<PAGE>2
As filed with the Securities and Exchange Commission on Jan. 16, 2001
Commission File Number 333-44882
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT 2 to
FORM SB-2
REGISTRATION STATEMENT
Under The Securities Act of 1933
GREAT EXPECTATIONS AND ASSOCIATES, INC.
(Name of Small Business Issuer in its charter)
Colorado 84-1521955
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
501 South Cherry Street, Suite 610, Denver, Colorado 80246
(Address of principal executive offices) (Zip Code)
(303) 320-0066
(Address and telephone number of registrant's principal executive
offices and principal place of business.)
Rafael Solot
501 South Cherry Street, Suite 610
Denver, Colorado 80246
(Name, address and telephone number of agent for service.)
with copies to:
Jody M. Walker
Attorney At Law
7841 South Garfield Way
Littleton, Colorado 80122
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box: | x |
<TABLE>
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed Amount of
class of Amount to be offering aggregate registration
securities registered price offering price fee
<S> <C> <C> <C> <C>
common stock
$.001 par value 2,000,000 $ .50 $1,000,000 $ 278.00
</TABLE>
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
registrant will file a further amendment which specifically states that
this registration statement will thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement will become effective on such date as the
Commission, acting under Section 8(a), may determine.
<PAGE>3
Preliminary Prospectus Dated January 16, 2000
SUBJECT TO COMPLETION
2,000,000 common shares
$.50 per common share
GREAT EXPECTATIONS AND ASSOCIATES, INC.
The Offering
Per Share Total
Public Price $.50 $1,000,000
Commissions* $.05 100,000
Proceeds to Great Expectations $.45 $ 900,000
*To be paid only if a broker dealer participates in the offering
This is an any or all offering with no minimum offering amount.
We are a blank check company.
This offering will terminate on or before December 31, 2001.
This is our initial public offering, and no public market currently
exists for our shares.
Our employees, officers and directors are offering the common shares as
a self underwritten offering.
Consider carefully the risk factors beginning on page 10 in this
prospectus.
Neither the SEC nor any state securities commission has approved these
common shares or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
The date of the prospectus is January 16, 2001.
<PAGE>4
<TABLE>
TABLE OF CONTENTS
<S> <C>
PROSPECTUS SUMMARY 5
RISK FACTORS 5
- No operating history
- No intent to make a market until merger or
acquisition consummated
- No active trading market
- We may not be able to find a suitable
merger or acquisition candidate
- We will have to return your investment
- If a sufficient number of investors
do not reconfirm their investment
- You will not have access to your funds
- We have no funds and do not have any
full-time management
- Management may sell some of their
common stock to a merger or acquisition
candidate
RULE 419 OFFERINGS 7
PLAN OF DISTRIBUTION 7
USE OF PROCEEDS 8
DILUTION 8
GREAT EXPECTATIONS 9
PLAN OF OPERATION 16
MANAGEMENT 17
PRINCIPAL SHAREHOLDERS 18
CERTAIN TRANSACTIONS 18
SHARES ELIGIBLE FOR FUTURE SALE 19
MARKET FOR REGISTRANT'S COMMON EQUITY 20
DESCRIPTION OF SECURITIES 20
INDEMNIFICATION 21
LEGAL MATTERS 21
LEGAL PROCEEDINGS 21
ADDITIONAL INFORMATION 21
EXPERTS 21
INTERESTS OF NAMED EXPERTS AND COUNSEL 21
FINANCIAL STATEMETNS 21
</TABLE>
<PAGE>5
PROSPECTUS SUMMARY
Great Expectations Great Expectations has a mailing
address at 501 South Cherry St., Suite 610,
Denver, Colorado 80246, phone number is (303) 320-
0066. Other than this mailing address, Great
Expectations does not currently have any other
office facilities. We do not anticipate the
need for office facilities at any time
in the foreseeable future. Great Expectations pays
no rent or other fees for the use of this mailing
address.
Corporate
Operations. We are a development stage company. Our business
will be to merge, make an exchange of
capital stock asset acquisition or other similar
business combination with an operating or
development stage business.
We will not engage in any substantive commercial
business immediately following this offering and
for an indefinite period of time following this
offering.
Common Shares Outstanding 166,120,000
Common Shares being offered 2,000,000
Nature of Offering Any and all with no minimum
Termination of Offering On or before December 31, 2001
Rule 419
Offering We are a blank check company.
SEC rules require that we deposit all offering
proceeds after deduction of cash paid for
commissions and all securities into an escrow
account until
- we execute an agreement for an acquisition;
- we successfully get 80% of the investors of
this offering to notify us in writing to
reconfirm your investment;
- an acquisition is consummated within an 18-
month time period;
- the value of the business or net assets
acquired must equal 80% of the maximum
offering amount ($800,000); and
- we will return at least 80% of the proceeds
to you if an acquisition is not consummated
in the 18-month time period.
We may receive up to 10percent of the proceeds
remaining after payment of commissions excluive of
interest or dividends, as we deposit proceeds into
the escrow account.
Use of
Selling Agents We reserve the right to use selling agents. Any
selling agents will be paid standard NASD
commissions.
RISK FACTORS
1. We have no operating history and will not pursue any operations
until we locate a merger or acquisition candidate. You may lose up
to 20% of your investment if we do not raise sufficient funds to find a
merger candidate.
Since our incorporation in 1987, we have been performing only
administrative operations to pursue this offering. To date, we have an
operating loss of ($14,180) for the period from inception to October
31, 2000. We currently have no working capital and we are dependent
on the successful sale of the shares in this offering to locate a
merger candidate.
<PAGE>6
2. We cannot make a market in our securities until we have
consummated a merger or acquisition. You may not be able to liquidate
your investment in the event of an emergency or for any other reason.
We do not have a public market for our common shares. Many states have
enacted statutes, rules and regulations limiting the sale of securities
of blank check companies in their jurisdictions. We cannot undertake
any efforts to cause a market to develop in our securities until we
consummate a merger or acquisition.
3. If our common stock has no active trading market, you may not be
able to sell your common shares at all.
We cannot assure you that a public market will ever develop even if we
successfully locate a merger or acquisition candidate. Consequently,
you may not be able to liquidate your investment in the event of an
emergency or for any other reason.
4. If we cannot find a suitable merger or acquisition candidate, we
may not be able to commence operations and we will have to return your
investment. You will not receive a full refund. The maximum
deduction from your investment will be 20%.
We have not entered into any current negotiations regarding an
acquisition or merger. Even if we locate a suitable candidate, we may
not be able to successfully commence operations due to the other costs
involved, such as costs involving filing a post effective amendment,
etc. We would have to return your investment and up to 20% of your
investment may have been used in attempting to locate a merger
candidate.
5. If a sufficient number of investors do not reconfirm their
investment, we will have to return your investment. You will not
receive a full refund. The maximum deduction from your investment
will be 20%.
We cannot consummate a business combination with a target business
unless we can convince 80% of the investors in this offering to
reconfirm their investment. If an insufficient number of investors
reconfirm their investment, we will have to return the funds in escrow
to investors on a pro-rata basis. We will likely spend up to 10% of
the proceeds prior to that time, may have paid up to 10% of the
proceeds in commissions and investors will receive only a portion of
the funds originally invested.
6. You will not have access to your funds after termination of the
offering for up to 18 months. If we do not consummate a merger, you
will not receive a full refund. The maximum deduction from your
investment will be 20%.
No transfer or other disposition of the escrowed securities can be
permitted except in identified instances. For the term of the
offering or 18 months, you will not have access to your funds after
consummation of the offering. If we do not consummate a merger, you
will not receive all of your initial investment back. Up to 10% of the
funds may have been paid for expenses and 10% of the funds may have
been paid for commissions.
7. We have no funds and do not have full-time management that can
conduct a complete and exclusive investigation and analysis of any
target merger or acquisition candidate. We may not find a suitable
candidate. You will not receive a full refund. The maximum deduction
from your investment will be 20%.
It is impracticable to conduct a complete and exclusive investigation
and analysis of any target business with no funds. Our management
decisions will likely make decisions without detailed feasibility
studies, independent analysis or market surveys.
8. A merger or acquisition candidate may purchase some or all of
management's common stock. Management may incur conflicts of interest
as they consider their own pecuniary interests rather than your best
interests.
Management may consent to the purchase of any portion of their common
stock as a condition to or in connection with a proposed merger or
acquisition transaction. A premium may be paid for management's
shares in connection with any these stock purchase transactions.
<PAGE>7
Management may have conflicts of interest as they consider their own
pecuniary interests rather than the best interests of the other
stockholders.
9. There is no minimum offering amount. We may not have sufficient
funds to locate an acquisition candidate and you may lose up to 20% of
your investment.
We may not sell enough of the offering to obtain sufficient funds to
conduct any search for an acquisition candidate. If we are unable to
consummate an acquisition within the 18 month time frame, you will lose
up to 20% of your investment.
RULE 419 OFFERINGS
Rights and Protections under Rule 419
Escrow of the proceeds of this offering after payment of commissions,
if any.
We will promptly deposit all of proceeds in an escrow account and all
securities to be issued in this offering with First City Transfer
Company, as escrow agent until:
- We execute an agreement for a acquisition.
