FORM 10-KSB/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
(FEE REQUIRED)
For the year fiscal year ended September 30, 1995
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(NO FEE REQUIRED)
For the transition period from ......to.........
Commission file number 0-14213
GLOBAL VENTURE FUNDING, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0990371
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
2712 Echo Mesa Drive, Las Vegas, NV 89134
(Address of principal executive offices)
Registrant's telephone number, including area code (702) 233-6638
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.0001 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(g) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes No X
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of regulation S-K is not contained herein, and will not be
contained, to the best of registrant s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-K. [x]
Common Stock $.0001 par value - 2,782,513 shares outstanding as of April
30, 1996.
Aggregate market value of voting Common Stock held by non-affiliates:$-0-
PART I
Item 1. Description of Business
Venture Funding Corporation (The "Company") was incorporated in the state of
Colorado on December 7, 1984. The Company was formed for the purpose of
acquiring or merging with a privately held business. The Company completed
its registered offering on form S-18 on October 17, 1985. The stock was
traded in the OTC market.
On May 8, 1992, a Certificate of Assumed or Trade Name was filed with the
Colorado Secretary of State to record the trade name of Global Venture
Funding, Inc. Global Venture Funding Inc. (GVF) is the name under which
the Company transacts its business. On June 18, 1993, the Articles of
Incorporation were amended and the name of the Company was changed to
Global Venture Funding, Inc.
Effective August 4, 1992, the company acquired, through its wholly owned
subsidiary, GVF/Global Foods, Inc., all of the issued and outstanding stock
of American West Foods, Inc. (AWF) in a tax free stock for stock acquisition
agreement. AWF, located in Denver, Colorado, was a wholesale distributor of
fresh fruits and vegetables and hauled freight in its trucking operation.
Effective at the inception for the beginning of the fiscal year ended
September 30, 1994, AWF ceased operations and subsequently filed for
bankruptcy. This business segment operation no longer exists as a part of
GVF effective with the beginning of the fiscal year ended September 30, 1994.
In June 1993, GVF acquired Macrologic, Inc. (MLI). GVF exchanged 4,200
shares of GVF s convertible Series C preferred shares and 380,000 shares of
GVF s $.0001 par value common shares for 80% of the outstanding shares of
MLI's common stock. The total cost of the acquisition was as follows:
Value of net assets acquired $3,345,146
Minority interests (113,146)
Total cost $3,232,000
The value acquired exceeded the recorded amounts by $2,779,418. This excess
was allocated to computer software based on appraisal values and was to be
amortized over the five year estimated remaining useful life of the software.
As of December 31, 1993, the acquisition agreement with MLI was rescinded.
In late 1993, the management of the Company did a feasibility study of the
telephone debit card industry, to determine whether to enter this market. To
enter this market the Company would have to raise a minimum of $100,000 of
working capital. GVF did not raise the necessary working capital to succeed in
this actively, and after a brief pilot program, discontinued its efforts in
selling telephone debit cards in December of 1994.
On May 8, 1996, GVF acquired 100% of the common stock of AllCell
Communications, Inc.(ACI), a Georgia Corporation, in exchange for 5,500
shares of the Company s newly issued preferred stock of which 5,000 shares
have been placed in escrow pending achievement by ACI of certain earnings
levels as specified in the purchase agreement. The Company valued the
acquisition on the basis of $.10 par value of the preferred stock issued
times the number of shares or $550. ACI is in the debit cellular phone
communications industry.
The cellular communications industry has been rapidly growing during recent
years. As of June 1994, the cellular industry served more than 19 million
users within the United States, with industry revenues for 1993 aggregating
in excess of $12 billion. Usage has nearly doubled since 1992, and two of
every three new telephone numbers have been assigned to cellular phones since
that year. It is projected that there will be 58.5 million cellular phone
subscribers in the United States by 1999.
The explosive need and the abuse of cellular service have caused many of the
cellular carriers to stop selling service to people with bad or no credit.
There are many extenuating circumstances that cause a person to have bad
credit. Many are trying to work their way back to good credit. There are
approximately 70,000,000 Americans that do not have sufficient credit to
have a cellular phone. In addition to the 19 million people in the United
States who currently have cellular service, 6 million have applied for
service and have been turned down. At a rate of $.50 to $.75 per minute
usage, a person can easily run up a bill of $500 or more. By the time the
customer has two months of service, they may never be able to catch up with
the payments due.
ACI has discovered two forms of technology to supply a needed service to
this market niche. They have found a cellular telephone that will control
the amount of air time used by a customer. In this way, the customer can
prepay for the usage. When air time is programmed into the telephone and it
is used, the telephone will disable itself until more air time is paid for.
ACI also has a switch that can interact with the cellular carriers switch.
Buy using this method, it is possible to activate any cellular phone.
By using these technologies, ACI is protected from air time abuse and the
customer is also protected from having a cellular bill that they cannot pay.
The Company has continued it efforts in identifying a company in the
telecommunications industry and/or to establish its own activity in the
telecommunications industry. Toward this end, on May 29, 1996, the Company,
entered into an agreement with Cellular 99, a Nevada Corporation, whereby it
obtained an exclusive license to rent cellular phones within the state of
Illinois. The company expects to secure additional licenses for other
states. The cellular phone would be supplied by Cellular 99 and it is
estimated that they would rent for 99 cents per day. The Company is in the
process of determining its capital requirements to launch this venture.
