UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
Guideline Capital, Inc.
(Exact name of registrant as specified in its charter)
Nevada 86-1004672
(State of organization) (I.R.S. Employer Identification No.)
2100 N.E. 155th Street, Vancouver, Washington
(Address of principal executive offices)
(360) 574-4369
Registrant's telephone number, including area code
Securities to be registered pursuant to Section 12(b) of the
Act: None
Securities to be registered pursuant to Section 12(g) of the
Act:
Common Stock, par value $0.001 per share
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS
Background
Guideline Capital, Inc. (the "Company") is a Nevada corporation
formed on August 17, 2000. Its principal place of business is
located at 2100 N.E. 155th Street, Vancouver, Washington 98686.
The Company was organized to engage in any lawful corporate
business, including but not limited to, participating in
mergers with and acquisitions of other companies. The Company
has been in the developmental stage since inception and has
nooperating history other than organizational matters.
On August 17, the Company issued 10,000,000 shares of its stock
to the founder of the corporation and the sole officer and
director.
The primary activity of the Company currently involves seeking a
company or companies that it can acquire or with whom it can
merge. The Company has not selected any company as an
acquisition target or merger partner and does not intend to
limit potential candidates to any particular field or industry,
but does retain the right to limit candidates, if it so
chooses, to a particular field or industry. The Company's plans
are in the conceptual stage only.
The Board of Directors has elected to begin implementing the
Company's principal business purpose, described below under
"Item 2, Plan of Operation". As such, the Company 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.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules, and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time
as the Company has successfully implemented its business plan.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act
of 1934 (the "Exchange Act"), in order to ensure that public
information is readily accessible to all shareholders and
potential investors, and to increase the Company's access to
financial markets. In the event the Company's obligation to
file periodic reports is suspended pursuant to the Exchange Act,
the Company anticipates that it will continue to voluntarily
file such reports.
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 and has received no 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 it completes a business combination. This may
result in the Company incurring a net operating loss which will
increase continuously until the Company completes a business
combination with a profitable business opportunity. There is
no assurance that the Company will identify a business
opportunity or complete a business combination.
SPECULATIVE NATURE OF 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 business opportunity. While
management intends to seek business combinations with entities
having established operating histories, it cannot assure that
the Company will successfully locate candidates meeting such
criteria. In the event the Company completes a business
combination, the success of the Company's operations may be
dependent upon management of the successor firm or venture
partner firm together with 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
and joint ventures with, and acquisitions of small private
entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers
and acquisitions of companies which may also be desirable target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise,
and managerial capabilities than the Company. The Company is,
consequently, 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
arrangement, agreement, or understanding with respect to
engaging in a business combination with any private entity.
There can be no assurance the Company will successfully identify
and evaluate suitable business opportunities or conclude a
business combination. Management has not identified any
particular industry or specific business within an industry for
evaluations. The Company has been in the developmental stage
since inception and has no operations to date. Other than
issuing shares to its original shareholders, the Company never
commenced any operational activities. There is no assurance 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 business opportunity to have achieved, and
without which the Company would not consider a business
combination in any form with such business opportunity.
Accordingly, the Company may enter into a business combination
with a business opportunity having no significant operating
history, losses, limited or no potential for earnings, limited
assets, negative net worth, or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting
up to twenty hours per month to the business of the Company.
The Company's officers have not entered into written employment
agreements with the Company and are not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officers or directors. Notwithstanding the
combined limited experience and time commitment of management,
loss of the services of any of these individuals would adversely
affect development of the Company's business and its likelihood
of continuing operations. See "MANAGEMENT."
CONFLICTS OF INTEREST - GENERAL. The Company's officers and
directors participate in other business ventures which compete
directly with the Company. Additional conflicts of interest
and non "arms-length" transactions may also arise in the event
the Company's officers or directors are involved in the
management of any firm with which the Company transacts
business. The Company's Board of Directors has adopted a
resolution which prohibits the Company from completing a
combination with any entity in which management serve as
officers, directors or partners, or in which they or their
family members own or hold any ownership interest. Management
is not aware of any circumstances under which this policy could
be changed while current management is in control of the
Company. See "ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS - CONFLICTS OF INTEREST."