- We file a post-effective amendment
- We send each purchaser a copy of the prospectus
contained in the post-effective amendment
- We successfully get 80% of the investors of this offering to
notify us in writing to reconfirm their investment, and
- The acquisition is consummated.
We may receive up to 10 percent of the proceeds remaining after payment
of commissions, exclusive of interest or dividends, as we deposit those
proceeds into the escrow account.
</R.
Escrowed Funds not to be used for salaries or reimbursable expenses
The escrow agent will not disburse any funds for the payment of
salaries or reimbursement of expenses incurred on our behalf by our
officers and directors. In no event will we be able to utilize the
escrowed funds other than for the purpose of the implementation of a
business combination.
Rule 419 requires that the value of the business or net assets to be
acquired must equal at least $800,000, 80% of the maximum offering
amount.
Updating of this registration statement
Once we reach an agreement for an acquisition or merger meeting the
$800,000 business or net asset value, we will update the registration
statement with a post-effective amendment that contains information
about:
- the propose acquisition candidate(s) and its business including
audited financial statements
- results of this offering;
- use of proceeds disbursed from the escrow account, and
- terms of the reconfirmation offer
Reconfirmation offering
Rule 419 states that the terms of the reconfirmation offer must
include:
- within five business days after the effective date of the post-
effective amendment, we will send the prospectus contained in the post-
effective amendment to each investor whose securities are held in the
escrow account.
- we must return the pro rata portion of the escrowed funds,
including any related interest or dividends, to any investor who does
not provide use with written notification of their reconfirmation no
fewer than 20 and no more than 45 business days following the effective
date. We will return the funds to these investors within five business
days by first class mail or other equally prompt means;
<PAGE>8
- we can consummate the acquisition only if investors having
contributed 80% of the maximum offering proceeds elect to reconfirm
their investments; and
- we must return the escrowed funds to investors on a pro rata
basis within five business days by first class mail or other equally
prompt means if we do not consummate an acquisition within 18 months
from the date of this prospectus.
Plan of Distribution
This is an any or all offering with no minimum offering amount. No
escrow account has been established.
Our officers and directors are selling the common shares. No officer
or director will receive no commission or other offering remuneration.
All officers and directors will participate in the selling efforts.
Those officers and directors are Raphael Solot and Fred Mahlke. Mr.
Solot and Mr. Mahlke will be relying on the safe harbor in Rule 3a4-1
of the Securities Exchange Act of 1934 to sell Great Expectation's
securities.
We reserve the right to use selling agents. Any selling agents will be
paid standard NASD commissions not to exceed 10%. If we enter into
any arrangement with a broker-dealer to participate in the offer, we
must file a post-effective amendment to the registration statement to
identify the broker-dealer as a section 2(11) underwriter.
Additionally, the NASD's Corporate Finance Department must issue a no-
objection position before the broker-dealer may participate in the
offering.
No member of management, promoter or anyone acting at their direction
is expected to recommend, encourage or advise investors to open
brokerage accounts with any broker-dealer that is obtained to make a
market in our securities.
No member of management, promoter or any acting at their direction will
be paid finders' fees or other acquisition related compensation from
revenues or other funds of an acquisition or merger candidate, or by
the issuance of debt or equity of such an entity.
Management may consent to the purchase of any portion of their common
stock as a condition to or in connection with a proposed merger or
acquisition transaction. A premium may be paid for management's shares
in connection with any such stock purchase transaction.
We will disseminate information regarding any broker-dealers that make
a market in our securities in the future, if any, to our shareholders
as part of ongoing communication.
The offering will be registered in and conducted in the state of
Colorado.
Arbitrary determination of the offering price. We determined the
offering price of the common shares arbitrarily. The offer price has
no relationship to any traditional or established criteria of value.
Offering Period. This offering will terminate on or before
December 31, 2001.
USE OF PROCEEDS
Assuming successful completion of the offering, we will receive net
proceeds of $891,822 after payment of commissions ($100,000) and
offering expenses of approximately $8,178. The commissions amount
would only be payable if a broker-dealer is engaged. If significantly
less than the maximum amount is raised.
If only a nominal amount is raised, our officers and directors have
orally agreed to provide the funds necessary to pay the expenses of
the offering and attempt to locate an acquisition candidate. The
proceeds are to be utilized over an eighteen month period.
<PAGE>9
<TABLE>
<CAPTION>
$1,000,000 $500,000 $100,000
Raised Raised Raised
---------- ---------- --------
<S> <C> <C> <C>
Gross Proceeds $1,000,000 $500,000 $100,000
less commissions 100,000 50,000 10,000
---------- ---------- --------
Proceeds to be escrowed $ 900,000 $450,000 $ 90,000
Amount immediately available
To Great Expectations $ 90,000 $ 45,000 $ 9,000
Expenses relating to
Evaluation of acquisition
Candidates 70,000 21,822 5,000
Expenses relating to
SEC reporting 15,000 15,000 2,000
offering expenses 8,178 8,178 2,000
--------- --------- --------
Proceeds used $ 90,000 $ 45,000 $ 9,000
</TABLE>
The proceeds not held in the escrow account after payment of the
offering expenses will be used in the following order of priority.
- to pay for business, legal and accounting due diligence expenses
incurred in connection with evaluation of prospective business
combinations.
- for general and administrative expenses, including legal and
accounting fees and administrative support expenses incurred in
connection with our reporting obligations with the SEC.
- for expenses related to the offering to nonaffiliates
No portion of the proceeds will be paid to officers, directors, their
affiliates or associates for expenses of the offering.
Current officers and directors of Great Expectations have verbally
agreed to provide funds to cover the offering expenses, SEC reporting
requirements and a minimal search for an acquisition candidate not
covered by the available funds.
DILUTION
Persons purchasing common shares in this offering will suffer a
substantial and immediate dilution to the net tangible book value of
their common shares below the public offering price.
The following table illustrates the per common share dilution as of
the date of this prospectus, which may be experienced by investors
upon reaching the various levels as described below.
Assuming 1,000,000 raised
<TABLE>
<S> <C> <C>
Offering price $.50
Net tangible book value per common share before offering $ 0.00
Increase per Share attributable to investors $ .0058
Pro Forma net tangible book value per common share after offering $.0058
------
Dilution to investors $.4942
Dilution as a percent of offering price 98.84%
</TABLE>
Assuming 500,000 raised
<TABLE>
<S> <C> <C>
Offering price $.50
Net tangible book value per common share before offering $ 0.00
Increase per Share attributable to investors $ .0029
Pro Forma net tangible book value per common share after offering $.0029
------
Dilution to investors $.4971
Dilution as a percent of offering price 99.42%
</TABLE>
<PAGE>10
Assuming 100,000
<TABLE>
<S> <C> <C>
Offering price $.50
Net tangible book value per common share before offering $ 0.00
Increase per Share attributable to investors $ .0006
Pro Forma net tangible book value per common share after offering $.0006
------
Dilution to investors $.4994
Dilution as a percent of offering price 99.88%
</TABLE>
Further Dilution. We may issue additional restricted common shares
in private business transactions. Any sales under Rule 144
after the applicable holding period may have a depressive effect upon
the market price of Great Expectation's common shares and investors in
this offering upon conversion.
Great Expectations
General
Great Expectations was incorporated under the laws of the State of
Colorado on June 5, 1987 as Great Expectations, Inc. Great
Expectations was administratively dissolved on January 1, 1997 under
the Colorado Corporation Code for failure to file two biannual reports.
We filed for reinstatement on June 18, 1998, filed the past due
biannual reports, paid all fees and penalties and were reinstated on
that date as a corporation in good standing. Great Expectations was
required to change its name to Great Expectations and Associates, Inc.
based on the unavailability of its prior name.
Since 1987, Great Expectations has performed only those administrative
functions necessary in further pursuance of this offering. Great
Expectations is in the early developmental and promotional stages. To
date Great Expectation's only activities have been organizational ones,
directed at developing its business plan and raising its initial
capital. We have not generated any revenues.
Great Expectations has not commenced any commercial operations. Great
Expectations has no employees and owns no real estate. We do not
intend to perform any operations until a merger or acquisition
candidate is locates and a merger or acquisition consummated. Great
Expectations can be defined as a "shell" company whose sole purpose at
this time is to locate and consummate a merger or acquisition with a
private entity.
Another aspect of our business plan that Great Expectations intends to
implement after this registration statement becomes effective, is to
seek to facilitate the eventual creation of a public trading market in
its outstanding securities. Great Expectation's business plan is to
seek, investigate, and, if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value.
The acquisition of a business opportunity may be made by purchase,
merger, exchange of stock, or otherwise, and may encompass assets or a
business entity, such as a corporation, joint venture, or partnership.
Great Expectations has very limited capital, and it is unlikely that
Great Expectations will be able to take advantage of more than one such
business opportunity.
Great Expectations intends to seek opportunities demonstrating the
potential of long-term growth as opposed to short-term earnings. At the
present time Great Expectations has not identified any business
opportunity that it plans to pursue, nor has Great Expectations reached
any agreement or definitive understanding with any person concerning an
acquisition.
Frederick Mahlke, one of Company's officers and directors has
previously been involved in transactions involving a merger between an
established company and a shell entity, and has a number of contacts
within the field of corporate finance. As a result, he has had
preliminary contacts with representatives of numerous companies
concerning the general possibility of a merger or acquisition by a
shell company. However, none of these preliminary contacts or
discussions involved the possibility of a merger or acquisition
transaction with Great Expectations.
