<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
1st Amendment
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
G.P. PROPERTIES, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA 88-0377059
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
12821 AVENIDA LA VALENCIA
POWAY, CA 92064
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619) 699-1708 (619) 487-4124
(ISSUER'S TELEPHONE NUMBER) (ISSUER'S FAX NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
<S> <C>
- -------------------------------- --------------------------------------
- -------------------------------- --------------------------------------
</TABLE>
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
Common Stock - .001 Par Value
(TITLE OF CLASS)
1
<PAGE> 2
PART I
ITEM 1
DESCRIPTION OF THE BUSINESS
General
G.P. Properties, Inc. is filing this Form 10-SB on a voluntary basis in order to
make G.P. Properties' financial information equally available to any interested
parties or investors. The Company, on December 15, 1998 filed for trading on the
OTC Electronic Bulletin Board which is sponsored by the National Association of
Securities Dealers (NASD). The Company's 15c2-11 filing was returned to the
sponsoring broker pending SEC clearance in compliance with the OTC Bulletin
Board Eligibility rule change of January 4, 1999. The Company anticipates
re-filing the information statement with its sponsoring NASD Broker-Dealer for
listing of its securities on the OTC Electronic Bulletin Board upon completion
of the Company's comment period for this Form 10-SB filing.
Business Development
G.P. Properties, Inc. was incorporated in Nevada on July 6, 1989. The Company
was organized in order to implement management's concept for residential
financial analysis software for real estate brokers. Management determined that
existing software development costs in 1990 coupled with the recessionary real
estate conditions necessitated a delay in implementing the Company's business
plan. During 1995 the Company raised funds necessary to keep the Company current
in its state fees and taxes by the sale of stock to investors. In January of
1999 the board of directors voted to seek capital and began development of the
Company's business plan.
There have been no bankruptcy, receivership or similar proceedings.
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
Business of the Issuer
In January of 1999, Management determined the Company should complete the
development of its residential financial analysis software for real estate
brokers due to a reduction in programming costs, a robust national real estate
market, and Internet marketing potential that was unavailable in prior years.
The Company's residential financial analysis software for real estate brokers is
currently a concept which will require programming necessary to develop a system
for real estate brokers that integrates a home buyer's financing capacity,
available properties at specified price ranges, and financing terms of available
lenders. Management anticipates that software development costs will not exceed
$125,000. Management intends to market its software through direct marketing to
real estate brokers and mortgage lenders and on the Internet through the
Company's proposed website. While the Company has initiated informal discussions
with potential Internet website marketing providers, at this time the Company
has no formal contracts with these providers and
2
<PAGE> 3
will not initiate negotiations with these providers until such time as the
Company has sufficient funding. Management has no market or distribution
agreements with any real estate brokers, mortgage lenders, or Internet sales
sites. Once the Company is in beta testing of its software, management will seek
out direct marketing with real estate brokers and mortgage lenders and
distribution agreements with Internet sales sites.
The Company has no new product or service planned or announced to the public.
The size and financial strengths of the Company's competitors are substantially
greater than those of the Company. One competitor, Roger Martin Company, has
real estate analysis software marketed on the Internet that, while broad based,
does not analyze lender data. Management believes that the Company can
effectively compete with those other companies because of the unique nature of
its product which integrates three interrelated analyses of residential broker
transactions: buyer's financing capacity, sorted home pricing, and available
lender terms. This software gives the Company a competitive advantage because it
integrates, or bundles, the three primary parts of residential real estate
purchases: buyer's credit ability, purchase price range, and lender's financing
while reducing the amount of time needed to execute a real estate purchase. This
software integration of the residential real estate purchase process is
currently unavailable from the Company's competitors. Management is not aware of
any significant barriers to the Company's entry into the real estate financial
analysis market, however, the Company at this time cannot ascertain its exact
market share of this market.
Software programming and product manufacturing are available through various
suppliers such as EDP Management, Inc., Excelsoft Technologies, and I.D. Disk,
Inc. While the Company has initiated informal discussions with potential
software suppliers, at this time the Company has no formal contracts with
suppliers and will not initiate negotiations with potential suppliers until such
time as the Company has sufficient funding. As of the date of this filing the
Company's software design is in preliminary written outline and no computer code
has yet been written. Over the next eighteen months the Company intends to
achieve the following milestones in order to have its product available in the
market: during the first twelve months - raise capital needed to fund product
development through the sale of securities, complete schematic program flow
chart with programmer, write program code, test code, modify code, produce beta
product; during the succeeding six months - complete beta test period
modifications, and release product to market.
