SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
GTG Holdings, Inc.
(Name of Small Business Issuer in its charter)
Nevada 87-0657221
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5882 South 900 East, Suite 202, Salt Lake City, Utah 84121
(Address of Principal Executive Offices including Zip Code)
Issuer's telephone number: 801-269-9500
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered Each class is to be registered
_____________________________ ______________________________
_____________________________ ______________________________
Securities to be registered under Section 12(g) of the Act:
Common, Par Value $0.001
(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
This Form 10-SB contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. For this purpose any statements contained in this
Form 10-SB that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the
foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology
are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and
uncertainties, and actual results may differ materially depending
on a variety of factors, many of which are not within the
Company's control. These factors include but are not limited to
economic conditions generally and in the industries in which the
Company may participate; competition within the Company's chosen
industry, including competition from much larger competitors;
technological advances and failure by the Company to successfully
develop business relationships.
PART I
Item 1. Description of Business.
GTG Holdings, Inc. (the "Company") was incorporated on June
27, 2000 under the laws of the state of Nevada. The Company was
established to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions.
The Company has been in the development stage since its inception
and has no operations to date other than issuing shares to its
original shareholders.
The Company will attempt to locate and negotiate with a
business entity for the merger of that target company with the
Company or a combination through a stock exchange. In certain
instances, the business combination may be effected through a
merger or stock exchange with a subsidiary of the Company or a
target company. No assurances can be given that the Company will
be successful in locating or negotiating with any target company.
The Company has been formed to provide a method for a foreign or
domestic private company to become a reporting ("public") company
whose securities are qualified for trading in the United States
secondary market.
Perceived Benefits. There are certain perceived benefits to
being a reporting company with a class of publicly-traded
securities. These are commonly thought to include the following:
* the ability to use registered securities to make acquisitions
of assets or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
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* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital market
Potential Target Companies. A business entity, if any, which
may be interested in a business combination with the Company may
include the following:
* a company for which a primary purpose of becoming public is the
use of its securities for the acquisition of assets or
businesses;
* a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities on
terms acceptable to it;
* a company which wishes to become public with less dilution of
its common stock than would occur upon an underwriting;
* a company which believes that it will be able to obtain
investment capital on more favorable terms after it has become
public;
* a foreign company which may wish an initial entry into the
United States securities market;
* a special situation company, such as a company seeking a public
market to satisfy redemption requirements under a qualified
Employee Stock Option Plan;
* a company seeking one or more of the other perceived benefits
of becoming a public company.
A business combination with a target company will normally
result in the shareholders of the target company holding a
majority of the issued and outstanding common stock of the
corporation surviving the combination, officers and directors of
the target company continuing as management of the corporation
surviving the combination. No assurances can be given that the
Company will be able to enter into a business combination, as to
the terms of a business combination, or as to the nature of the
target company. The Company is voluntarily filing this
Registration Statement with the Securities and Exchange
Commission and is under no obligation to do so under the
Securities Exchange Act of 1934.
Risk Factors. The Company's business is subject to numerous
risk factors, including the following.
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The
Company has had no operating history nor any revenues or earnings
from operations. The Company has no significant assets or
financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until the consummation of a business combination. This may
result in the Company incurring a net operating loss, which will
increase continuously until the Company can consummate a business
combination with a target company. There is no assurance that
the Company can identify such a target company and consummate
such a business combination.
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SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The
success of the Company's proposed plan of operation will depend
to a great extent on the operations, financial condition and
management of the identified target company. While management
will prefer business combinations with entities having
established operating histories, there can be no assurance that
the Company will be successful in locating candidates meeting
such criteria. In the event the Company completes a business
combination, of which there can be no assurance, the success of
the Company's operations will be dependent upon management of the
target company and numerous other factors beyond the Company's
control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is and will continue to be an
insignificant participant in the business of seeking mergers with
and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital
firms, are active in mergers and acquisitions of companies which
maybe merger or acquisition target candidates for the Company.
Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than
the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination.
Moreover, the Company will also compete with numerous other small
public companies in seeking merger or acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION--NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no current
arrangement, agreement or understanding with respect to engaging
in a merger with or acquisition of a specific business entity.
There can be no assurance that the Company will be successful in
identifying and evaluating suitable business opportunities or in
concluding a business combination. Management has not identified
any particular industry or specific business within an industry
for evaluation by the Company. There is no assurance that the
Company will be able to negotiate a business combination on terms
favorable to the Company. The Company has not established a
specific length of operating history or a specified level of
earnings, assets, net worth or other criteria which it will
require a target company to have achieved, or without which the
Company would not consider a business combination with such
business entity. Accordingly, the Company may enter into a
business combination with a business entity having no significant
operating history, losses, limited or no potential for immediate
earnings, limited assets, negative net worth or other negative
characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.
While seeking a business combination, management anticipates
devoting only a limited amount of time per month to the business
of the Company. The Company's sole officer has not entered into
a written employment agreement with the Company and he is not
expected to do so in the foreseeable future. The Company has not
obtained key man life insurance on its officer and director.
Notwithstanding the combined limited experience and time
commitment of management, loss of the services of this individual
would adversely affect development of the Company's business and
its likelihood of continuing operations.
CONFLICTS OF INTEREST--GENERAL. The Company's officer and
director participates in other business ventures which may
compete directly with the Company. Additional conflicts of
interest and non-arms length transactions may also arise in the
future. Management has
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adopted a policy that the Company will not seek a merger with, or
acquisition of, any entity in which any member of management
serves as an officer, director or partner, or in which they or
their family members own or hold any ownership interest.