In order for GVF to be successful, additional funding will be required. The
Company had no significant revenues or other types of cash infusion during
the past two years. The failure of the company to successfully obtain
additional funds may jeopardize its existence. The company is proceeding
with raising additional working capital by the sale of common stock,
borrowings and/or possible licensing of its developed business arrangements.
GVF has two employees of which all are full time employees and ACI has
fourteen employees of which all are full time employees.
Item 2. Properties
The Company shares approximately 1,000 square feet of office space in
Las Vegas Nevada. ACI rents approximately 3,000 square feet of office space
in Jonesboro, Georgia.
Item 3. Legal Proceedings
There are no known legal proceedings to which the Company is a party as of
September 30, 1995.
Item 4. Submission of Matters to a Vote of Security Holders.
None. No matters were submitted to a vote of the Registrant's Security
holders during the year ended September 30, 1995.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
The Registrant's stock is not currently traded on any exchange.
The Registrant effected a 1 for 20 reverse stock split on October 31, 1991.
All references to stock or warrant prices and to the number of shares or
units are restated to the reverse split numbers.
On January 13, 1986, the Company completed a successful public offering of
5554,825 units consisting of one share of common stock, one class A warrant
exercisable at $1.20 and one class B warrant exercisable at $2.50. The
Company received net proceeds of $165,633 from this offering.
On February 14, 1986, in a private transaction, Vintage Group, Inc.,
purchased 512,500 shares of the Company s common stock from eight of the
principal shareholders. The shares were purchased for cash at a price of
$.10 per share and the number of shares purchased represented approximately
46 percent of the Company s issued and outstanding common stock.
On March 18, 1986, the Company filed a post-effective Registration statement
in order to allow the warrants to be exercised. A total of 100 warrants
were exercised for a total of $120.00.
The Company has authorized 20,000,000 shares of preferred stock with a $.10
par value. Shares of preferred stock may be divided into such series as may
be established by the Board of Directors. The Board of Directors may fix
and determine the relative rights and preferences of the shares of any series
established.
In October 1991, the Board of Directors of GVF authorized the issuance of
500,000 shares of Series II Convertible Preferred Stock, with a par value of
$.10, at $1.00 per share. Each share of Series II preferred stock is
entitled to preference upon liquidation of $1.00 per share for any unconverted
stock. The Series II preferred stock may be converted to common stock after
a one year holding period as follows: after the first year the shareholder
may convert each share of preferred stock for two shares of common stock;
after the second year the shareholder may convert each share of preferred
stock for five shares of common stock; and after the third year the
shareholder may convert each share of preferred stock for ten shares of
common stock.
In March 1992, the Board of Directors authorized the issuance of 500,000
shares of Series B Convertible Preferred Stock, with a par value of $.10, at
$1.00 per share. Each share of Series B preferred stock is entitled to
preference upon liquidation of $1.00 per share for any unconverted stock.
The Series B stock may be converted to common stock after a one year holding
period as follows: after one year the shareholder may convert each share of
preferred stock for two shares of common stock; after the second year the
shareholder may convert each share of preferred stock for five shares of
common stock.
In June of 1992, the Board of Directors authorized the issuance of 50,000
shares of Series C Convertible Preferred Stock, with a par value of $.10.
Each share of Series C convertible preferred stock is entitled to preference
upon liquidation of $100 per share for any unconverted shares and the
liquidation preference is junior only to that of all previously issued
preferred stock. Each share of Series C preferred stock may be converted
into 100 shares of common stock no sooner than one year after the exchange of
purchase date.
In June 1992, the Board of Directors authorized the issuance of 50,000 shares
of Series D Convertible Preferred Stock, with a par value of $.10. No shares
of the Series D convertible preferred stock is entitled to preference upon
liquidation and the stock is subject to forfeiture prior to conversion.
Each share of Series D preferred stock may be converted into 100 shares of
common stock no sooner than one year after the acquisition or purchase date.
Prior to the merger between GVF and AWF, GVF issued 500,000 and 245,000
shares of Series II preferred stock and Series B preferred stock, respectively,
for cash of $620,000 and for services associated with the offerings, valued
at $100,000.
In September of 1993, the Company issued 12,000 shares of Series C preferred
stock for $1,200 in the acquisition of AWF. In February 1996 the 12,000
shares of Series C preferred stock was converted to 1,200,000 shares of
common stock. No other shareholders of any series of preferred shares have
converted their shares.
Bid and Ask Prices
Period Bid Price Ask Price
Year ended September 30, 1995 None None
Year ended September 30, 1994 None None
Year ended September 30, 1993 None None
On May 8, 1996, the Company issued 5,500 shares Series C preferred stock with
5,000 shares being held in escrow to acquire 100% of the outstanding common
stock of Allcell Communications, Inc., a Georgia corporation, which is the
debit phone telecommunications industry. Also in March and April of 1996,
the Company issued 133,317 shares of Series B preferred stock to certain
creditors in exchange for debts owed by the Company in the amount $133,165.
Holders
The Company has approximately 569 owners of record and, it believes in excess
of 1,000 beneficial owners of the Company s stock exist as of September 30,
1995.
The Company has not paid cash dividends on its common stock and has no
present plans to do so. Any payment of cash dividends in the future will be
at the discretion of the Company's Board of Directors and will depend upon
the financial condition, capital requirements, and earnings, if any, of the
Company, as well as other factors which the Board of Directors may deem
relevant.