The Company intends to sell its products to a broad base of real estate brokers
and financial lenders throughout the United States and through the Internet and
will not depend on any one or a few major customers. Management estimates the
Company will begin beta testing of its software within approximately twelve
months of raising operating capital. Once the Company has raised sufficient
capital, Management estimates the Company will complete all testing, and release
its software product within approximately six months. At that time Management
will begin marketing directly to real estate brokers and financial lenders in
California and other Western states. The Company will then advertise on the
Internet through its own proposed website on a national basis. Management will
use their extensive contacts in the real estate and financial lending industries
to handle all direct marketing rather than relying on outside marketing
companies. For Internet marketing, the Company will utilize Internet website
marketing providers such as Invision LLC. While the Company has initiated
informal discussions with potential Internet website marketing providers, at
this time the Company has no formal contracts with these providers and will not
initiate negotiations with these providers until such time as the Company has
sufficient funding.
3
<PAGE> 4
When the Company has sufficient funding, and has a beta test version of its
software, management will seek legal council for copyright and trademark
protection. Until a beta test version of the software is produced and sufficient
funding is available, its software will be protected by common law copyright.
While Management believes its estimates of projected occurrences and events are
within the timetable of its business plan, there can be no guarantees or
assurances that the results anticipated will occur.
The Company does not need any governmental approval of its principal product.
The Company's business is not subject to material regulation by federal, state,
or local governmental agencies.
The Company's only employees are its two officers who will devote as much time
as the board of directors determines is necessary to manage the affairs of the
Company. The officers intend to work on a full time basis when the Company is
able to provide proper remuneration as discussed in Item 6, "Executive
Compensation".
Year 2000 Disclosure
Computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruption of normal business activities.
Based on a recent and ongoing assessment, the Company has determined that its
proposed software will be Year 2000 compatible and any other purchased software
will be off-the-shelf software that will be certified Year 2000 compatible for
all of its computing requirements. The Company presently believes that with
modifications to existing off-the-shelf software or conversions to new software,
the Year 2000 issue will not pose significant operational problems and will not
materially affect future financial results.
The Company currently anticipates purchasing new off-the-shelf Year 2000
compatible software by September 30, 1999, which is prior to any anticipated
impact on its operating systems. The total cost of this new software is not
anticipated to be a material expense to the Company at this time. However, there
can be no guarantee that these new off-the-shelf software products will be
adequately modified, which could have a material adverse effect on the Company's
results of operations.
4
<PAGE> 5
ITEM 2
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Plan of Operation
The Company's current cash is sufficient in Management's opinion until such time
as the Company can raise additional capital necessary to implement its business
plan.
The Company's business plan includes the following steps during the next
eighteen months: raise capital needed to fund product development through the
sale of private placement securities, finish all programming necessary to
produce a complete beta test product, complete beta test period modifications,
create Internet web sales site, manufacture product, and begin marketing and
sales of the finished product. Management anticipates that the funds needed to
complete these steps and pay for operating expenses to be approximately $300,000
to $400,000. In order to remain a going concern the Company must first utilize
private placement funding in order to implement its business plan and maintain a
positive cash flow. There is considerable risk in each step, including
insufficient funding from private placement securities sales; greater than
anticipated costs for programming, testing, and marketing; and insufficient
revenues from product sales. Without sufficient cash flow, the Company would
rely on its existing cash and loans from its officers until such time as the
Company could either raise sufficient private placement funds to complete its
product and sales plans, or be forced to sell its product concept to another
company.
There are no current plans for product research and development. There are no
current plans to purchase or sell any significant amount of fixed assets. There
are no current plans to increase the number of employees.
Results of Operations
There were no revenues from sales for the period ended December 31, 1998. The
Company sustained a net loss of $3,174 for the period ended December 31, 1998.
Liquidity and Capital Resources
As of December 31, 1998, the Company had $726 cash on hand and in the bank. The
primary costs and expenses for the period ended December 31, 1998 were $2,700
legal and accounting, $474 operating expenses.