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Section 13 of the Securities Exchange Act of 1934 (the "Exchange
Act") requires companies subject thereto to provide certain
information about significant acquisitions including certified
financial statements for the company acquired covering one or two
years, depending on the relative size of the acquisition. The
time and additional costs that may be incurred by some target
companies to prepare such financial statements may significantly
delay or essentially preclude consummation of an otherwise
desirable business combination. Acquisition prospects that do
not have or are unable to obtain the required audited statements
may not be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The
Company has neither conducted, nor have others made available to
it, market research indicating that demand exists for the
transactions contemplated by the Company. Even in the event
demand exists for a merger or acquisition of the type
contemplated by the Company, there is no assurance the Company
will be successful in completing any such business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations,
even if successful, will in all likelihood result in the Company
engaging in a business combination with only one business entity.
Consequently, the Company's activities will be limited to those
engaged in by the business entity with which the Company effects
a combination. The Company's inability to diversify its
activities into a number of areas may subject the Company to
economic fluctuations within a particular business or industry
and therefore increase the risks associated with the Company's
operations.
REGULATION UNDER INVESTMENT COMPANY ACT. Although the Company
will be subject to regulation under the Exchange Act, management
believes the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such event, the
Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to
the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act could subject
the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business
combination will, in all likelihood, result in shareholders of a
target company obtaining a controlling interest in the resulting
corporation. Any such business combination may require
shareholders of the Company to sell or transfer all or a portion
of the Company's common stock held by them. The resulting change
in control of the Company will likely result in removal of the
present officer and director of the Company and a corresponding
reduction in or elimination of his participation in the future
affairs of the Company.
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REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based
upon a business combination with a business entity which, in all
likelihood, will result in the shareholders of the target company
holding a majority of the outstanding shares of the corporation
resulting from the combination.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both
companies, pursuant to various federal and state tax provisions.
The Company intends to structure any business combination so as
to minimize the federal and state tax consequences to both the
Company and the target company; however, there can be no
assurance that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties
will obtain the intended tax-free treatment upon a transfer of
stock or assets. A non-qualifying reorganization could result in
the imposition of both federal and state taxes which may have an
adverse effect on both parties to the transaction.
Reports to Security Holders. Prior to the filing of this
registration statement on Form 10-SB, the Company was not subject
to the reporting requirements of Section 12(a) or 15(d) of the
Exchange Act. Upon effectiveness of this registration statement,
the Company will file annual and quarterly reports with the
Securities and Exchange Commission ("SEC"). The public may read
and copy any materials filed by the Company with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-
800-SED-0330. The Company is an electronic filer and the SEC
maintains an Internet site that contains reports and other
information regarding the Company, which may be viewed at
Item 2. Plan of Operation
The Company intends to merge with or acquire a business entity
in a stock exchange. The Company has no particular business
combination in mind and has not entered into any negotiations
regarding such a combination. Neither the Company's officer and
director nor any affiliate has engaged in any negotiations with
any representative of any company regarding the possibility of a
merger or stock exchange between the Company and such other
company. Management anticipates seeking out a target company
through solicitation. Such solicitation may include newspaper or
magazine advertisements, mailings and other distributions to law
firms, accounting firms, investment bankers, financial advisors
and similar persons, the use of one or more World Wide Web sites
and similar methods. No estimate can be made as to the number of
persons who will be contacted or solicited. Management may
engage in such solicitation directly or may employ one or more
other entities to conduct or assist in such solicitation.
Management and its affiliates pay referral fees to consultants
and others who refer target businesses for mergers with public
companies in which management and its affiliates have an
interest. Payments are made if a business combination occurs,
and may consist of cash or a portion of the stock in the Company
retained by management and its affiliates, or both.
The Company has no full time employees. The Company's
president has agreed to allocate a portion of his time to the
activities of the Company, without compensation. The president
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anticipates that the business plan of the Company can be
implemented by him devoting no more than 10 hours per month to
the business affairs of the Company and, consequently, conflicts
of interest may arise with respect to the limited time commitment
by such officer.
Management is currently involved with other reporting
companies, and is involved in creating additional reporting
companies similar to this one. A conflict may arise in the event
that another reporting company with which management is
affiliated is formed and actively seeks a target company.
Management anticipates that target companies will be located for
the Company and other reporting companies in chronological order
of the date of formation of such reporting companies or by lot.
However, other reporting companies that may be formed may differ
from the Company in certain items such as place of incorporation,
number of shares and shareholders, working capital, types of
authorized securities, or other items. It may be that a target
company may be more suitable for or may prefer a certain
reporting company formed after the Company. In such case, a
business combination might be negotiated on behalf of the more
suitable or preferred reporting company regardless of date of
formation or choice by lot.
The Articles of Incorporation of the Company provides that the
Company may indemnify officers and/or directors of the Company
for liabilities, which can include liabilities arising under the
securities laws. Therefore, assets of the Company could be used
or attached to satisfy any liabilities subject to such
indemnification.
General Business Plan. The Company's purpose is to seek,
investigate and, if such investigation warrants, effect a merger
or stock exchange with a business entity which desires to seek
the perceived advantages of a corporation which has a class of
securities registered under the Exchange Act. The Company will
not restrict its search to any specific business, industry or
geographical location and the Company may participate in a
business venture of virtually any kind or nature. Management
anticipates that it will be able to participate in only one
potential business venture because the Company has nominal assets
and limited financial resources.
