guarantee, the burden of proving that the Indemnitee is not
entitled to be indemnified or to such Advancement of Expenses under
this Section or otherwise shall be on the corporation.
(c) The right to indemnification and to the Advancement of
Expenses conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
these Articles of Incorporation, bylaws, agreement, vote of
stockholders or disinterested directors or otherwise.
(d) The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust
or other enterprise against any expense, liability or loss, whether or
not the corporation would have the power to indemnify such person
against such expense, liability or loss under the Florida Busincs5
Corporation Act.
(e) The corporation may, to the extent authorized from time to
time by tile Board of Directors, grant rights to indemnification and to
the Advancement of Expenses, to any employee or agent of the
corporation to the fullest extent of the provisions of this Article
with respect to the indemnification and Advancement of Expenses of
directors, and executive officers of the corporation."
ARTICLE F of the Issuers Bylaws provides:
"INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The Corporation shall indemnify any person made or threatened
to be made a party to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
(other than an action by, or in the right of, the Corporation), brought
to impose a liability or penalty on such person in his capacity of
Director, officer, employee or agent of this Corporation, or of any
other corporation which such person serves as such at the request of
this Corporation, against judgments, fines, amounts paid in settlement
and expenses, including attorney's fees, actually and reasonably
incurred as a result of such action, suit or proceeding, or any appeal
thereof, if they acted in good faith in the reasonable belief that such
15
<PAGE>
action was in the best interest of this Corporation, and in criminal
actions or proceedings without reasonable ground for belief that such
action was unlawful. The termination of any such civil or criminal
action, suit or proceedings by judgment, settlement, conviction or upon
a plea of nolo contendere shall not in itself create a presumption that
any Director or officer did not act in good faith in the reasonable
belief that such action was in the best interests of this Corporation
or that they had reasonable ground for belief that such action was
unlawful. The foregoing rights of indemnification shall apply to the
heirs and personal representatives of any such Director, officer,
employee or agent and shall not be exclusive of other rights to which
they may be entitled."
Insofar as indemnification for liabilities raising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Issuer pursuant to the foregoing provisions, the Issuer has been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy and is therefor unenforceable.
16
<PAGE>
GREAT WALL FOOD AND BEVERAGE CORPORATION
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Page
----
I. For the Years Ended December 31, 1998, 1997, 1996 and 1995:
----------------------------------------------------------
Independent Auditor's Report....................................... F-2
Balance Sheet...................................................... F-3
Statement of Operations............................................ F-4
Statement of Stockholders' Equity.................................. F-5
Statement of Cash Flows............................................ F-6
Notes to Financial Statements...................................... F-7
II. For the Nine Months Ended September 30, 1999:
--------------------------------------------
Report of Certified Public Accountant.............................. F-9
Balance Sheet...................................................... F-10
Statement of Operations............................................ F-11
Statement of Stockholders' Equity.................................. F-12
Statement of Cash Flows............................................ F-13
Notes to Financial Statements...................................... F-14
F-1
<PAGE>
Joseph F. Janusz Certified Public Accountant
MEMBER: AMERICAN AND FLORIDA INSTITUTES OF CERTIFIED PUBLIC ACCOUNTANTS
7204 Jacaranda Lane
Miami Lakes, Florida 33014
--------
(305) 558-2272
Fax: (305)362-3118
Independent Auditors' Report
----------------------------
The Board of Directors
Great Wall Food And Beverage Corporation
I have audited the accompanying balance sheets of GREAT WALL FOOD AND BEVERAGE
CORPORATION as of December 31, 1998, 1997, 1996 and 1995, and the related
statements of operations, stockholders' equity, and cash flows for the years
then ended. 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 audits.
I conducted my audits 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
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of GREAT WALL FOOD AND BEVERAGE
CORPORATION as of December 31, 1998, 1997, 1996 and 1995 and the results of its
operations and its cash flows for the years ended in conformity with generally
accepted accounting principles.