Currently, the Company maintains a sufficient positive cash balance for working
capital. The losses through December 1998 were due to legal, accounting and
operating expenses. The Company has no financial commitments or obligations
including accounts payable, notes payable, salaries payable, and outside
services payable.
5
<PAGE> 6
ITEM 3
DESCRIPTION OF PROPERTY
The Company's principal executive office address and telephone number are
provided by a Director of the Company at no cost. Management considers the
Company's current principal office space arrangement adequate for current and
short-term estimated growth.
ITEM 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information on the ownership of the Company's
voting securities by Officers, Directors and major shareholders as well as those
who own beneficially more than five percent of the Company's common stock
through the most current date - January 31,1999:
<TABLE>
<CAPTION>
Title Of Name & Amount & Percent
Class Address Nature of owner Owned
- ----- ------- --------------- -----
<S> <C> <C> <C>
Common Eileen Sturtevant 4,500,000 (a) 42%
12821 Avenida La Valencia
Poway, Ca 92064
Common Anne Winton 4,500,000 (b) 42%
12821 Avenida La Valencia
Poway, Ca 92064
</TABLE>
(a) Ms. Sturtevant received 100,000 shares of the Company's common stock in
1995 for services, and 4,400,000 shares of the Company's common stock
were issued to her per a 45 for 1 forward stock split on February 5,
1998.
(b) Ms. Winton received 100,000 shares of the Company's common stock in 1995
for services, and 4,400,000 shares of the Company's common stock were
issued to her per a 45 for 1 forward stock split on February 5, 1998.
6
<PAGE> 7
ITEM 5
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS
The Directors and Officers of the Company, all of those whose terms will expire
8/31/99, or at such a time as their successors shall be elected and qualified
are as follows:
<TABLE>
<CAPTION>
Name & Address Age Position Date First Elected
- -------------- --- -------- ------------------
<S> <C> <C> <C>
Eileen Sturtevant 39 President, 9/28/95
12821 Avenida La Valencia Secretary,
Poway, Ca 92064 Director
Anne Winton 60 Director 9/28/95
12821 Avenida La Valencia Treasurer
Poway, Ca 92064
</TABLE>
Each of the foregoing persons may be deemed a "promoter" of the Company, as that
term is defined in the rules and regulations promulgated under the Securities
and Exchange Act of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers appointed to
serve until the meeting of the Board of Directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
No Executive Officer or Director of the Corporation has been the subject of any
Order, Judgement, or Decree of any Court of competent jurisdiction, of any
regulatory agency enjoining him from acting as an investment advisor,
underwriter, broker or dealer in the securities industry, or as an affiliated
person, director or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase or sale of any securities nor has any such person been the subject of
any Order of a State authority barring or suspending for more than sixty (60)
days, the right of such a person to be engaged in such activities or to be
associated with such activities.
No Executive Officer or Director of the Corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
No Executive Officer or Director of the Corporation is the subject of any
pending legal proceedings.
7
<PAGE> 8
Resumes
Eileen Sturtevant, President, Secretary & Director
1996-Current Accubank Mortgage Corporation: Senior statistical analyst in the
financial services industry. Responsible for mortgage loan
analysis modeling for institutional lenders
1995-1996 North American Mortgage Corporation: Residential loan underwriter.
BA-San Diego State University
Anne Winton, Treasurer & Director
1995-Current Owner and CEO of The Winton Group, a real estate consulting
company.
1981-1995 Owner and CEO of Anne Winton & Associates Realty. Managed over one
hundred brokers and sales personnel and an administration staff of
thirty. Developed and staffed fifteen real estate broker offices.
Represented major developers for complete project residential
sales. Successfully formed two large real estate syndicates and
raised funding for two residential real estate development
projects.
BA-University of Mississippi at Oxford
ITEM 6
EXECUTIVE COMPENSATION
The company's current officers receive no compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name & Year Salary Bonus Other Restricted Options LTIP All other
principle ($) (annual stock SARs Payouts compen-
position compen- awards ($) ($) sation ($)
sation ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E Sturtevant 1996 -0- -0- -0- 100 -0- -0- -0-
President 1997 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0- -0- -0-
A Winton 1996 -0- -0- -0- 100 -0- -0- -0-
Director 1997 -0- -0- -0- -0- -0- -0- -0-
1998 -0- -0- -0- -0- -0 -0- -0-
</TABLE>
8
<PAGE> 9
There are no current employment agreements between the Company and its executive
officers.