This lack of diversification should be considered a
substantial risk to the shareholders of the Company because it
will not permit the Company to offset potential losses from one
venture against gains from another. The Company may seek a
business opportunity with entities which have recently commenced
operations, or which wish to utilize the public marketplace in
order to raise additional capital in order to expand into new
products or markets, to develop a new product or service, or for
other corporate purposes.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Management believes (but has not conducted any research
to confirm) that there are business entities seeking the
perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the
terms on which additional equity financing may be sought,
providing liquidity for incentive stock options or similar
benefits to key employees, increasing the opportunity to use
securities for acquisitions, providing liquidity for shareholders
and other factors. Business opportunities may be available 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 difficult and complex.
The Company has, and will continue to have, no capital with
which to provide the owners of business entities with any cash or
other assets. However, management believes the Company
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will be able to offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a
public company without incurring the cost and time required to
conduct an initial public offering. Management has not conducted
market research and is not aware of statistical data to support
the perceived benefits of a merger or acquisition transaction for
the owners of a business opportunity.
The analysis of new business opportunities will be undertaken
by, or under the supervision of, the officer and director of the
Company, who is not a professional business analyst. In
analyzing prospective business opportunities, management may
consider such matters as the available technical, financial and
managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the
future; nature of present and expected competition; the quality
and experience of management services which may be available and
the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or
expansion; the potential for profit; the perceived public
recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. This discussion of
the proposed criteria is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter
into potential business opportunities.
The Exchange Act requires that any merger or acquisition
candidate comply with certain reporting requirements, which
include providing audited financial statements to be included in
the reporting filings made under the Exchange Act. The Company
will not combine or merge with any company for which audited
financial statements cannot be obtained at or within a reasonable
period of time after closing of the proposed transaction.
The Company may enter into a business combination with a
business entity that desires to establish a public trading market
for its shares. A target company may attempt to avoid what it
deems to be adverse consequences of undertaking its own public
offering by seeking a business combination with the Company.
Such consequences may include, but are not limited to, time
delays of the registration process, significant expenses to be
incurred in such an offering, loss of voting control to public
shareholders, or the inability to obtain an underwriter or to
obtain an underwriter on satisfactory terms. The Company will
not restrict its search for any specific kind of business
entities, but may combine with a venture which is in its
preliminary or development stage, which is already in operation,
or in essentially any stage of its business life. It is
impossible to predict at this time the status of any business in
which the Company may become engaged, in that such business may
need to seek additional capital, may desire to have its shares
publicly traded, or may seek other perceived advantages which the
Company may offer. Management of the Company, which in all
likelihood will not be experienced in matters relating to the
business of a target company, will rely upon its own efforts in
accomplishing the business purposes of the Company.
Outside consultants or advisors may be utilized by the Company
to assist in the search for qualified target companies. If the
Company does retain such an outside consultant or advisor, any
cash fee earned by such person will need to be assumed by the
target company, as the Company has limited cash assets with which
to pay such obligation.
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Following a business combination the Company may benefit from
the services of others in regard to accounting, legal services,
underwritings and corporate public relations. If requested by a
target company, management may recommend one or more
underwriters, financial advisors, accountants, public relations
firms or other consultants to provide such services. A potential
target company may have an agreement with a consultant or advisor
providing that services of the consultant or advisor be continued
after any business combination. Additionally, a target company
may be presented to the Company only on the condition that the
services of a consultant or advisor be continued after a merger
or acquisition. Such preexisting agreements of target companies
for the continuation of the services of attorneys, accountants,
advisors or consultants could be a factor in the selection of a
target company.
Acquisition of Opportunities. In implementing a structure for
a particular business acquisition, the Company may become a party
to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. On the
consummation of a transaction, it is likely that the present
management and shareholders of the Company will no longer be in
control of the corporation resulting from the combination.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of its
transaction, there may be an agreement to register all or a part
of such securities immediately after the transaction is
consummated or at specified times thereafter. If such
registration occurs, of which there can be no assurance, it will
be undertaken by the surviving entity after the Company has
entered into an agreement for a business combination or has
consummated a business combination and the Company is no longer
considered a reporting company. The issuance of additional
securities and their potential sale into any trading market which
may develop may depress the market value of the securities of the
corporation resulting from the combination in the future if such
a market develops, of which there is no assurance.
While the terms of a business transaction to which the Company
may be a party cannot be predicted, it is expected that the
parties to the business transaction will desire to avoid the
creation of a taxable event and thereby structure the acquisition
in a "tax-free" reorganization under Sections 351 or 368 of the
Internal Revenue Code of 1986, as amended (the "Code").
The Company will participate in a business opportunity only
after the negotiation and execution of appropriate agreements.
Although the terms of such agreements cannot be predicted,
generally such agreements will require certain representations
and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the
conditions which must be satisfied by the parties prior to and
after such closing and will include miscellaneous other terms.
The Company will not acquire or merge with any entity which
cannot provide audited financial statements at or within a
reasonable period of time after closing of the proposed
transaction.
The Company is subject to all of the reporting requirements
included in the Exchange Act. Included in these requirements is
the duty of the Company to file audited financial statements as
part of or within 60 days following its Form 8-K to be filed with
the Securities and Exchange Commission upon consummation of a
merger or acquisition, as well as the Company's audited financial
statements included in its annual report on Form 10-K (or 10-KSB,
as applicable). If
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such audited financial statements are not available at closing,
or within time parameters necessary to insure the Company's
compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to there
presentations made by the target company, the closing documents
may provide that the proposed transaction will be voidable at the
discretion of the present management of the Company.