<PAGE>11
We anticipate that Mr. Mahlke will contact broker-dealers and other
persons with whom he is acquainted who are involved in corporate
finance matters to advise them of Great Expectation's existence and to
determine if any companies or businesses they represent have an
interest in considering a merger or acquisition with Great
Expectations. No assurance can be given that Great Expectations will
be successful in finding or acquiring a desirable business opportunity,
given the limited funds that are expected to be available for
acquisitions, or that any acquisition that occurs will be on terms that
are favorable to Great Expectations or its stockholders.
Great Expectation's search will be directed toward small and medium-
sized enterprises which have a desire to become public corporations and
which are able to satisfy, or anticipate in the reasonably near future
being able to satisfy, the minimum asset requirements in order to
qualify shares for trading on NASDAQ or on a stock exchange
Great Expectations anticipates that the business opportunities
presented to it will
- be recently organized with no operating history, or a history of
losses attributable to under-capitalization or other factors;
- be in need of funds to develop a new product or service or to
expand into a new market;
- be relying upon an untested product or marketing any business,
to the extent of its limited resources. This includes industries such
as service, finance, natural resources, manufacturing, high technology,
product development, medical, communications and others.
Great Expectation's discretion in the selection of business
opportunities is unrestricted, subject to the availability of such
opportunities, economic conditions, and other factors. As a consequence
of this registration of its securities, any entity, which has an
interest in being acquired by, or merging into Great Expectations, is
expected to be an entity that desires to become a public company and
establish a public trading market for its securities.
In connection with such a merger or acquisition, it is highly likely
that an amount of stock constituting control of Great Expectations
would be issued by Great Expectations or purchased from the current
principal shareholders of Great Expectations by the acquiring entity or
its affiliates.
If stock is purchased from the current shareholders, the transaction is
very likely to result in substantial gains to them relative to their
purchase price for such stock. In Great Expectation's judgment, none of
its officers and directors would thereby become an "underwriter" within
the meaning of the Section 2(11) of the Securities Act of 1933, as
amended. The sale of a controlling interest by certain principal
shareholders of Great Expectations could occur at a time when the other
shareholders of Great Expectations remain subject to restrictions on
the transfer of their shares.
Depending upon the nature of the transaction, the current officers and
directors of Great Expectations may resign their management positions
with Great Expectations in connection with Great Expectation's
acquisition of a business opportunity.
In the event of such a resignation, Great Expectation's current
management would not have any control over the conduct of Great
Expectation's business following Great Expectation's combination with a
business opportunity. We anticipate that business opportunities will
come to Great Expectation's attention from various sources, including
our officer and director, our other stockholders, professional advisors
such as attorneys and accountants, securities broker-dealers, venture
capitalists, members of the financial community, and others who may
present unsolicited proposals.
Great Expectations has no plans, understandings, agreements, or
commitments with any individual for such person to act as a finder of
opportunities for Great Expectations. Great Expectations does not
foresee that it would enter into a merger or acquisition transaction
with any business with which its officers or directors are currently
affiliated. Should Great Expectations determine in the future,
contrary to the foregoing expectations, that a transaction with an
<PAGE>12
affiliate would be in the best interests of Great Expectations and its
stockholders, Great Expectations is permitted by Colorado law to enter
into such a transaction if:
- The material facts as to the relationship or interest of
the affiliate and as to the contract or transaction are
disclosed or are known to the Board of Directors, and the Board
in good faith authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested directors,
even though the disinterested directors constitute less than a
quorum; or
- The material facts as to the relationship or interest of
the affiliate and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
- The contract or transaction is fair as to Great
Expectations as of the time it is authorized, approved or
ratified, by the Board of Directors or the stockholders.
Investigation and Selection of Business Opportunities
To a large extent, a decision to participate in a specific business
opportunity may be made upon:
- management's analysis of the quality of the other company's
management and personnel,
- the anticipated acceptability of new products or marketing
concepts,
- the merit of technological changes, the perceived benefit Great
Expectations will derive from becoming a publicly held entity, and
numerous other factors which are difficult, if not impossible, to
analyze through the application of any objective criteria.
In many instances, it is anticipated that the historical operations of
a specific business opportunity may not necessarily be indicative of
the potential for the future because of the possible need to shift
marketing approaches substantially, expand significantly, change
product emphasis, change or substantially augment management, or make
other changes. Great Expectations will be dependent upon the owners of
a business opportunity to identify any such problems which may exist
and to implement, or be primarily responsible for the implementation
of, required changes.
Because Great Expectations may participate in a business opportunity
with a newly organized firm or with a firm which is entering a new
phase of growth, it should be emphasized that Great Expectations will
incur further risks, because management in many instances will not have
proved its abilities or effectiveness, the eventual market for such
company's products or services will likely not be established, and such
company may not be profitable when acquired.
We anticipate that we will not be able to diversify, but will
essentially be limited to one such venture because of Great
Expectation's limited financing. This lack of diversification will
not permit Great Expectations to offset potential losses from one
business opportunity against profits from another, and should be
considered an adverse factor affecting any decision to purchase Great
Expectation's securities.
Holders of Great Expectation's securities should not anticipate that
Great Expectations necessarily will furnish such holders, prior to any
merger or acquisition, with financial statements, or any other
documentation, concerning a target company or its business. In some
instances, however, the proposed participation in a business
opportunity may be submitted to the stockholders for their
consideration, either voluntarily by such directors to seek the
stockholders' advice and consent or because state law so requires. The
analysis of business opportunities will be undertaken by or under the
supervision of Great Expectation's President, who is not a professional
business analyst.
Although there are no current plans to do so, Company management might
hire an outside consultant to assist in the investigation and selection
of business opportunities, and might pay a finder's fee.
<PAGE>13
Since Company management has no current plans to use any outside
consultants or advisors to assist in the investigation and selection of
business opportunities, no policies have been adopted regarding use of
such consultants or advisors, the criteria to be used in selecting such
consultants or advisors, the services to be provided, the term of
service, or regarding the total amount of fees that may be paid.
However, because of the limited resources of Great Expectations, it is
likely that any such fee Great Expectations agrees to pay would be paid
in stock and not in cash. Otherwise, Great Expectations anticipates
that it will consider, among other things, the following factors:
- Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
- Great Expectation's perception of how any particular
business opportunity will be received by the investment
community and by Great Expectation's stockholders;
- Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a
significant prospect in the foreseeable future of becoming
sufficient to enable the securities of Great Expectations to
qualify for listing on an exchange or on a national automated
securities quotation system, such as NASDAQ, so as to permit
the trading of such securities to be exempt from the
requirements of a Rule 15g-9 adopted by the Securities and
Exchange Commission.
- Capital requirements and anticipated availability of
required funds, to be provided by Great Expectations or from
operations, through the sale of additional securities, through
joint ventures or similar arrangements, or from other sources;
- The extent to which the business opportunity can be
advanced;
- Competitive position as compared to other companies of
similar size and experience within the industry segment as well
as within the industry as a whole;
- Strength and diversity of existing management, or
management prospects that are scheduled for recruitment;
- The cost of participation by Great Expectations as
compared to the perceived tangible and intangible values and
potential; and
- The accessibility of required management expertise,
personnel, raw materials, services, professional assistance,
and other required items. In regard to the possibility that the
shares of Great Expectations would qualify for listing on
NASDAQ, the current standards include the requirements that the
issuer of the securities that are sought to be listed have
total assets of at least $4,000,000 and total capital and
surplus of at least $2,000,000, and proposals have recently
been made to increase these qualifying amounts.
Many, and perhaps most, of the business opportunities that
might be potential candidates for a combination with Great
Expectations would not satisfy the NASDAQ listing criteria. No
one of the factors described above will be controlling in the
selection of a business opportunity, and management will
attempt to analyze all factors appropriate to each opportunity
and make a determination based upon reasonable investigative
measures and available data.
Potentially available business opportunities may occur in many
different industries and at various stages of development, all
of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
Potential investors must recognize that, because of Great
Expectation's limited capital available for investigation and
management's limited experience in business analysis, Great
Expectations may not discover or adequately evaluate adverse
facts about the opportunity to be acquired. Great Expectations
is unable to predict when it may participate in a business
<PAGE>14
opportunity. We expect, however, that the analysis of specific
proposals and the selection of a business opportunity may take
several months or more.
Prior to making a decision to participate in a business opportunity,
Great Expectations will generally request that we be provided with
written materials regarding the business opportunity containing such
items as
- a description of products
- services and company history
- management resumes
- financial information
- available projections, with related assumptions upon which they
are based
- an explanation of proprietary products and services;
- evidence of existing patents, trademarks, or services marks, or
rights thereto
- present and proposed forms of compensation to management
- a description of transactions between such company and its
affiliates during relevant periods
- a description of present and required facilities
- an analysis of risks and competitive conditions
- a financial plan of operation and estimated capital
requirements
- audited financial statements, or if they are not available,
unaudited financial statements, together with reasonable
assurances that audited financial statements would be able
to be produced within a reasonable period of time not to
exceed 60 days following completion of a merger transaction;
and other information deemed relevant.