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Since October of 1993, GVF has allocated its efforts towards seeking a viable
business venture to acquire and/or develop internally. Based upon the status of
the Company, its lack of operating cash and its working capital deficit,
additional funding will be required in order for the Company to complete any
business ventures whether through an acquisition, merger, or developed
internally. The Company will also require additional funds in order to
maintain its ongoing operations.
The Company had net losses from operations of $11,384, and $207,582 for the
years ended September 30, 1995 and 1994, respectively. The Company is
attempting to establish profitable operations as noted in Item 1 and below.
The Company anticipates that with the acquisition of Allcell Communication,
Inc. and with the exclusive license agreement from Cellular 99 to rent
cellular phones by-the-day, that it will be able to attract the additional
working capital it needs to generate profits and cash flows to the Company.
Liquidity and Capital Resources
The Company had a current working capital deficit of $31,927 and $266,012,
respectively, as of September 30, 1995 and 1994. The Company will need
additional capital to continue its existence and will endeavor to raise
sufficient funds through sale of shares, or other means.
The audited financial statements for the fiscal year ended September 30,
1995 and 1994, were prepared assuming that the Company would continue as a
going concern. The Company has suffered recurring losses from operations
and has a working capital deficiency that raises substantial doubt about its
ability to continue as a going concern.
Subsequent Events
In March and April of 1996, the Company issued 102,800 shares of Series B
preferred stock to certain creditors in exchange for debts owed by the
Company in the amount $116,100.
On May 8, 1996, the Company issued 5,500 shares of it common stock with
5,000 shares being held in escrow to acquire 100% of the outstanding common
stock of Allcell Communications, Inc. a Georgia corporation, which is in the
debit cellular phone communications industry.
On May 29, 1996, the Company entered into a License Agreement with Cellular
99, Inc. whereby Cellular 99, Inc. granted a ten year license for the
exclusive right to engage in the merchandising, marketing, distribution,
promotion and renting of cellular telephones in the State of Illinois and
the right to use the trade name Cell Phone 99.
Subsequent Adjustments To Financial Statements Effective September 30, 1995
The Company made the following adjustments to the Form 10-KSB for the fiscal
year ended September 30, 1995 which was filed on May 16, 1996:
The intangibles, which management had valued after cancellation of the
merger between AWF and the Company, have been reevaluated by management based
upon requests from regulatory agencies and said intangibles have been
eliminated as an asset for the fiscal year ended September 30, 1995. Such
adjustment has been included in the financials as a reduction in the original
intangible ($1,773,433 in 1995 and 1,200,000 in 1994) and as a reduction in
additional paid-in capital. Beyond elimination of the intangible asset(s) on
the balance sheet, the related value has been fully eliminated on the Statement
of Change's In Stockholder's Equity.
Debt relief which had originally been reported as "other income" has been
adjusted and is now presented as an Extraordinary Item. This debt relief
($116,100) is related to third parties only. The Statement of Cash Flows has
been adjusted, as necessary, to reflect that although cash was not exchanged
between the parties, the transactions clearly maintained the characteristics of
a cash transaction. In essence, the Company and the creditor(s) alleviated a
step and simplified the transaction. Had the transaction occurred with cash
actually being exchanged it would have simply been given to the creditor(s)
and then simultaneously given back to the Company.
The weighted average number of shares for the fiscal year ended September
30, 1995, has been adjusted to 1,581,263.
Item 7. Financial Statements and Supplementary Data.
Please refer to pages F-1 through F-14.
Item 8. Changes In and Disagreements on Accounting and Financial Disclosure.
During the period from inception (December 7, 1984) to September 30, 1995,
the Company had no disagreement with accountants on any matter of accounting
principles or practices or financial statement disclosure.
John M. Hanson & Company, P.C., Certified Public Accountants, Denver,
Colorado conducted their independent audit for fiscal year ended September
30, 1993. The accounting firm was dismissed due to the fact that the Company
was in an inactive status and had no funds available for the audit for fiscal
years ended September 30, 1994 and 1995. The accountant's report for the fiscal
year ended September 30, 1993 did not contain an adverse opinion or
disclaimer of opinion, nor were there any disagreements with the accountant
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, the decision to change auditors
was approved by the Board of Directors in 1996.
On April 24, 1996, the Company engaged the current accounting firm of Gilbert
& Company, Certified Public Accountants, for the purpose of conducting an
independent audit of the Company for fiscal years ended September 30, 1994
and 1995, respectively.
PART III
Item 9. Directors and Executive Officers of the Registrant.
The Directors and Executive Officers of the Company are as follows:
Name Age Position
Roger K. Knight 72 Chief Executive Officer and Director
Silas A. Phillips 25 Secretary, Vice President and Director
Each director holds office until the next annual meeting of shareholders and
until his or her successor has been elected and qualified. Each executive
officer holds office at the pleasure of the Board of Directors and until his
or her successor has been elected and qualified.
There are no family relationships among the directors and executive officers
of the Company.
Roger K. Knight has served as a Director of the Company since February 1,
1990. Mr Knight has experience in identifying business candidates for
acquisitions. He has served as president since January of 1995. Mr. Knight
retired from the U.S. Navy as a Captain in July, 1965. Mr. Knight has been
involved in retail operations since the mid-1970's and his experience will
be beneficial to the Company.
Silas A. Phillips has served as Director of the Company since January 1, 1995.
Mr. Phillips holds a degree from Wichita State University in International
Business. Mr. Phillips uses his analytical skills in assisting the
President in evaluating possible business mergers and acquisitions.
Item 10. Executive Compensation.