The principal shareholder of the Company has orally agreed
that he will advance to the Company any additional funds which
the Company needs for operating capital and for costs in
connection with searching for or completing an acquisition or
merger. Such advances will be made without expectation of
repayment unless the owners of the business which the Company
combines or merges with agree to repay all or a portion of such
advances. There is no minimum or maximum amount the shareholders
will advance to the Company. The Company will not borrow any
funds to make any payments to the Company's promoters, management
or their affiliates or associates. The Board of Directors has
passed a resolution which contains a policy that the Company will
not seek a combination or merger with any entity in which the
Company's officer, director, and shareholders or any affiliate or
associate serves as an officer or director or holds any ownership
interest.
Competition. The Company will remain an insignificant
participant among the firms which engage in the acquisition of
business opportunities. There are many established venture
capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than
the Company. In view of the Company's combined extremely limited
financial resources and limited management availability, the
Company will continue to be at a significant competitive
disadvantage compared to the Company's competitors.
Item 3. Description of Property
The Company has no properties and at this time has no
agreements to acquire any properties. The Company currently uses
the offices of the Company's shareholder at no cost to the
Company. The shareholder has agreed to continue this arrangement
until the Company completes an acquisition or merger.
Item 4. Security Ownership of Certain Beneficial Owners and
Management; Changes in Control
The following table sets forth as of September 20, 2000, the
name and the number of shares of the Registrant's Common Stock,
par value $0.001 per share, held of record or beneficially by
each person who held of record, or was known by the Registrant to
own beneficially, more than 5% of the 100,000 issued and
outstanding shares of the Registrant's Common Stock, and the name
and shareholdings of each director and of all officers and
directors as a group.
Title of Name and Address of Amount and Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class
Common John Chymboryk (1) 100,000 100%
8 E. Broadway, Ste. 620
Salt Lake City, UT 84111
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Common Total Officers and
Directors (1 person) 100,000 100%
(1) Officer and/or Director
There are no contracts or other arrangements that could result
in a change of control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
The following table sets forth as of September 19, 2000 the
names, ages, and positions of the executive officers and
directors of the Company, and the term of office of each director
of the Company.
Name Age Position Director or Officer Since
John Chymboryk 47 President, Secretary, June 17, 2000
Treasurer & Director
All officers hold their positions at the will of the Board of
Directors. All directors hold their positions for one year or
until their successors are elected and qualified.
Set forth below is certain biographical information regarding
each of the Company's executive officers and directors:
John Chymboryk, Director, President, Secretary & Treasurer.
Mr. Chymboryk received his bachelor's degree with an emphasis in
accounting and economics in 1982. Following graduation he worked
for a large international accounting firm until 1984. He then
taught courses in finance, marketing and management in business
departments of a Community College from 1984 to 1992. Concurrent
with his teaching experience, Mr. Chymboryk operated an
accounting business that specialized in preparing financial
statements, tax returns and business plans for small businesses.
Mr. Chymboryk co-founded a company that specialized in marketing,
customer retention and management training. Mr. Chymboryk served
as Vice President and was responsible for the financial
operations and in developing and delivering management training.
Mr. Chymboryk was instrumental in designing and presenting the
sales management workshop that was contracted with Lexus, the
Toyota Motor Corporation luxury car line. In 1997, Mr. Chymboryk
was involved in designing, developing, and implementing a new
application that assists companies in following up and retaining
their existing customer base.
Other Reporting Company Activities. Mr. Chymboryk is
currently a director of the following reporting companies, all of
which are seeking business acquisitions: Golden Quest, Inc.,
Reddi Brake Supply Company, Videoplex, Inc., GTM Holdings, Inc.
and Heavenly Hotdog, Inc. The possibility exists that one or
more of the officers and directors of the Company could become
officers and/or directors of other reporting companies in the
future, although they have no intention of doing so at the
present time. Certain conflicts of interest are inherent in the
participation of the Company's officers and directors as
management in other reporting companies, which may be difficult,
if not impossible, to resolve in all cases in the best interests
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of the Company. Failure by management to conduct the Company's
business in its best interests may result in liability of
management of the Company to the shareholders.
To the knowledge of management, during the past five years, no
present or former directors, executive officer or person
nominated to become a director or an executive officer of the
Company:
(1) filed a petition under the federal bankruptcy laws or any
state insolvency law, nor had a receiver, fiscal agent or similar
officer appointed by a court for the business or property of such
person, or any partnership in which she was a general partner at
or within two years before the time of such filing, or any
corporation or business association of which she was an executive
officer at or within two years before the time of such filing;
(2) was convicted in a criminal proceeding or named subject
of a pending criminal proceeding (excluding traffic violations or
other minor offenses);
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him
from or otherwise limiting, the following activities:
(i) acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator,
floor broker, leverage transaction merchant, associated person
of any of the foregoing, or as an investment advisor,
underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment
company, or engaging in or continuing any conduct or practice
in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection
with any violation of federal or state securities laws or
federal commodities laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or
state authority barring, suspending, or otherwise limiting for
more than 60 days the right of such person to engage in any
activity described above under this Item, or to be associated
with persons engaged in any such activity.
(5) was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have
violated any federal or state securities law, and the judgment in
such civil action or finding by the Securities and Exchange
Commission has not been subsequently reversed, suspended, or
vacated
(6) was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any federal Commodities law, and the judgment in such
civil action or finding by the Commodity Futures Trading
Commission has not been subsequently reversed, suspended or
vacated.