As part of Great Expectation's investigation, Great Expectation's
executive officers and directors
- may meet personally with management and key personnel,
- may visit and inspect material facilities,
- obtain independent analysis or verification of certain
information provided,
- check references of management and key personnel, and
- take other reasonable investigative measures, to the extent of
Great Expectation's limited financial resources and management
expertise.
Regulation of Penny Stocks
Our management believes that various types of potential merger or
acquisition candidates might find a business combination with Great
Expectations to be attractive. These include
- acquisition candidates desiring to create a public market for
their shares in order to enhance liquidity for current shareholders,
- acquisition candidates which have long-term plans for raising
capital through the public sale of securities and believe that the
possible prior existence of a public market for their securities would
be beneficial, and
- acquisition candidates which plan to acquire additional assets
through issuance of securities rather than for cash, and believe that
the possibility of development of a public market for their securities
will be of assistance in that process.
Acquisition candidates that have a need for an immediate cash infusion
are not likely to find a potential business combination with Great
Expectations to be an attractive alternative.
<PAGE>15
Form of Acquisition
It is impossible to predict the manner in which Great Expectations may
participate in a business opportunity. Specific business opportunities
will be reviewed as well as the respective needs and desires of Great
Expectations and the promoters of the opportunity and, upon the basis
of that review and the relative negotiating strength of Great
Expectations and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may
include, but is not limited to
- leases, purchase and sale agreements,
- licenses,
- joint ventures and
- other contractual arrangements.
Great Expectations may act directly or indirectly through an interest
in a partnership, corporation or other form of organization.
Implementing such structure may require the merger, consolidation or
reorganization of Great Expectations with other corporations or forms
of business organization, and although it is likely, we cannot assure
you that Great Expectations would be the surviving entity. In addition,
the present management and stockholders of Great Expectations most
likely will not have control of a majority of the voting shares of
Great Expectations following a reorganization transaction. As part of
such a transaction, Great Expectation's existing directors may resign
and new directors may be appointed without any vote by stockholders. It
is likely that Great Expectations will acquire its participation in a
business opportunity through the issuance of common stock or other
securities of Great Expectations.
Although the terms of any such transaction cannot be predicted, in
certain circumstances, the criteria for determining whether or not an
acquisition is a so-called "tax free" reorganization under the Internal
Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest equal to 80% or more of
the common stock of the combined entities immediately following the
reorganization.
If a transaction were structured to take advantage of these provisions
rather than other "tax free" provisions provided under the Internal
Revenue Code, Great Expectation's current stockholders would retain in
the aggregate 20% or less of the total issued and outstanding shares.
This could result in substantial additional dilution in the equity of
those who were stockholders of Great Expectations prior to such
reorganization. Our issuance of these additional shares might also be
done simultaneously with a sale or transfer of shares representing a
controlling interest in Great Expectations by the current officers,
directors and principal shareholders.
We anticipate that any new securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available, from
registration under applicable federal and state securities laws. In
some circumstances, however, as a negotiated element of the
transaction, Great Expectations may agree to register such securities
either at the time the transaction is consummated, or under certain
conditions or at specified times thereafter.
The issuance of substantial additional securities and their potential
sale into any trading market that might develop in Great Expectation's
securities may have a depressive effect upon such market. Great
Expectations will participate in a business opportunity only after the
negotiation and execution of a written agreement.
Although the terms of such agreement cannot be predicted, generally
such an agreement would require
- specific representations and warranties by all of the parties
thereto,
- specify certain events of default,
- detail the terms of closing and the conditions which must be
satisfied by each of the parties thereto prior to such closing,
- outline the manner of bearing costs if the transaction is not
closed,
- set forth remedies upon default, and
- include miscellaneous other terms.
<PAGE>16
Great Expectations anticipates that we, and/or our officers and
principal shareholders will enter into a letter of intent with the
management, principals or owners of a prospective business opportunity
prior to signing a binding agreement. This letter of intent will set
forth the terms of the proposed acquisition but will not bind any of
the parties to consummate the transaction. Execution of a letter of
intent will by no means indicate that consummation of an acquisition is
probable. Neither Great Expectations nor any of the other parties to
the letter of intent will be bound to consummate the acquisition unless
and until a definitive agreement concerning the acquisition as
described in the preceding paragraph is executed.
Even after a definitive agreement is executed, it is possible that the
acquisition would not be consummated should any party elect to exercise
any right provided in the agreement to terminate it on specified
grounds. We anticipate that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for
accountants, attorneys and others.
If we decide not to participate in a specific business opportunity, the
costs incurred in the related investigation would not be recoverable.
Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are
provided, our inability to pay until an indeterminate future time may
make it impossible to procure goods and services.
Investment Company Act and Other Regulation
Great Expectations may participate in a business opportunity by
purchasing, trading or selling the securities of such business. Great
Expectations does not, however, intend to engage primarily in such
activities.
Specifically, Great Expectations intends to conduct its activities so
as to avoid being classified as an investment company under the
Investment Company Act of 1940, and therefore to avoid application of
the costly and restrictive registration and other provisions of the
Investment Act, and the regulations promulgated thereunder.
Section 3(a) of the Investment Act contains the definition of an
investment company, and it excludes any entity that does not engage
primarily in the business of investing, reinvesting or trading in
securities, or that does not engage in the business of investing,
owning, holding or trading investment securities defined as all
securities other than government securities or securities of majority-
owned subsidiaries the value of which exceeds 40% of the value of its
total assets excluding government securities, cash or cash items.
Great Expectations intends to implement its business plan in a manner
that will result in the availability of this exception from the
definition of investment company. As a result, Great Expectation's
participation in a business or opportunity through the purchase and
sale of investment securities will be limited.
Great Expectation's plan of business may involve changes in our capital
structure, management, control and business, especially if we
consummates a reorganization as discussed above. Each of these areas
is regulated by the Investment Act, in order to protect purchasers of
investment company securities. Since Great Expectations will not
register as an investment company, stockholders will not be afforded
these protections.
Any securities which Great Expectations might acquire in exchange for
our common stock will be restricted securities within the meaning of
the Securities Act of 1933. If Great Expectations elects to resell such
securities, such sale cannot proceed unless a registration statement
has been declared effective by the Securities and Exchange Commission
or an exemption from registration is available. Section 4(1) of the
Act, which exempts sales of securities not involving a distribution,
would in all likelihood be available to permit a private sale.
Although the plan of operation does not contemplate resale of
securities acquired, if such a sale were to be necessary, Great
Expectations would be required to comply with the provisions of the Act
<PAGE>17
to effect such resale. An acquisition made by Great Expectations may be
in an industry that is regulated or licensed by federal, state or local
authorities. Compliance with such regulations can be expected to be a
time-consuming and expensive process.
Competition
Great Expectations expects to encounter substantial competition in its
efforts to locate attractive opportunities, primarily from business
development companies, venture capital partnerships and corporations,
venture capital affiliates of large industrial and financial companies,
small investment companies, and wealthy individuals. Many of these
entities will have significantly greater experience, resources and
managerial capabilities than Great Expectations and will therefore be
in a better position than Great Expectations to obtain access to
attractive business opportunities. Great Expectations also will
experience competition from other public blind pool companies, many of
which may have more funds available than does Great Expectations.
Employees
Great Expectations is a development stage company and currently has no
employees. Management of Great Expectations expects to use consultants,
attorneys and accountants as necessary, and does not anticipate a need
to engage any full-time employees so long as it is seeking and
evaluating business opportunities. The need for employees and their
availability will be addressed in connection with the decision whether
or not to acquire or participate in specific business opportunities.
Although there is no current plan with respect to its nature or amount,
we may pay or accrue remuneration for the benefit of, Great
Expectation's officers prior to, or at the same time as the completion
of a business acquisition
PLAN OF OPERATION
Liquidity and Capital Resources
Great Expectations remains in the development stage and, since
inception, has experienced no significant change in liquidity or
capital resources. Great Expectation's balance sheet as of October
31, 2000, reflects a current asset value of $0, and a total asset
value of $22,099 in the form of deferred offering costs. Great
Expectations will carry out its plan of business as discussed above.
Great Expectations cannot predict to what extent its liquidity and
capital resources will be diminished prior to the consummation of a
business combination or whether its capital will be further depleted
by the operating losses, if any of the business entity which Great
Expectations may eventually acquire.
Results of Operations
During the period from June 5, 1987 (inception) through October 31,
2000, Great Expectations has engaged in no significant operations
other than organizational activities, acquisition of capital and
preparation for registration of its securities under the Securities
Exchange Act of 1934, as amended. No revenues were received by Great
Expectations during this period.
For the current fiscal year, Great Expectations anticipates incurring
a loss as a result of expenses associated with registration under the
Securities Exchange Act of 1934, and expenses associated with locating
and evaluating acquisition candidates. Great Expectations anticipates
that until a business combination is completed with an acquisition
candidate, we will not generate revenues other than interest income,
and may continue to operate at a loss after completing a business
combination, depending upon the performance of the acquired business.
Need for Additional Financing
The proceeds not held in the escrow account after payment of the
offering expenses will be used in the following order of priority.
- to pay for business, legal and accounting due diligence expenses
incurred in connection with evaluation of prospective business
combinations.