The Directors and Principal Officers have agreed to work with no remuneration
until such time as the Company receives sufficient revenues necessary to provide
proper salaries to all Officers and compensation for Directors' participation.
The Officers and the Board of Directors have the responsibility to determine the
timing of remuneration based upon a positive cash flow to include stock sales,
product sales, estimated cash expenditures, accounts receivable, accounts
payable, notes payable, and a sufficient cash balance at each month end. When
these elements of positive cash flow have been achieved, the Board of Directors
will determine the compensation for the Board members, and Officers. At this
time, management cannot accurately estimate when sufficient revenues will occur
to implement this compensation.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Corporation in the event of retirement
at normal retirement date pursuant to any presently existing plan provided or
contributed to by the Corporation or any of its subsidiaries, if any.
ITEM 7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Ms. Sturtevant (Director, President & Secretary) received 100,000 shares of the
Company's common stock in 1995 for services, and 4,400,000 shares of the
Company's common stock were issued to her per a 45 for 1 forward stock split on
February 5, 1998.
Ms. Winton (Director & Treasurer) received 100,000 shares of the Company's
common stock in 1995 for services, and 4,400,000 shares of the Company's common
stock were issued to her per a 45 for 1 forward stock split on February 5, 1998.
The Company has no stated policy regarding related party transactions.
ITEM 8
DESCRIPTION OF SECURITIES
The Company's Certificate of Incorporation authorizes the issuance of 25,000,000
Shares of Common Stock, .001 par value per share. There is no preferred stock
authorized. Holders of shares of Common Stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of Common Stock
have cumulative voting rights. Holders of shares of Common Stock are entitled to
share ratable in dividends, if any, as may be declared, from time to time by the
Board of Directors in its discretion, from funds legally available therefor. In
the event of a liquidation, dissolution, or winding up of the Company, the
holders of shares of Common Stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. Holders of Common Stock have
no preemptive or other subscription rights, and there are no conversion rights
or redemption or sinking fund provisions with respect to such shares. All of the
outstanding Common Stock is, and the shares offered by the Company pursuant to
this offering will be, when issued and delivered, fully paid and non-assessable.
9
<PAGE> 10
PART II
ITEM 1
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Company, on December 15, 1998 filed for trading on the OTC Electronic
Bulletin Board which is sponsored by the National Association of Securities
Dealers (NASD). The Company's 15c2-11 filing was returned to the sponsoring
broker pending SEC clearance in compliance with the OTC Bulletin Board
Eligibility rule change of January 4, 1999. As of the date of this filing, the
above application is pending.
As of the date of this filing, there is no public market for the Company's
securities. As of December 31, 1998, the Company had 39 shareholders of record.
The Company has paid no cash dividends. The Company has no outstanding options.
The Company has no plans to register any of its securities under the Securities
Act for sale by security holders. There is no public offering of equity and
there is no proposed public offering of equity.
ITEM 2
LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceedings and is not aware
of any pending or potential legal actions.
ITEM 3
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
CONTROL AND FINANCIAL DISCLOSURE
None.
ITEM 4
RECENT SALES OF UNREGISTERED SECURITIES
On November 8, 1995, at a special meeting of the board of directors, the
shareholders authorized the issuance of 100,000 shares of common stock to each
of the officers and directors of the Company for a total of 200,000 Rule 144
legend shares. The Company relied upon Section 4(2) of Securities Act of 1993,
as amended (the "Act"). The Company issued the shares in satisfaction of
management services rendered which does not constitute a public offering,
together with the fact that these shares were issued to officers and directors,
both of whom are accredited investors.
From the period of approximately November 8, 1995 until November 30, 1995, the
Company offered and sold 39,000 shares of common stock for at $.10 per share to
non-affiliated private investors. The Company relied upon Section 4(2) of the
Securities Act of 1993, as amended (the
10
<PAGE> 11
"Act"). Each prospective investor was given a private placement memorandum
designed to disclose all material aspects of an investment in the Company. This
offering was not accompanied by general advertisement or general solicitation
and the shares were issued with a Rule 144 restrictive legend.
