<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
------------------------------------------------------------
AMENDMENT NO. 1 TO FORM 10-SB
General Form For Registration of Securities
of Small Business Issuers Under Section 12(b)
or 12 (g) of the Securities Exchange Act of 1934
CONSTRUCTION TECHNOLOGY INDUSTRIES INC.
(Name of Small Business Issuer in Its Charter)
<TABLE>
<CAPTION>
Delaware 22-2535380
<S> <C>
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
</TABLE>
68 Schraalenburg Road, P.O. Box 233
Harrington Park, New Jersey 07640
With copies to:
John Gitlin
3008 Falls Church Lane
Mesquite, Texas 75149
(Address of principal executive offices, including zip code)
(201) 784-5190
(Registrant's Telephone Number, Including Area Code)
Securities to be registered pursuant to Section 12(b)of the Act:
NONE
---------------------------------------------
(Title of Class)
Securities to be registered pursuant to Section 12(g)of the Act:
Common Stock, par value $.0001 per share
(Title of Class)
1
<PAGE> 2
INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Business Development. Construction Technology Industries Inc. (the
"Company" or "CTI") was incorporated in the state of Delaware on March 8, 1984.
Subsequent to its date of incorporation, the Company filed with the Securities
and Exchange Commission a Registration Statement for the public sale of
6,600,000 units consisting of 6,600,000 shares of common stock, $0.0001 par
value and 6,600,000 warrants to purchase 19,800,000 shares of the Company's
common stock. All unexercised warrants have expired. The effective date of the
Prospectus and Registration Statement was October 1, 1985. The Company initially
engaged in the manufacture of modular building components for the residential
housing industry, which were sold to developers of residential housing units.
In November, 1986, the Company filed a voluntary petition under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court, District of New
Jersey, Bk. No. 86-07021, which was converted by order of the court to a
liquidation proceeding under Chapter 7 of the Bankruptcy Code on October 5,
1987. On September 22, 1993 a Final Decree was entered by the court closing the
Chapter 7 proceedings. During the bankruptcy proceedings the Company ceased
operations which it never revived.
On June 12,1984, the Company, by amendment to its certificate of
incorporation, increased the authorized number of shares to 50,000,000 at par
value $0.0001.
In February 2000, the Company decided to engage in the pursuit of seeking a
partnership with a viable business entity. The primary activity of the Company
will involve seeking business opportunity candidates which it can acquire or
with whom it can merge. The Company has not selected any company for acquisition
or merger and does not intend to limit potential acquisition candidates to any
particular field or industry, but does retain the right to limit acquisition or
merger candidates, if it so chooses, to a particular field or industry. The
Company is currently in a development stage of its business.
The proposed business activities classify the Company as a "blank
check" company. The Securities and Exchange Commission defines such companies as
"any development stage company that is issuing a penny stock within the meaning
of section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an unidentified company or
companies." 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 further efforts to
cause a market to develop in the Company's securities other than, upon its
becoming a reporting company, to locate a broker dealer to apply to the National
Association of Securities Dealers to trade the Company's common stock on the
NASD Bulletin Board. The Company does not intend to undertake any offering of
the Company's securities, either debt or equity, until such time as the Company
has successfully implemented its business plan. On March 10, 2000 the Company
completed a private placement with its major shareholder which resulted in the
Company receiving $15,000.00, which management feels will be sufficient to fund
the Company's efforts to become a reporting and listed company. There is,
however, no assurances that the Company will be accepted for listing on the NASD
Bulletin Board. The Company intends to comply with the periodic reporting
requirements of the Exchange Act for so long as it is subject to those
requirements.
The Company is filing this Form 10SB on a voluntary basis. It has no obligation
to do so under the Exchange Act. The Company believes that by filing such Form
10SB and being obligated to file reports pursuant to Section 13 of the Exchange
Act, and by being listed on the NASDQ Bulletin Board, the Company will best
2
<PAGE> 3
position itself as an attractive partner for potential merger or acquisition
companies of greater financial value with a history of success. While the
Company believes it will be a more attractive acquisition candidate, there is no
assurance that the foregoing assumption is correct. Further, effective January
4, 1999, in order to become listed for trading on the Bulletin Board operated by
the National Association of Securities Dealers, Inc., the Company must be filing
reports with the Securities and Exchange Commission (the "Commission") pursuant
to Section 13 of the Exchange Act.
The Company believes that there is a demand by non-public corporations for shell
corporations that have a public distribution of securities, such as the Company.
The Company believes that demand for shells has increased dramatically since the
Commission imposed additional requirements upon "blank check" companies pursuant
to Rule 419 of the Securities Act of 1933, as amended (the " '33 Act").
According to the Commission, Rule 419 was designed to strengthen regulation of
securities offerings by blank check companies, which Congress has found to have
been a common vehicle for fraud and manipulation in the penny stock market. See
Securities Act Releases No. 6891 (April 17, 1991), 48 SEC Docket 1131 and No.
6932 (April 13, 1992) 51 SEC Docket 0382. The foregoing regulation has
decreased, substantially, the number of "blank check" offerings filed with the
Commission, and as a result has stimulated an increased demand for shell
corporations. While the Company has made the foregoing assumption, there is no
assurance that the same is accurate or correct and accordingly, no assurance
that the Company will be acquired by or acquire an existing non-public entity.
Furthermore, any business combination or transaction will likely result in a
significant issuance of shares and substantial dilution to present stockholders
of the Company.
Forward Looking Statements
Certain statements contained in this Registration Statement discuss potential
future events and/or transactions concerning the Company and may be deemed to be
forward looking statements. Forward looking statements are statements not based
on historical information and which relate to future operations, strategies,
financial results or other developments. Forward looking statements are
necessarily based upon estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company's control and many of which, with respect
to future business decisions, are subject to change. These uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking statements made by or on
behalf of the Company. The Company strongly urges the reader of this
Registration Statement to carefully read and consider the risk factors and other
cautionary statements identified by the Company in conjunction with the
discussions by the Company of the forward looking statements.
Risk Factors.
