<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB-A1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- ---------------
Commission File No. 0-27177
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
-------------------------------------------
(Name of Small Business Issuer in its Charter)
UTAH 87-0427597
---- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
923 West 500 North
Lindon, Utah 84042
------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 785-6294
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
June 30, 2000
14,844,018
----------
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS
CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000 and December 31, 1999
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets
[CAPTION]
<TABLE>
ASSETS
June 30, December 31,
2000 1999
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 63,677 $ -
Inventory 160,000 160,000
Total Current Assets 223,677 160,000
EQUIPMENT, NET (Note 2) 40,678 58,797
TOTAL ASSETS $ 264,355 $ 218,797
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 5,571 $ -
Accounts payable (Note 5) 40,563 40,563
Note payable - related (Note 3) 8,588 1,424
Accrued expenses 429 72
Total Current Liabilities 55.151 42,059
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY
Common stock, $0.00025 par value,
200,000,000 shares authorized;
14,814,018 and 14,644,018 shares
issued and outstanding, respectively 3,713 3,663
Additional paid-in capital 4,934,673 4,884,723
Stock subscription receivable (183,002 ) (388,002)
Deficit accumulated during
the development stage (4,546,180 ) (4,323,646)
Total Stockholders' Equity 209,204 176,738
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 264,355 $ 218,797
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
June 18, 1984
For the Three Months For the Six Months Through
Ended June 30, Ended June 30, June 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
SALES $ - $ - $ - $ - $ 599,609
COST OF
PRODUCT SOLD - - - - 676,198
GROSS MARGIN - - - - (76,589)
OPERATING EXPENSES
General and
administrative 2,018 1,741 189,537 29,789 2,475,000
Legal and
professional 2,774 - 4,765 1,200 835,593
Research and
development 10,731 - 10,731 25,000 546,830
Depreciation 9,059 9,059 18,119 18,119 382,490
Total Expenses 24,582 10,800 223,152 49,108 4,239,913
Net Loss
From Operations (24,582) (10,800) (223,152) (49,108) 4,316,502
OTHER INCOME (EXPENSE)
Interest expense (219) - (429) - (85,420)
Interest income 858 - 1,047 - 94,474
Loss on disposal
of assets - - - - (241,238)
Miscellaneous - - - - 2,506
Total Other Income
(Expense) 639 - 618 - (229,678)
NET LOSS $ (23,943) $ (10,800) $(222,534) $(49,108) $(4,546,180)
BASIC LOSS
PER SHARE $ (0.00) $ (0.00) $ (0.02) $ (0.00)
WEIGHTED AVERAGE
NUMBER OF
SHARES
OUTSTANDING 14,662,370 10,644,018 14,738,194 10,644,018
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
[CAPTION]
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance,
June 18, 1984 - $ - $ - $ -
Stock issued for
cash at $0.0143
per share 140,173 35 1,965 -
Balance,
December 31, 1984 140,173 35 1,965 -
Stock issued for
cash at $0.05
per share 400,000 100 19,900 -
Stock issuance costs - - (4,450) -
Purchase of treasury
stock - - - -
Sale of treasury
stock at - - 411,073 -
$2.11 per share
Stock issued to
officers for
services at $0.005
per share 438,600 110 2,083 -
Net loss for the year
ended December 31,
1985 - - - (146,384)
Balance,
December 31, 1985 978,773 $ 245 $ 430,571 $ (146,384)
<PAGE>
Treasury Stock Subscription Total
Shares Amount Receivable Equity
<S> <C> <C> <C> <C>
Balance, June 18, 1984 $ - $ - $ - $ -
Stock issued for cash
at $0.0143 per share - - - 2,000
Balance, December 31,
1984 - - - 2,000
Stock issued
for cash at $0.05
per share - - - 20,000
Stock issuance costs - - - (4,450)
Purchase of treasury
stock (403,976) (5,950) - (5,950)
Sale of treasury stock
at $2.11 per share 196,658 2,896 - 413,969
Stock issued to
officers for services
at $0.005 per share - - - 2,193
Net loss for the year
ended December 31,1985 - - - (146,384)
Balance, December 31,
1985 (207,318) (3,054) - 281,378
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