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Conflicts of Interest. The Company's officer and director
has organized and expects to organize other companies of a
similar nature and with a similar purpose as the Company.
Consequently, there are potential inherent conflicts of interest
in acting as an officer and director of the Company. Insofar as
the officer and director is engaged in other business activities,
management anticipates that it will devote only a minor amount of
his time to the Company's affairs. The Company does not have a
right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate
to the Company's proposed business operations. A conflict may
arise in the event that another reporting company with which
management is affiliated is formed and actively seeks a target
company. It is anticipated that target companies will be located
for the Company and other reporting companies in chronological
order of the date of formation of such reporting companies or by
lot. However, any reporting companies that may be formed may
differ from the Company in certain items such as place of
incorporation, number of shares and shareholders, working
capital, types of authorized securities, or other items. It may
be that a target company may be more suitable for or may prefer a
certain reporting company formed after the Company. In such
case, a business combination might be negotiated on behalf of the
more suitable or preferred reporting company regardless of date
of formation or choice by lot.
Mr. Chymboryk will be responsible for seeking, evaluating,
negotiating and consummating a business combination with a target
company which may result in terms providing benefits to Mr.
Chymboryk. Mr. Chymboryk is also an officer and director of
other companies, as stated in the above autobiographical and
"other reporting company activities" information. As such,
demands may be placed on the time of Mr. Chymboryk which will
detract from the amount of time he is able to devote to the
Company. Mr. Chymboryk intends to devote as much time to the
activities of the Company as required. However, should such a
conflict arise, there is no assurance that Mr. Chymboryk would
not attend to other matters prior to those of the Company. Mr.
Chymboryk projects that initially up to ten hours per month of
his time may be spent locating a target company which amount of
time would increase when the analysis of, and negotiations and
consummation with, a target company are conducted.
Mr. Chymboryk owns 100% of the issued and outstanding stock of
the Company and is the president, secretary, treasurer, director
and controlling shareholder. At the time of a business
combination, some or all of the shares of Common Stock owned by
Mr. Chymboryk will be purchased by the target company or retired
by the Company. The amount of Common Stock sold or continued to
be owned by Mr. Chymboryk cannot be determined at this time. The
terms of business combination may include such terms as Mr.
Chymboryk remaining a director or officer of the Company.
The terms of a business combination may provide for a payment
by cash or otherwise to Mr. Chymboryk for the purchase of all or
part of his common stock of the Company by a target company or
for services rendered incident to or following a business
combination. Mr. Chymboryk would directly benefit from such
employment or payment. Such benefits may influence Mr.
Chymboryk's choice of a target company.
The Company may agree to pay finder's fees, as appropriate and
allowed, to unaffiliated persons who may bring a target company
to the Company where that reference results in a business
combination. No finder's fee of any kind will be paid by the
Company to management or promoters of the Company or to their
associates or affiliates. No loans of any type have, or
13
<PAGE>
will be, made by the Company to management or promoters of the
Company or to any of their associates or affiliates. The Company
will not enter into a business combination, or acquire any assets
of any kind for its securities, in which management or promoters
of the Company or any affiliates or associates have any interest,
direct or indirect.
Management has adopted certain policies involving possible
conflicts of interest, including prohibiting any of the following
transactions involving management, promoters, shareholders or
their affiliates: (i) Any lending by the Company to such persons;
(ii) The issuance of any additional securities to such persons
prior to a business combination; (iii) The entering into any
business combination or acquisition of assets in which such
persons have any interest, direct or indirect; or (iv) The
payment of any finder's fees to such persons. These policies have
been adopted by the Board of Directors of the Company and any
changes in these provisions require the approval of the Board of
Directors. Management does not intend to propose any such action
and does not anticipate that any such action will occur. There
are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve
conflicts of interest in favor of the Company could result in
liability of management to the Company. However, any attempt by
shareholders to enforce a liability of management to the Company
would most likely be prohibitively expensive and time consuming.
Item 6. Executive Compensation.
The Company's officer and director does not receive any
compensation for his services rendered to the Company, has not
received such compensation in the past, and is not accruing any
compensation pursuant to any agreement with the Company. The
officer and director of the Company will not receive any finder's
fee from the Company as a result of his efforts to implement the
Company's business plan outlined herein. However, the officer
and director of the Company anticipates receiving benefits as a
beneficial shareholder of the Company.
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted by
the Company for the benefit of its employees.
Item 7. Certain Relationships and Related Transactions.
Mr. Chymboryk provides office space at no cost to the Company.
Item 8. Description of Securities.
The authorized capital stock of the Company consists of
50,000,000 shares of Common Stock, par value $0.001 per share,
and 10,000,000 shares of Preferred Stock, par value $0.001 per
share. The following statements relating to the capital stock
set forth the material terms of the Company's securities;
however, reference is made to the more detailed provisions of,
and such statements are qualified in their entirety by reference
to, the Articles of Incorporation and the By-laws, copies of
which are filed as exhibits to this registration statement.
Common Stock. Holders of shares of common stock are entitled
to one vote for each share on all matters to be voted on by the
stockholders. Holders of common stock do not have cumulative
voting rights. Holders of common stock are entitled to share
ratably in dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds
14
<PAGE>
legally available there for. In the event of a liquidation,
dissolution or winding up of the Company, the holders of common
stock are entitled to share pro rata all assets remaining after
payment in full of all liabilities. All of the outstanding
shares of common stock are fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the
Company's common stock. There are no conversion or redemption
rights or sinking fund provisions with respect to the common
stock.