On February 5, 1998, the Board of Directors authorized a forward stock split of
45 for 1 resulting in a total of 10,755,000 shares of common stock issued and
outstanding.
ITEM 5
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-Laws allow for the indemnification of Company Officers and
Directors in regard to their carrying out the duties of their offices. The
By-Laws also allow for reimbursement of certain legal defenses.
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling the Company, the Company has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
PART F/S
The audited financial statements of the Company and related notes which are
included in this offering have been examined by Barry L. Friedman, PC, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.
PART III
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Financial Statements
1 Audited financial statements for the year ended June 30, 1997
and the year ended June 30 1998 and the period ended November
30, 1998
2 Interim financial statements for the period ended December 31,
1998.
Exhibit 2 Plan of acquisition, reorganization or liquidation None
Exhibit 3(i) Articles of Incorporation Included with original
Exhibit 3(ii) Bylaws filing
Exhibit 4 Instruments defining the rights of holders None
Exhibit 7 Opinion re: liquidation preference None
Exhibit 9 Voting Trust Agreement None
Exhibit 10 Material contracts None
</TABLE>
11
<PAGE> 12
<TABLE>
<S> <C> <C>
Exhibit 11 Statement re: computation of per share earnings See Exhibit A
Exhibit 14 Material foreign patents None
Exhibit 16 Letter on change of certifying accountant None
Exhibit 21 Subsidiaries of the registrant None
Exhibit 24 Power of Attorney None
Exhibit 27 Financial Data Schedule Included
Exhibit 28 Reports furnished to State insurance agencies None
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
G.P. Properties, Inc.
Date 5/14/99 By /s/ EILEEN STURTEVANT
------------------------ ------------------------------------------
Eileen Sturtevant, President & Director
Date 5/14/99 By /s/ ANNE WINTON
------------------------ ------------------------------------------
Anne Winton, Director
12
<PAGE> 13
Exhibit A
13
<PAGE> 14
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
Board of Directors December 7, 1998
G.P. Properties, Inc.
San Diego, California
I have audited the accompanying Balance Sheets of G.P. Properties, Inc.,
(A Development Stage Company), as of November 30, 1998, June 30, 1998, and June
30, 1997, and the related statements of operations, stockholders' equity and
cash flows for the period July 1, 1998, to November 30, 1998, the two years
ended June 30, 1998, and June 30, 1997, and the period July 6, 1989 (inception)
to November 30, 1998. 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 we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides 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 G.P. Properties,
Inc., (A Development Stage Company), as of November 30, 1998, June 30, 1998, and
June 30, 1997, and the results of its operations and cash flows for the period
July 1, 1998, to November 30, 1998, the two years ended June 30, 1998, and June
30, 1997, and the period July 6, 1989 (inception) to November 30, 1998, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters are also described in Note #5. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ BARRY L. FRIEDMAN
- --------------------------
Barry L. Friedman
Certified Public Accountant
<PAGE> 15
G.P. PROPERTIES, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
November June June
30, 1998 30, 1998 30, 1997
--------- -------- --------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash $3,885 $3,900 $3,900
------ ------ ------
TOTAL CURRENT ASSETS $3,885 $3,900 $3,900
------ ------ ------
OTHER ASSETS: $ 0 $ 0 $ 0
------ ------ ------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
------ ------ ------
TOTAL ASSETS $3,885 $3,900 $3,900
====== ====== ======
</TABLE>
See accompanying notes to financial statements & audit report
-2-
<PAGE> 16
G.P. PROPERTIES, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
November June June
30, 1998 30, 1998 30, 1997
-------- -------- --------
<S> <C> <C> <C>
CURRENT LIABILITIES: $ 0 $ 0 $ 0
------- ------- -------
TOTAL CURRENT LIABILITIES $ 0 $ 0 $ 0
------- ------- -------
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value,
authorized 1,000,000 shares;
issued and outstanding at
June 30, 1997-239,000 shares $ 239
Common stock, $0.001 par value
authorized 25,000,000 shares
issued and outstanding at
June 30, 1998-10,755,000 shares $10,755
November 30, 1998-10,755,000 shares $10,755