Miami Lakes, Florida /s/ Joseph F. Janusz
August 31, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known As Ronnie Systems, Inc.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
------
December 31, December 31, December 31, December 31,
1998 1997 1996 1995
------------ ------------ ------------ ------------
CURRENT ASSETS
- --------------
<S> <C> <C> <C> <C>
Cash $117,838 $ 0 $ 0 $ 0
-------- ------- -------
Total Current Assets $117,838 $ 0 $ 0 $ 0
-------- ------- ------- -------
OTHER ASSETS
Deposits $100,000 $ 0 $ 0 $ 0
-------- ------- ------- -------
Total Other Assets $100,000 $ 0 $ 0 $ 0
-------- ------- ------- -------
TOTAL ASSETS $217,838 $ 0 $ 0 $ 0
======== ======= ======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
- -------------------
Accounts Payable $ 2,121 $ 1,300 $ 550 $ 0
-------- ------- ------- -------
Total current liabilities $ 2,121 $ 1,300 $ 550 $ 0
-------- ------- ------- -------
STOCKHOLDER'S EQUITY (DEFICIT)
------------------------------
Preferred Stock - par value $.0001,
Authorized 20,000,000 shares, no
issued and outstanding shares
Common stock - par value $5.00,
authorized 100 shares, issued
and outstanding 100 shares at
December 31, 1995,
Common stock - par value $.001,
authorized 50,000,000 shares,
issued and outstanding 100,000
at December 31, 1996 and
100,000 at December 31, 1997
Common stock - par value $.0001,
authorized 80,000,000 shares,
issued and outstanding 2,676,664
at December 31,1998 $ 268 $ 100 $ 100 $ 500
Additional paid-in capital 400,232 400 400 0
Deficit accumulated during
the development stage (184,783 (1,800) (1,050) ( 500)
-------- ------- ------- -------
Total stockholder's equity
(deficit) $215,717 $(1,300) $( 550) $( 0)
-------- ------- ------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $217,838 $ 0 $ 0 $ 0
======== ======= ======= =======
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems, Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
For the Period
For the Year For the Year For the Year For the Year August 1, 1980
Ended Ended Ended Ended (Inception)
December 31, December 31, December 31, December 31, to December 31,
1998 1997 1996 1995 1998
------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
Revenue $ 0 $ 0 $ 0 $ 0 $ 0
Total Revenue 0 0 0 0 0
--------- ------- ------- ------- ---------
Development stage
expenses 182,983 750 550 0 184,783
--------- ------- ------- ------- ---------
Total expenses 182,983 750 550 0 184,783
--------- ------- ------- ------- ---------
Net loss $(182,983) $ (750) $ (550) $ 0 $(184,783)
========= ======= ======= ======= =========
Net loss per share $ (.16) $ (.008) $ (.006) $ .000
========= ======= ======= =======
Weighted average
common shares
outstanding 1,119,218 100,000 100,000 100,000
========= ======= ======= =======
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE TOTAL
------------------------- PAID-IN DEVELOPMENT STOCKHOLDERS
SHARES AMOUNT CAPITAL STAGE EQUITY (DEFICIT)
-------- -------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Balance at August 5, 1980
(Date of Inception)
issuance of common stock 100 $ 500 $ 0 $ $ 500
Net loss (500) (500)
--------- ----- -------- --------- --------
Balance at December 31, 1994 100 500 0 (500) 0
Net loss
--------- ----- -------- --------- --------
Balance at December 31, 1995 100 500 0 (500) 0
Common stock changed par
value from $5.00 to $.001 (500) 500 0
Common stock forward stock
split 1,000: 1 99,900 100 (100) 0
Net loss (550) (550)
--------- ----- -------- --------- --------
Balance, December 31, 1996 100,000 $ 100 $ 400 $ (1,050) $ (550)
========= ===== ======== ========= ========
Net loss (750) (750)
--------- ----- -------- --------- --------
Balance, December 31, 1997 100,000 $ 100 $ 400 $ (1,800) $ (1,300)
========= ===== ======== ========= ========
Common stock reverse stock
split from 10 shares of $.001 to
1 share of $.0001 10,000 ( 99) 99 0
Common stock issued in connection
with 504 offering 2,666,664 267 399,733 400,000
Net loss (182,983) (182,983)
--------- ----- -------- --------- --------
Balance, December 31, 1998 2,676,664 $ 268 $400,232 $(184,783) $215,717
========= ===== ======== ========= ========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems Inc.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the Period
For the Year Ended August 1, 1980
December 31, (Date of Inception)
1998 1997 1996 1995 to December 31, 1998
------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C>
CASH FLOW FROM
OPERATING ACTIVITIES:
Net loss $(182,983) $( 750) $(550) $ 0 $(184,783)
Adjustments to reconcile
net loss to net cash used in
operating activities:
Change in operating assets and liabilities:
Deposits (100,000) 0 0 0 (100,000)
--------- ------ ----- ---- ---------
Accounts payable 821 750 550 0 2,121
--------- ------ ----- ---- ---------
Net cash used in
operating activities (282,162) (750) (550) 0 (282,662)
CASH FLOWS FROM INVESTING
INVESTING ACTIVITIES
Net cash used in
investing activities 0 0 0 0 0
--------- ------ ----- ---- ---------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issuance of
common stock - - 0 0 500
Proceeds from sales of
common stock 400,000 - 0 - 400,000
--------- ------ ----- ---- ---------
Net cash provided
by financing activities 400,000 0 0 - 400,500
--------- ------ ----- ---- ---------
Net (decrease)increase in cash 117,838 0 0 0 117,838
Cash at Beginning of period 0 0 0 0 0
--------- ------ ----- ---- ---------
Cash at End of Period $ 117,838 $ 0 $ 0 $ 0 $ 117,838
========= ====== ===== ==== =========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-6
<PAGE>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS AND ORGANIZATION
Great Wall Food And Beverage Corporation (the Company), a development stage
company, was incorporated in the State of Florida on August 1, 1980 as Ronnie
Interior Designs, Inc for the purpose of acquiring or merging with an existing
operating company.