Preferred Stock. The Company's Certificate of Incorporation
authorizes the issuance of 10,000,000 shares of preferred stock,
$0.001 par value per share, of which no shares have been issued.
The Board of Directors is authorized to provide for the issuance
of shares of preferred stock in series and, by filing a
certificate pursuant to the applicable law of Nevada, to
establish from time to time the number of shares to be included
in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof without any
further vote or action by the shareholders. Any shares of
preferred stock so issued would have priority over the common
stock with respect to dividend or liquidation rights. Any future
issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of the Company
without further action by the shareholders and may adversely
affect the voting and other rights of the holders of common
stock. At present, the Company has no plans to issue any
preferred stock nor adopt any series, preferences or other
classification of preferred stock. The issuance of shares of
preferred stock, or the issuance of rights to purchase such
shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred
stock might impede a business combination by including class
voting rights that would enable the holder to block such a
transaction, or facilitate a business combination by including
voting rights that would provide a required percentage vote of
the stockholders. In addition, under certain circumstances, the
issuance of preferred stock could adversely affect the voting
power of the holders of the common stock. Although the Board of
Directors is required to make any determination to issue such
stock based on its judgment as to the best interests of the
stockholders of the Company, the Board of Directors could act in
a manner that would discourage an acquisition attempt or other
transaction that some, or a majority, of the stockholders might
believe to be in their best interests or in which stockholders
might receive a premium for their stock over the then market
price of such stock. The Board of Directors does not at present
intend to seek stockholder approval prior to any issuance of
currently authorized stock, unless otherwise required by law or
stock exchange rules. The Company has no present plans to issue
any preferred stock.
Dividends. Dividends, if any, will be contingent upon the
Company's revenues and earnings, if any, capital requirements and
financial conditions. The payment of dividends, if any, will be
within the discretion of the Company's Board of Directors. The
Company presently intends to retain all earnings, if any, for use
in its business operations and accordingly, the Board of
Directors does not anticipate declaring any dividends prior to a
business combination.
Restrictions on Transfers of Securities Prior to Business
Combination. The proposed business activities described herein
classify the Company as a reporting company. See "GLOSSARY".
The Securities and Exchange Commission and many states have
enacted statutes, rules and regulations limiting the sale of
securities of reporting companies. Management does not intend to
undertake any efforts to cause a market to develop in the
15
<PAGE>
Company's securities until such time as the Company has
successfully implemented its business plan described herein.
Trading of Securities in Secondary Market. The National
Securities Market Improvement Act of 1996 limited the authority
of states to impose restrictions upon sales of securities made
pursuant to exemptions from registration in Sections 4(1), 4(3)
and 4(4) of the Securities Act of 1933, as amended (the
"Securities Act") of companies which file reports under Sections
13 or 15(d) of the Securities Exchange Act. The Company files
such reports. As a result, sales of the Company's common stock
in the secondary trading market by the holders thereof may be
made subject to complying with these exemptions.
If, after a merger or acquisition, the Company does not meet
the qualifications for listing on the Nasdaq SmallCap Market, the
Company's securities may be traded in the over-the-counter
("OTC") market. The OTC market differs from national and
regional stock exchanges in that it (1) is not sited in a single
location but operates through communication of bids, offers and
confirmations between broker-dealers and (2) securities admitted
to quotation are offered by one or more broker-dealers rather
than the "specialist" common to stock exchanges. The Company may
apply for listing on the NASD OTC Bulletin Board or may offer its
securities in what are commonly referred to as the "pink sheets"
of the National Quotation Bureau, Inc. To qualify for listing on
the NASD OTC Bulletin Board, an equity security must have one
registered broker-dealer, known as the market maker, willing to
list bid or sale quotations and to sponsor the company for
listing on the Bulletin Board.
GLOSSARY
The Company or The company whose common stock is the subject of this
the Registrant registration statement.
Exchange Act The Securities Exchange Act of 1934, as amended.
"Penny Stock" As defined in Rule 3a51-1 of the Exchange
Security Act, a "penny stock" security is any
equity security other than a security (i)
that is a reported security (ii) that is
issued by an investment company (iii) that
is a put or call issued by the Option
Clearing Corporation (iv) that has a price
of $5.00 or more (except for purposes of
Rule 419 of the Securities Act) (v) that
is registered on a national securities
exchange (vi) that is authorized for
quotation on the Nasdaq Stock Market,
unless other provisions of Rule 3a51-1 are
not satisfied, or (vii) that is issued by
an issuer with (a) net tangible assets in
excess of $2,000,000, if in continuous
operation for more than three years or
$5,000,000 if in operation for less than
three years or (b) average revenue of at
least $6,000,000 for the last three years.
Securities Act The Securities Act of 1933, as amended.
Small Business Issuer As defined in Rule 12b-2 of the Exchange
Act, a "Small Business Issuer" is an
entity (i) which has revenues of less than
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<PAGE>
$25,000,000 (ii) whose public float (the
outstanding securities not held by
affiliates) has a value of less than
$25,000,000 (iii) which is a United States
or Canadian issuer (iv) which is not an
Investment Company and (v) if a majority-
owned subsidiary, whose parent corporation
is also a small business issuer.
PART II
Item 1. Market Price for Common Equity and Related Stockholder
Matters.