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.
Companies subject to Section 13 of the Securities Exchange Act
of 1934 (the "Exchange Act") must 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 entities to
prepare such statements may significantly delay or even
preclude the Company from completing an otherwise desirable
acquisition. 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 1934 Act are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company
has not conducted or received results of market research
indicating that market demand exists for the transactions
contemplated by the Company. Moreover, the Company does not
have, and does not plan to establish, a marketing organization.
If there is demand for a business combination as contemplated by
the Company, there is no assurance the Company will successfully
complete such transaction.
LACK OF DIVERSIFICATION. In all likelihood, the Company's
proposed operations, even if successful, will result in a
business combination with only one entity. Consequently, the
resulting activities will be limited to that entity's business.
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, thereby increasing the
risks associated with the Company's operations.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, 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 would subject
the Company to material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business
combination involving the issuance of the Company's common stock
will, in all likelihood, result in shareholders of a private
company obtaining a controlling interest in the Company. Any
such business combination may require management of the Company
to sell or transfer all or a portion of the Company's common
stock held by them, or resign as members of the Board of
Directors of the Company. The resulting change in control of the
Company could result in removal of one or more present officers
and directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the
Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of such private company. Issuing previously
authorized and unissued common stock of the Company will reduce
the percentage of shares owned by present and prospective
shareholders, and a change in the Company's control and/or
management.
DISADVANTAGES OF BLANK CHECK OFFERING. The Company may enter
into a business combination with an 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. The perceived adverse
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,
and the inability or unwillingness to comply with various
federal and state securities laws enacted for the protection of
investors. These securities laws primarily relate to
registering securities and full disclosure of the Company's
business, management, and financial statements.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Typically, these transactions may be
structured 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 entity. Management cannot assure that a
business combination will meet the statutory requirements for 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.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY
BUSINESS OPPORTUNITIES. Management believes that any potential
target company must provide audited financial statements for
review, and for the protection of all parties to the business
combination. One or more attractive business opportunities may
forego a business combination with the Company, rather than
incur the expenses associated with preparing audited financial
statements.
BLUE SKY CONSIDERATIONS. Because the securities registered
hereunder have not been registered for resale under the blue sky
laws of any state, and the Company has no current plans to
register or qualify its shares in any state, holders of these
shares and persons who desire to purchase them in any trading
market that might develop in the future, should be aware that
there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. These
restrictions could reduce the size of any potential market. As
a result of recent changes in federal law, non-issuer trading or
resale of the Company's securities is exempt from state
registration or qualification requirements in most states.
However, some states may continue to restrict the trading or
resale of blind-pool or "blank-check" securities. Accordingly,
investors should consider any potential secondary market for the
Company's securities to be a limited one.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included
in this Registration Statement, other than statements of
historical fact, are forward-looking statements. Although
Management believes that the expectations reflected in these
forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been
correct. Important factors that could cause actual results to
differ materially from the expectations are disclosed in this
Statement, including, without limitation, in conjunction with
those forward-looking statements contained in this Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more
business opportunities presented to it by persons or firms
desiring the perceived advantages of a publicly held
corporation.
At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any
specific business or company, and the Company has not identified
any specific business or company for investigation and
evaluation. No member of Management or any promoter of the
Company, or an affiliate of either, has had any material
discussions with any other company with respect to any
acquisition of that company. The Company will not restrict its
search to any specific business, industry, or geographical
location, and may participate in business ventures of virtually
any kind or nature. Discussion of the proposed business under
this caption and throughout this Registration Statement is
purposefully general and is not meant to restrict the Company's
virtually unlimited discretion to search for and enter into a
business combination.
