UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-SB/A1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
CONCEPT CAPITAL CORP.
(Name of small business issuer in its charter)
Utah 87-0422564
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
175 South Main Street, Suite 1210, Salt Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (801)-364-2538
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $0.001
<PAGE>
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. Such
statements reflect the Company's views with respect to future events based
upon information available to it at this time. These forward-looking
statements are subject to certain uncertainties and other factors that could
cause actual results to differ materially from such statements. These
uncertainties and other factors include, but are not limited to: the ability
of the Company to locate a business opportunity for acquisition or participa-
tion by the Company; the terms of the Company's acquisition of or participa-
tion in a business opportunity; and the operating and financial performance
of any business opportunity following its acquisition or participation by the
Company. The words "anticipates," "believes," "estimates," "expects,"
"plans," "projects," "targets" and similar expressions identify forward
looking statements. Readers are cautioned not to place undue reliance on
these forward looking statements, which speak only as of the date the
statement was made. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, changes in assumptions, future events or otherwise.
Item 1. Description of Business
HISTORY
Concept Capital Corporation (the "Company") was organized under the laws
of the State of Utah on May 21, 1985 for the purpose of seeking business
opportunities for acquisition or participation by the Company. In connection
with its organization, the Company sold 300,000 shares of its restricted
common stock to its original officers and directors and their associates for
$0.04 per share, or an aggregate of $12,000. During 1985, the Company
completed a public offering of 1,450,000 shares of common stock at an
offering price of $0.10 per share, from which the Company realized net
proceeds of approximately $131,755 after deducting the costs of the offering.
The offering was conducted pursuant to the exemption from the registration
requirements of the Securities Act of 1933, as amended, provided by
Regulation A promulgated thereunder and was registered by qualification in
the State of Utah.
On February 10, 1999, the Company entered into a Stock Purchase
Agreement with T. Kent Rainey, the current president of the Company, pursuant
to which the Company agreed to sell Mr. Rainey and other investors 2,625,000
unregistered shares of the Company's common stock for $105,000, subject to
approval by the Company's shareholders. The transaction was approved by the
Company's shareholders on February 23, 1999 and the shares were issued on
March 2, 1999.
Since its organization in 1985, the Company has not engaged in active
business operations and its activities have consisted of its search for and
evaluation of potential business opportunities for acquisition or
participation by the Company. During such period, the Company has incurred
limited operating expenses necessary to maintain its status as a
corporation in good standing and has incurred expenses in connection with
its search for and evaluation of potential business opportunities. The
Company has evaluated several business opportunities since the date of its
organization but has not acquired any business opportunity. Due to the
lack of active operations and the Company's purpose of seeking to acquire
a currently unknown business opportunity, the Company may be classified as
a "blank check" company subject to all the risks of a new business together
with the substantial risks associated with the search for and acquisition
of business opportunities.
<PAGE>
The Company is voluntarily filing this registration statement on Form
10-SB in order to become a reporting company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which management believes
will assist the Company in continuing to have its common stock included for
quotation on the OTC Bulletin Board. Management also believes that the
preparation and filing with the Securities and Exchange Commission (the
"Commission") of periodic reports under the Exchange Act may assist the
Company in its search for business opportunities by making information
about the business and financial condition of the Company readily available
to the public. Following the filing of this registration statement, the
Company will be obligated to file various reports required by the Exchange
Act, including quarterly reports on Form 10-QSB and annual reports on Form
10-KSB which include audited annual financial statements. Although the
Company may be entitled to deregister its securities under the Exchange Act
until such time as the size of its assets and number of its shareholders
requires mandatory registration, the Company has no plans to deregister its
securities and intends to remain a reporting company for the foreseeable
future.
BUSINESS PLAN
The Company intends to continue to seek, investigate, and, if warranted,
acquire an interest in a business opportunity. Management has not estab
lished any firm criteria with respect to the type of business with which the
Company desires to become involved and will consider participating in a
business enterprise in a variety of different industries or areas with no
limitation as to the geographical location of such enterprise. The Company's
management will have unrestricted discretion in reviewing, analyzing, and
ultimately selecting a business enterprise for acquisition or participation
by the Company. It is anticipated that any enterprise ultimately selected
will be selected by management based on its analysis and evaluation of the
business and financial condition of such enterprise, as well as its business
plan, potential for growth, and other factors, none of which can be
anticipated to be controlling. If the Company is able to locate a suitable
business enterprise, the decision to acquire or participate in the enterprise
may be made by the Company's board of directors without shareholder approval.