[CAPTION]
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capitol Deficit
<S> <C> <C> <C> <C>
Balance forward 978,773 $ 245 $ 430,571 $ (146,384)
Purchase of treasury
stock - - - -
Sale of treasury stock at
$29.65 per share - - 1,838,032 -
Net loss for the year
ended December 31, 1986 - - - (542,930)
Balance,
December 31, 1986 978,773 245 2,268,603 (689,314)
Net loss for the year
ended December 31, 1987 - - - (509,693)
Balance,
December 31, 1987 978,773 245 2,268,603 (1,199,007)
Stock issued for
services at $0.60 per
share 25,000 6 14,994 -
Net loss for the year ended
December 31, 1988 - - - (501,513)
Balance,
December 31, 1988 1,003,773 $ 251 $ 2,283,597 $ (1,700,520)
Treasury Stock Subscription Total
Shares Amount Receivable Equity
<S> <C> <C> <C> <C>
Balance forward (207,318) (3,054) - 281,378
Purchase of treasury
stock (13,997) (13,500) - (13,500)
Sale of treasury stock at
$29.65 per share 62,000 768 (732,300) 1,106,500
Net loss for the year
ended December 31, 1986 - - - (542,930)
Balance,
December 31, 1986 (159,315) (15,786) (732,300) 831,448
Net loss for the year
ended December 31, 1987 - - - (509,693)
Balance,
December 31, 1987 (159,315) (15,786) (732,300) 321,755
Stock issued for
services at $0.60 per
share - - - 15,000
Net loss for the year ended
December 31, 1988 - - - (501,513)
Balance,
December 31, 1988 (159,315) (15,786) (732,300) (164,758)
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
[CAPTION]
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capitol Deficit
<S> <C> <C> <C> <C>
Balance forward 1,003,773 $ 251 $ 2,283,597 $ (1,700,520)
Stock issued for cash at
$2.00 per share 10,000 3 19,997 -
Stock issued for cash
at $0.575 per share 20,000 5 11,495 -
Sale of treasury stock
and subscription
receivable - - (34,786) -
Net loss for the year
ended December 31, 1989 - - - (306,612)
Balance
December 31, 1989 1,033,773 259 2,280,303 (2,007,132)
Cancellation of shares (5) - - -
Stock issued for cash
at $0.10 per share 25,000 6 2,494 -
Stock issued for cash
at $0.005 per share 3,150 1 15 -
Additional compensation
for treasury stock - - 34,701 -
Balance 1,061,918 $ 266 $ 2,317,513$ (2,007,132)
Treasury Stock Subscription Total
Shares Amount Receivable Equity
<S> <C> <C> <C> <C>
Balance forward (159,315) $ (15,786) $ (732,300) $ (164,758)
Stock issued for cash at - - - 20,000
$2.00 per share
Stock issued for cash - - - 11,500
at $0.575 per share
Sale of treasury stock 159,315 15,786 732,300 713,300
and subscription
receivable
Net loss for the year
ended December 31, 1989 - - - (306,612)
Balance
December 31, 1989 - - - 273,430
Cancellation of shares - - - -
Stock issued for cash
at $0.10 per share - - - 2,500
Stock issued for cash
at $0.005 per share - - - 16
Additional compensation
for treasury stock - - - 34,701
Balance - $ - $ - 310,647
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
[CAPTION]
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capitol Deficit
<S> <C> <C> <C> <C>
Balance forward 1,061,918 $ 266 $ 2,317,513 $ (2,007,132)
Net loss for the year
ended December 31, 1990 - - - (123,676)
Balance,
December 31, 1990 1,061,918 266 2,317,513 (2,130,808)
Stock issued for services
at $0.12 per share 20,400 5 2,395 -
Net loss for the year ended
December 31, 1991 - - - (207,142)
Balance,
December 31, 1991 1,082,318 271 2,319,908 (2,337,950)
Net loss for the year
ended December 31, 1992 - - - -
Balance,
December 31, 1992 1,082,318 271 2,319,908 (2,337,950)
Net loss for the year
ended December 31, 1993 - - - -
Balance,
December 31, 1993 1,082,318 $ 271 $ 2,319,908 $(2,337,950)
Treasury Stock Subscription Total
Shares Amount Receivable Equity
<S> <C> <C> <C> <C>
Balance forward $ - $ - $ - $ 310,647
Net loss for the year
ended December 31, 1990 - - - (123,676)
Balance,
December 31, 1990 - - - 186,971
Stock issued for services
at $0.12 per share - - - 2,400
Net loss for the year
ended December 31, 1991 - - - (207,142)
Balance,
December 31, 1991 - - - (17,771)
Net loss for the year
ended December 31, 1992 - - - -
Balance,
December 31, 1992 - - - (17,771)
Net loss for the year
ended December 31, 1993 - - - -
Balance,
December 31, 1993 - - - (17,771)