The Company may seek a combination with a firm which only
recently commenced operations, or a developing company in need
of additional funds to expand into new products or markets or
seeking to develop a new product or service, or an established
business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to
be easier to raise by a public company. In some instances, a
business opportunity may involve acquiring or merging with a
corporation which does not need substantial additional cash but
which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish
wholly-owned subsidiaries in various businesses or purchase
existing businesses as subsidiaries.
Selecting a business opportunity will be complex and extremely
risky. Because of general economic conditions, rapid
technological advances being made in some industries, and
shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded
corporation. Such perceived benefits of a publicly traded
corporation may include facilitating or improving the terms on
which additional equity financing may be sought, providing
liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of
applicable statutes) for all shareholders, and other items.
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.
Management believes that the Company may be able to benefit from
the use of "leverage" to acquire a target company. Leveraging a
transaction involves acquiring a business while incurring
significant indebtedness for a large percentage of the purchase
price of that business. Through leveraged transactions, the
Company would be required to use less of its available funds to
acquire a target company and, therefore, could commit those
funds to the operations of the business, to combinations with
other target companies, or to other activities. The borrowing
involved in a leveraged transaction will ordinarily be secured
by the assets of the acquired business. If that business is not
able to generate sufficient revenues to make payments on the
debt incurred by the Company to acquire that business, the
lender would be able to exercise the remedies provided by law or
by contract. These leveraging techniques, while reducing the
amount of funds that the Company must commit to acquire a
business, may correspondingly increase the risk of loss to the
Company. No assurance can be given as to the terms or
availability of financing for any acquisition by the Company.
During periods when interest rates are relatively high, the
benefits of leveraging are not as great as during periods of
lower interest rates, because the investment in the business
held on a leveraged basis will only be profitable if it
generates sufficient revenues to cover the related debt and
other costs of the financing. Lenders from which the Company
may obtain funds for purposes of a leveraged buy-out may impose
restrictions on the future borrowing, distribution, and
operating policies of the Company. It is not possible at this
time to predict the restrictions, if any, which lenders may
impose, or the impact thereof on the Company.
The Company has insufficient capital with which to provide the
owners of businesses significant cash or other assets.
Management believes the Company will offer owners of businesses
the opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to
conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion
of their shares for subsequent sale. The Company will also incur
significant legal and accounting costs in connection with the
acquisition of a business opportunity, including the costs of
preparing post-effective amendments, Forms 8-K, agreements, and
related reports and documents. Nevertheless, the officers and
directors of the Company have not conducted market research and
are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for
the owners of a businesses. The Company does not intend to make
any loans to any prospective merger or acquisition candidates or
to unaffiliated third parties.
The Company will not restrict its search for any specific kind
of firms, but may acquire a venture which is in its preliminary
or development stage, which is already in operation, or in
essentially any stage of its corporate 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. However, the Company does not intend to obtain funds
in one or more private placements to finance the operation of
any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition. The
Company also has no plans to conduct any offerings under
Regulation S.
Sources of Opportunities
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of
its officers and directors as well as indirect associations
between them and other business and professional people. It is
not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or
reorganizations.
Management, while not especially experienced in matters relating
to the new business of the Company, will rely upon their own
efforts and, to a much lesser extent, the efforts of the
Company's shareholders, in accomplishing the business purposes
of the Company. It is not anticipated that any outside
consultants or advisors, other than the Company's legal counsel
and accountants, will be utilized by the Company to effectuate
its business purposes described herein. However, if the Company
does retain such an outside consultant or advisor, any cash fee
earned by such party will need to be paid by the prospective
merger/acquisition candidate, as the Company has no cash assets
with which to pay such obligation. There have been no
discussions, understandings, contracts or agreements with any
outside consultants and none are anticipated in the future. In
the past, the Company's management has never used outside
consultants or advisors in connection with a merger or
acquisition.
As is customary in the industry, the Company may pay a finder's
fee for locating an acquisition prospect. If any such fee is
paid, it will be approved by the Company's Board of Directors
and will be in accordance with the industry standards. Such fees
are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved.
Such fees are typically in the range of 5% on a $1,000,000
transaction ratably down to 1% in a $4,000,000 transaction.