The Company's business is subject to numerous risk factors which
include the following:
1. No Operating History or Revenue and Minimal Assets. We have had no
recent operating history nor any revenues or earnings from operations since
inception. The Company has no significant assets or financial resources. We
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 that will increase
continuously until we can consummate a business combination with a profitable
business opportunity. There is no assurance that the Company can identify such a
business opportunity and consummate such a business combination.
3
<PAGE> 4
2. Assets of the Corporation. The Company has no substantial, material,
tangible assets as of the filling date of this registration statement. Its
present assets are extremely limited. Any business activity that the Company
eventually undertakes may require substantial capital.
3. 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 companies with which the
Company may merge or which it acquires. While management intends to seek a
merger or acquisition of privately held entities with established operating
histories, there can be no assurance that the Company will be successful in
locating an acquisition candidate meeting such criteria. In the event the
Company completes a merger or acquisition transaction, of which there can be no
assurance, the success of the Company's operations will be dependent upon
management of the successor firm and numerous other factors beyond the Company's
control.
4. Dilution in Merger or Acquisition Transaction. The Company's plan of
operation is based upon a merger with or acquisition of a private concern, which
in all likelihood would result in the Company issuing securities to shareholders
of any such target concern. The issuance of previously authorized and unissued
Common Stock of the Company would result in substantial dilution to present and
prospective shareholders of the Company, which may necessarily result in a
change in control or management of the Company.
5. Impact of Limited Time Devoted to the Company. Opportunities available
to the Company for mergers or acquisitions may be lost or delayed as a result of
the limited amount of time devoted to the Company by management. As a result,
an acquisition or merger may never take place.
6. No Business Plan. The Company has not identified the business
opportunities in which it will attempt to obtain an interest. The Company
therefore cannot describe the specific risks presented by such business. In
general, it may be expected that such business will present such a level of
risks that conventional bank financing would not be available on favorable
terms. Such business may involve an unproven product, technology or marketing
strategy, the ultimate success of which cannot be assured. The acquired business
opportunity may be in competition with larger, more established firms over which
it will have no competitive advantage. The Company's investment in a business
opportunity may be expected to be highly illiquid and could result in a total
loss to the Company if the opportunity is unsuccessful.
7. Company's Securities are Subject to Penny Stock Rules. The Company's
shares are "penny stocks" and consequently they are subject to Commission
regulations which impose sales practice requirements upon broker/dealers.
8. Conflicts of Interest. All of the Directors are associated with other
firms or occupations involving a range of business activities. Because of these
affiliations and because these individuals will devote only a minor amount of
time to the affairs of the Company. There are potential inherent conflicts of
interest in their acting as Directors and Officers of the Company. All of the
Company's Directors and Officers are Officers and/or Directors of the majority
shareholder of the Company and are or may be Directors and/or Officers of other
entities engaged in a variety of businesses which may in the future have various
transactions with the Company. Additional conflicts of interest and non-arm's
length transactions may also arise in the future in the event the Company's
Officers or Directors are involved in the management of any firms with which the
Company transacts business. Management has adopted a policy that the Company
will not seek a merger with or an acquisition of any entity with which any of
the Officers or Directors serve as Officers, Directors or partners or in which
they or their family members own or hold an ownership interest. Business
combinations with entities owned or controlled by affiliates or associates of
the Company will not be considered, however, securities owned or controlled by
the affiliates and associates of the Company may be sold in the business
combination transaction without affording all existing shareholders a similar
4
<PAGE> 5
opportunity. A buy-out of the Company's majority shareholder's interest could
occur by an offer from a merger/acquisition candidate. See, also "Plan of
Operation".
9. No Dividends Anticipated. At the present time the Company does not
anticipate paying dividends, cash or otherwise, on its Common Stock in the
foreseeable future. Future dividends will depend on earnings, if any, of the
Company, its financial requirements and other factors. Investors who anticipate
the need of an immediate income from their investment in the Company's Common
Stock should refrain from the purchase of the Company's securities.
10. Scarcity of and Competition for Merger or Acquisition Prospects. The
Company is and will continue to be an insignificant participant in the business
of seeking mergers 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 private companies which may be
desirable 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 merger or acquisition
candidates with numerous other small public companies.
11. No Agreement for Business Combination or Other Transaction. The Company
has no arrangement, agreement or understanding with respect to engaging in a
merger with, or acquisition of, any entity private or public. There can be no
assurance the Company will be successful in identifying and evaluating suitable
merger or acquisition candidates or in concluding a merger or acquisition
transaction. Management has not identified any specific business within an
industry for evaluation by the Company. There is no assurance the Company will
be able to negotiate a merger or acquisition on favorable terms.
12. Lack of Market Research or Marketing Organization. The Company has
neither conducted nor has the Company engaged other entities to conduct market
research such that management has assurance 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. Even in the event
demand is identified 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 transaction.
13. Impracticability of Exhaustive Investigation. The Company's limited
funds and the lack of full-time management will likely make it impracticable to
conduct a complete and exhaustive investigation and analysis of a business
opportunity before the Company commits its capital or other resources thereto.
Therefore, management decisions will likely be made without detailed feasibility
studies, independent analysis, market surveys and the like which, if the Company
had more funds available to it, would be desirable. The Company will be
particularly dependent in making decisions upon information provided by the
promoter, owner, sponsor, or others associated with the business opportunity
seeking the Company's participation. There are numerous individuals, publicly
held companies, and privately held companies seeking merger and acquisition
prospects. There is significant competition among such groups for attractive
merger and acquisition prospects. However, the number of suitable and attractive
prospects is limited and the Company may find a scarcity of suitable companies
with audited financial statements seeking merger partners of the type and size
of the Company.
14. Possible Lack of Diversification. The Company may be unable to
diversify its business activities, which creates the possibility of a total loss
to the Company and its shareholders should an acquisition by the Company prove
to be unprofitable. The Company's failure or 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.
5
<PAGE> 6
15. The Company May Pay a Finder's Fee. In connection with a
merger/acquisition, the Company may issue "restricted" shares of the Company's
Common Stock to finders. A finder's fee will not be paid, however, to any
officer, director, shareholder or other affiliated party. At the present time,
there are no plans to pay any finder's fees.