Additional paid-in capital -6,555 -6,555 3,961
Deficit accumulated during
development stage -315 -300 -300
------- ------- -------
TOTAL STOCKHOLDER'S EQUITY $ 3,885 $ 3,900 $ 3,900
------- ------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 3,885 $ 3,900 $ 3,900
======= ======= =======
</TABLE>
See accompanying notes to financial statements & audit report
-3-
<PAGE> 17
G.P. PROPERTIES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
July 1, Year Year July 6, 1989
1998 to Ended Ended (inception)
Nov. 30, June 30, June 30, to Nov. 30,
1998 1998 1997 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCOME:
Revenue $ 0 $ 0 $ 0 $ 0
----------- ----------- ----------- -----------
EXPENSES:
General, Selling
and Administrative $ 15 $ 0 $ 0 $ 315
----------- ----------- ----------- -----------
Total Expenses $ 15 $ 0 $ 0 $ 315
Net Profit/Loss (-) -$15 $ 0 $ 0 -$315
=========== =========== =========== ===========
Net Profit/Loss (-)
per weighted
share (Note 1) $ NIL $ 0.0000 $ 0.0000 $ NIL
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding 10,755,000 10,755,000 10,755,000 10,755,000
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements & audit report
-4-
<PAGE> 18
G.P. PROPERTIES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional
Common Stock paid-in Retained
Shares Amount capital Earnings
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balance,
June 30, 1996 239,000 $ 239 $ 3,961 -$300
Net loss year ended
June 30, 1997 0
---------- ---------- ---------- ----------
Balance,
June 30, 1997 239,000 $ 239 $ 3,961 -$300
February 15, 1998
forward stock split
45:1 10,516,000 +10,516 -10,516
Net loss year ended
June 30, 1998 0
---------- ---------- ---------- ----------
Balance,
June 30, 1998 10,755,000 $ 10,755 -$6,555 -$300
Net loss
July 1, 1998 to
November 30, 1998 -15
---------- ---------- ---------- ----------
Balance,
November 30, 1998 10,755,000 $ 10,755 -$6,555 -$315
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements & audit report
-5-
<PAGE> 19
G.P. PROPERTIES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
July 1, Year Year July 6, 1989
1998 to Ended Ended (inception)
Nov. 30, June 30, June 30, to Nov. 30,
1998 1998 1997 1998
------ ------ ------ ----------
<S> <C> <C> <C> <C>
Cash Flows from
Operating Activities:
Net Loss -$15 $ 0 $ 0 -$315
Adjustment to
reconcile net loss
to net cash
provided by operating
activities 0 0 0 0
Changes in assets and
liabilities:
Increase in current
liabilities:
Officers Advances 0 0 0 0
------ ------ ------ ------
Net cash used in
operating activities -$15 $ 0 $ 0 -$315
Cash Flows from
investing activities 0 0 0 0
Cash Flows from
Financing Activities:
Issuance of common
stock for services 200
stock for cash 0 0 0 +4,000
------ ------ ------ ------
Net increase (decrease)
in cash -$15 $ 0 $ 0 $+3,885
Cash,
beginning of period 3,900 3,900 3,900 0
------ ------ ------ ------
Cash,
end of period $3,885 $3,900 $3,900 $ 3,885
====== ====== ====== =======
</TABLE>
See accompanying notes to financial statements & audit report
-6-
<PAGE> 20
G.P. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 1998, June 30, 1998, and June 30, 1997
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized July 6, 1989, under the laws of the State of Nevada as
G.P. Properties, Inc. The Company currently has no operations and, in accordance
with SFAS #7, is considered a development company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest bearing bank that
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents. There are no cash
equivalents as of November 30, 1998.
Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS #109)
"Accounting for Income Taxes." A deferred tax asset or liability is recorded for
all temporary difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
Organization Costs
Costs incurred to organize the Company were amortized on a straight-line basis
over a sixty month period.
-7-
<PAGE> 21
G.P. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS CONTINUED
November 30, 1998, June 30, 1998, and June 30, 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Loss Per Share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per
share is computed by dividing losses available to common stockholders by the
weighted average number of common shares outstanding during the period. Diluted
loss per share reflects per share amounts that would have resulted if dilative
common stock equivalents had been converted to common stock. As of December 31,
1998, the Company had no dilative common stock equivalents such as stock
options.
Year End
The Company has selected June 30, as its fiscal year end.