Management has adopted a policy that such a finder's fee or real
estate brokerage fee could, in certain circumstances, be paid to
any employee, officer, director or 5% shareholder of the
Company, if such person plays a material role in bringing a
transaction to the Company.
The Company will not have sufficient funds to undertake any
significant development, marketing, and manufacturing of any
products which may be acquired. Accordingly, if it acquires the
rights to a product, rather than entering into a merger or
acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for
which the Company would probably be required to give up a
substantial portion of its interest in any acquired product.
There is no assurance that the Company will be able either to
obtain additional financing or to interest third parties in
providing funding for the further development, marketing and
manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by
or under the supervision of the officers and directors of the
Company (see "Item 5). Management intends to concentrate on
identifying prospective business opportunities which may be
brought to its attention through present associations with
management. In analyzing prospective business opportunities,
management will consider, among other factors, such matters as
1. the available technical, financial and managerial
resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which
may be available and the depth of that management
7. the potential for further research, development or
exploration
8. specific risk factors not now foreseeable but which then
may be anticipated to impact the proposed activities of
the Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of
products, services or trades
12. name identification
Management will meet personally with management and key
personnel of the firm sponsoring the business opportunity as
part of their investigation. To the extent possible, the Company
intends to utilize written reports and personal investigation to
evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements
cannot be obtained.
Opportunities in which the Company participates will present
certain risks, many of which cannot be identified adequately
prior to selecting a specific opportunity. The Company's
shareholders must, therefore, depend on Management to identify
and evaluate such risks. Promoters of some opportunities may
have been unable to develop a going concern or may present a
business in its development stage (in that it has not generated
significant revenues from its principal business activities
prior to the Company's participation.) Even after the Company's
participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development
stage. Other opportunities may involve new and untested
products, processes, or market strategies which may not succeed.
Such risks will be assumed by the Company and, therefore, its
shareholders.
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 as well as substantial
costs for accountants, attorneys, and others. If a decision is
made not to participate in a specific business opportunity the
costs incurred in the related investigation would not be
recoverable. Furthermore, even if an agreement is reached for
the participation in a specific business opportunity, the
failure to consummate that transaction may result in the loss by
the Company of the related costs incurred.
There is the additional risk that the Company will not find a
suitable target. Management does not believe the Company will
generate revenue without finding and completing a transaction
with a suitable target company. If no such target is found,
therefore, no return on an investment in the Company will be
realized, and there will not, most likely, be a market for the
Company's stock.
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, franchise, or
licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a
transaction is complete, it is possible that the present
management and shareholders of the Company will not be in
control of the Company. In addition, a majority or all of the
Company's officers and directors may, as part of the terms of
the transaction, resign and be replaced by new officers and
directors without a vote of the Company's shareholders. It is
anticipated that securities issued in any such reorganization
would be issued in reliance on exemptions from registration
under applicable Federal and state securities laws. In some
circumstances, however, as a negotiated element of this
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified time thereafter. The issuance of
substantial additional securities and their potential sale into
any trading market which may develop in the Company's Common
Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the
acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986,
as amended (the "Code"). In order to obtain tax free treatment
under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the
surviving entity. In such event, the shareholders of the
Company, including investors in this offering, would retain less
than 20% of the issued and outstanding shares of the surviving
entity, which could result in significant dilution in the equity
of such shareholders.
As part of the Company's investigation, officers and directors
of the Company will 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
the Company's limited financial resources and management
expertise.
The manner in which the Company participates in an opportunity
with a target company will depend on the nature of the
opportunity, the respective needs and desires of the Company and
other parties, the management of the opportunity, and the
relative negotiating strength of the Company and such other
management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the
percentage of the Company which the target company's
shareholders would acquire in exchange for their shareholdings
in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's
shareholders will, in all likelihood, hold a lesser percentage
ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to
significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition
effected by the Company can be expected to have a significant
dilutive effect on the percentage of shares held by the
Company's then shareholders, including purchasers in this
offering.