16. Issuance of Additional Shares. The Board of Directors has the power to
issue shares and may do so in an exchange offer or a stock for stock exchange
agreement. The Company may also issue additional shares of Common Stock pursuant
to a plan and agreement of merger with a private corporation. Although the
Company presently has no commitments, contracts or intentions to issue any
additional shares to other persons, the Company may in the future attempt to
issue shares to acquire products, properties or businesses, or for other
corporate purposes.
17. Lack of Public Market for Securities. At present, no market exists for
the Company's securities and there is no assurance that a regular trading market
will develop and if developed, that it will be sustained. A market for the
securities cannot develop until a merger or acquisition has been concluded. A
purchaser of stock may, therefore, be unable to resell the securities offered
herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept the Company's securities as pledged collateral
for loans unless a regular trading market develops.
18. Change of Control. As part of the acquisition of a business
opportunity, some or all of the current Board of Directors may resign after
appointing their successors, without shareholder approval. The acquisition of an
opportunity may also involve the issuance of a majority of the Company's stock
to promoters of the opportunity. In such event, purchasers of shares offered
hereunder would be unable to elect or remove Directors against the wishes of
such promoters.
ITEM 2 PLAN OF OPERATION
The Company intends to seek to acquire assets or shares of an entity
actively engaged in a business that generates revenues, in exchange for its
securities. We have not identified a particular acquisition target and have not
entered into any negotiations regarding such an acquisition. As soon as this
registration statement becomes effective under Section 12 of the Exchange Act,
we intend to contact securities broker/dealers, venture capitalists, members of
the financial community and others who may present solicited and unsolicited
proposals. None of our officers, directors, or affiliates have engaged in any
preliminary contact or discussions with any representative of any other company
regarding the future possibility of an acquisition or merger between the Company
and such other company as of the date of this registration statement.
Due to the Company's intent to remain a shell corporation until a merger
or acquisition candidate is identified, it is anticipated that its cash
requirements shall be minimal, and that any further necessary capital, to the
extent required, will be provided by the directors, officers or affiliates. The
Company does not anticipate that it will have to raise capital in the next
twelve months. The Company does not intend to engage in the acquisition of any
assets.
The Company has no full time employees. Our President and Vice President have
agreed to allocate a portion of their time to the activities of the Company at a
salary of $250.00 per month. These officers anticipate that the business plan of
the Company can be implemented by their devoting an average of approximately 20
hours each 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 officers. The Company does not expect any significant changes in the number
of employees.
6
<PAGE> 7
Our officers and directors may become involved with other companies
which have a business purpose similar to that of the Company. As a result,
potential conflicts of interest may arise in the future. If such a conflict does
arise and an officer or director of the Company is presented with business
opportunities under circumstances where there may be a doubt as to whether the
opportunity should belong to the Company or another "blank check" company they
are affiliated with, they will disclose the opportunity to all such companies.
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 with or acquire such target
company, the company which first filed a registration statement with the
Commission will be entitled to proceed with the proposed transaction. See "Risk
Factors - "Conflicts of Interest"
Selection of Opportunities
The Company proposes to seek, investigate and, if warranted, acquire an interest
in one or more business opportunities ventures. As of the date hereof the
Company has no business opportunities or ventures under contemplation for
acquisition but proposes to investigate potential opportunities in the form of
investors or entrepreneurs with a concept which has not yet been placed in
operation, or in the form of firms which are developing companies. The Company
may seek out established businesses which may be experiencing financial or
operation difficulties and are in need of the limited additional capital the
Company could provide. The Company anticipates that it will seek to merge with
or acquire an existing business. After the merger or acquisition has taken
place, it is likely that management from the acquired entity will operate the
Company. Due to the absence of capital available for investment by the Company,
the types of business seeking to be acquired by the Company will no doubt be
smaller and higher risk types of businesses. In all likelihood, a business
opportunity will involve the acquisition of or merger with a corporation which
does not need additional cash but which desires to establish a public trading
market for its Common Stock. Accordingly, the Company's ability to acquire any
business of substance will be extremely limited.
The Company does not propose to restrict its search for investment
opportunities to any particular industry or geographical location and may,
therefore, engage in essentially any business, anywhere, to the extent of its
limited resources.
This discussion of the proposed business is purposefully general and is not
meant to be restrictive of the Company's virtually unlimited discretion to
search for and enter into potential business opportunities. Management
anticipates that it may be able to participate in only one potential business
venture because the Company has nominal assets and limited financial resources.
See "Part F/S, Financial Statements." This lack of diversification should be
considered a substantial risk to shareholders of the Company because it will not
permit the Company to offset potential losses from one venture against gains
from another.
We anticipate that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to 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 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, providing liquidity (subject
to restrictions of applicable statutes) for all shareholders and other factors.
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.
7
<PAGE> 8
We have, and will continue to have, no capital with which to provide
the owners of business opportunities with any significant cash or other assets.
However, management believes we will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
publicly registered company without incurring the cost and time required to
conduct an initial public offering. The owners of the business opportunities
will, however, incur significant legal and accounting costs in connection with
acquisition of a business opportunity, including the costs of preparing Form
8-K's, 10-K's or 10-KSB's, 10-Q's or 10-QSB's, agreements and related reports
and documents. The Exchange Act specifically requires that any merger or
acquisition candidate comply with all applicable reporting requirements, which
include providing audited financial statements to be included within the
numerous filings relevant to complying with the Exchange Act. 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 business opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officers and directors of the Company, none of
whom is a professional business analyst. Inasmuch as the Company will have no
funds available to it in its search for business opportunities and ventures, the
Company will not be able to expend significant funds on a complete and
exhaustive investigation of potential business opportunities or ventures. The
Company will however investigate to the extent believed reasonable by its
management, potential business opportunities or ventures. Management intends to
concentrate on identifying preliminary prospective business opportunities which
may be brought to its attention through present associations of our officers and
directors, or by our shareholders. In analyzing prospective business
opportunities, management will 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
trademarks; name identification; and other relevant factors. To the extent
possible, the Company intends to utilize written reports and personal
investigations to evaluate the above factors.