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
[CAPTION]
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capitol Deficit
<S> <C> <C> <C> <C>
Balance,
December 31, 1993 1,082,318 $ 271 $ 2,319,908 $(2,337,950)
Net loss for the year
ended December 31, 1994 - - - (10,964)
Balance,
December 31, 1994 1,082,318 271 2,319,908 (2,348,914)
Stock issued for
Commodity Recovery
Corporation valued at
predessor cost of $0.00 500,000 125 (125) -
Stock issued for Energy
Research Corporation
valued at predessor cost
of $0.00 4,200,000 1,050 (1,050) -
Conversion of debt to
equity - - 3,500 -
Net loss for the year ended
December 31, 1995 - - - (89,740)
Balance,
December 31, 1995 5,782,318 $1,446 $ 2,322,233 $(2,438,654)
Treasury Stock Subscription Total
Shares Amount Receivable Equity
<S> <C> <C> <C> <C>
Balance,
December 31, 1993 - $ - $ - $ (17,771)
Net loss for the year
ended December 31, 1994 - - - (10,964)
Balance,
December 31, 1994 - - - (28,735)
Stock issued for
Commodity Recovery
Corporation valued at
predessor cost of $0.00 - - - -
Stock issued for Energy
Research Corporation
valued at predessor cost
of $0.00 - - - -
Conversion of debt to
equity - - - 3,500
Net loss for the year ended
December 31, 1995 - - - (89,740)
Balance,
December 31, 1995 - $ - $ - $ (114,975)
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
[CAPTION]
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capitol Deficit
<S> <C> <C> <C> <C>
Balance,
December 31, 1995 5,782,318 $ 1,446 $ 2,322,233 $(2,438,654)
Stock issued for cash
cash at $0.60 per share 150,000 38 89,962 -
Stock issued for
services valued at $1.00
per share 288,000 73 287,927 -
Stock subscription
receivable at $0.50
per share 40,000 10 19,990 -
Net loss for the year ended
December 31, 1996 - - - (400,501)
Balance,
December 31, 1996 6,260,318 1,567 2,720,112 (2,839,155)
Stock issued for cash
at $0.50 per share 1,163,700 291 575,773 -
Stock issued for services
at $0.50 per share 250,000 63 124,937 -
Receipt of stock
subscription - - - -
Net loss for the year ended
December 31, 1997 - - - (290,549)
Balance,
December 31, 1997 7,674,018 $1,921 $3,420,822 $(3,129,704)
Treasury Stock Subscription Total
Shares Amount Receivable Equity
<S> <C> <C> <C> <C>
Balance,
December 31, 1995 - $ - $ - $ (114,975)
Stock issued for cash
cash at $0.60 per share - - - 90,000
Stock issued for
services valued at $1.00
per share - - - 288,000
Stock subscription
receivable at $0.50
per share - - (20,000) -
Net loss for the year ended
December 31, 1996 - - - (400,501)
Balance,
December 31, 1996 - - (20,000) (137,476)
Stock issued for cash
at $0.50 per share - - - 576,064
Stock issued for services
at $0.50 per share - - - 125,000
Receipt of stock
subscription - - 20,000 20,000
Net loss for the year ended
December 31, 1997 - - - (290,549)
Balance,
December 31, 1997 - $ - $ - $ 293,039
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
[CAPTION]
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capitol Deficit
<S> <C> <C> <C> <C>
Balance,
December 31, 1997 7,674,018 $ 1,921 $3,420,822 $(3,129,704)
Stock issued for
services valued at
$0.12 per share 2,970,000 742 355,658 -
Contribution of
capital by shareholder - - 29,243 -
Net loss for the year
ended December 31, 1998 - - - (464,211)
Balance,
December 31, 1998 10,644,018 2,663 3,805,723 (3,593,915)
Stock Issued for
services valued at
$0.27 per share 1,000,000 250 269,750 -
Stock issued for
services to be
rendered valued at
$0.27 per share 2,000,000 500 539,500 -
Stock issued for
debt and subscription
valued at $0.27
per share 1,000,000 250 269,750 -
Net loss for the year
ended December 31, 1999 - - - (729,731)
Balance,
December 31, 1999 14,644,018 $ 3,663 $ 4,884,723 $(4,323,646)
Treasury Stock Subscription Total
Shares Amount Receivable Equity
<S> <C> <C> <C> <C>
Balance,
December 31, 1997 - $ - $ - $ 293,039
Stock issued for
services valued at
$0.12 per share - - - 356,400
Contribution of
capital by shareholder - - - 29,243
Net loss for the year
ended December 31, 1998 - - - (464,211)
Balance,
December 31, 1998 - - - 214,471
Stock Issued for
services valued at
$0.27 per share - - - 270,000