Management has advanced, and will continue to advance, funds
which shall be used by the Company in identifying and pursuing
agreements with target companies. Management anticipates that
these funds will be repaid from the proceeds of any agreement
with the target company, and that any such agreement may, in
fact, be contingent upon the repayment of those funds.
Competition
The Company is an insignificant participant among firms which
engage in business combinations with, or financing of,
development-stage enterprises. There are many established
management and financial consulting companies and venture
capital firms which have significantly greater financial and
personal resources, technical expertise and experience than the
Company. In view of the Company's limited financial resources
and management availability, the Company will continue to be at
significant competitive disadvantage vis-a-vis the Company's
competitors.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. The Company has assessed these issues as they relate
to the Company, and since the Company currently has no operating
business and does not use any computers, and since it has no
customers, suppliers or other constituents, it does not believe
that there are any material year 2000 issues to disclose in this
Form 10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment
company" as an issuer which is or holds itself out as being
engaged primarily in the business of investing, reinvesting or
trading securities. While the Company does not intend to engage
in such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The
Company could be expected to incur significant registration and
compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to
review the Company's activities from time to time with a view
toward reducing the likelihood the Company could be classified
as an "investment company".
The Company intends to structure a merger or acquisition in such
manner as to minimize Federal and state tax consequences to the
Company and to any target company.
Employees
The Company's only employees at the present time are its
officers and directors, who will devote as much time as the
Board of Directors determine is necessary to carry out the
affairs of the Company. (See "Item 5).
ITEM 3. DESCRIPTION OF PROPERTY.
The Company neither owns nor leases any real property at this
time. The Company does have the use of a limited amount of
office space from sole officer and director, Thomas R. Platfoot
at no cost to the Company, and Management expects this
arrangement to continue. The Company pays its own charges for
long distance telephone calls and other miscellaneous
secretarial, photocopying, and similar expenses.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the Company,
as of August 17, 2000, to be a beneficial owner of five percent
(5%) or more of the Company's common stock, by the Company's
directors individually, and by all of the Company's directors
and executive officers as a group. Except as noted, each person
has sole voting and investment power with respect to the shares
shown.
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common Thomas R. Platfoot 10,000,000 100%
2100 N.E. 155th Street
Vancouver, Washington 98686
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
The Company's officers and directors will devote their time to
the business on an "as-needed" basis, which is expected to
require 5-10 hours per month.
Information as to the directors and executive officers of the
Company is as follows:
Name/Address Age Position
Thomas R. Platfoot 48 President/Secretary/
2100 N.E. 155th Street Treasurer/Director
Vancouver, Washington 98686
Thomas R. Platfoot; President/Secretary/Treasurer/Director. Mr.
Platfoot is an active Real Estate Broker since 1978 licensed in
both California and Washington. In 1992, Mr. Platfoot started
Evergreen State Investments, which focuses on acquiring,
syndicating and managing real estate properties. During this
time he has also turned his focuses in assisting and supporting
in developing companies in the technologies and Internet
industry. Mr. Platfoot with his vast experience in business is
able to assist companies through many challenges of early and
on-going stages of growth. From managerial development, Mr.
Platfoot offers his background relationships to bring success
for management and shareholders alike.
Blank Check Experience
In addition to the experience described above, Thomas R.
Platfoot, has not been an officer and/or director of a blank
check companies.
Conflicts of Interest
Insofar as the officers and directors are engaged in other
business activities, management anticipates it will devote only
a minor amount of time to the Company's affairs. The officers
and directors of the Company may in the future become
shareholders, officers or directors of other companies which may
be formed for the purpose of engaging in business activities
similar to those conducted by the Company. The Company does not
currently 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.
The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to their attention, either in the performance of
their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the
companies that they are affiliated with on an equal basis. A
breach of this requirement will be a breach of the fiduciary
duties of the officer or director. Subject to the next
paragraph, if a situation arises in which more than one company
desires to merge with or acquire that target company and the
principals of the proposed target company have no preference as
to which company will merge or acquire such target company, the
company of which the President first became an officer and
director will be entitled to proceed with the transaction.