(A) Market Price. There is no trading market for the
Company's Common Stock at present and there has been no trading
market to date. There is no assurance that a trading market will
ever develop or, if such a market does develop, that it will
continue. The Securities and Exchange Commission has adopted
Rule 15g-9 which establishes certain restrictions on transactions
in a "penny stock". For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any
transaction in a penny stock, a disclosure schedule prepared by
the Commission relating to the penny stock market, which, in
highlight form, (i) sets forth the basis on which the broker or
dealer made the suitability determination and (ii) that the
broker or dealer received a signed, written agreement from the
investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public
offerings and in secondary trading, and about commissions payable
to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
In order to qualify for listing on the Nasdaq SmallCap Market,
a company must have at least (i) net tangible assets of
$4,000,000 or market capitalization of $50,000,000 or net income
for two of the last three years of $750,000; (ii) public float of
1,000,000 shares with a market value of $5,000,000; (iii) a bid
price of $4.00; (iv) three market makers; (v) 300 shareholders
and (vi) an operating history of one year or, if less than one
year, $50,000,000 in market capitalization. For continued listing
on the Nasdaq SmallCap Market, a company must have at least (i)
net tangible assets of$2,000,000 or market capitalization of
$35,000,000 or net income for two of the last three years of
$500,000; (ii) a public float of500,000 shares with a market
value of $1,000,000; (iii) a bid price of $1.00; (iv) two market
makers; and (v) 300 shareholders.
If, after a merger or acquisition, the Company does not meet
the qualifications for listing on the Nasdaq SmallCap Market, the
Company's securities may be traded in the over-the-counter
("OTC") market. The OTC market differs from national and regional
stock exchanges in that it
17
<PAGE>
(1) is not sited in a single location but operates through
communication of bids, offers and confirmations between broker-
dealers and (2) securities admitted to quotation are offered by
one or more broker-dealers rather than the "specialist" common to
stock exchanges. The Company may apply for listing on the NASD
OTC Bulletin Board or may offer its securities in what are
commonly referred to as the "pink sheets" of the National
Quotation Bureau, Inc. To qualify for listing on the NASD OTC
Bulletin Board, an equity security must have one registered
broker-dealer, known as the market maker, willing to list bid or
sale quotations and to sponsor the company for listing on the
Bulletin Board. If the Company is unable initially to satisfy
the requirements for quotation on the Nasdaq SmallCap Market or
becomes unable to satisfy the requirements for continued
quotation thereon, and trading, if any, is conducted in the OTC
market, a shareholder may find it more difficult to dispose of,
or to obtain accurate quotations as to the market value of, the
Company's securities.
(B) Holders. There is one holder of the Company's Common
Stock. The issued and outstanding shares of the Company's Common
Stock were issued in accordance with the exemptions from
registration afforded by Section 4(2) of the Securities Act of
1933.
(C) Dividends. The Company has not paid any dividends to
date, and has no plans to do so in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the
Company.
Item 3. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
The Company has not changed accountants since its formation
and there are no disagreements with the findings of its
accountants.
Item 4. Recent Sales of Unregistered Securities.
During the past three years, the Company has sold securities
which were not registered as follows:
On June 17, 2000, 100,000 shares of common stock of the
company were sold for cash to an individual relying on an
exemption from registration provided by Section 4(2) of the
Securities Act of 1933. The Company realized $100 from the sale
of the shares which is being used as working capital.
Item 5. Indemnification of Directors and Officers.
The General Corporation Law of Nevada permits provisions in
the articles, by-laws or resolutions approved by shareholders
which limit liability of directors for breach of fiduciary duty
to certain specified circumstances, namely, breaches of their
duties of loyalty, acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of law, acts
involving unlawful payment of dividends or unlawful stock
purchases or redemptions, or any transaction from which a
director derives an improper personal benefit. The articles with
18
<PAGE>
these exceptions eliminate any personal liability of a Director
to the Company or its shareholders for monetary damages for the
breach of a Director's fiduciary duty and therefore a Director
cannot be held liable for damages to the Company or its
shareholders for gross negligence or lack of due care in carrying
out his fiduciary duties as a Director. The Company's by-laws
indemnify its Officers and Directors to the full extent permitted
by Nevada law. Nevada law permits indemnification if a director
or officer acts in good faith in a manner reasonably believed to
be in, or not opposed to, the best interests of the corporation.
A director or officer must be indemnified as to any matter in
which she successfully defends himself. Indemnification is
prohibited as to any matter in which the director or officer is
adjudged liable to the corporation.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO
DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT
TO THE FOREGOING PROVISIONS, IT IS THE OPINION OF THE SECURITIES
AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST
PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE
UNENFORCEABLE.
PART F/S
Attached are audited financial statements for the Company for
the period ended July 31, 2000. The following financial
statements are attached to this report and filed as a part
thereof.
PART III
Item 1. Index and Description of Exhibits.
Exhibit No SEC Ref Number Title of Document Location
1 1(i) Articles of Incorporation See Attached
2 2(ii) Bylaws See Attached
3 27 Financial Data Schedule See Attached
19
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to be
signed on its behalf, thereunto duly authorized.
GTG HOLDINGS, INC.