Stock issued for
services to be
rendered valued at
$0.27 per share - - (180,000) 360,000
Stock issued for
debt and subscription
valued at $0.27
per share - - (208,002) 61,998
Net loss for the year
ended December 31, 1999 - - - (729,731)
Balance,
December 31, 1999 - $ - $ (388,002) $ 176,738
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
[CAPTION]
<TABLE>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capitol Deficit
<S> <C> <C> <C> <C>
Balance,
December 31, 1999 14,644,018 $ 3,663 $ 4,884,723 $(4,323,646)
Expense of subscription
receivable (unaudited) - - - -
Receipt of stock
subscription (unaudited) - - - -
Stock issued for cash at
$0.25 per share
(unaudited) 200,000 50 49,950 -
Net loss for the period
ended June 30, 2000
(unaudited) - - - (222,534)
Balance,
June 30, 2000
(unaudited) 14,844,018 $ 3,713 $ 4,934,673 $(4,546,180)
Treasury Stock Subscription Total
Shares Amount Receivable Equity
<S> <C> <C> <C> <C>
Balance,
December 31, 1999 - $ - $ (388,002 $ 176,738
Expense of subscription
receivable (unaudited) - - 180,000 180,000
Receipt of stock
subscription (unaudited) - - 25,000 25,000
Stock issued for cash at
$0.25 per share
(unaudited) - - - 50,000
Net loss for the period
ended June 30, 2000
(unaudited) - - - (222,534)
Balance,
June 30, 2000
(unaudited) - $ - $ 183,002 $ 209,204
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
[CAPTION]
<TABLE>
From
Inception on
June 18, 1984
For the Three Months For the Six Months Through
Ended June 30, Ended June 30, June 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
CASH FLOWS
FROM OPERATING
ACTIVITIES
Net loss $ (23,943) $(10,800) $(222,534) $(49,108) $(4,546,180)
Adjustment to
reconcile net
loss to net
cash used by
operating activities:
Depreciation 9,059 9,059 18,119 18,119 382,490
Common stock
issued for
services - - 205,000 - 1,604,400
Loss on disposal
of property - - - - 241,238
Changes in operating
assets and liabilities:
(Increase)
in inventory - - - - (160,000)
Increase
(decrease) in
accounts payable 5,083 - 5,571 - 5,571
Increase
(decrease) in
accrued liabilities 219 - 357 - 60,099
Net Cash (Used)
by Operating
Activities (9,580) (1,741) 6,513 (30,989) (2,412,382)
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures - - - - (718,191)
Purchase of
treasury stock - - - - (19,450)
Stock subscription - - - - (732,300)
Net Cash (Used)
from Investing
Activities - - - - (1,469,941)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from
note payable
- related 178 1,741 7,164 30,989 547,962
Repayments of
note payable
- related - - - - (443,761)
Sale of
treasury stock - - - - 1,911,183
Cancellation of
stock subscription - - - - 732,300
Common stock issued
for cash - - 50,000 - 1,198,316
Net Cash (Used)
Provided by
Financing
Activities $ 178 $ 1,741 $ 57,164 $ 30,989 $ 3,946,000
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
[CAPTION]
<TABLE>
From
Inception on
June 18, 1984
For the Three Months For the Six Months Through
Ended June 30, Ended June 30, June 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS $ (9,402) $ - $ 63,677 $ - $ 63,677
CASH AND CASH
EQUIVALENTS AT
BEGINNING
OF PERIOD 73,079 - - - -
CASH AND CASH
EQUIVALENTS END
OF PERIOD $ 63,677 $ - $ 63,677 $ - $ 63,677
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR
Interest $ - $ - $ - $ - $ 84,919
Income taxes $ - $ - $ - $ - $ -
SCHEDULE OF NON-CASH FINANCING
ACTIVITIES
Common stock
issued for
services $ - $ - $ 205,000 $ - $ 1,604,400
Common stock
issued for debt $ - $ - $ - $ - $ 61,998
</TABLE>
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2000 and December 31, 1999
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements presented are those of Galtech Materials
Corporation (the Company) and its wholly-owned subsidiaries Energy Research
Corporation (ERC) and Commodity Recovery Corporation (CRC). The Company was
incorporated on June 18, 1984 under the laws of the State of Utah as Versa
tech, Inc. On April 30, 1985, the Company changed its name to Galtech, Inc.,
and on June 18, 1986, the Company changed its name to Galtech Semiconductor
Materials Corporation. The Company was engaged in the manufacture of compound