Approval may also be obtained pursuant to a consent of majority shareholders
and since members of management and the principal shareholders of the Company
own over 50% of the Company's outstanding shares, they would be able to
approve any transaction without the affirmative votes of any other sharehold
ers. Further, it is anticipated that the acquisition of or participation in
an enterprise may involve the issuance by the Company of a controlling
interest in the Company which would dilute the respective equity interests of
the Company's shareholders and may also result in a reduction of the
Company's net tangible asset value per share. In connection with an
acquisition, members of management may also be able to negotiate the sale of
their shares in the Company at a premium.
The activities of the Company will continue to be subject to several
significant risks which arise primarily as a result of the fact that the
Company has no specific business and may acquire or participate in a business
opportunity based on the decision of management which will, in all probabil-
ity, act without the consent, vote, or approval of the Company's sharehold
ers. The risks faced by the Company are further increased as a result of its
limited resources and its inability to provide a prospective business
opportunity with a significant amount of capital. (See "RISK FACTORS.")
Although management believes that it is in the best interest of the
Company to acquire or participate in a business enterprise, there is no
assurance that the Company will be able to locate a business enterprise which
management believes is suitable for acquisition or participation by the
Company or that if such an enterprise is located, it can be acquired on terms
acceptable to the Company. Similarly, there can be no assurance that if any
business opportunity is acquired, it will perform in accordance with
management's expectations or result in any profit to the Company or
appreciation in the price for the Company's shares.
<PAGE>
If business opportunities become available, the selection of an
opportunity in which to participate will be complex and extremely risky and
may be made on management's analysis of the quality of the other company's
management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, and numerous other
factors which are difficult, if not impossible to analyze through the
application of any objective criteria. There is no assurance that the
Company will be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its shareholders.
It is anticipated that business opportunities may be introduced to the
Company from a variety of sources, including its officers and directors, and
their business and social contacts, professional advisors such as attorneys
and accountants, securities broker-dealers, venture capitalists, members of
the franchise community, and others who may present unsolicited proposals.
The Company will not restrict its search to any particular business,
industry, or geographical location. The Company may enter into a business or
opportunity involving a "start-up" or new company, an established business
which needs additional funding, or a firm which is in need of additional
capital to overcome financial problems or difficulties. It is impossible to
predict the status of any business in which the Company may become engaged.
The period within which the Company may participate in a business
opportunity cannot be predicted and will depend on circumstances beyond the
Company's control, including the availability of business opportunities, the
time required for the Company to complete its investigation and analysis of
prospective business opportunities, the time required to prepare the
appropriate documents and agreements providing for the Company's participa-
tion, and other circumstances.
In certain circumstances, the Company may agree to pay a finder's fee or
to otherwise pay for investment banking or other services provided by persons
who are unaffiliated with the Company but who submit business opportunities
in which the Company participates. No such finder's fees or other compensa
tion will be paid to any person who is an officer, director, or current owner
10% or more of the Company's issued and outstanding Common Stock.
It is impossible to predict the manner in which the Company may
participate in a business opportunity. Specific business opportunities will
be reviewed and, on the basis of that review, the legal structure or method
deemed by management to be suitable will be selected. Such structure may
include, but is not limited to, mergers, reorganizations, leases, purchase
and sale agreements, licenses, joint ventures, and other contractual
arrangements. The Company may act directly or indirectly through an interest
in a partnership, corporation, or other form of organization. Implementing
such structure may require the merger, consolidation, or reorganization of
the Company with other corporations or forms of business organization, and
there is no assurance that the Company would be the surviving entity. In
addition, the current shareholders of the Company may not have control of a
majority of the voting shares of the Company following a reorganization
transaction. 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.