<PAGE>18
- for general and administrative expenses, including legal and
accounting fees and administrative support expenses incurred in
connection with our reporting obligations with the SEC.
- for expenses related to the offering to nonaffiliates
Great Expectations believes that our existing capital will not be
sufficient to meet Great Expectation's cash needs, including the costs
of compliance with the continuing reporting requirements of the
Securities Exchange Act of 1934, as amended, for a period of
approximately one year. Accordingly, in the event Great Expectations
is able to complete a business combination during this period, it
anticipates that our existing capital will not be sufficient to allow
us to accomplish the goal of completing a business combination.
Great Expectations will depend on additional advances from
stockholders.
We cannot assure you that the available funds will ultimately prove to
be adequate to allow it to complete a business combination, and once a
business combination is completed, Great Expectation's needs for
additional financing are likely to increase substantially. Management
and other stockholders have not made any commitments to provide
additional. We cannot assure you that any additional funds will be
available to Great Expectations to allow us to cover our expenses.
Even if Great Expectation's cash assets prove to be inadequate to meet
Great Expectation's operational needs, Great Expectations might seek
to compensate providers of services by issuances of stock in lieu of
cash.
We do not expect to purchase or sell any significant equipment, engage
in product research or development and do not expect any significant
changes in the number of employees.
MANAGEMENT
The directors and executive officers currently serving Great
Expectations are as follows:
Name Position Term of office
Raphael M. Solot President/Treasurer November 1999
Director to present
Frederick W. Mahlke Vice President/Secretary July 1987
Director to present
Only Mr. Mahlke has been involved with prior blank check companies.
The directors named above will serve until the next annual meeting of
Great Expectation's stockholders. Officers will hold their positions
at the pleasure of the board of directors, absent any employment
agreement, of which none currently exists or is contemplated.
There is no arrangement or understanding between the directors and
officers of Great Expectations and any other person under which any
director or officer was or is to be selected as a director or officer.
The directors and officer of Great Expectations will devote their time
to Great Expectation's affairs on an "as needed" basis. As a result,
the actual amount of time which they will devote to Great Expectation's
affairs is unknown and is likely to vary substantially from month to
month.
Biographical Information
Raphael M. Solot. Mr. Solot has been an attorney in private practice
in Colorado since 1964 with an emphasis on complex civil litigation,
corporate and franchise law. From 1994 until March 1996, Mr. Solot
served on the Board of Directors of Jones Global, Ltd., a corporation
engaged in the international cable business. From March 1996 until the
sale of Jones Intercable, M. Solot served on the Board of Directors of
Jones Intercable, Inc., the eighth largest cable television company in
the United States. Mr. Solot was elected Vice Chairman of the Board
of Jones Intercable, Inc. at the annual meeting of shareholders in 1997
and served in that capacity until April 1998.
Mr. Solot received a Bachelor of Science degree from the University of
Colorado in 1958 and a Juris Doctor degree from the University of
Denver in 1963.
<PAGE>19
Frederick W. Mahlke. Mr. Malhke has served as a Director of Great
Expectations since July 1987. From November 1979 to present, Mr.
Mahlke has been President of Cumberland Sales and management of Denver,
Colorado, a commercial and residential management company. For the
past ten years, Mr. Mahlke has also worked as a Colorado court-
appointed receiver on over forty properties and has also been appointed
receiver for two California properties.
Mr. Mahlke's prior experience with blank check companies. Mr. Mahlke
was a director of Deversified Management Acquisitions II, Inc.
Deversified Management Acquisitions II, Inc. completed an offering on
From S-18 dated June 19, 1988. Deversified Management Acquisitions
II, Inc. merged with Constellation Development, Inc. (33-16885-1) in
March 1989. Mr. Mahlke resigned from Deversified Management
Acquisitions II, Inc. simultaneously with its merger with Constellation
Development, Inc. Thereafter, Constellation Development, Inc. merged
with Carpet Holdings, Inc. Constellation Development, Inc. was an
English real estate development and acquisition company with real
estate holdings in Liverpool, England consisting of a shopping center.
Carpet Holdings, Inc. was a carpet wholesaler located in Dalton,
Georgia.
Great Expectation's officers and directors may elect, in the future, to
form one or more additional shell companies with a business plan
similar or identical to that of Great Expectations. Any such additional
shell companies would also be in direct competition with Great
Expectations for available business opportunities.
We do not have a procedure in place that would allow these individuals
to resolve potential conflicts in an arms-length fashion. They will
be required to use their discretion to resolve them in a manner that
they consider appropriate. Great Expectation's officers and directors
may actively negotiate or otherwise consent to the purchase of a
portion of his common stock as a condition to, or in connection with, a
proposed merger or acquisition transaction.
We anticipate that a substantial premium over the initial cost of such
shares may be paid by the purchaser at the same time as any sale of
shares by Great Expectation's officers and directors which is made as a
condition to, or in connection with, a proposed merger or acquisition
transaction. The fact that a substantial premium may be paid to Great
Expectation's officers and directors to acquire their shares creates a
potential conflict of interest for them in satisfying their fiduciary
duties to Great Expectations and its other shareholders. Even though
such a sale could result in a substantial profit to them, they would be
legally required to make the decision based upon the best interests of
Great Expectations and Great Expectation's other shareholders, rather
than their own personal pecuniary benefit.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the date of this registration
statement, the number of shares of common stock owned of record and
beneficially by executive officers, directors and persons who hold 5.0%
or more of the outstanding common stock of Great Expectations. Also
included are the shares held by all executive officers and directors as
a group.
<TABLE>
<CAPTION>
Name and Address Number of Percentage Percentage
Shares Outstanding of Shares of Shares
Outstanding After Offering
<S> <C> <C> <C>
Frederick W. Mahlke(1) 500,000 .30% .30%
4105 S. Florida Avenue
Suite 100
Denver, Colorado 80222
Raphael M. Solot 1,000,000 .60% .60%
501 South Cherry Street
Suite 610
Denver, Colorado 80222
Miles Wynn 139,340,000 83.88% 83.38%
3679 South Dawson Street
Aurora, Colorado 80014
<PAGE>20
Officers and Directors as a group
(2 persons) 1,500,000 .90% .90%
(1)Mr. Mahlke and Mr. Solot are officers and directors of Great
Expectations
Executive Compensation.
Other than described below, no compensation was awarded to, earned by,
or paid in the last three years. Mr. Solot received 1,000,000 Common
Shares at $.00005 per share in October 1999 for services rendered to
Great Expectations.
Although there is no current plan in existence, it is possible that
Great Expectations will adopt a plan to pay or accrue compensation to
its officers and directors for services related to seeking business
opportunities and completing a merger or acquisition transaction.
Great Expectations has no stock option, retirement, pension, or profit-
sharing programs for the benefit of directors, officers or other
employees, but the board of directors may recommend adoption of one or
more such programs in the future.
CERTAIN TRANSACTIONS
In February 1988 and December 31, 1998, advances totaling $4,000 were
made to Great Expectations by stockholders. No written repayment
terms were entered into.
In 1998, Capital Holding Company, an Oklahoma corporation purchased
67,680,000 shares of the treasury stock of Great Expectations, who in
turn issued the stock to Capital Holding Company and James Porter for
the sum of $.00005 per share. The shares were issued in lieu of
compensation for salaries and other administrative expenses valued at
$3,384 relating to bringing Great Expectations up to date with the
Colorado Secretary of State, providing updated accounting for Great
Expectations and paying all expenses relating to S.E.C. filings. In
addition, Great Expectations was provided office space by Capital
Holding Company.
In June 1998, Miles Wynn received 7,520,000 shares of Great
Expectations for the sum of $.00005 per share in lieu of salary and
other compensation due to Mr. Wynn valued at $376. This compensation
included repayment of expenses relating to S.E.C. filings and corporate
state filings. Wynn also provided Great Expectations with office
space at no cost to the company from 1987 to June 16, 1999 and
thereafter, from March 10, 1999 to November 12, 1999.
On March 10, 1999, Mr. Wynn purchased the 67,680,000 shares of Great
Expectations owned jointly by Capital Holding Company and James Porter
for the sum of $25,000.
No officer, director, promoter, or affiliate of Great Expectations has
or proposes to have any direct or indirect material interest in any
asset proposed to be acquired by Great Expectations through security
holdings, contracts, options, or otherwise. Great Expectations has
adopted a policy under which any consulting or finder's fee that may be
paid to a third party for consulting services to assist management in
evaluating a prospective business opportunity would be paid in stock or
in cash. Any such issuance of stock would be made on an ad hoc basis.
Accordingly, Great Expectations is unable to predict whether or in what
amount such a stock issuance might be made.
Although there is no current plan in existence, it is possible that
Great Expectations will adopt a plan to pay or accrue compensation to
its sole officer and director for services related to seeking business
opportunities and completing a merger or acquisition transaction. Great
Expectations maintains a mailing address at the office of its legal
counsel, but otherwise does not maintain an office. As a result, it
pays no rent and incurs no expenses for maintenance of an office and
does not anticipate paying rent or incurring office expenses in the
future. It is likely that Great Expectations will establish and
maintain an office after completion of a business combination.