It is not anticipated that any outside consultants or advisors, except
for our legal counsel and accountants, will be utilized by the Company to
effectuate its business purposes. However, if we do retain such an outside
consultant or advisor, any cash fee earned by such party will be paid by the
prospective merger/acquisition candidate, as the Company has no cash assets with
which to pay such obligation. We have no contracts or agreements with any
outside consultants and none are contemplated. It is the Company's policy that
no finder's or other fee will be paid to any of the Company's officers,
directors or shareholders who are instrumental in finding a merger or
acquisition candidate for the Company. Management does not intend to make any
changes to this policy.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan and that the capital raised by the Company
through a private placement with its major shareholder in March, 2000 will be
sufficient to cover such expenses. If additional funding is necessary,
management and or shareholders may continue to provide capital or arrange for
additional outside funding. However, the only opportunity which management would
have to have these loans repaid will be from a prospective merger or acquisition
candidate. Neither management nor any of the Company's shareholders have any
agreements with the Company that would impede or prevent consummation of a
proposed transaction. There is no assurance, however, that management or any
shareholder will continue to provide capital indefinitely if a merger candidate
cannot be found. If a merger candidate cannot be found in a reasonable
8
<PAGE> 9
period of time, management may be required to reconsider its business strategy,
which could result in the dissolution of the Company.
Form of Acquisition
The manner in which the Company participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of the
Company and the promoters of the opportunity, and the relative negotiating
strength of the Company and such promoters. The exact form or structure of the
Company's participation in a business opportunity or venture will be dependent
upon the needs of the particular situation. The Company's participation may be
structured as an asset purchase agreement, a lease, a license, a joint venture,
a partnership, a merger, or acquisition of securities.
As set forth above, the Company may acquire its participation in a business
opportunity through the issuance of Common Stock or other securities in the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended, may depend
upon the issuance to the shareholders of the acquired company of at least eighty
percent (80%) of the Common Stock of the combined entities immediately following
the reorganization. If a transaction were structured to take advantage of these
provisions rather than other "tax free" provisions provided under the Internal
Revenue Code all prior shareholders may, in such circumstances, retain twenty
percent (20%) or less of the total issued and outstanding Common Stock. This
could result in substantial additional dilution to the equity of those who were
shareholders of the Company prior to such reorganization.
Further, extreme caution should be exercised by any investor relying upon any
tax benefits in light of proposed new tax laws. It is possible that no tax
benefits will exist at all. Prospective investors should consult their own
legal, financial and other business advisors.
The present management and the shareholders of the Company will in all
likelihood not have control of a majority of the voting shares of the Company
following a reorganization transaction. In fact, it is most probable that the
shareholders of the acquired entity will gain control of the Company. As part of
such a transaction, all or a majority of the Company's Directors may resign and
new Directors may be appointed without any vote by shareholders.
It may be anticipated that any opportunity in which the Company
participates will present certain risks. Many of these risks cannot be
adequately identified prior to selection of the specific opportunity, and the
Company's shareholders must, therefore, depend on the ability of management to
identify and evaluate such risk. In the case of some of the opportunities
available to the Company, it may be anticipated that the promoters thereof have
been unable to develop a going concern or that such business is in its
development stage in that it has not generated significant revenues from its
principal business activities prior to the Company's participation. There is a
risk, even after the Company's participation in the activity and the related
expenditure of the Company's funds, that the combined enterprises will still be
unable to become a going concern or advance beyond the development stage. Many
of the opportunities may involve new and untested products, processes, or market
strategies that may not succeed. The Company and, therefore, its shareholders
will assume such risks.
The Company has an unwritten policy that it will not acquire or merge
with a business or company in which the Company's management or their affiliates
or associates directly or indirectly have an ownership interest. Management is
not aware of any circumstances under which the foregoing policy will be changed
and management, through their own initiative, will not change said policy.
9
<PAGE> 10
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon an exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, we may agree 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
successfully consummated a merger or acquisition and the Company is no longer
considered a "shell" company. Until a merger or acquisition is consummated, the
Company will not attempt to register any additional securities. The issuance of
substantial additional securities and their potential sale into any trading
market which may develop in the Company's securities may have a depressive
effect on the value of the Company's securities in the future, if such a market
develops, of which there is no assurance.
We will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties, will specify
certain events of default, will detail the terms of closing and the conditions
that must be satisfied by each of the parties prior to and after such closing,
will outline the manner of bearing costs, including costs associated with the
Company's attorneys and accountants, will set forth remedies on default and will
include miscellaneous other terms.
ITEM 3. DESCRIPTION OF PROPERTY. The Company's executive offices are currently
located at 68 Schraalenburg Road, Harrington Park, New Jersey, under a month to
month sub-lease with Power Tech Services, Inc. The Company pays rent of $250.00
per month for the leased space. Mr. Robert Schuck who is an officer and director
of the Company acts as a consultant to Power Tech. Mr. Schuck receives no
benefit from the sub-lease of the property by the Company.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding the beneficial
ownership of common stock, the only class of securities of the Company, as of
the filing date of this registration statement by (i) each person known by the
Company to beneficially own more than five percent of the Company's common
stock; (ii) each director and executive officer of the Company; and (iii) all
current directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
common stock, par HITK Corporation 20,300,000 shares 53%
value $.0001 68 Schraalenburg Road
per share Harrington Park, New Jersey 07640
</TABLE>
*Based on 37,964,360 shares issued and outstanding as of the filing date of
this registration statement.
10
<PAGE> 11
The number of shares of common stock of the Company owned by the
Directors and Executive Officers of the Company as of the filing date of this
registration statement is as follows:
<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
-------- ---------------- -------------------- ----------
<S> <C> <C> <C>
common stock, par Robert N. Schuck 20,420,000 shares(1)(2) 54%
value $.0001 85 Somerset Road
per share Norwood, New Jersey 07648
common stock, par John J. Gitlin 20,420,000 shares(1)(2) 54%
value $.00001 3008 Falls Church Lane
per share Mesquite, Texas 75149
common stock, par Herbert Maslo 20,300,000 shares(1)(2) 53%
value $.00001 9 Kathy Lane
per share Warren, NJ 07060
All Officers and Directors as
a Group (3 persons) 3,413,000 shares (1)(2) 95.1%
</TABLE>
* Based on 37,964,360 shares issued and outstanding as of the filing date of
this registration statement.