Year 2000 Disclosure
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Computer programs that
have time sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a system failure or
miscalculations causing disruption of normal business activities. Based on a
recent and ongoing assessment, the Company has determined that it will require
only off-the-shelf software utilizing a Microsoft Windows platform for all of
its computing requirements. The Company presently believes that with
modifications to existing off-the-shelf software or conversions to new software,
the Year 2000 issue will not pose significant operational problems and will not
materially affect future financial results. The Company currently anticipates
purchasing new off-the-shelf Year 2000 compatible software within the near
future, which is prior to any anticipated impact on its operating systems. The
total cost of this new software is not anticipated to be a material expense to
the Company at this time. However, there can be no guarantee that these new
off-the-shelf software products will be adequately modified, which could have a
material adverse effect on the Company's results of operations.
Policy in Regards to Issuance of Common Stock in a Non-Cash Transaction
The Company's accounting policy for issuing shares in a non-cash transaction is
to issue the equivalent amount of stock equal to the fair market value of the
assets or services received.
-8-
<PAGE> 22
G.P. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS CONTINUED
November 30, 1998, June 30, 1998, and June 30, 1997
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended November 30, 1998,
due to the net loss and no state income tax in the state of the Company's
domicile and operations. The Company's total deferred tax asset as of June 30,
1998, is as follows:
<TABLE>
<S> <C>
Net operation loss carry forward $300
Valuation allowance 300
----
Net deferred tax asset $ 0
</TABLE>
The federal net operation loss carry forward will expire between 2014 and 2018.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
NOTE 4 - SHAREHOLDERS' EQUITY
Common Stock
The authorized common stock of G.P. Properties, Inc. consists of 25,000,000
shares with a par value of $.001 per share.
Preferred Stock
G.P. Properties, Inc. has no preferred stock.
On June 28, 1990, the Company issued 100,000 shares of its $.001 par value
common stock for cash of $100.00 to a director.
On November 8, 1995, the Company cancelled the stock that was issued on June 28,
1990, and issued a new 200,000 shares of its $.001 par value common stock for
services of $200.00 to two directors.
On November 25, 1995, the Company issued 39,000 shares of its $.001 par value
common stock for cash of $3,900.00 to investors.
On October 22, 1997, the State of Nevada approved the Company's restated
Articles of Incorporation, which increased its capitalization from 1,000,000
common shares to 25,000,000 common shares. The par value remained at $0.001.
On February 5, 1998, the Company approved a forward stock split on the basis of
45:1, thus increasing the outstanding common stock from 239,000 shares to
10,755,000 shares.
-9-
<PAGE> 23
G.P. PROPERTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS CONTINUED
November 30, 1998, June 30, 1998, and June 30, 1997
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using 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 does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. The
stockholders/officers and or directors have committed to advancing the operating
costs of the Company interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real or personal property. Office
services are provided without charge by an officer. 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. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants of options outstanding to acquire any additional shares of
common stock.
-10-
<PAGE> 24
G.P. PROPERTIES, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
1998 1997
<S> <C> <C>
CURRENT ASSETS
CASH 726.00 3,900.00
--------- --------
TOTAL CURRENT ASSETS 726.00 3,900.00
FIXED ASSETS
--------- --------
NET FIXED ASSETS 0.00 0.00
OTHER ASSETS
ORGANIZATION COSTS
LESS AMORTIZATION
--------- --------
TOTAL OTHER ASSETS 0.00 0.00
--------- --------
TOTAL ASSETS 726.00 3,900.00
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
--------- --------
TOTAL CURRENT LIABILITIES 0.00 0.00
LONG TERM LIABILITIES
--------- --------
TOTAL LONG TERM LIABILITIES 0.00 0.00
--------- --------
TOTAL LIABILITIES 0.00 0.00
STOCKHOLDERS' EQUITY
COMMON STOCK 10,755.00 239.00
PAID IN CAPITAL -6,555.00 3,961.00
BEGINNING RETAINED EARNINGS -300.00 -300.00
NET INCOME (LOSS) -3,174.00 0.00
--------- --------
ENDING RETAINED EARNINGS -3,474.00 -300.00
--------- --------
TOTAL STOCKHOLDERS' EQUITY 726.00 3,900.00
--------- --------
TOTAL LIAB & STOCKHOLDERS' EQUITY 726.00 3,900.00
========= ========
</TABLE>
<PAGE> 25
G.P. PROPERTIES, INC.
