UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
GATEWAY INDUSTRIES, INC.
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(Name of Issuer)
Common Stock, $.001 Par Value Per Share
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(Title of Class of Securities)
3679595105
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(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue
New York, New York 10022
(212) 872-1000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 29, 1996
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [X]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d- 1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Continued on following page(s)
Page 1 of 9 Pages
Exhibit Index: Page 8
<PAGE>
SCHEDULE 13D
CUSIP No. 367595105 Page 2 of 9 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
George Soros (in his capacity as the sole proprietor of Soros
Fund Management)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
827,716(1)
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[_]
13 Percent of Class Represented By Amount in Row (11)
22.97%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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(1) See Item 5.
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Page 3 of 9 Pages
Item 1. Security and Issuer.
This statement on Schedule 13D relates to shares of common stock,
par value $.001 per share (the "Shares"), of Gateway Industries, Inc. (the
"Issuer"). The address of the principal executive offices of the Issuer is
101-01 Foster Avenue, Brooklyn, New York 11236. This statement on Schedule 13D
is being filed by the Reporting Person (as defined below) to report recent
acquisitions of Shares for the account of Quota Fund N.V., a Netherlands
Antilles investment corporation ("Quota"), as a result of which the Reporting
Person may be deemed the beneficial owner of more than 5% of the outstanding
Shares.
Item 2. Identity and Background.
This statement is being filed on behalf of Mr. George Soros (the
"Reporting Person") in his capacity as the sole proprietor of an investment
advisory firm conducting business under the name Soros Fund Management ("SFM").
This statement on Schedule 13D relates to Shares held for the account of Quota,
which has granted investment discretion to SFM pursuant to an investment
advisory contract.
SFM is a sole proprietorship of which the Reporting Person is the
sole proprietor. SFM has its principal office at 888 Seventh Avenue, 33rd Floor,
New York, New York 10106. Its sole business is to serve, pursuant to contract,
as the principal investment advisor to several foreign investment companies (the
"SFM Clients"), including Quota. Quota has its principal office at Kaya
Flamboyan 9, Willemstad, Curacao, Netherlands Antilles. SFM's contracts with SFM
Clients generally provide that SFM is responsible for designing and implementing
the SFM Clients' overall investment strategy; for conducting direct portfolio
management strategies to the extent that SFM determines that it is appropriate
to utilize its own portfolio management capabilities; for selecting, evaluating
and monitoring other investment advisors who manage separate portfolios on
behalf of the SFM Clients; and for allocating and reallocating the SFM Clients'
assets among the outside managers and itself.
The principal occupation of the Reporting Person, a United States
citizen, is his direction of the activities of SFM, which is carried out in his
capacity as the sole proprietor of SFM at SFM's principal office. Information
concerning the identity and background of the Managing Directors of SFM is set
forth in Annex A hereto and incorporated by reference in response to this Item
2.
Pursuant to regulations promulgated under Section 13(d) of the
Act, and notwithstanding that none of the Reporting Person, SFM or Quota
currently exercises voting or dispositive power over the securities of the
Issuer held for the account of Quota, the Reporting Person (as the sole
proprietor and the person ultimately in control of SFM) may be deemed a
beneficial owner of securities, including the securities of the Issuer held for
the account of Quota, as a result of the contractual authority of SFM to acquire
voting and dispositive power with regard to the securities of the Issuer held
for the account of Quota.
During the past five years, none of the Reporting Person, Quota
and, to the best of the Reporting Person's knowledge, any other person
identified in response to this Item 2 has been (a) convicted in a criminal
proceeding, or (b) a party to any civil proceeding as a result of which he has
been subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws, or finding any violation with respect to such laws.
<PAGE>
Page 4 of 9 Pages
Item 3. Source and Amount of Funds or Other Consideration.
SFM, on behalf of Quota, has granted investment discretion over
certain funds of Quota to Steel Partners Services, Ltd., a New York corporation
("Services"), pursuant to an investment advisory contract between Quota and
Services (the "Services Contract"). The Shares reported herein as being held for
the account of Quota were acquired at the direction of Services. Services has
informed the Reporting Person that it expended an aggregate of approximately
$1,750,500 of the funds it manages for Quota to purchase the Shares acquired for
the account of Quota during the 60 days prior to the date hereof.
The Shares held for the account of Quota may be held through
margin accounts maintained with brokers, which extend margin credit to Quota as
and when required to open or carry positions in its margin accounts, subject to
applicable federal margin regulations, stock exchange rules and such firms'
credit policies. The positions which may be held in margin accounts, including
the Shares, are pledged as collateral security for the repayment of debit
balances in the respective accounts.
Item 4. Purpose of Transaction.
All of the Shares reported herein as having been acquired for the
account of Quota were acquired for investment purposes. Neither the Reporting
Person, nor, to the best of his knowledge, any of the other individuals
identified in response to Item 2, has any plans or proposals which relate to or
would result in any of the transactions described in subparagraphs (a) through
(j) of Item 4 of Schedule 13D. The Reporting Person reserves the right to
acquire additional securities of the Issuer, to dispose of such securities at
any time or to formulate other purposes, plans or proposals regarding the Issuer
or any of its securities, to the extent deemed advisable in light of general
investment and trading policies of SFM Clients, market conditions or other
factors.
Item 5. Interest in Securities of the Issuer.
(a) As a consequence of SFM's ability to terminate the Services
Contract with respect to all investments made for the account of Quota at the
direction of Services, including but not limited to those involving the Shares,
and acquire the voting and dispositive power held by Services with respect to
the Shares, notwithstanding that neither SFM nor Quota currently exercises
voting or dispositive power over the Shares, the Reporting Person may be deemed
to be the beneficial owner of 827,716 Shares (approximately 22.97% of the total
number of outstanding Shares).