(1) For purposes of this table, beneficial ownership is determined in
accordance with Rule 13d-3 under the Exchange Act and generally
includes voting or investment power with respect to securities.
(2) Robert Schuck and John Gitlin who respectively hold the positions of
President and Vice President/Secretary-Treasurer and Directors and
Herbert Maslo who holds the position of Director of the Company hold
identical positions with HITK Corporation which owns as of the filing
date of this registration statement, an equity interest in the Company
of 53%, and therefore are deemed to be beneficial owners of the
shares held by HITK Corporation.
ITEM 5. Directors, Executive Officers, Promoters and Control Persons.
(a) Directors and Executive Officers.
Directors of the Company serve for a term of one year or until their
successors are elected. Officers are appointed by, and serve at the pleasure of,
the Board. The Directors and Executive Officers of the Company are as follows:
Robert N. Schuck, age 63. President and Director. Mr. Schuck has been President
and a Director of the Company since February 2000. Mr. Schuck has been a
Director of Power Tech Systems, Inc. since September 1988 and President and
Director of Cathel Partners Ltd. since 1987. He held the position of Executive
Vice President of eGlobe, Inc. from 1989 to 1997 and Director from 1989 to 1995.
Mr. Schuck has since 1986 been the President and a Director of HITK Corporation.
11
<PAGE> 12
Herbert Maslo, age 62. Mr. Maslo has been a Director of the Company since March
2000. Mr. Maslo has been, since 1990, a director of HITK Corporation. He has
also been a Director of Power Tech Systems, Inc. since 1990 and was its
President from 1990 to 1995. Prior to that, Mr. Maslo was employed by New York
Telephone, a division of Nynex for 23 years where he held various engineering
positions including central office planning, installations and engineering as a
project manager. Mr. Maslo holds a B.A. degree in Mechanical Engineering from
the Newark College of Engineering.
John Gitlin, age 57. John Gitlin has been Vice President/ Secretary-Treasurer
and a Director of the Company since February 2000. From 1978 to 1982, Mr. Gitlin
held the position of staff attorney with the United States Department of
Justice, Antitrust Division. From 1982 through April of 1994, he was a partner
in the law firm of Fischer, Gitlin & Sanger in Dallas, Texas. From May 1994 to
September, 1997, Mr. Gitlin held the position of Secretary with eGlobe, Inc. Mr.
Gitlin has been a director since January 1997 and an officer since October 1997
of HITK Corporation.
(b) Significant Employees.
There are no other employees of the Company other than its executive
officers, John Gitlin and Robert Schuck.
(c) Family relationships.
There are no family relationships among the present directors or officers
of the Company and there are presently no nominees or persons chosen by the
Company to become executive officers or directors of the Company.
(d) Involvement in certain legal proceedings.
During the past five years, none of the directors or officers of the
Company (i) has had any bankruptcy petitions filed by or against them, (ii) has
been convicted in a criminal proceeding or been subject to a pending criminal
proceeding, (iii) has been subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; nor (iv) has been found by a court of competent jurisdiction
(in a civil action), the Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
ITEM 6. EXECUTIVE COMPENSATION.
On March 14, 2000 the Company entered into employment agreements
with its two executive officers, Robert Schuck, President and John Gitlin, Vice
President/ Secretary-Treasurer, under the terms of which each was granted the
right to purchase 120,000 shares of the Company's stock at a purchase price of
$.005 per share. The employment agreements further provide that each officer is
to receive a salary of $250.00 per month. The Company relied on the exemption
provided by Section 4(2) of the '33 Act for the issuance of the shares of Common
Stock to Mr. Gitlin and Mr. Schuck. All of the shares issued were issued for
investment purposes in a private transaction and are restricted shares as
defined in Rule 144 under the '33 Act. These shares may not be offered for
public sale except under Rule 144, or other exemption from registration which
may be applicable pursuant to the '33 Act.
No retirement, pension, profit sharing, stock option plans or other
compensatory programs have been adopted by the Company for its officers or
directors.
12
<PAGE> 13
Directors serve without fees or any other compensation for their
services.
No Officer and Director is entitled to any finder's or other fees for
any services performed by them in finding a merger or acquisition candidate for
the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) On March 10, 2000 the Company entered into a private placement,
pursuant to Section 4(2) under the '33 Act with HITK Corporation ("HITK") under
which HITK purchased a total of 3,000,000 shares of the Company's common stock
at a purchase price of $.005 per share. HITK, prior to the sale, held a total of
17,300,000 shares of the Company's common stock or 49.8% of the outstanding
shares. Robert Schuck, President and John Gitlin, Vice President/
Secretary-Treasurer and Directors and Herbert Maslo, a Director of the Company,
hold identical positions with HITK and therefore would be deemed to have an
indirect material interest in the transaction.
On March 14, 2000 the Company entered into employment agreements with its two
executive officers, Robert Schuck, President and John Gitlin, Vice President/
Secretary-Treasurer, under the terms of which each was granted the right to
purchase 120,000 shares of the Company's stock at a purchase price of $.005 per
share. The employment agreements further provide that each officer is to receive
a salary of $250.00 per month.
(b) As of the filing date of this registration statement, HITK
Corporation holds a total of 20,300,000 shares of the Company's common stock
which represent 53% of the issued and outstanding shares.
(c) Transactions with Promoters.
None.
ITEM 8. DESCRIPTION OF SECURITIES.