Although management has no current plans to cause Great Expectations to
do so, it is possible that Great Expectations may enter into an
agreement with an acquisition candidate requiring the sale of all or a
portion of the common stock held by Great Expectation's current
stockholders to the acquisition candidate or principals thereof, or to
<PAGE>21
other individuals or business entities, or requiring some other form of
payment to Great Expectation's current stockholders, or requiring the
future employment of specified officers and payment of salaries to
them.
It is more likely than not that any sale of securities by Great
Expectation's current stockholders to an acquisition candidate would be
at a price substantially higher than that originally paid by such
stockholders. Any payment to current stockholders in the context of an
acquisition involving Great Expectations would be determined entirely
by the largely unforeseeable terms of a future agreement with an
unidentified business entity.
SHARES ELIGIBLE FOR FUTURE SALE
Great Expectations currently has 166,120,000 shares of common stock
outstanding. Of these, all of the common shares will be deemed to be
restricted securities. Promoters or affiliates of a blank check
company and their transferees would act as "underwriters' under the
Securities Act of 1933 when reselling the securities of the blank check
company. Rule 144 would not be available for those resale
transactions despite technical compliance with the requirements of Rule
144.
Additionally, shareholders who obtained securities directly from a
blank check issuer and through promoters and affiliates, cannot use
Rule 144 to resell their securities, since their resale transactions
would appear to be designed to distribute or redistribute securities to
the public without compliance with the registration requirement of the
Securities Act.
After the completion of an acquisition, other securities may be issued,
in the future, in private transactions under an exemption from the
Securities Act. Rule 144 provides, in essence, that a person who has
held restricted securities for a period of two years may sell every
three months in a brokerage transaction or with a market maker an
amount equal to the greater of 1% of Great Expectation's outstanding
shares or the average weekly trading volume, if any, of the shares
during the four calendar weeks preceding the sale.
The amount of restricted securities which a person who is not an
affiliate of Great Expectations may sell is not so limited. Non-
affiliates may each sell without limitation shares held for three
years. Great Expectations will make application for the listing of its
Shares in the over-the-counter market. Sales under Rule 144 may, in
the future, depress the price of Great Expectation's Shares in the
over-the-counter market, should a market develop. Prior to this
offering there has been no public market for the common stock of Great
Expectations. The effect, if any, of a public trading market or the
availability of shares for sale at prevailing market prices cannot be
predicted. Nevertheless, sales of substantial amounts of shares in
the public market could adversely effect prevailing market prices.
MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Market Information. Great Expectation's common stock is not listed
in the pink sheets or in the OTC Bulletin Board maintained by the NASD.
Holders. The approximate number of holders of record of Great
Expectation's no par value common stock, as of June 30, 2000 was 10.
Dividends. Holders of Great Expectation's common stock are entitled
to receive such dividends as may be declared by its board of directors.
Tradability. We do not meet the requirements for our stock to be
quoted on NASDAQ and the tradability in our stock will be limited under
the penny stock regulation.
If the trading price of our common stock is less than $5.00 per share,
trading in the common stock would also be subject to the requirements
of Rule 15g-9 under the Exchange Act. Under this rule, broker/dealers
who recommend low-priced securities to persons other than established
customers and accredited investors must satisfy special sales practice
requirements. The broker/dealer must make an individualized written
suitability determination for the purchaser and receive the purchaser's
written consent prior to the transaction.
<PAGE>22
SEC regulations also require additional disclosure in connection with
any trades involving a "penny stock", including the delivery, prior to
any penny stock transaction, of a disclosure schedule explaining the
penny stock market and its associated risks. Such requirements severely
limit the liquidity of the common stock in the secondary market because
few broker or dealers are likely to undertake such compliance
activities. Generally, the term penny stock refers to a stock with a
market price of less than $5.00 per share.
DESCRIPTION OF SECURITIES
Common Stock
Great Expectation's articles of incorporation authorize the issuance of
500,000,000 shares of common stock. Each record holder of common stock
is entitled to one vote for each share held on all matters properly
submitted to the stockholders for their vote.
Cumulative voting for the election of directors is not permitted by the
articles of incorporation. Holders of outstanding shares of common
stock are entitled to such dividends as may be declared from time to
time by the board of directors out of legally available funds; and, in
the event of liquidation, dissolution or winding up of the affairs of
Great Expectations, holders are entitled to receive, ratably, the net
assets of Great Expectations available to stockholders after
distribution is made to the preferred stockholders, if any, who are
given preferred rights upon liquidation.
Holders of outstanding shares of common stock have no preemptive,
conversion or redemptive rights. All of the issued and outstanding
shares of Common Stock are, and all unissued shares when offered and
sold will be, duly authorized, validly issued, fully paid, and
nonassessable. To the extent that additional shares of Great
Expectation's common stock are issued, the relative interests of then
existing stockholders may be diluted.
Great Expectations plans to furnish its stockholders with an annual
report for each fiscal year containing financial statements audited by
its independent certified public accountants. In the event Great
Expectations enters into a business combination with another company,
it is the present intention of management to continue furnishing annual
reports to stockholders. Additionally, Great Expectations may, in its
sole discretion, issue unaudited quarterly or other interim reports to
its stockholders when it deems appropriate. Great Expectations intends
to comply with the periodic reporting requirements of the Securities
Exchange Act of 1934 for so long as it is subject to those
requirements.
INDEMNIFICATION
Our bylaws do not contain a provision entitling any director or
executive officer to indemnification against liability under the
Securities Act of 1933. The Nevada Revised Statutes allow a company
to indemnify its officers, directors, employees, and agents from any
threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, except under certain
circumstances. Indemnification may only occur if a determination has
been made that the officer, director, employee, or agent acted in good
faith and in a manner, which such person believed to be in the best
interests of Great Expectations. A determination may be made:
- by the shareholders
- by a majority of the directors who were not parties to the
action, suit, or proceeding confirmed by opinion of independent legal
counsel; or
- by opinion of independent legal counsel
in the event a quorum of directors who were not a party to such action,
suit, or proceeding does not exist.
Provided the terms and conditions of these provisions under Nevada law
are met, officers, directors, employees, and agents of Great
Expectations may be indemnified against any cost, loss, or expense
arising out of any liability under the 33 Act. Insofar as
indemnification for liabilities arising under the 33 Act may be
permitted to directors, officers and controlling persons of Great
Expectations. Great Expectations has been advised that in the opinion
of the Securities and Exchange Commission, such indemnification is
against public policy and is, therefore, unenforceable.
<PAGE>23
LEGAL MATTERS
Certain legal matters with respect to the issuance of the securities
offered hereby will be passed upon by Jody M. Walker, Attorney-At-Law.
LEGAL PROCEEDINGS
Great Expectations is not involved in any legal proceedings as of the
date of this prospectus.
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a
registration statement under the Act with respect to the securities
offered hereby. This prospectus does not contain all of the
information set forth in the registration statement, some parts are
omitted in accordance with the rules and regulations of the Commission.
For further information with respect to Great Expectations and the
securities offered hereby, reference is made to the registration
statement.
Copies of such materials may be examined without charge at, or obtained
upon payment of prescribed fees from, the Public Reference Section of
the Commission at Room 1024, telephone number 1-800-SEC-0330, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549, at the Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and the New York Regional Office, 7 World
Trade Center, New York, New York 10048.
We will voluntarily file periodic reports in the event our obligation
to file such reports is suspended under Section 15(d) of the Exchange
Act.
We will provide without charge to each person who receives a
prospectus, upon written or oral request of such person, a copy of any
of the information that was incorporated by reference in the prospectus
not including exhibits to the information that is incorporated by
reference unless the exhibits are themselves specifically incorporated
by reference. The prospectus delivery period does not terminate until
90 days after the funds and securities are released from escrow or
trust account under Rule 419. Requests for copies of said documents
should be directed to Raphael Solot, President.
The Commission maintains a Web site -- //www.sec.gov -- that contains
reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission.
No dealer, salesman, agent or any other person has been authorized to
give any information or to make any representation other than those
contained in this prospectus. If given or made, this information or
representation must not be relied on as having been authorized by Great
Expectations or the underwriter, if an underwriter assists in the sale
of the securities.
This prospectus does not constitute an offer or a solicitation by
anyone to any person in any state, territory or possession of the
United States in which the offer or solicitation is not authorized by
the laws thereof, or to any person to whom it is unlawful to make such
offer or solicitation.
Neither the delivery of this prospectus or any sale made hereunder
will, under any circumstances, create an implication that there has not
been any change in the facts set forth in this prospectus or in the
affairs of Great Expectations since the date hereof.
EXPERTS
The audited financial statements included in this prospectus have been
so included in reliance on the report of Tannenbaum & Company, P.C.,
Certified Public Accountants, on the authority of such firm as experts
in auditing and accounting.
INTERESTS OF NAMED
EXPERTS AND COUNSEL
None of the other experts or counsel named in the prospectus are
affiliated with Great Expectations.
<PAGE>24
FINANCIAL STATEMENTS
Index to Financial Statements
Independent Auditors' Report dated November 3, 2000
Balance Sheet dated October 31, 2000
Statement of Operations for the period from inception (June 5, 1987)
to October 31, 2000
Statement of Stockholders' Equity for the period from inception
(June 5, 1987) to October 31, 2000
Statement of Cash Flows for the period from inception (June 5, 1987)
to October 31, 2000
Notes to Consolidated Financial Statements
Independent Auditors' Report dated November 3, 1999
Balance Sheet dated October 31, 1999
Statement of Operations for the period from inception (June 5, 1987)
to October 31, 1999
Statement of Stockholders' Equity for the period from inception
(June 5, 1987) to October 31, 1999
Statement of Cash Flows for the period from inception (June 5, 1987)
to October 31, 1999
Notes to Consolidated Financial Statements
<PAGE>25
Tannenbaum & Company, P.C.