There was no compensation paid to any of the officers or directors for the
fiscal years ended September 30, 1995 and 1994.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information, as of September 30, 1995, with
respect to the beneficial ownership of the Company's common stock by each
person known by the Company to be the beneficial owner of more than five
percent of the outstanding common stock of the Company and by Directors and
executive officers of the Company, both individually and as a group:
Post Stock Split
Shares
Beneficially
Beneficial Owner Owned Percent of Class
Vintage Group, Inc. 307,500 11%
1625 Broadway
Suite 770
Denver, CO 94920
James A. Merriam 500,000 18%
138 Lyford Drive
Tiburon, CA 94970
All officers and Directors
as a group (1 person) None 0%
Item 12. Certain Relationships and Related Transactions.
Related parties to the Company have at various times loaned funds to the
corporation which funds are interest bearing. The balance due at September 30,
1995, was $13,500.00 and was converted to Series B preferred stock (see
Subsequent Events).
In addition to the above related party notes, the Company owed various
related parties (individual and business entity) as September 30, 1995,
$20,820. This debt was converted to Series B preferred stock (See Subsequent
Events).
PART IV
Item 13. Exhibits, Financial Statements Schedules, and Reports on Form 8-K.
(a) Document filed as part of this report.
(b) All schedules are omitted because the required information is not
present or is not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the financial
statements and notes thereto.
Exhibit
Number Description
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
4 Specimen stock certificate (1)
(1) Incorporated by reference to the Company's Registration
Statement on form S-18 (Registration No. 33-19327)
GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANT
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors
Global Venture Funding, Inc.
I have audited the accompanying balance sheets of Global Venture Funding,
Inc. (formerly Venture Funding Corporation) as of September 30, 1995 and
1994, and the related statements of operations, changes in stockholders'
equity and cash flows for the fiscal years ended September 30, 1995 and 1994.
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. The financial statements of Global Venture
Funding, Inc. for the fiscal year ended September 30, 1993, were audited by
other auditors whose report dated December 8, 1993, expressed an
unqualified opinion on those statements.
I conducted my audits 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 used 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 Global Venture
Funding, Inc. (formerly Venture Funding Corporation) as of September 30, 1995
and 1994, and the results of its operations and its cash flows for the fiscal
years ended September 30, 1995 and 1994, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from
operations and has a working capital deficiency that raises substantial doubt
about its ability to continue as a going concern, and effective December 31,
1994, officially suspended operations due to lack of capital and managements'
decision to utilize its time in pursuing alternative business opportunities
within the Corporation. The continuation of the Company as a going concern is
dependent on future developments, including the successful completion of
additional future funding and/or profitable operations. The financial
statements do not include any adjustments that might result from the outcome
of these uncertainties.
/s/ Gilbert & Company
May 10, 1996
(Except for Note 9, as to which the date is August 17, 1996)
1 MARITIME PLAZA, SUITE 1300, SAN FRANCISCO, CALIFORNIA 94111
(415) 576-1300 FAX (415) 491-4141
F-1
GLOBAL VENTURE FUNDING, INC.
(Formerly Venture Funding Corporation)
BALANCE SHEETS
As of September 30, 1995 and 1994
ASSETS
September 30,
1995 1994
______________________
CURRENT ASSETS
Cash (Note 3) $ 367 $ 159
Inventory (Note 3) 0 7,405
Prepaids & deposits 150 150
Total Current Assets 517 7,714
FIXED ASSETS (Note 3)
Fixed assets 1,158 1,158
Accumulated depreciation 723 495
Total Fixed Assets 435 663
OTHER ASSETS
Organization costs 50,625 50,625
Accumulated amortization 50,625 50,625
Net Organization Costs 0 0
Total Other Assets 0 0
TOTAL ASSETS $ 952 $ 8,377
The accompanying notes are an integral part of these financial statements
F-2
GLOBAL VENTURE FUNDING, INC.
(Formerly Venture Funding Corporation)
BALANCE SHEETS (Continued)
As of September 30, 1995 and 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30,
1995 1994
___________________________
CURRENT LIABILITIES
Accounts payable $ 32,444 $ 164,619
Accrued liabilities (Note 5) 0 78,387
Advances from affiliates (Note 1) 0 18,720
Notes payable - related party (Note 1) 0 12,000
Total Current Liabilities 32,444 273,726
Total Liabilities 32,444 273,726
STOCKHOLDERS' EQUITY (Note 2)
Common stock, shares authorized 150,000,000
par value $.0001, 1,582,513 and 1,582,513
were issued and outstanding at par,
respectively 158 158
Preferred stock, shares authorized 20,000,000:
Series II, $.10 par value, 500,000 shares
authorized; 500,000 shares issued and
outstanding; $500,000 liquidation value 50,000 50,000
Series B, S.10 par value, 500,000 shares
authorized; 398,317 shares issued and
outstanding; $398,317 liquidation value 39,817 26,500
Series C, $.10 par value, 50,000 shares
authorized; 12,000 shares issued and
outstanding; $1,200,000 liquidation value 1,200 1,200
Series D, $.10 par value, 50,000 shares
authorized; 500 shares issued and
outstanding; $-0- liquidation value 50 50
Additional paid-in capital 449,645 329,797
Retained earnings (572,362) (673,054)
Total Stockholders' Equity (31,492) (265,349)
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 952 $ 8,377
The accompanying notes are an integral part of these financial statements.
F-3
GLOBAL VENTURE FUNDING, INC.