semiconductor materials, but ceased all operations in 1990 when a fire
destroyed the Company's research and development as well as the Company's
operations center. Principal operations have not yet resumed. On February
28, 1995, the Company issued 500,000 shares of common stock in exchange for
100% of the issued and outstanding common stock of CRC. On February 28,
1995, the Company issued 4,200,000 shares of common stock in exchange for 100%
of the issued and outstanding shares of ERC. (Note 4)
Energy Research Corporation (ERC) was incorporated on February 7, 1994 under
the laws of the State of Arizona. ERC was incorporated to develop and produce
alternative sources of energy.
Commodity Recovery Corporation (CRC) was incorporated on October 31, 1994
under the laws of the State of Utah. CRC was incorporated to develop and
market products relating to the decontamination of aflatoxin.
At the time of acquisition of CRC and ERC, the Company was essentially
inactive, with no operations and minimal assets. Neither CRC or ERC had any
assets or operations. As such, the acquisition was recorded at predessor cost
which was $0. The Company is the continuing entity for accounting and legal
purposes.
a. Accounting Methods
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 year end.
b. Equipment
Depreciation of equipment is provided using the straight-line method over the
estimated lives of five years.
Maintenance and repairs of the equipment that do not improve or extend the
lives of the respective assets are charged to expense as incurred. Major
renewals and betterments are treated as capital expenditures and depreciated
accordingly.
When assets are retired or otherwise disposed of, or become fully depreciated,
the cost of the assets and the related accumulated depreciation are removed
from the accounts with any gain or loss on disposition reflected in the
statement of operations.
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2000 and December 31, 1999
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
c. Income Taxes
No provision for taxes has been made, due to cumulative operating losses at
June 30, 2000. The Company has net operating loss carryforwards of
approximately $4,546,000 which will expire by 2020. The potential tax
benefits of the loss carryforwards are offset by a valuation allowance of the
same amount.
d. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
e. Basic Loss Per Share
For the Three Months Ended
June 30, 2000
Loss Shares Per Share
(Numerator) (Denominator) Amount
$ (23,943 ) 14,662,370 $ (0.00)
For the Three Months Ended
June 30, 1999
Loss Shares Per Share
(Numerator) (Denominator) Amount
$ (10,800) 10,644,018 $ (0.00)
For the Six Months Ended
June 30, 2000
Loss Shares Per Share
(Numerator) (Denominator) Amount
$ (222,534) $ 14,738,194 $ (0.02)
For the Six Months Ended
June 30, 1999
Loss Shares Per Share
(Numerator) (Denominator) Amount
$ (49,108) $ 10,644,018 $ (0.00)
The computations of basic loss per share of common stock is based on the
weighted average number of shares outstanding during the period.
<PAGE>
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2000 and December 31, 1999
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES )Continued)
f. Principles of Consolidation
The consolidated financial statements include those of Galtech Semiconductor
Materials Corporation (the Company) and its 100% owned subsidiaries Energy
Research Corporation and Commodity Recovery Corporation. All significant
accounts and transactions have been eliminated.
g. Use of 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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
h. Inventory
The inventory of raw materials for crystal growing is stated at the lower of
cost or market and is accounted for on a first-in-first-out basis.
i. Revenue Recognition
When the Company begins operations, revenue will be recorded upon the sale and
delivery of the finished products.
j. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. Such adjustments which, in the opinion of management, are
necessary for a fair presentation. Such adjustments are of a normal recurring
nature.