Except as set forth above, the Company has not adopted any other
conflict of interest policy with respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to or
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 would subject the
Company to material adverse consequences.
ITEM 6. EXECUTIVE COMPENSATION
The Company's sole officer and director has not receive any
compensation for his respective services rendered to the
Company, nor has he received such compensation in the past. He
has agreed to act without compensation until authorized by the
Board of Directors, which is not expected to occur until the
Registrant has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this
registration statement, the Company has no funds available to
pay directors. Further, none of the directors are accruing any
compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates
a merger or acquisition with an unaffiliated entity, that entity
may desire to employ or retain one or more members of the
Company's management for the purposes of providing services to
the surviving entity, or otherwise provide other compensation to
such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of
management will not be a consideration in the Company's decision
to undertake any proposed transaction. Each member of management
has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them
by any entity which proposes to undertake a transaction with the
Company and further, to abstain from voting on such transaction.
Therefore, as a practical matter, if each member of the
Company's Board of Directors is offered compensation in any form
from any prospective merger or acquisition candidate, the
proposed transaction will not be approved by the Company's Board
of Directors as a result of the inability of the Board to
affirmatively approve such a transaction.
It is possible that persons associated with management may refer
a prospective merger or acquisition candidate to the Company. In
the event the Company consummates a transaction with any entity
referred by associates of management, it is possible that such
an associate will be compensated for their referral in the form
of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the
Company as part of the terms of the proposed transaction, or
will be in the form of cash consideration. However, if such
compensation is in the form of cash, such payment will be
tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such
finder's fee cannot be determined as of the date of this
registration statement, but is expected to be comparable to
consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either
directly or indirectly, as a result of their respective efforts
to implement the Company's business plan outlined herein.
Persons "associated" with management is meant to refer to
persons with whom management may have had other business
dealings, but who are not affiliated with or relatives of
management.
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted
by the Registrant for the benefit of its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Board of Directors has passed a resolution which contains a
policy that the Company will not seek an acquisition or merger
with any entity in which any of the Company's Officers,
Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership
interest. Management is not aware of any circumstances under
which this policy may be changed through their own initiative.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
There is no current market for the Company's stock. There has
been no trading in the Company's stock, therefore high and low
bid quotations are not available.
There is 1 record owner of the Company's stock. The Company has
never paid a cash dividend and has no present intention of doing
so in the foreseeable future.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange
Commission adopted Rule 15g-9, which established the definition
of a "penny stock," for purposes relevant to the Company, as any
equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. 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.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included
on NASDAQ, a company must maintain $2,000,000 in net tangible
assets and a $1,000,000 market value of its publicly-traded
securities. In addition, continued inclusion requires two
market-makers and a minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a
transaction with any merger or acquisition candidate which will
allow the Company's securities to be traded without the
aforesaid limitations. However, there can be no assurances
that, upon a successful merger or acquisition, the Company will
qualify its securities for listing on NASDAQ or some other
national exchange, or be able to maintain the maintenance
criteria necessary to insure continued listing. The failure of
the Company to qualify its securities or to meet the relevant
maintenance criteria after such qualification in the future may
result in the discontinuance of the inclusion of the Company's
securities on a national exchange. In such events, trading, if
any, in the Company's securities may then continue in the non-
NASDAQ over-the-counter market. As a result, 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.
Holders
There is one holder of the Company's Common Stock. On August
17, 2000, the Company issued 10,000,000 shares of its stock to
the founder of the corporation and the sole officer and
director. All of the issued and outstanding shares of the
Company's Common Stock were issued in accordance with the
exemption from registration afforded by Section 4(2) of the
Securities Act of 1933.