On October 14, 1997, Ronnie Interior Designs, Inc. changed its name to Ronnie
Systems, Inc.
On March 13, 1998, the Company amended and restated its articles of
incorporation for Ronnie Systems, Inc. which changed its name to Great Wall Food
And Beverage Corporation.
DEVELOPMENT STAGE
The Company has operated as a development stage enterprise since its inception
by devoting substantially all of its efforts with the ongoing development of the
Company.
ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31, year end.
LOSS PER SHARE
The computation of loss per share of common stock is based upon the weighted
average common shares outstanding during each period.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the company to
continue as a going concern. It is management's plan to seek additional capital
through a merger with an existing operating company and raising capital.
NOTE 3 - CAPITAL STOCK ACTIVITY
The Company has issued 100 shares of its common stock, par value $.10 for $500,
on August 5, 1980.
On September 16, 1996, the State of Florida approved the Company's restated
Articles of Incorporation, which increased its capitalization from 100 common
shares, $5.00 par value, to 50,000,000 common shares, $.001 par value
F-7
<PAGE>
GREAT WALL FOOD AND BEVERAGE CORPORATION
(Formerly Known as Ronnie Systems Inc.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK ACTIVITY (con't)
Effective September 16, 1996, the Board of Directors approved a forward stock
split of 1,000:1. Thus increasing the number of outstanding common stock shares
from 100 common shares to 100,000 common shares.
On March 6, 1998, as part of the restated articles of incorporation, the Company
combined each 10 common shares of the $.001 par value stock of the Company
outstanding as of February 28, 1998 into 1 common share of the $.0001 par value
common stock of the Company.
In November 1998, the Company completed a private offering of 2,666,664 shares
of common stock at a price of $.15 per share, amounting to gross proceeds of
$400,000.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. An officer/ stockholder
provided office services without charge. Such costs are immaterial to the
financial statements and accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities.
F-8
<PAGE>
BARRY I. HECHTMAN, P.A.
Certified Public Accountant
Member of
Florida and American
Institute of CPAs
8100 SW 81 Drive Telephone: (305) 270-0014
Suite 210 Fax: (305) 598-3695
Miami Florida, 33143-6603 email: [email protected]
To the Board of Directors of
Great Wall Food and Beverage Corporation
We have compiled the accompanying balance sheet of Great Wall Food and
Beverage Corporation as of September 30, 1999 and the related statements of
income, stockholders' equity and, cash flows for the nine months then
ended, in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
and supplementary schedules information that is the representation of
management. We have not audited or reviewed the accompanying financial
statements and, accordingly, do not express an opinion or any other form of
assurance on them.
/s/ Barry I. Hechtman, P.A.
Barry I. Hechtman
December 21, 1999
F-9
<PAGE>
Great Wall Food and Beverage Corporation
Balance Sheet
September 30, 1999
ASSETS
CURRENT ASSETS
Cash $ 87,917.76
------------
TOTAL CURRENT ASSETS $87,917.76
OTHER ASSETS:
Deposits Receivable 100,000.00
------------
TOTAL OTHER ASSETS 100,000.00
-----------
TOTAL ASSETS $187,917.76
===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES:
TOTAL LIABILITIES $ 0.00
STOCKHOLDERS' EQUITY
Preferred Stock, $.0001 par
value; authorized 20,000,000
shares; no issued and
outstanding shares
Common Stock, $.0001 par value;
authorized 50,000,000 shares;
issued and outstanding 2,676,664
shares $ 268.00
Additional Paid-in Capital 400,232.00
Accumulated Deficit (212,582.24)
------------
TOTAL STOCKHOLDERS' EQUITY 187,917.76
-----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $187,917.76
===========
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
F-10
<PAGE>
Great Wall Food and Beverage Corporation
Statement of Income
Nine Months Ended September 30, 1999
Nine Months
REVENUES:
TOTAL REVENUES $ 0.00
EXPENSES
DEVELOPMENT STAGE EXPENSES (27,799.24)
-----------
NET LOSS $(27,799.24)
===========
NET LOSS PER SHARE $ (0.01)
===========
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
F-11
<PAGE>
<TABLE>
<CAPTION>
Great Wall Food and Beverage Corporation
Statement of Changes in Stockholders' Equity
For the Nine Months Ended September 30, 1999
Series A
Preferred Stock Common Stock
Par Value $.0001 Par Value $.0001
---------------------------------------------------- Additional Total
Paid-In Retained Stockholders'
Shares Amount Shares Amount Capital Earnings Equity
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1999 - - 2,676,664 $ 268 $ 400,232 $(184,783) $ 215,717
Net Income September 30, 1999 (27,799) (27,799)
-----------------------------------------------------------------------------------------------
Balance at September 30, 1999 - 1 2,676,664 $ 268 $ 400,232 (212,582) $ 187,917
===============================================================================================
See Accompanying Notes and Accountants' Report
Barry I. Hechtman, P.A.