(a) Common Stock
The Company is authorized to issue up to 50,000,000 shares of common
stock, par value $.0001 per share ("common stock"), of which 34,724,360 shares
were outstanding as of the filing date of this registration statement. Holders
of common stock are entitled to one vote for each share held of record on each
matter submitted to a vote of stockholders. There is no cumulative voting for
election of directors. Subject to the prior rights of any series of preferred
stock which may from time to time be outstanding, if any, holders of common
stock are entitled to receive ratably dividends when, as, and if declared by the
Board of Directors out of funds legally available therefor and, upon the
liquidation, dissolution, or winding up of the Company, are entitled to share
ratably in all assets remaining after payment of liabilities and payment of
accrued dividends and liquidation preferences on the preferred stock, if any.
Holders of common stock have no preemptive rights and have no rights to convert
their common stock into any other securities. The outstanding common stock is
validly authorized and issued, fully paid, and nonassessable.
13
<PAGE> 14
(b) Preferred Stock
None
(c) Change in Control Provisions.
There are no provisions in the Company's Certificate of Incorporation
which would delay, defer or prevent a change in control of the Company. There
are provisions in the Company's By-Laws which may be deemed to delay or defer a
change in control. These include (i) that no special meeting may be called by
stockholders unless a request is made in writing by shareholders holding at
least sixty-six and two thirds of the issued and outstanding shares of the
Company's common stock and entitled to vote; (ii) nominations of persons for
election to the Board of Directors may only be made by a stockholder delivering
notice to the Company at least 60 days prior to the annual or a special meeting
called for the purpose of electing a director or not later than 10 days
following the date on which the Company announces the special or annual meeting
and providing in the notice all information relating to such person that is
required to be disclosed pursuant to Regulation 14A under the Exchange Act,
including such person's written consent to be nominated and to serve if elected;
(iii)any proposal by a stockholder of business to be considered at an annual
meeting must also be delivered to the Company within the same time limitations
set for nominations of persons for election to the Board and must include a
brief description of the proposed business to be considered, the reasons for
conducting such business and any material interest in such business of such
stockholder.
PART II.
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
(a) Market information.
As of the filing date of this registration statement, there is no
trading market for the Company's common stock and there has been no trading
market since at least 1987. There is no assurance that a trading market will
ever develop or, if such a market does develop, that it will continue. It is
contemplated that a broker-dealer will file a Form 211 with the National
Association of Securities Dealers ("NASD") to permit the Company's common stock
to be quoted on the NASD Bulletin Board. Subject to approval of the NASD, the
Company's shares of common stock will trade on the Bulletin Board under the
symbol CTI, if available. There are no outstanding options or warrants to
purchase or securities convertible into the Company's common stock.
Market Price
The Company's common stock is not quoted at the present time. The
Commission has adopted a Rule 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
14
<PAGE> 15
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and information regarding the 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.
Effective January 4, 1999, the National Association of Securities
Dealers, Inc. (the "NASD") requires that companies listed for trading on the
Bulletin Board must file a Form 10-SB that must become effective by operation of
law and have no outstanding comments before trading may commence.
Transfer Agent
American Stock Transfer & Trust Co., 40 Wall Street, New York, New York
10005, shall act as the Company's transfer agent.
(b) Holders.
According to the Company's transfer agent, there are 1211 shareholders
of record of the Company's common stock.
(c) Dividends.
The Company has not paid any dividends since inception and does not
anticipate paying any dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not presently a party to any pending litigation nor, to
the knowledge of management, is any litigation threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
On March 10, 2000 the Company entered into a private placement,
pursuant to Section 4(2) under the '33 Act with HITK pursuant to which HITK
purchased a total of 3,000,000 shares of the Company's
15
<PAGE> 16
common stock at a purchase price of $.005 per share or a total purchase price
of $15,000.00. Prior to the sale, the Board of Directors voted to effectuate a
one hundred to one reverse stock split of its common stock resulting in a
reduction of the issued and outstanding shares to 347,243. At a subsequent
meeting, the Board reconsidered its approval and voted to withdraw its approval
of the reverse stock split. HITK, prior to the sale, held 49.8% of the
outstanding shares of the Company's common stock. The Company relied on
exemptions provided by Section 4(2) of the '33 Act for the issuance of the
shares of Common Stock. All of the shares issued were issued for investment
purposes only in a private transaction and are restricted shares as defined in
Rule 144 under the '33 Act. These shares may not be offered for public sale
except under Rule 144, or other exemption from registration which may be
applicable pursuant to the '33 Act.
On March 14, 2000, pursuant to rights granted to them under the terms of their
respective employment agreements with the Company, the Company's two executive
officers, John Gitlin and Robert Schuck each purchased a total of one hundred
and twenty thousand shares of the Company's common stock at a purchase price of
$.005 per share or a total of $600.00 for each sale. The Company relied on
exemptions provided by Section 4(2) of the '33 Act for the issuance of the
shares of Common Stock. All of the shares issued were issued for investment
purposes only in a private transaction and are restricted shares as defined in
Rule 144 under the '33 Act, as amended. These shares may not be offered for
public sale except under Rule 144, or other exemption from registration which
may be applicable pursuant to the '33 Act.
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Corporation's Certificate and By-Laws provide mandatory indemnification
rights to the fullest extent permitted under the General Corporation Law of
Delaware, subject to limited exceptions, to any person who was or is party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that such person is or was a director
or officer of the Company, or is or was serving at the request of the Company as
a director or officer of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. Such indemnification rights include
reimbursement for expenses incurred by such person in advance of the final
disposition of such proceeding in accordance with the applicable provisions of
the Delaware General Corporation Law.
PART F/S
16
<PAGE> 17
THOMAS P. MONAHAN
CERTIFIED PUBLIC ACCOUNTANT
208 LEXINGTON AVENUE
PATERSON, NEW JERSEY 07502
(973) 790-8775
FAX (973) 790-8845
To The Board of Directors and Shareholders
of Construction Technology Industries, Inc.
I have audited the accompanying balance sheet of Construction Technology
Industries, Inc. as of December 31, 1999 and the related statements of
operations, cash flows and shareholders' equity for the years ended December 31,
1998 and 1999. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Construction Technology
Industries, Inc. as of December 31, 1999 and the results of its operations,
shareholders equity and cash flows for the years ended December 31, 1998 and
1999 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Construction Technology Industries, Inc. will continue as a going concern. As
more fully described in Note 2, the Company has incurred operating losses since
the date of reorganization and requires additional capital to continue
operations. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans as to these matters are
described in Note 2. The financial statements do not include any adjustments to
reflect the possible effects on the recoverability and classification of assets
or the amounts and classifications of liabilities that may result from the
possible inability of Construction Technology Industries, Inc. to continue as a
going concern.