The Reporting Person expressly disclaims membership in any group,
within the meaning of Section 13(d)(3) of the Act. The Reporting Person also
expressly disclaims beneficial ownership of any Shares not held for the account
of Quota.
(b) The power to direct the voting and disposition of the Shares
held for the account of Quota currently is vested in Services pursuant to the
Services Contract. SFM has the contractual authority on behalf of Quota to
terminate the Services Contract and, as a result, the Reporting Person may be
deemed to have the ability to acquire the voting and dispositive power held by
Services with respect to the 827,716 Shares held for the account of Quota.
(c) Services has informed the Reporting Person that on August 29,
1996 it acquired 778,000 Shares for the account of Quota pursuant to a rights
offering of the Issuer (the "Rights Offering"). The Rights Offering entitled
<PAGE>
Page 5 of 9 Pages
holders of record of each Share to transferable subscription rights to purchase
three additional Shares at $2.25 per Share (the "Basic Subscription Privilege").
In addition, pursuant to the terms of the Rights Offering, holders who exercised
their Basic Subscription Privilege were entitled to subscribe for additional
unissued Shares remaining after satisfaction of all subscriptions pursuant to
the Basic Subscription Privilege (the "Oversubscription Privilege"). Services
has informed the Reporting Person that of the 778,000 Shares acquired on August
29,1996 for the account of Quota, 149,148 were acquired pursuant to the Basic
Subscription Privilege and 628,852 were acquired pursuant to the
Oversubscription Privilege.
Other than the transactions described above, there have been no
transactions with respect to the Shares since July 11, 1996 (60 days prior to
the date hereof) by Quota, the Reporting Person, or to the best of the Reporting
Person's knowledge, any other person mentioned in Item 2.
(d) The shareholders of Quota have the right to participate in
the receipt of dividends from, or proceeds from the sale of, securities,
including the Shares, held by Quota in accordance with their ownership interests
in Quota.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings in Relationship with
Respect to Securities of the Issuer.
From time to time, the Reporting Person and/or Quota may lend
portfolio securities to brokers, banks or other financial institutions. These
loans typically obligate the borrower to return the securities, or an equal
amount of securities of the same class, to the lender and typically provide that
the borrower is entitled to exercise voting rights and to retain dividends
during the term of the loan. From time to time to the extent permitted by
applicable laws, Quota or other SFM Clients may borrow securities, including the
Shares, for the purpose of effecting, and may effect, short sale transactions,
and may purchase securities for the purpose of closing out short positions in
such securities.
Except as disclosed above, the Reporting Person does not have any
contracts, arrangements, understandings or relationships with respect to any
securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
(a) Power of Attorney dated April 16, 1996 granted by Mr. George
Soros in favor of Mr. Sean C. Warren.
<PAGE>
Page 6 of 9 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: September 9, 1996 GEORGE SOROS
By: /S/ SEAN C. WARREN
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Sean C. Warren
Attorney-in-Fact
<PAGE>
Page 7 of 9 Pages
ANNEX A
The following is a list of all of the persons who serve as
Managing Directors of Soros Fund Management ("SFM"):
Scott K. H. Bessent
Walter Burlock
Stanley Druckenmiller
Jeffrey L. Feinberg
Arminio Fraga
Gary Gladstein
Robert K. Jermain
David N. Kowitz
Elizabeth Larson
Alexander C. McAree
Paul McNulty
Gabriel S. Nechamkin
Steven Okin
Dale Precoda
Lief D. Rosenblatt
Mark D. Sonnino
Filiberto H. Verticelli
Sean C. Warren
Each of the above-listed persons is a United States citizen whose principal
occupation is serving as Managing Director of SFM, and each has a business
address c/o Soros Fund Management, 888 Seventh Avenue, New York, New York 10106.
During the past five years, none of the above-listed persons has been (i)
convicted in a criminal proceeding, or (ii) a party to any civil proceeding as a
result of which any such persons has been subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws, or finding any violations with
respect to such laws.
<PAGE>
Page 8 of 9 Pages
INDEX OF EXHIBITS
EXHIBIT PAGE
A Power of Attorney dated April 16, 1996 granted by
Mr. George Soros in favor of Mr. Sean C. Warren. 9
Page 9 of 9 Pages
EXHIBIT A
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that I, GEORGE SOROS, hereby make, constitute and
appoint SEAN C. WARREN as my agent and attorney in fact for the purpose of
executing in my name, in my personal capacity or in my capacity as sole
proprietor of Soros Fund Management, all documents, certificates, instruments,
statements, filings and agreements ("documents") to be filed with or delivered
to any foreign or domestic governmental or regulatory body or required or
requested by any other person or entity pursuant to any legal or regulatory
requirement relating to the acquisition, ownership, management or disposition of
securities or other investments, and any other documents relating or ancillary
thereto, including but not limited to, all documents relating to filings with
the United States Securities and Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933 or the Securities Exchange Act of 1934 (the "Act") and
the rules and regulations promulgated thereunder, including: (1) all documents
relating to the beneficial ownership of securities required to be filed with the
SEC pursuant to Section 13(d) or Section 16(a) of the Act including, without
limitation: (a) any acquisition statements on Schedule 13D or Schedule 13G and
any amendments thereto, (b) any joint filing agreements pursuant to Rule
13d-1(f) and (c) any initial statements of, or statements of changes in,
beneficial ownership of securities on Form 3, Form 4 or Form 5 and (2) any
information statements on Form 13F required to be filed with the SEC pursuant to
Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument this 16th of April, 1996.
/S/ GEORGE SOROS
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GEORGE SOROS