<PAGE>
The Company will most likely acquire a business opportunity by issuing
shares of the Company's common stock to the owners of the business opportun-
ity. Although the terms of such transaction cannot be predicted, in many
instances the business opportunity entity will require that the transaction
by which the Company acquires its participation be "tax-free" under Sections
351 or 368 of the Internal Revenue Code of 1986 (the "Code"). In an exchange
of property for Common Stock under Section 351 of the Code, the tax free
status of the transaction depends on the issuance of shares of the Company's
Common Stock to transferors of the business opportunity in an amount equal to
at least 80% of the Common Stock of the Company outstanding immediately
following the transaction. In such a transaction, the current shareholders
would retain 20% or less of the total issued and outstanding shares of the
Company. Section 368 of the Code provides for tax free treatment of certain
business reorganizations between corporate entities where one corporation is
merged with, or acquires the securities or assets of, another corporation.
Generally, the Company will be the acquiring corporation in a Section 368
business reorganization, and the tax free status of the transaction will not
depend on the issuance of any specific amount of the Company's Common Stock.
It is not uncommon however, that as a negotiated element of a Section 368
transaction, the acquiring corporation issue securities in such an amount
that the shareholders of the acquired corporation will hold 50% or more of
the acquiring corporation's securities immediately after the transaction.
Therefore, there is a substantial possibility that in a Section 368
transaction involving the Company, current shareholders may retain 50% or
less of the total issued and outstanding shares of the Company. A business
opportunity acquisition structured as a tax free reorganization under
Sections 351 or 368 of the Code may result in substantial additional dilution
to the equity of those who were shareholders of the Company prior to such
acquisition.
Notwithstanding the fact that the Company is technically the acquiring
entity in the foregoing circumstances, generally accepted accounting
principles will ordinarily require that such transaction be accounted for as
if the Company had been acquired by the other entity owning the business
venture or opportunity and, therefore, will not permit a write up in the
carrying value of the assets of the other company.
It is anticipated that securities issued in any such transaction would
be issued in reliance on exemptions from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of the transaction, the Company may agree to register such
securities either at the time the transaction is consummated or under certain
conditions or at specified times thereafter. The issuance of a substantial
number of additional securities and their potential sale into any trading
market which may develop in the Company's Common Stock.
The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto,
specify certain events of default, detail the terms of closing and the
conditions which must be satisfied by each of the parties thereto prior to
such closing, outline the manner of bearing costs if the transaction is not
closed, set forth remedies on default, and include miscellaneous other terms.
It is emphasized that management of the Company has broad discretion in
determining the manner by which the Company will participate in a prospective
business opportunity and may effect transactions having a potentially adverse
impact on the current shareholders in that their percentage ownership in the
Company may be reduced without any increase in the value of their investment
or that the business opportunity in which the Company acquires an interest
may ultimately prove to be unprofitable. Such transactions may be consum-
mated without being submitted to the shareholders of the Company for their
consideration. In some instances, however, the proposed participation in a
business opportunity may be submitted to the shareholders for their
consideration, either voluntarily by the board of directors to seek the
shareholders' advice or consent or because of a requirement to do so by state
law.
<PAGE>
The investigation of specific business opportunities and the negotia
tion, drafting, and execution of relevant agreements, disclosure documents,
and other instruments may require substantial management time and attention
and substantial costs for accountants, attorneys, and others. If a decision
is made not to participate in a specific business opportunity, the costs
previously incurred in the related investigation would not be recoverable.
Furthermore, even if an agreement is reached for the participation in a
specific business opportunity, the failure to consummate that transaction may
result in the loss to the Company of the related costs incurred.
The Company's operations following its acquisition of an interest in a
business opportunity will be dependent on the nature of the opportunity and
interest acquired. The specific risks of a given business opportunity cannot
be predicted at the present time.
The Company is not registered and does not propose to register as an
"investment company" under the Investment Company Act of 1940 (the "Invest
ment Act"). The Company intends to conduct its activities so as to avoid
being classified as an "investment company" under the Investment Act and,
therefore to avoid application of the costly and restrictive registration and
other provisions of the Investment Company Act and the regulations promul-
gated thereunder.
REGULATION
It is impossible to predict what government regulation, if any, the
Company may be subject to until it has acquired an interest in a business
opportunity. The use of assets and/or conduct of businesses which the
Company may acquire could subject it to environmental, public health and
safety, land use, trade, or other governmental regulations and state or local
taxation. In selecting a business opportunity to acquire, management will
endeavor to ascertain, to the extent of the limited resources of the Company,
the effects of such government regulation on the prospective business of the
Company. In certain circumstances, however, such as the acquisition of an
interest in a new or start-up business activity, it may not be possible to
predict with any degree of accuracy the impact of government regulation. The
inability to ascertain the effect on a prospective business activity of
government regulation will make the acquisition of an interest in such
business more risky.