NOTE 2 - EQUIPMENT
June 30, December 31,
2000 1999
(Unaudited)
Equipment consists of the following:
Research equipment $ 181,187 $ 181,187
Less: accumulated depreciation (140,509) (122,390)
Net Equipment $ 40,678 $ 58,797
Amounts charged to depreciation expense were $18,118 and $18,118 for the
periods ended June 30, 2000 and 1999, respectively.
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
June 30, 2000 and December 31, 1999
NOTE 3 - RELATED PARTY TRANSACTIONS
In 1999, the former president of the Company, paid expenses of $61,998 toward
the stock subscription of $270,000. In March of 2000, an additional $25,000
was paid toward the stock subscription. Additionally, the current president
made advances to the Company of $3,294 which bear interest at 10%, are
unsecured and due on demand.
Two other related parties made advances to the Company to cover operating
expenses of $5,294, which also bear interest at 10%, are unsecured and due on
demand. Thus, making total related part debt $8,588 at June 30, 2000.
NOTE 4 - STOCK TRANSACTIONS
On February 8, 1995, the Board of Directors approved a 20 to 1 reverse stock
split. All references to shares outstanding and earnings per share have been
retroactively restated to reflect the reverse stock split.
On February 28, 1995, the Board of Directors issued 500,000 shares of common
stock to acquire Commodity Research Corporation (CRC). CRC has no assets or
operating history and the acquisition was valued at $0.
On February 28, 1995, the Board of Directors issued 4,200,000 shares of common
stock to acquire Energy Research Corporation (ERC). ERC had no assets or
operating history, and the acquisition was valued at predecessor cost of $0.
In November 1995, the Company issued 125,000 shares of common stock for public
relations services to be performed. The contract was canceled in December,
1995 and the stock was returned and canceled. Accordingly, the financial
statements do not reflect the issuance and cancellation of the 125,000 shares.
In 1996, the Company issued 150,000 shares of common stock for cash at $0.60
per share.
In 1996, the Company issued 40,000 shares of common stock for a subscription
receivable valued at $0.50 per share.
In 1996, the Company issued 288,000 shares of common stock for legal and
professional services rendered, valued at $1.00 per share.
In 1997, the Company issued 1,163,700 shares of common stock for cash at $0.50
per share.
In 1997, the Company issued 250,000 shares of common stock for services,
valued at $0.50 per share.
In 1998, the Company issued 2,970,000 shares of common stock for services
valued at $0.12 per share.
GALTECH SEMICONDUCTOR MATERIALS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
June 30, 2000 and December 31, 1999
NOTE 4 - STOCK TRANSACTIONS (Continued)
In 1999, the Company issued 3,000,000 shares of common stock for services
valued at $0.27 per share.
In 1999, the Company issued 1,000,000 shares of common stock for debt and
subscription valued at $0.27 per share.
In March 2000, the Company issued 200,000 shares of common stock for cash at
$0.25 per share.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
On December 18, 1992, a judgment was entered against the Company for $40,563
for non-payment of an account payable. This amount has been included in the
accounts payable for June 30, 2000. The Company has written off other
accounts payable which were incurred prior to 1990. The Company's legal
counsel has represented that the statute of limitations for collection of the
payables has expired. The Company does not intend to pay the liabilities
however there is no assurance that the creditors will not make claims against
the Company.
NOTE 6 - GOING CONCERN
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has little cash and without realization of
additional adequate financing, it would be unlikely for the Company to pursue
and realize its objective of operating profitably. The Company plans to
continue the research and development process prior to the sales of its
product. In the interim, management has committed to covering the operating
expenses of the Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
GALTECH SEMICONDUCTOR MATERIALS
CORPORATION
Date: 18 Sept. 2000 By: /s/ William F. Pratt
-------------- -------------------------------------
William F. Pratt
CEO, President and Director
Date: 18 Sept. 2000 By: /s/ David R. Porter
-------------- -------------------------------------
David R. Porter
Secretary/Treasurer and Director