(Formerly Venture Funding Corporation)
STATEMENT OF OPERATIONS
For the Years Ended September 30, 1995, 1994, and 1993
Years Ended
September 30,
1995 1994 1993
____________________________________
REVENUE:
Produce sales $ 0 $ 0 $ 8,099,041
Billing revenues 0 0 94,079
Debit card sales 1,000 3,630 0
Miscellaneous 146 0 0
TOTAL REVENUE 1,146 3,630 8,193,120
COST OF GOODS SOLD: 8,080 6,018 7,001,954
OPERATING EXPENSES: 4,450 205,194 1,563,776
Net (Loss) From Operations (11,384) (207,582) (372,610)
OTHER INCOME (EXPENSE):
Interest income 0 1,022 1,422
Interest expense (4,024) (7,872) (70,330)
(Loss) on sale of fixed assets 0 (12,701) 0
(Loss) on investment 0 (208,027) 0
Other income 0 0 9,528
TOTAL OTHER (EXPENSE) (4,024) (227,578) (59,380)
Net (Loss) from Operations (15,408) (435,160) (431,990)
Net Income from Minority interest 0 0 42,039
Net (Loss) After Minority Interest (15,408) (435,160) (389,951)
Net (Loss) From Discontinued Operations 0 0 (239,768)
Net (Loss) After Discontinued Operations (15,408) (435,160) (629,719)
Net Income from Extraordinary Item
(Relief of Third Party Debt) 116,100 0 0
Net Income (Loss) After Extraordinary
Item $ 100,692 $ (435,160) $ (629,719)
INCOME (LOSS) PER COMMON SHARE:
(Loss) from continuing operations $ (0.01) $ (0.28) $ (0.26)
Income from minority interest $ 0.00 $ 0.00 $ 0.03
(Loss) from net discontinued
operations $ 0.00 $ 0.00 $ (0.14)
Income from extraordinary item $ 0.07 $ 0.00 $ 0.00
Income (Loss) per common share $ 0.06 $ (0.28) $ (0.38)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 1,581,263 1,581,263 1,677,513
The accompanying notes are an integral part of these financial statements.
F-4
GLOBAL VENTURE FUNDING, INC.
(Formerly Venture Funding Corporation)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
For the Years Ended September 30, 1995, 1994, and 1993
<TABLE>
<CAPTION>
Total
* Common Stock Additional Stockholders'
Preferred Par Paid-in Retained Equity
Stock Shares Value Capital Earnings (Deficit)
_____________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1990 $ 1,200 1,082,513 $ 108 $ 104,800 $ 123,263 $ 229,371
Net loss - September 30, 1991 - - - - (197,495) (197,495)
Balance at September 30, 1991 1,200 1,082,513 108 104,800 (74,232) 31,876
Merger between GVF and AWF 72,000 - - 204,191 - 276,191
Shares issued in connection
with employment contract - 500,000 50 - - 50
Net loss - September 30, 1992 - - - - (374,869) (374,869)
Balance at September 30, 1992 73,200 1,582,513 158 308,991 (449,101) (66,752)
Merger between GVF and MLI 420 380,000 38 3,231,542 - 3,232,000
Sale of stock 2,500 - - 22,500 - 25,000
Stock bonus 40 - - - - 40
Merger adjustment-September 1992 - - - 31,518 - 31,518
Net loss - September 30, 1993 - - - - (629,719) (629,719)
Balance at September 30, 1993 76,160 1,962,513 196 3,594,551 (1,078,820) 2,592,087
Cancellation of merger between
GVF and MLI/AWF (420) (380,000) (38) (3,292,744) 840,926 (2,452,276)
Stock issuance for payment of
account payable 2,000 - - 18,000 - 20,000
Stock issuance for payment of
account payable 10 - - 9,990 - 10,000
Net loss - September 30, 1994 - - - - (435,160) (435,160)
Balance at September 30, 1994 77,750 1,582,513 158 329,797 (673,054) (265,349)
Stock issuance for payment of
account payable 13,317 - - 119,848 - 133,165
Net income - September 30, 1995 - - - - 100,692 100,692
Balance at September 30, 1995 $ 91,067 1,582,513 $ 158 $ 449,645 $ (572,362) $ (31,492)
</TABLE>
* - See detail on the following page.
The accompanying notes are an integral part of these financial statements.
F-5
GLOBAL VENTURE FUNDING, INC.
(Formerly Venture Funding Corporation)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (Continued)
For the Years Ended September 30, 1995, 1994, and 1993
<TABLE>
<CAPTION>
Total
Series II Series B Series C Series D Preferred
Shares Amount Shares Amount Shares Amount Shares Amount Stock
______________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1990 - $ - - $ - 12,000 $ 1,200 - $ - $ 1,200
Balance at September 30, 1991 - - - - 12,000 1,200 - - 1,200
Merger between GVF and AWF 500,000 50,000 220,000 22,000 - - - - 72,000
Balance at September 30,1992 500,000 50,000 220,000 22,000 12,000 1,200 - - 73,200
Merger between GVF and MLI - - - - 4,200 420 - - 420
Sale of stock - - 25,000 2,500 - - - - 2,500
Stock bonus - - - - - - 400 40 40
Balance at September 30,1993 500,000 50,000 245,000 24,500 16,200 1,620 400 40 76,160
Cancellation of merger between
GVF and MLI - - - - (4,200) (420) - - (420)
Stock issuance for payment
of account payable - - 20,000 2,000 - - - - 2,000
Stock issuance for payment
of account payable - - - - - - 100 10 10
Balance at September 30,1994 500,000 50,000 265,000 26,500 12,000 1,200 500 50 77,750
Stock issuance for payment
of account payable - - 133,317 13,317 - - - - 13,317
Balance at September 30,1995 500,000 $ 50,000 398,317 $39,817 12,000 $1,200 500 $ 50 91,067
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
GLOBAL VENTURE FUNDING, INC.