</TABLE>
F-12
<PAGE>
Great Wall Food and Beverage Corporation
Statement of Cash Flows
For the Nine Months Ended September 30, 1999
Cash flows from operating activities:
Net Loss $(27,799)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Accounts payable (2,121)
--------
Net cash utilized by operating activities (29,920)
Cash flows from investing activities:
Net cash utilized by investing activities 0
Cash flows from financing activities:
Net cash provided from financing activities 0
--------
Net Increase in Cash (29,920)
Cash & Cash Equivalents balance at January 1, 1999 117,838
--------
Cash & Cash Equivalents balance at September 30, 1999 $ 87,918
========
See accompanying notes and accountants' report
Barry I. Hechtman, P.A.
F-13
<PAGE>
Great Wall Food and Beverage Corporation
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business and Organization
- -------------------------
Great Wall Food and Beverage Corporation (the "Company"), a development
stage company, was incorporated in the State of Florida on August 1, 1980
as Ronnie Interior Designs, Inc. for the purpose of acquiring or merging
with an existing operating company.
On October 14, 1997, Ronnie Interior Designs, Inc. changed its name
to Ronnie Systems, Inc.
On March 13, 1998, the Company amended and restated its articles of
incorporation and changed its name to Great Wall Food and Beverage
Corporation.
Development Stage
- -----------------
the Company has operated as a development stage enterprise since its
inception by devoting substantially all its efforts to the ongoing
development of the Company.
Accounting Method
- -----------------
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end of December 31.
Loss per Share
- --------------
The computation of loss per share of common stock is based upon the
weighted average common shares outstanding during each period.
Development Stage
- -----------------
The Company has operated as a development stage enterprise since its
inception by devoting substantially all of its efforts to the ongoing
development of the Company.
NOTE 2 - DEPOSITS RECEIVABLE
The deposits were on equipment to be purchased. These are expected to be
refunded to the company.
NOTE 3 - STOCKHOLDER'S EQUITY
The Company has the following classes of capital stock as of September 30,
1999:
Series A Preferred Stock, $0.0001 par value; authorized 20,000,000 shares;
issued and outstanding -0- shares.
Common stock, $0.0001 par value; authorized 50,000,000 shares; issued and
outstanding 2,676,664 shares.
F-14
<PAGE>
NOTE 4 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the Company has no current source
of revenue. Without realization of additional capital, it would be unlikely
for the Company to continue as a going concern. It is management's
intention to seek additional capital through a merger with an existing
operating company and raising capital.
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. Fees totaling $11,500
have been paid to companies owned by shareholders during the nine months
ended September 30, 1999 for administrative and consulting services
rendered on behalf of the Company. The officers and directors of the
Company are involved in other business activities and may, in the future,
become involved in other business opportunities.
F-15
<PAGE>
PART III
1. Index to Exhibits
-----------------
Exhibit No. Description of Exhibits
----------- -----------------------
2(a)* Issuer's Amended and Restated Articles of Incorporation
2(b)* Issuer's Bylaws
12(a)* Form of Subscription Agreement for Rule 504 Offering
12(b)* Form of Subscriber Questionnaire for Rule 504 Offering
12(c)* Investment Letter for Sale of Restricted Securities
27 Financial Data Schedule
--------------
* Previously filed.
Signatures:
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Issuer has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized.
GREAT WALL FOOD AND BEVERAGE CORPORATION
Dated: December 29, 1999 By: /s/ Patti Cooke
------------------------------------
Patti Cooke, President
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GREAT WALL
FOOD AND BEVERAGE CORPORATIONS' FORM 10-SB AND IS QUALIFIED IN ITS ENTIRETY TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-END> DEC-31-1998 SEP-30-1999
<CASH> 117,838 87,918
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 117,838 87,918
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 217,838 187,918
<CURRENT-LIABILITIES> 2,121 0
<BONDS> 0 0
0 0
0 0
<COMMON> 268 268
<OTHER-SE> 215,449 187,560
<TOTAL-LIABILITY-AND-EQUITY> 217,838 187,918
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 182,983 27,799
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 (27,799)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 (27,799)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (182,983) (27,799)
<EPS-BASIC> (.16) (.01)
<EPS-DILUTED> (.16) (.01)
</TABLE>