Dividends
The Registrant has not paid any dividends to date, and has no
plans to do so in the immediate future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
With respect to the sales made, the Registrant relied on Section
4(2) of the Securities Act of 1933, as amended. No advertising
or general solicitation was employed in offering the shares. The
securities were offered for investment only and not for the
purpose of resale or distribution, and the transfer thereof was
appropriately restricted.
Of the issued and outstanding shares, all 10,000,000 are subject
to resale restrictions and, unless registered under the
Securities Act of 1933 (the "Act") or exempted under another
provision of the Act, will be ineligible for sale in the public
market. In general, under Rule 144, a person (or persons whose
shares are aggregated) who has satisfied a one year holding
period, under certain circumstances, may sell within any three-
month period a number of shares which does not exceed the
greater of one percent of the then outstanding Common Stock or
the average weekly trading volume during the four calendar weeks
prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity
limitation by a person who has satisfied a two-year holding
period and who is not, and has not been for the preceding three
months, an affiliate of the Company.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 50,000,000 shares of Common Stock, par value $0.001 per
share, of which 10,000,000 are issued and outstanding. The
shares are non-assessable, without pre-emptive rights, and do
not carry cumulative voting rights. Holders of common shares are
entitled to one vote for each share on all matters to be voted
on by the stockholders. The shares are fully paid, non-
assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to share ratably in dividends, if any, as may be declared by the
Company from time-to-time, from funds legally available. In the
event of a liquidation, dissolution, or winding up of the
Company, the
holders of shares of common stock are entitled to share on a
pro-rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates
of either.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts or omissions
not amounting to intentional misconduct, fraud, or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if
they were not engaged in intentional misconduct, fraud, or a
knowing violation of the law. Therefore, purchasers of these
securities may have a more limited right of action than they
would have except for this limitation in the Articles of
Incorporation and By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling
the Company's affairs. A shareholder may be able to institute
legal action on behalf of himself and all others similarly
stated shareholders to recover damages where the Company has
failed or refused to observe the law.
Shareholders may, subject to applicable rules of civil
procedure, be able to bring a class action or derivative suit to
enforce their rights, including rights under certain federal and
state securities laws and regulations. Shareholders who have
suffered losses in connection with the purchase or sale of their
interest in the Company in connection with such sale or
purchase, including the misapplication by any such officer or
director of the proceeds from the sale of these securities, may
be able to recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
The Registrant has not changed accountants since its formation,
and Management has had no disagreements with the findings of its
accountants.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
GUIDELINE CAPITAL, INC.
FINANCIAL STATEMENT
DECEMBER 15, 2000
<PAGE>
MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
888 SEVENTH AVENUE
NEW YORK, NEW YORK 10106
TEL: (212) 757-6400
FAX: (212) 757-6124
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Guideline
Capital, Inc. as of December 15, 2000. The financial statement
is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial
statement based on our audit.
We conduct our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Guideline Capital, Inc. as of December 15, 2000 in
conformity with generally accepted accounting principles.
/s/ Merdinger, Fruchter, Rosen & Corso, P.C.
MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
Certified Public Accountants
New York, New York
December 15, 2000
<PAGE> 1
Guideline Capital, Inc.
BALANCE SHEET
December 15, 2000
ASSETS $ -
LIABILITIES
Capital -
Subscription of Stock Receivable (10,000)
Common Stock, $0.001 par value;
50,000,000 shares authorized,
10,000,000 share issued and outstanding 10,000
------
Total Capital -
------
TOTAL LIABILITIES $ -
======
The accompanying note is an integral part of the financial
statement.
<PAGE> 2
Guideline Capital, Inc.
NOTES TO FINANCIAL STATEMENTS
December 15, 2000
NOTE 1 - NATURE OF OPERATIONS
Guideline Capital, Inc. was incorporated on August 17, 2000 in
the State of Nevada. The Corporation's principal business
activity has not been determined.
<PAGE> 3
EXHIBITS
3.1 Articles of Incorporation
3.2 By-Laws
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Guideline Capital, Inc.
Dated: December 15, 2000 By: /s/ Thomas R. Platfoot
Thomas R. Platfoot, President