(Formerly Venture Funding Corporation)
STATEMENT OF CASH FLOWS
For the Years Ended September 30, 1995, 1994, and 1993
<TABLE>
<CAPTION>
Years Ended
September 30,
1995 1994 1993
_______________________________________
<S> <C> <C> <C>
CASH FLOW FROM
OPERATING ACTIVITIES:
Net cash paid/applied to suppliers,
employees and settlement $ (132,957) $(1,020,411) $ (164,859)
Interest received 0 1,022 1,422
Interest paid 0 0 (63,899)
Net cash (used) by operating activities (132,957) (1,019,389) (102,382)
CASH FLOW FROM
INVESTMENT ACTIVITIES:
Minority interests 0 71,107 (42,039)
Cash acquired in merger 0 0 9,304
Purchase/sale of property and equipment 0 4,397,813 (2,961,596)
Principal collected on loans 0 0 75,500
Net cash provided (used) by investment
activities 0 4,468,920 (2,918,831)
CASH FLOW FROM
FINANCING ACTIVITIES:
Net proceeds from current and long term debt 0 (257,927) (231,956)
Proceeds from the sale of stock & adjustment
to additional paid-in capital 0 (3,263,202) 3,288,558
Stock issued in lieu of accounts payable
& stock issued for services 133,165 0 40
Net cash provided (used) by financing
activities 133,165 (3,521,129) 3,056,642
INCREASE (DECREASE) IN CASH 208 (71,598) 35,429
CASH AT BEGINNING OF YEAR 159 71,757 36,328
CASH AT END OF YEAR $ 367 $ 159 $ 71,757
Reconciliation of net income (loss) to
net cash (used) by operating activities:
Net Income (Loss) $ 100,692 $ (435,160) $ (629,719)
Adjustments to reconcile net income
(loss) to net cash (used) by operating
activities:
(Increase) decrease in:
Inventory 7,405 104,006 53,191
Accounts receivable & notes receivable 0 522,953 13,761
Prepaids, deposits, other assets &
miscellaneous 0 53,684 135,818
Accumulated depreciation 228 353,284 (243,859)
Increase (decrease) in:
Accounts payable (132,175) (931,368) 78,771
Accrued expenses (78,387) (231,323) 102,896
Current notes payable/Advances
from affiliates (30,720) (455,465) 386,759
Total adjustments (233,649) (584,229) 527,337
Net cash (used) by operating activities $ (132,957) $ (1,019,389) $ (102,382)
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
GLOBAL VENTURE FUNDING, INC.
(Formerly Venture Funding Corporation)
Notes to the Financial Statements
September 30, 1995 and 1994
Organization:
Organization
Global Venture Funding, Inc. ("GVF") (the "Company"), formerly Venture
Funding Corporation, was incorporated in the State of Colorado on December 7,
1984. In August of 1992 the Company merged with American West Foods, Inc.
("AWF") (see Note 4), which had been incorporated on October 4, 1989, in
Colorado. AWF's primary business had been the marketing and distribution of
vegetables and fruits and also generated revenues from a trucking operation.
Effective at the inception for the fiscal year ended September 30,1994, AWF
ceased operations, and subsequently filed for bankruptcy effectively
resulting in the cancellation of the merger. This business segment operation
no longer exists as a part of GVF effective with the inception of the
September 30, 1994, fiscal year.
Effective June 30, 1993, GVF acquired 80% of the outstanding stock of
Macrologic, Inc. ("MLI") (see Note 4). In December of 1993, this merger was
canceled and appropriate adjustments were made to the financial statements
to reflect this matter.
Since October of 1993, GVF has allocated its efforts towards seeking a viable
business venture to acquire and/or develop internally. Based upon the status of
the Company, its lack of operating cash and its working capital deficit,
additional funding will be required in order for the Company to complete any
business ventures whether through an acquisition, merger, or developed
internally. The Company will also require certain funds in order to maintain
the ongoing operations of the Company which will also require additional
funding. Based upon the capital needs of the Company, the Company is subject
to all of the risks inherent in a business enterprise that is restructuring
itself and the likelihood of success of the Company must be considered in
light of the fact that the Company has had no significant revenues or other
types of cash infusion during the two years presented in this audit report.
The financial statements do not include any adjustments that might be
necessary should the Company be unable to continue in existence.
The Company had a current working capital deficit of $266,012 as of fiscal
September 30, 1994, and $31,927 as of fiscal September 30, 1995. Additional
funding will be required in order for the Company to complete its proposed
operations. The failure of the Company to successfully obtain additional
future funding may jeopardize the existence of the Company. The Company is
also contemplating that the necessary funding to maintain its existence may
come from the sale of common stock, borrowing's, and/or possible licensing of
its developed business arrangements.
Basis of Presentation
The financial statements are presented on the accrual basis, which is the
accounting method the corporation uses to file its federal tax returns. Under
this basis of accounting, revenue and related assets are recognized when
earned and expenses and related liabilities are recognized when the
obligations are incurred.
Net Income (Loss) Per Common Share
The net income (loss) per common share is computed using an weighted average
number of shares outstanding during the period as follows:
Period Average No.