INCOME STATEMENTS
FOR THE SIX MONTHS ENDED
<TABLE>
<CAPTION>
12/31/98 12/31/97
<S> <C> <C>
REVENUE
-------- --------
TOTAL REVENUE 0.00 0.00
DIRECT COSTS
-------- --------
TOTAL COST OF GOODS SOLD 0.00 0.00
-------- --------
GROSS PROFIT 0.00 0.00
OPERATING EXPENSES
LICENSES & FEES 418
OFFICE EXPENSE 56
TRANSFER AGENT 500
ACCOUNTANT 1,900
LEGAL 300
-------- --------
TOTAL OPERATING EXPENSES 3,174.00 0.00
-------- --------
INCOME FROM OPERATIONS -3,174.00 0.00
OTHER INCOME & EXPENSE
-------- --------
TOTAL OTHER INCOME & EXPENSE 0.00 0.00
-------- --------
INCOME BEFORE TAXES -3,174.00 0.00
PROVISION FOR TAXES
-------- --------
NET INCOME -3,174.00 0.00
======== ========
</TABLE>
<PAGE> 26
INCOME STATEMENTS
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
<TABLE>
<CAPTION>
12/31/98 12/31/97
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS -3,174 0
ADJ TO RECONCILE NET INCOME (LOSS) TO NET
CASH USED IN OPERATING ACTIVITIES
-------- -----
NET CASH FLOWS FROM OPERATING ACTIVITIES -3,174 0
-------- -----
NET INCREASE (DECREASE) -3,174 0
CASH AT BEGINNING OF PERIOD 3,900 3,900
CASH AT END OF PERIOD 726 3,900
</TABLE>
<PAGE> 27
G. P. PROPERTIES, INC.
NOTES TO FINANCIAL STATEMENTS
1. MANAGEMENT'S OPINION
In the opinion of management, the accompanying financial statements contain all
adjustments necessary to present fairly the financial position of the company as
of December 31, 1998 and 1997 and the results of operations for the six months
ended December 31, 1998 and 1997 and changes in cash for the six months ended
December 31, 1998 and 1997.
2. INTERIM REPORTING
The results of operations for the six months ended December 31, 1998 and 1997
are not necessarily indicative of the results to be expected for the remainder
of the year.
3. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
The Company was incorporated in Nevada on July 6, 1989. The Company was
organized in order to design and produce residential financial analysis software
for real estate brokers. The Company is a development stage company and has not
conducted any business activities to date.
Basis of Accounting
The Company's policy is to use the accrual method of accounting and to prepare
and present financial statements which conform to generally accepted accounting
principles. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
Cash and equivalents
For purpose of the statements of cash flows, all highly liquid investments with
a maturity of three months or less are considered to be cash equivalents. There
were no cash equivalents as of December 31, 1998 and 1997.
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS (continued)
Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109),
"Accounting for Income Taxes." A deferred tax asset or liability is recorded for
all temporary differences between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
4. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND OPERATIONS
Material changes in financial condition
As of December 31, 1998 the Company had $726 of cash in the bank compared to
$3,900 of cash in the bank as of December 31, 1997. The Company had no cash
receipts for the six months ended December 31, 1998. The primary uses of cash
during the six months ended December 31, 1998 were $2,700 for professional fees,
and $474 for operating expenses.
Material changes in the results of operations
Expenses of $3,174 for the six months ended December 31, 1998 were primarily for
preparing the Company's legal documents and audit in anticipation of securing
private placement capital in 1999. Management believes that the current positive
real estate market and Internet marketing potential make economic sense for the
Company to complete its business plan to raise capital through the sale of
private placement securities in order to develop its real estate financial
analysis software product in 1999.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM INTERIM
FINANCIAL STATEMENTS FOR 2ND QUARTER 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH G.P. PROPERTIES, INC. AMENDED 10-SB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 726
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 726
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 726
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 10,755
<OTHER-SE> (6,555)
<TOTAL-LIABILITY-AND-EQUITY> 726
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,174
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,174)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,174)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,174)
<EPS-PRIMARY> 0.0
<EPS-DILUTED> 0.0
</TABLE>