Certified Public Accountants
INDEPENDENT AUDITORS'REPORT
The Board of Directors
Great Expectations and Associates Inc.
Englewood, Colorado
We have audited the accompanying balance sheet of Great Expectations
and Associates Inc. (a development stage enterprise) as of October 31,
2000, and the related statements of stockholders' equity, loss and
accumulated deficit, and cash flows for the period from the date of
inception (June 5, 1987) to October 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Great
Expectations and Associates Inc., as of October 31, 2000, the changes
in its stockholders' equity, the results of its operations and its
cash flows for the period then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 6
to the financial statements, the Company has suffered recurring losses
from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Denver, Colorado
November 3, 2000
Tannenbaum & Company P.C.
1873 S. Bellaire Suite 908 Denver, Colorado 80222 (303) 756-5216
FAX (303) 757-5279
<PAGE>26
Great Expectations and Associates, Inc.
Tannenbaum & Company, P.C. (A Development Stage Enterprise)
Certified Public Accountants BALANCE SHEET
October 31, 2000
</TABLE>
<TABLE>
<CAPTION>
October
31,2000
ASSETS
<S> <C>
CURRENT ASSETS
Cash $ -
----------
Total current assets -
Other Assets
Deferred offering costs (Note 1) 22,099
--------
Total other assets 22,099
--------
Total assets 22,099
-------
LIABILITIES AND STOCKHOLDERS'EQUITY
CURRENT LIABILITIES
Due to stockholders (Note 4) 21,315
------
Total current liabilities 21,315
STOCKHOLDERS'EQUITY
Common stock, no par value, 500,000,000
shares authorized; 1 50,520,000 shares
issued and outstanding (Note 1) 21,129
Treasury stock (697) 20,432
------
Deficit accumulated during the development stage (19,648)
--------
Total stockholders' equity 784
Total liabilities and stockholders' equity $22,099
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>27
Tannenbaum & Company, P.C.
Certified Public Accountants
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
For the period from inception (June 5, 1987) to October 31, 2000
<TABLE>
<CAPTION>
Inception
to October October
31, 2000 31, 2000
<S> <C> <C>
Revenue
Interest Income $ 166 -
--------- --------
Total revenue 166 -
Other expense
Amortization 700 -
Rent 6,650 -
Salaries (Note 3) 5,432 (697)
Office supplies and expense 2,112 4,250
Legal 1,500 1,500
Travel 1,435 1,435
Filing fees 1,030 1,030
Accounting 955 600
-------- ---------
Total expense 19,814 8,118
NET LOSS (19,648) (8,118)
Accumulated deficit
Balance, beginning of period - (11,530)
------- -------
Balance, end of period $(19,648) (19,648)
-------- -------
Loss per share $ (Nil) (Nil)
-------- -------
Shares outstanding 150,520,000 150,520,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>28
Tannenbaum & Company, P.C.
Certified Public Accountants
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS'EQUITY
For the period from inception (June 5, 1987) to October 31, 2000
<TABLE>
<CAPTION>
Common stock Total
------------ Accumu- stock-
Number lated holders'
of shares Amount deficit equity
---------- ------- -------- ----------
<S> <C> <C> <C> <C>
Balance, June 5, 1987 - $ - $ - $ -
Issuance of stock for cash
July 1987 ($.00005 per share) 67,000,000 3,000 - 3,000
Issuance of stock for cash
July 1987 ($.0017 per share) 7,200,000 12,000 - 12,000
Issuance of stock for services (Note 3)
July 1987 ($.0017 per share) 1,000,000 1,666 - 1,666
Issuance of stock for services (Note 3)
March 1998 ($.00005 per share) 75,320,000 3,766 - 3,766
Net loss for the period inception
to October 31, 1998 - - (10,833) (10,833)
------------ -------- --------- ---------
Balance, October 31, 1998 150,520,000 20,432 (10,833) 9,599
Issuance of stock for services (Note 3)
October 1999 ($.00005 per share) 7,300,000 326 326
Issuance of stock for services (Note 3)
October 1999 ($.00005 per share) 7,300,000 326 326
Issuance of stock for services (Note 3)
October 1999($.00005 per share) 1,000,000 45 45
Net loss for the period October 31, 1999 - - (697) (697)
---------- ------- -------- -------
Balance, October 31, 1999 166,120,000 $ 21,129 $(11,530) $9,599
Net loss for the period October 31, 2000 (8,118) (8,118)
Treasury stock (15,600,000) (697) (697)
Balance, October 31, 2000 150,520,000 $20,432 $ (19,648) $784
----------- ------- ----------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>29
Tannenbaum & Company, P.C.
Certified Public Accountants
Great Expectations and Associates, Inc.
A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
For the periods ended October 31, 2000
<TABLE>
<CAPTION>
Inception
to October October
31, 2000 31, 2000
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(19,648) (8,118)
Add non-cash items:
Salaries paid with stock (Note 3) 5,432 (697)
Organizational cost amortization 700 -
Increase in organizational cost (700) -
Cash used in operations (14,216) (8,815)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans-stockholders (Note 4) 21,315 17,315
Proceeds from issuance of common stock 15,000 -
Offering costs (Note 1) (22,099) (8,500)
Cash provided by financing activities 14,216 8,815
Net increase (decrease) in cash - -
Cash, beginning of periods - -
Cash, end of periods $ - -
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>30
Tannenbaum & Company, P.C.
Certified Public Accountants
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
1. Summary of significant accounting policies
Organization
Great Expectations and Associates Inc. (the "Company", formerly Great
Expectations, Inc.) was organized under the laws of the State of
Colorado on June 5, 1987, for the purpose of evaluating and seeking
merger candidates. The Company is currently considered to be in the
development stage as more fully defined in the Financial Accounting
Standards Board Statement No. 7. The Company has engaged in limited
activities, but has not generated significant revenues to date. The
Company is currently seeking business opportunities.
Accounting methods
The Company records income and expenses on the accrual method.
Fiscal year
The Company has selected October 31 as its fiscal year.
Deferred offering cost
Costs associated with any public offering were charged to proceeds of
the offering.
Loss per share
All stock outstanding prior to the public offering had been issued at
prices substantially less than that which was paid for the stock in
the public offering. Accordingly, for the purpose of the loss per
share calculation, shares outstanding at the end of the period were
considered to be outstanding during the entire period.
2. Income taxes
Since its inception, the Company has incurred a net operating loss.
Accordingly, no provision has been made for income taxes.
3. Stock issued for services
The value of the stock issued for services is based on management's
estimate of the fair market value of the services rendered. The
current amount reverses last years amount.
4. Due to stockholders
During the fiscal year advances totaling $17,315 were made to the Company
by stockholders.
5. Management representation
For the period ended October 31, 2000 management represents that all
adjustments necessary to a fair statement of the results for the period
have been included and such adjustments are of a normal and recurring
nature.
6. Going concern
The company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability to
continue as a going concern.
<PAGE>31
Tannenbaum & Company, P.C.
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Great Expectations and Associates Inc.
Englewood, Colorado
We have audited the accompanying balance sheet of Great Expectations
and Associates Inc. (a development stage enterprise) as of October 31,
1999, and the related statements of stockholders' equity, loss and
accumulated deficit, and cash flows for the period from the date of
inception (June 5, 1987) to October 31, 1999. These financial
statements are the responsibility of Great Expectation's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Great
Expectations and Associates Inc., as of October 31, 1999, the chances
in its stockholders' equity, the results of its operations and its
cash flows for the period then ended in conformity with Generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Great Expectations will continue as a going concern. As discussed in
Note 6 to the financial statements, the Company has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Denver, Colorado
November 3, 1999
Tannenbaum & Company P.C.
1873 S. Bellaire Suite 908 Denver, Colorado 90222 (303) 756-5216
FAX (303) 757-5279
<PAGE>32
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
BALANCE SHEET
October 31, 1999
October
31, 1999
ASSETS
CURRENT ASSETS
Cash $ -
Total current assets -
Other Assets
Deferred offering costs (Note 1) 13,599
Total other assets 13,599
Total assets 13,599
LIABILITIES AND STOCKHOLDERS'EQUITY
CURRENT LIABILITIES
Due to stockholders (Note 4) $4,000
Total current liabilities 4,000
STOCKHOLDERS'EQUITY
Common stock, no par value, 500,000,000
shares authorized; 1166,120,000 shares
issued and outstanding (Note 1) 21,129
Deficit accumulated during the development stage (11,530)
Total stockholders' equity 9,599
Total liabilities and stockholders' equity $13,599
The accompanying notes are an integral part of the financial statements.