Ending of Shares
09/94 1,581,263
09/95 1,581,263
The weighted average shares are based upon the cumulative common stock
outstanding. As a result of the antidilutive effect that conversion of
preferred stock to common stock would have in fiscal 1994 and fiscal 1995,
these shares have not been included in the computation of the net income
(loss) per share.
Related Party Transactions
Related parties to the Company have, at various times, loaned funds to the
corporation which funds are interest bearing. As of September 30, 1994, the
principal balance was $12,000, which balance was considered due on demand,
as of September 30, 1995, the principal balance was $-0-. The balance during
the fiscal year ending September 30, 1995, increased to $13,500, and was
converted into Series B preferred stock.
In addition to the above related party notes, the Company has received
various interest bearing advances from various related parties (individual
and business entity). As of September 30, 1994, the net advances balance was
$18,720, which balance was considered due on demand, as of September 30,
1995, the net advances balance was $-0-. The balance during the fiscal year
ending September 30, 1995, increased to $20,820, and was converted into
Series B preferred stock.
2. Stockholders' Equity:
The Company has authorized 20,000,000 shares of preferred stock with a $.10
par value. Shares of preferred stock may be divided into such series as may be
established by the Board of Directors. The Board of Directors may fix and
determine the relative rights and preferences of the shares of any series
established.
Each share of Series II preferred stock is convertible into two shares of
common stock during year one, five shares of common stock during year two, and
ten shares of common stock during year three, calculated from the date of
purchase.
Each share of Series B preferred stock is convertible into two shares of
common stock during year one and five shares of common stock during year two,
calculated from the date of purchase.
Prior to the merger between GVF and AWF, GVF issued 500,000 and 220,000
shares of Series II Preferred stock and Series B Preferred stock, respectively,
for cash of $620,000 and for services associated with the offerings, valued
at $100,000.
Each share of Series C preferred stock is convertible into 100 shares of
common stock, commencing one year after issuance.
Each share of Series D preferred stock is convertible into 100 shares of
common stock. Series D preferred stock may be subject to forfeiture.
Prior to the merger between GVF and AWF, GVF issued 500,000 shares of its
$.0001 par value common stock to the President of GVF as part of an employment
agreement with the Company, valued at $50,000.
The Company has reserved 10,500,000 shares of its $.0001 par value common
stock for conversion of preferred stock.
As discussed in Note 4, all effects to the stockholders' equity section of
the Company's financial statement relating to the initial merger of GVF and MLI,
and its subsequent cancellation, were appropriately included.
The Company has not paid any ordinary and operating cash dividends on its common
or preferred stock and has no plans to do so. Any payment of cash dividends in
the future will be at the discretion of the Company's Board of Directors and
will depend upon the financial condition, capital requirements, and earnings,
if any, of the Company, as well as other factors which the Board of Directors
may deem relevant.
3. Summary of Significant Accounting Policies:
The most significant accounting policies followed by the Company are
summarized as follows:
Basis of Subsidiary Status
See Note 4.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
Inventories
Inventories consisted of telephone debit cards which existed at the
inception of the fiscal tax year beginning October 1, 1993, and which such
debit telephone cards were sold in their entirety by the end of the following
fiscal year, September 30, 1995.
Income Taxes
At September 30, 1995, the Company had an estimated tax loss carryforward of
approximately $572,000,which "may" be available to offset future taxable
income, if any, through the fiscal tax years ending between 2002 and 2007.
The Company had carried back tax losses and investment tax credits, for the
fiscal year ended September 30, 1991, which resulted in a tax benefit of
$94,360.
The net operating loss carryforward for tax purposes may be severely limited
with respect to its availability based on changes in ownership which occurred.
In addition, the tax loss carryforward may be further limited due to certain
consolidation tax return rules.
Statement of Financial Accounting Standards ("SFAS")#109 - Accounting for
Income Taxes - established financial accounting and reporting standards for the
effects of income taxes that result from an enterprise's activities during
the current and preceding years. It requires an asset and a liability approach
for financial accounting and reporting for income taxes. Adoption of this
statement is required for fiscal years beginning after December 15, 1992. The
Company has not determined the impact of Statement 109 on the Company's
consolidated financial statements. The Company presently employs APB 11 to
account for its income taxes.
Fixed Assets
Fixed assets represent computer equipment, machinery and equipment, and
furniture and equipment. All assets are stated at cost with depreciation
calculated over the estimated useful lives using the straight line method.
4. Business Acquisitions:
In August of 1992, GVF merged with AWF (see Note 1). For financial statement
purposes, AWF was considered the acquiring company, and this transaction had
been treated as a purchase by AWF of GVF. For legal purposes, however, GVF
remained the surviving entity. Therefore, the combined entity retained GVF's
capital structure. Based upon the fact that AWF no longer exists, GVF
continues to act as the surviving entity legally, and also for operational
purposes. Therefore, the fiscal September 30, 1992 adjustments to additional
paid-in capital has appropriately been reversed which originally represented
cash received for the sale of stock. All outstanding shares of AWF's common
stock were exchanged for 12,000 shares of GVF's convertible Series C
preferred shares. The net assets of GVF acquired in the merger were recorded
at their net historical value, which approximated their fair market value.
In November of 1994, AWF filed for bankruptcy and the merger was effectively
canceled. In February of 1995, the case was dismissed. The balance sheet effects
of the discontinuation of this business/cancellation of the merger, which
also included the nonjudicial foreclosure of its land and building, have been
appropriately reflected in the attached financial statements.