Date: September 21, 2000 By: /s/ John Chymboryk
President, Secretary & Treasurer
20
<PAGE>
GTG HOLDINGS, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Independent Auditors' Report 22
- Balance Sheet, July 31, 2000 23
- Statement of Operations, for the period from
inception on June 27, 2000 through July 31, 2000 24
- Statement of Stockholders' Equity, for the period
from inception on June 27, 2000 through July 31,
2000 25
- Statement of Cash Flows, for the period from
inception on June 27, 2000 through July 31, 2000 26
- Notes to Financial Statements 27-28
21
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
GTG HOLDINGS, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheet of GTG Holdings,
Inc. [a development stage company] at July 31, 2000, and the
related statements of operations, stockholders' equity and cash
flows for the period from inception on June 27, 2000 through July
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 audits 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 audited by us present
fairly, in all material respects, the financial position of GTG
Holdings, Inc. [a development stage company] as of July 31, 2000,
and the results of its operations and its cash flows for the
period from inception on June 27, 2000 through July 31, 2000, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 5 to the financial statements, the Company was only recently
formed and has not yet been successful in establishing profitable
operations, raising substantial doubt about its ability to
continue as a going concern. Management's plans in regards to
these matters are also described in Note 5. The financial
statements do not include any adjustments that might result from
the outcome of these uncertainties.
/s/ PRITCHETT, SILER & HARDY, P.C.
August 10, 2000
Salt Lake City, Utah
22
<PAGE>
GTG HOLDINGS, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
July 31,
2000
________
CURRENT ASSETS
Cash $ 100
________
Total Current Assets $ 100
_________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $ -
________
Total Current Liabilities -
________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
100,000 shares issued and outstanding 100
Capital in excess of par value -
(Deficit) accumulated during the
development stage -
________
Total Stockholders' Equity 100
________
$ 100
_________
The accompanying notes are an integral part of this financial
statement.
23
<PAGE>
GTG HOLDINGS, INC.
[A Development Stage Company]
STATEMENT OF OPERATIONS
From Inception
on June 27,
2000 Through
July 31, 2000
___________
REVENUE $ -
EXPENSES:
General and Administrative -
___________
LOSS FROM OPERATIONS
BEFORE INCOME TAXES -
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
___________
NET LOSS $ -
____________
LOSS PER COMMON SHARE $ -
____________
The accompanying notes are an integral part of this financial
statement.
24
<PAGE>
GTG HOLDINGS, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON JUNE 27, 2000
THROUGH JULY 31, 2000
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
__________________________________ Excess of Development
Shares Amount Shares Amount Par Value Stage
_________________________________________________________
BALANCE, June 27, 2000 - $ - - $ - $ - $ -
Common stock issued for
cash at $.001 per share 100,000 100 -
Net loss for the period
ended July 31, 2000 - - - - - -
_________________________________________________________
BALANCE, July 31, 2000 - $ - 100,000 $ 100 $ - $ -
_________________________________________________________
The accompanying notes are an integral part of this financial
statement.
25
<PAGE>
GTG HOLDINGS, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
From Inception
on June 27,
2000 Through
July 31, 2000
___________
Cash Flows Provided by Operating
Activities:
Net loss $ -
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes is assets and liabilities:
___________
Net Cash Provided (Used) by
Operating Activities -
___________
Cash Flows Provided by Investing
Activities -
___________
Net Cash Provided by Investing
Activities -
___________
Cash Flows Provided by Financing
Activities:
Proceeds from issuance of common stock 100
___________
Net Cash Provided by Financing
Activities 100
___________
Net Increase in Cash 100
Cash at Beginning of Period -
___________
Cash at End of Period $ 100
____________
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the period ended July 31, 2000:
None
The accompanying notes are an integral part of this financial
statement.
26
<PAGE>
GTG HOLDINGS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - GTG Holdings, Inc. (the Company) was organized
under the laws of the State of Nevada on June 27, 2000. The
Company has not commenced planned principal operations and is
considered a development stage company as defined in Statement of
Financial Accounting Standards (SFAS) No. 7. The Company is
seeking potential business ventures. The Company has, at the
present time, not paid any dividends and any dividends that may
be paid in the future will depend upon the financial requirements
of the Company and other relevant factors.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". [See Note 6]
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB statement No. 133 ( an amendment of FASB
Statement No. 133.)," were recently issued. SFAS No. 132, 133,
134, 135, 136 and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - CAPITAL STOCK
Preferred Stock - The Company has authorized 10,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences
and designations and to be issued in such series as determined
by the Board of Directors. No shares are issued and outstanding
at July 31, 2000.
Common Stock - During July 2000, in connection with its
organization, the Company issued 100,000 shares of its previously
authorized, but unissued common stock. The shares were issued
for $100 cash at $.001 per share.
27
<PAGE>
GTG HOLDINGS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". FASB 109 requires the Company to provide a
net deferred tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book
and tax accounting methods and any available operating loss or
tax credit carryforwards. At July 31, 2000 there were no
material deferred tax assets or liabilities, current or deferred
tax expense, or net operating loss carryforwards.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of July 31, 2000, the Company has
not paid any compensation to an officer/director of the Company.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his/her home as a mailing address, as needed, at
no expense to the Company.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company was only recently formed and has not yet
been successful in establishing profitable operations. These
factors raise substantial doubt about the ability of the Company
to continue as a going concern. In this regard, management is
proposing to raise any necessary additional funds not provided by
operations through loans or through additional sales of its
common stock. There is no assurance that the Company will be
successful in raising this additional capital or achieving
profitable operations. The financial statements do not include
any adjustments that might result from the outcome of these
uncertainties.
NOTE 6 - LOSS PER SHARE
The following data shows the amounts used in computing loss per
share:
From Inception
on June 27,
2000 Through
July 31, 2000
___________
Loss from continuing operations
available to common shareholders
(numerator) $ -
__________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 100,000
___________
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