Thomas P. Monahan, CPA
March 5, 2000
Paterson, New Jersey
17
<PAGE> 18
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
March 31,
December 31, 2000
1999 Unaudited
---- ---------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ -0- $ 2,780
-------- --------
Total current assets -0- 2,780
Total assets $ -0- $ 2,780
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 9,121 $ 1,671
-------- --------
Total current liabilities 9,121 1,671
Stockholders' equity
Common Stock authorized 50,000,000 shares, $0.0001 par value 3,472 3,796
each. At December 31, 1999 and March 31, 2000, there are
34,724,400 and 37,964,000 shares outstanding respectively.
Additional paid in capital -0- 15,876
Deficit accumulated during the development stage (12,593) (18,573)
-------- --------
Total stockholders' equity (9,121) 1,109
-------- --------
Total liabilities and stockholders' equity $ -0- $ 2,780
======== ========
</TABLE>
See accompanying notes to financial statements.
18
<PAGE> 19
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the three For the three
For the year For the year months ended months ended
ended ended March 31, March 31,
December 31, December 31, 1999 2000
1998 1999 Unaudited Unaudited
---- ---- --------- ---------
<S> <C> <C> <C> <C>
Revenue $ -0- $ -0- $ -0- $ -0-
Costs of goods sold -0- -0- -0- -0-
--------- --------- --------- ---------
Gross profit -0- -0- -0- -0-
Operations:
General and administrative -0- 9,121 500 5,980
Depreciation and amortization -0- -0- -0- -0-
--------- --------- --------- ---------
Total expense -0- 9,121 500 5,980
Loss from operations -0- (9,121) (500) (5,980)
Net income (loss) $ -0- $ (9,121) $ (500) $ (5,980)
========= ========= ========= =========
Net income (loss) per share -basic $ -0- $ (0.03) $ (0.00) $ (0.01)
========= ========= ========= =========
Number of shares outstanding-basic 347,244 347,244 347,244 607,244
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
19
<PAGE> 20
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
Additional Deficit
Common Common paid accumulated during
Date Stock Stock in capital development stage Total
---- ----- ----- ---------- ---------------- -----
<S> <C> <C> <C> <C> <C>
Balance December 31, 1997(1) 34,724,400 $ 3,472 $ -0- $ (3,472) $ -0-
Net loss $ -0- $ -0-
----------- -----------
Balance December 31, 1998 34,724,400 3,472 -0- (3,472) -0-
Net loss (9,121) (9,121)
----------- -----------
Balance December 31, 1999 34,724,400 $ 3,472 $ -0- $ (12,593) $ (9,121)
Unaudited
Sale of shares 3,000,000 300 14,700 15,000
Issuance of shares 240,000 24 1,176 1,200
Net loss (5,980) (5,980)
----------- -----------
Balances March 31, 2000 37,964,000 $ 3,796 $ 15,876 $ (18,573) $ 1,109
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
20
<PAGE> 21
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the three For the three
For the year For the year months ended months ended
ended ended March 31, March 31,
December 31, December 31, 1999 2000
1998 1999 Unaudited Unaudited
---- ---- --------- ---------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ -0- $ (9,121) $ (500) $ (5,980)
Adjustments to reconcile net loss to cash used in
operating activities
Depreciation -0- -0- -0-
Issuance of shares of common stock in payment 1,200
of accrued salaries
Accounts payable -0- 9,121 500 (7,450)
-------- -------- -------- --------
TOTAL CASH FLOWS FROM OPERATIONS -0- -0- -0- (12,220)
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of shares of common stock 15,000
--------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES -0- -0- -0- 15,000
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES -0- -0- -0- -0-
NET INCREASE (DECREASE) IN CASH -0- -0- -0- 2,780
CASH BALANCE BEGINNING OF PERIOD -0- -0- -0- -0-
-------- -------- -------- --------
CASH BALANCE END OF PERIOD $ -0- $ -0- $ -0- $ 2,780
======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements.
21
<PAGE> 22
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - FORMATION OF COMPANY AND ISSUANCE OF COMMON STOCK
a. Formation and Description of the Company
Construction Technology Industries, Inc. (the "Company"), was formed
under the laws of the State of Delaware on March 8, 1984 and authorized to issue
to 50,000,000 shares of common stock, $0.00001 par value.
b. Description of Company
The Company is a development stage company that is without a business
purpose since the date of the Company's discharge from a bankruptcy on September
22, 1993 and is in the process of seeking a viable business opportunity.
c. Issuance of Shares of Common Stock
On March 10, 2000, the Company sold an aggregate of 3,000,000 shares of
common stock to HITK Corporation for an aggregate consideration of $15,000 or
$.0005 per share.
On March 14, 2000, the Company issued an aggregate of 120,000 shares of
common stock each to Robert N. Schuck and John Gitlin in consideration of
services valued at $1,200 or $.0005 per share.
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Financial Statement Presentation
The accompanying unaudited financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has
had no business activities since 1992 and has incurred net losses of $15,126 for
the period from reorganization, September 22, 1993, to March 31, 2000. These
factors indicate that the Company's continuation as a going concern is dependent
upon its ability to obtain adequate financing. The Company will be relying upon
the resources of management to provide the necessary working capital to sustain
the Company's existence until a viable business opportunity can be located. The
Company will require substantial additional funds to finance its business
activities on an ongoing basis and will have a continuing long-term need to
obtain additional financing once a viable business opportunity is found.
The financial statements presented at December 31, 1999 consist of the
balance sheet as at December 31, 1999 and the statements of operations, cash
flows and stockholders equity for the years ended December 31, 1998 and 1999.