In June of 1993, GVF acquired MLI (see Note 1). GVF exchanged 4,200 shares of
GVF's convertible Series C preferred shares and 380,000 shares of GVF's $.0001
par value common shares for 80% of the outstanding shares of MLI's common stock.
The total cost of the acquisition was as follows:
Value of the net assets acquired $3,345,146
Minority interests (113,146)
Total cost $3,232,000
The value of the MLI net assets excluded any adjustment to fair value of the
minority interest. The value acquired exceeded the recorded amounts by
$2,779,418. This excess was allocated to computer software based on appraisal
values and was to be amortized over the five year estimated remaining useful
life of the software.
As discussed in Note 1, the above described merger transaction was canceled
and fully rescinded in December of 1994. Therefore, all initial and
subsequent financial statement effects were reversed as if the merger had not
occurred, except as discussed in Note 5.
5. Organization Costs:
Organization costs incurred represent original and subsequent costs required
to organize the Corporation. Such costs have been amortized over a period of
five years and as of September 30, 1994, such costs were amortized in full
and charged to expense.
6. Accrued Liabilities:
The details of accrued liabilities is as follows:
September 30, 1994:
Compensation $ 77,764
Taxes $ 623
Total $ 78,387
September 30, 1995:
Compensation $ -O
Taxes $ -O
Total $ -O
7. Going Concern:
As discussed in Note 1, the financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has suffered
recurring losses from operations and has a working capital deficiency that
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are outlined in the following
paragraph. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
The Company is in the process of arranging and obtaining private and public
financing for additional equity to provide working capital for current overhead
costs as well as to finance start-up costs of planned telecommunications
projects. The Company intended to divest itself of AWF, which it has, and
concentrate on telecommunications opportunities. There is no assurance that
the Company will be successful in obtaining additional equity, that satisfactory
financing can be obtained, or that planned telecommunications operations
will be located, implemented, and succeed.
8. Subsequent Events:
As discussed in Note 7 above, the Company has continued its efforts in
identifying a company in the telecommunications industry and/or to establish
its own activity in the telecommunications industry. Toward this end, in the
spring of 1996, the Company entered into an agreement with Cellular 99, a
Nevada Corporation, whereby it obtained an exclusive license to rent
cellular phones within the State of Illinois. The Company expects to secure
additional licenses for other states. The cellular phone would be supplied by
Cellular 99 and it is estimated that they would rent for 99 cents per day.
The Company is in the process of determining its capital requirements to launch
this venture.
On May 8, 1996, GVF acquired 100% of the common stock of Allcell
Communications (ACI) a Georgia Corporation, in exchange for 5,500 shares of the
Company's newly issued preferred stock, of which 5,000 shares have been
placed in escrow pending achievement by ACI of certain earnings levels as
specified in the purchase agreement. ACI is in the debit phone tele-
communications industry.
9. Subsequent Adjustments to the Financial Statements Effective September
30, 1995:
This report includes the following adjustments made to the original September
30, 1995 report dated May 10, 1996:
a) Intangibles which management had valued after the cancellation of the
merger with AWF have been analyzed by management based upon requests from
regulatory agencies and have been eliminated as an asset. Such adjustment has
been included herein as a reduction in the original intangible ($1,773,433)
and as a reduction in additional paid-in capital.
b) Debt relief which had been originally reported as "other income" has
been adjusted and is now presented as an Extraordinary Item. This debt relief is
related to third parties only. All other debt relief, including debt relief
to related parties, has been included in the Stockholder's Equity section of
this report as a reduction in the current liability and as an increase in par
value and additional paid-in capital.
c) The weighted average number of shares for the fiscal year ended
September 30, 1995, has been appropriately adjusted to 1,581,263.
d) The Statement of Cash Flows has been appropriately adjusted for the
effects of the revision in the financial statements as discussed above in
footnote 9, sub-item a).
e) Beyond the elimination of the intangible asset(s) on the attached
balance sheet, the related value has been fully eliminated on the Statement of
Changes in Stockholder's Equity, see footnote 9, sub-item a).
SIGNATURES
Pursuant to the requirements of section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Global Venture Funding, Inc.
Date: Aug 22, 1996 By: /s/ ROGER K. KNIGHT
Roger K. Knight, CEO
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
/s/ ROGER K. KNIGHT CEO and Director Aug 22, 1996
Roger K. Knight
/s/ SILAS A. PHILLIPS Secretary, VP and Aug 22, 1996
Silas A. Phillips Director
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM FORM 10-KSB/A AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-95
<PERIOD-END> SEP-30-95
<CASH> 367
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 517
<PP&E> 1,158
<DEPRECIATION> 723
<TOTAL-ASSETS> 952
<CURRENT-LIABILITIES> 32,444
<BONDS> 0
0
91,067
<COMMON> 158
<OTHER-SE> (122,717)
<TOTAL-LIABILITY-AND-EQUITY> 952
<SALES> 1,146
<TOTAL-REVENUES> 1,146
<CGS> 8,080
<TOTAL-COSTS> 8,080
<OTHER-EXPENSES> 4,450
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,024
<INCOME-PRETAX> (15,408)
<INCOME-TAX> 0
<INCOME-CONTINUING> (15,408)
<DISCONTINUED> 0
<EXTRAORDINARY> 116,100
<CHANGES> 0
<NET-INCOME> 100,692
<EPS-PRIMARY> .06
<EPS-DILUTED> 0 <F1>
<FN>
<F1>
Not applicable due to loss
</FN>
</TABLE>