<PAGE>33
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
For the period from inception (June 5, 1987) to October 31, 1999
Inception
to October October
31,1999 31, 1999
Revenue
Interest Income $ 166 -
Total revenue 166 -
Other expense
Amortization 700 -
Rent 6,650 -
Salaries (Note 3) 6,129 697
Office supplies
and expense (2,138) -
Accounting 355 -
Total expense 11,696 697
NET LOSS (11,530) (697)
Accumulated deficit
Balance, beginning of period (10,833)
Balance, end of period $(11,530) (11,530)
Loss per share $ (Nil) $ (Nil)
Shares outstanding 166,120,000 166,120,000
The accompanying notes are an integral part of the financial statements.
<PAGE>34
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS'EQUITY
For the period from inception (June 5, 1987) to October 31, 1999
Total
Common stock Accumu- stock-
Number lated holders'
of shares Amount deficit equity
Balance, June 5, 1987 - $ - $ - $ -
Issuance of stock for cash
July 1987
($.00005 per share) 67,000,000 3,000 - 3,000
Issuance of stock for cash
July 1987
($.0017 per share) 7,200,000 12,000 - 12,000
Issuance of stock for services (Note 3)
July 1987
($.0017 per share) 1,000,000 1,666 - 1,666
Issuance of stock for services (Note 3)
March 1998
($.00005 per share) 75,320,000 3,766 - 3,766
Net loss for the period inception
to October 31, 1998 - - (10,833) (10,833)
Balance, October 31, 1998 150,520,000 20,432 (10,833) 9,599
Issuance of stock for services (Note 3)
October 1999
($.00005 per share) 7,300,000 326 326
Issuance of stock for services (Note 3)
October 1999
($.00005 per share) 7,300,000 326 326
Issuance of stock for services (Note 3)
October 1999
($.00005 per share) 1,000,000 45 45
Net loss for the period
October 31, 1999 - - (697) (697)
Balance, October 31, 1999 166,120,000 $21,129 $(11,530) $9,599
The accompanying notes are an integral part of the financial statements.
<PAGE>35
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
For the period ended October 31, 1999
Inception
to October October
31,1999 31,1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(11,530) $(697)
Add non-cash items:
Salaries paid with stock (Note 3) 6,129 697
Organizational cost amortization 700 -
Increase in organizational cost (700) -
Cash used in operations (5,401) -
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans-stockholders (Note 4) 4,000 -
Proceeds from issuance of common stock 15,000 -
Offering costs (Note 1) (13,599) -
Cash provided by financing activities 5,401 -
Net increase (decreease) in cash - -
Cash, beginning of periods - -
Cash, end of periods $ - -
The accompanying notes are an integral part of the financial statements.
<PAGE>36
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
1. Summary of significant accounting policies Organization Great
Expectations and Associates Inc. (the "Company", formerly Great
Expectations, Inc.) was organized under the laws of the State of
Colorado on June 5, 1987, for the purpose of evaluating and seeking
merger candidates. Great Expectations is currently considered to be in
the development stage as more fully defined in the Financial Accounting
Standards Board Statement No. 7. Great Expectations has engaged in
limited activities, but has not generated significant revenues to date.
Great Expectations is currently seeking business opportunities.
Accounting methods
Great Expectations records income and expenses on the accrual method.
Fiscal year
Great Expectations has selected October 31 as its fiscal year.
Deferred offering cost
Costs associated with any public offering were charged to proceeds of
the offering.
Loss per share
All stock outstanding prior to the public offering had been issued at
prices substantially less than that which was paid for the stock in the
public offering. Accordingly, for the purpose of the loss per share
calculation, shares outstanding at the end of the period were considered
to be outstanding during the entire period.
2. Income taxes
Since its inception, Great Expectations has incurred a net operating
loss. Accordingly, no provision has been made for income taxes.
3. Stock issued for services
The value of the stock issued for services is based on management's
estimate of the fair market value of the services rendered.
4. Due to stockholders
In February 1988 and December '31, 1998, advances totaling $4,000 were
made to Great Expectations by stockholders.
5 . Management representation
For the period ended October 1, 1999 management represents that all
adjustments necessary to a fair statement of the results for the period
have been included and such adjustments are of a normal and recurring
nature.
Note 6. Going concern
The Company has suffered recurring losses from operations and has a
net capital deficiency that raise substantial doubt about its
ability to continue as a going concern.
- End of Financial Statements
<PAGE>37
Until , 2001 (90 days after the date of the prospectus), all
persons effecting transactions in the registered securities, whether or
not participating in the offering, may be required to deliver a
prospectus. These persons are still obligated to deliver a prospectus
when they act as underwriters and when they sell their unsold
allotments or subscriptions.
<PAGE>38
PART II
INFORMATION NOT REQUIRED BY PROSPECTUS
Item 24. Indemnification of Officers and Directors.
The bylaws of Great Expectations provides that a director of the
registrant will have no personal liability to the registrant or its
stockholders for monetary damages for breach of a fiduciary duty as a
director, except for liability (a) for any breach of the director's
duty of loyalty to the registrant or its stockholders, (b) for acts and
omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, and (c) under Nevada law for any
transaction from which the director derived an improper personal
benefit.
Registrant's bylaws exculpates and indemnifies the directors, officers,
employees, and agents of the registrant from and against liabilities.
Further the bylaws also provides that the Registrant will indemnify to
the full extent permitted under Nevada law any director, officer
employee or agent of registrant who has served as a director, officer,
employee or agent or the registrant or, at the Registrant's request,
has served as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING GREAT EXPECTATIONS
FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
Item 25. Other Expenses of Issuance and Distribution.
Other expenses in connection with this offering which will be paid by
Great Expectations are estimated to be substantially as follows:
<TABLE>
Amount
Payable
Item By Great
Expectations
<S> <C>
S.E.C. Registration Fees $ 278.00
Printing and Engraving Fees 1,500.00
Legal Fees 3,500.00
Accounting Fees and Expenses 1,400.00
Miscellaneous 1,500.00
Total $8,178.00
</TABLE>
Item 26. Recent Sales of Unregistered Securities.
During the last three years, Great Expectations has sold our common
stock to the persons listed in the table below in transactions
summarized as follows:
In March 1998, Great Expectations issued 75,320,000 at $.0004 per
share for services rendered by Capital Holding Company (James
Porter) - 67,800,000 and Miles Wynn - 7,520. These shares were
issued under an exemption from registration under Section 4(2) of
the Securities Act of 1933. These issuances were made to
sophisticated investors who had an ongoing relationship with Great
Expectations.
In October 1999, Great Expectations issued 15,600,000 common shares
to the following individuals for services rendered at $.00005 per
share:
Jody Walker 7,300,000
Brian Story 7,300,000
Rapheal Solot 1,000,000
Each of the sales of common stock listed above was made for services
rendered to Great Expectations. The listed sales of common stock were
made in reliance upon the exemption from registration provided by
Rule 701 adopted under Section 3(b) of the Securities Act of 1933.
In the second quarter of 2000, Ms. Walker and Mr. Story agreed to
return their common shares to the treasury and negotiate alternative
payment, if due. There are no arrangements related to the return of
those shares. The legal services provided by Ms. Jody Walker were
<PAGE>39
less than anticipated and a cash payment was arranged in lieu of the
shares. These shares were undelivered and were returned to the
treasury. Mr. Story did not perform any services for Great
Expectations and the shares were undelivered and returned to the
treasury.
Item 27. Exhibit Index.
<TABLE>
<S> <C>
(1) Not Applicable
(2) Not Applicable
(3) Articles of Incorporation incorporated by reference
to Form 10SB
(3.1) Bylaws incorporated by reference
to Form 10SB
(4) Specimen certificate for common stock incorporated by
reference to Form 10SB
(5) Consent and Opinion of Jody M. Walker regarding
legality of securities registered under this
Registration Statement and to the
references to such attorney in the prospectus filed
as part of this Registration Statement
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of
(25) Not Applicable
(26) Not Applicable
(27) Financial Data Schedule
(28) Not Applicable
</TABLE>
Item 28. Undertaking.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation form the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission under Rule 424(b) if, in the
aggregate, , the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any additional or changed material information on the
plan of distribution.
(2) That, for the purpose of determining any liability under the
Securities Act, we will treat each such post-effective amendment as a
new registration statement of the securities offered, and the offering
of the securities at that time will be deemed to be the initial bona
fide offering.
<PAGE>40
(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(b) to supplement the prospectus, after the end of the subscription
period, to include the results of the subscription offer, the
transactions by the underwriters during the subscription period, the
amount of unsubscribed securities that the underwriters will purchase
and the terms of any later reoffering. If the underwriters make any
public offering of the securities on terms different from those on the
cover page of the prospectus, we will file a post-effective amendment
to state the terms of such offering.
(c) Not applicable.
(d) to provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the small business issuer under the
foregoing provisions, or otherwise, the small business issuer has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
<PAGE>41
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements of filing on Form SB-2 and authorized
this registration statement to be signed on its behalf by the
undersigned, in the City of Denver, State of Colorado on the 16th day
of January, 2001.
Great Expectations, Inc.
/s/
By: Raphael Solot, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the
capacities and on the dates stated.
<TABLE>
Signature Capacity Date
<S> <C> <C>
/s/Raphael Solot, Principal Executive Officer January 16, 2001
-------------------- Principal Financial Officer
Controller Director
/s/Fredrick Mahlke Secretary/Vice President January 16, 2001
-------------------- Director
</TABLE>