22
<PAGE> 23
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
The unaudited financial statements presented at March 31, 2000 consist
of the balance sheet as at March 31, 2000 and the statements of operations, cash
flows and stockholders equity for the three months ended March 31, 1999 and
2000.
b. Cash and Cash Equivalents
Cash and Cash Equivalents - Temporary investments with a maturity of less
than three months when purchased are treated as cash
c. Loss Per Share:
Basic loss per common share is computed by dividing the loss by the
weighted average number of common shares outstanding during the period. During
the period from reorganization September 22, 1993 through December 31, 1999,
there were no dilutive securities outstanding.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
e. Unaudited financial information
In the opinion of Management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting only of normal
recurring items) necessary to present fairly the consolidated financial position
of the Company and its subsidiary as of March 31, 2000 and the consolidated
results of its operations and its cash flows for the three months ended March
31, 1999 and 2000. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the SEC's rules
and regulations of the Securities and Exchange Commission. The results of
operations for the periods presented are not necessarily indicative of the
results to be expected for the full year.
NOTE 3 - RELATED PARTY TRANSACTIONS
a. Office Space
Beginning in February, 2000, the Company occupies office space at 68
Schraalenburg Road, P.O. Box 233, Harrington Park, New Jersey 07640 for a
monthly rental of $250.
23
<PAGE> 24
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
b. Officer Salaries
For the two months ended March 31, 2000, the Company has accrued a
minimal compensation of $250 per month respectively each as compensation to the
President and the Secretary/Treasurer as consideration for services while the
Company is in the development stage of development of an aggregate of $1,000.
c. Common Management
Robert N. Schuck is both the President of the Company and for HITK
Corporation which holds 20,300,000 shares or 53% of the Company's issued and
outstanding shares of stock at March 31, 2000.
John J. Gitlin is both the Secretary/Treasurer of the Company and for
HITK Corporation.
On March 10, 2000, the Company sold an aggregate of 3,000,000 shares of
common stock to HITK Corporation for an aggregate consideration of $15,000.
NOTE 6 - INCOME TAXES
The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any, represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of December 31, 1999 and March 31,
2000, the Company had no material current tax liability, deferred tax assets, or
liabilities to impact on the Company's financial position because the deferred
tax asset related to the Company's net operating loss carry forward and was
fully offset by a valuation allowance.
At March 31, 2000, the Company has net operating loss carry forwards for
income tax purposes of $15,126. These carry forward losses are available to
offset future taxable income, if any, and expire in the year 2010. The Company's
utilization of this carry forward against future taxable income may become
subject to an annual limitation due to a cumulative change in ownership of the
Company of more than 50 percent.
The components of the net deferred tax asset as of March 31, 2000 are as
follows:
Deferred tax asset:
<TABLE>
<S> <C>
Net operating loss carry forward $ 5,142
Valuation allowance $ (5,142)
--------
Net deferred tax asset $ -0-
</TABLE>
24
<PAGE> 25
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
The Company recognized no income tax benefit from the loss generated for the
period from the date of reorganization September 22, 1993 to March 31, 2000.
SFAS No. 109 requires that a valuation allowance be provided if it is more
likely than not that some portion or all of a deferred tax asset will not be
realized. The Company's ability to realize benefit of its deferred tax asset
will depend on the generation of future taxable income. Because the Company has
yet to recognize significant revenue from the sale of its products, the Company
believes that a full valuation allowance should be provided.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
a. Employment Agreement with John J. Gitlin
In March, 2000, the Company entered into an employment agreement with
John J. Gitlin as executive Vice President. The agreement may be terminated at
will by Mr. Gitlin upon 30 days notice or election by a majority vote of the
board of directors or at the written request of the majority of shareholders.
Compensation is $3,000 payable in monthly increments of $250 per month plus
reimbursement for out of pocket expenses. Mr. Gitlin was also granted an option
to purchase 120,000 of common stock during the term of this agreement.
During March, 3,000, Mr. Gitlin exercised this option and received
120,000 shares of common stock in consideration for $250.00 in accrued wages
that was due him as of March 14, 2000 and delivery of a note for the balance.
b. Employment Agreement with Robert N. Schuck
In March, 2000, the Company entered into an employment agreement with
Robert N. Schuck as President. The agreement may be terminated at will by Mr.
Schuck upon 30 days notice or election by a majority vote of the board of
directors or at the written request of the majority of shareholders.
Compensation is $3,000 payable in monthly increments of $250 per month plus
reimbursement for out of pocket expenses. Mr. Schuck was also granted an option
to purchase 120,000 of common stock during the term of this agreement.
During March, 2000, Mr. Schuck exercised this option and received
120,000 shares of common stock in consideration for $250 in accrued wages that
were due him as of March 14, 2000 and delivery of a note for the balance.
NOTE 8 - BUSINESS AND CREDIT CONCENTRATIONS
The amount reported in the financial statements for cash approximates fair
market value. Because the difference between cost and the lower of cost or
market is immaterial, no adjustment has been recognized and investments are
recorded at cost.
25
<PAGE> 26
NOTE 9 - DEVELOPMENT STAGE COMPANY
CONSTRUCTION TECHNOLOGY INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
The Company is considered to be a development stage company with little
operating history. The Company is dependent upon the financial resources of the
Company's management and from the net proceeds of any private placement for its
continued existence. The Company will also be dependent upon its ability to
raise additional capital to complete its search for a new viable business
opportunity, management talent, and working capital to engage in any profitable
business activity. Since its reorganization, the Company's activities have been
limited to the search for a new viable business opportunity and office space.
26
<PAGE> 27
PART III
ITEM 1. INDEX TO EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
3.1 Certificate of Incorporation of Registrant
3.2 Certificates of Amendment to Certificate of
Incorporation of Registrant
3.3 By-laws of Registrant
10.1 Stock Purchase Agreement between the Company and HITK
Corporation
10.2 Employment and Stock Purchase Agreement with Robert Schuck
10.3 Employment and Stock Purchase Agreement with John Gitlin
</TABLE>
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 by the
undersigned, thereunto duly authorized.
CONSTRUCTION TECHNOLOGY INDUSTRIES INC.
Date: July 24, 2000 By: /s/ Robert N. Schuck
---------------------
Robert N. Schuck
President
27