COMPETITION
The Company encounters substantial competition in its efforts to locate
a business opportunity. The primary competition for desirable investments
comes from business development companies, venture capital partnerships and
corporations, venture capital affiliates of large industrial and financial
companies, small business investment companies, and wealthy individuals.
Many of these entities will have significantly greater experience, resources,
and managerial capabilities than the Company, and will, therefore, be in a
better position than the Company to obtain access to attractive business
opportunities.
FACILITIES
The Company's offices are located at the office of its president at 175
South Main Street, Suite 1210, Salt Lake City, Utah 84111. The Company
sublets such space on a month-to-month basis for a monthly rental of $180,
plus reimbursement for its portion of office costs such as telephone, fax,
copies, postage etc. estimated at an additional $50 to $70 per month.
<PAGE>
EMPLOYEES
The Company has no employees and its business and affairs are handled by
its officers and directors who provide services to the Company on an as
needed basis. Management of the Company may engage consultants, attorneys,
and accountants on a limited basis, and does not anticipate a need to engage
any full-time employees so long as it is seeking and evaluating business
opportunities. The need for employees and their availability will be
addressed in connection with a decision whether or not to acquire or
participate in a business opportunity.
YEAR 2000
Since the Company conducts no active business operations and owns no
properties or equipment, it does not anticipate that so-called "Year 2000"
problems will have any material adverse impact on the Company. The Company's
bank has advised the Company that it is taking steps to become Year 2000
compliant and the Company does not conduct material business transactions or
rely to any material extent on any other third parties. In determining
whether to acquire any particular business opportunity, the Company will
consider the potential adverse impact that the failure to become Year 2000
compliant could have on any such business.
RISK FACTORS
"Blank Check" Company
The business plan of the Company is to use its limited capital to search
for, investigate, and acquire or participate in a business opportunity which
has not yet been selected. A business opportunity will be selected by
management, and management may select an opportunity without approval of the
Company's shareholders. Accordingly, shareholders are unable to determine
the future activities of the Company and may have no opportunity to analyze
the merits of any opportunity to be acquired by the Company. In addition,
the Company has no employment contracts with members of management, no
assurance can be given that the Company will continue to be managed by such
persons in the future, and it is likely that such persons will resign at such
time as a business opportunity is acquired.
Limited Capital
As of March 31, 1999, the Company had assets in the form of cash and
cash equivalents in the amount of approximately $250,000 which is not
adequate to permit the Company to undertake an elaborate or extensive search
for business opportunities. This limited capital will prevent the Company
from participating in any business opportunity which requires immediate
substantial additional capital and may make it difficult or impossible for
the Company to locate a business opportunity.
Future Issuance of Substantial Additional Shares
It is likely that the Company would acquire an interest in a business
opportunity through a reverse merger or other business reorganization
involving the issuance by the Company of additional shares of the Company's
Common Stock. It is also likely that the Company would issue a controlling
interest to the shareholders of the acquired company in which event the
ownership interest of current shareholders would be substantially diluted.
The board of directors, acting without shareholder approval, has authority to
issue all or any part of the authorized but unissued stock of the Company.
Thus, the board of directors could issue up to 45,625,000 additional shares
of Common Stock without shareholder approval. (See "BUSINESS PLAN" and
"DESCRIPTION OF SECURITIES.")
<PAGE>
No Operating History
The Company was incorporated under the laws of the state of Utah in
1985, and has had no operations or significant revenues from operations. The
Company faces all of the risks inherent in any new business, together with
those risks specifically inherent in the search for and acquisition of
business opportunities.
No Assurance of Profitability
There can be no assurance that the Company will be able to acquire or
enter into a business opportunity or, if the Company does acquire or enter
into a business opportunity, that the business opportunity will develop into
a successful or profitable business. (See "BUSINESS PLAN.")
Limited Market for Common Stock
The market for the Company's common stock must be characterized as a
limited market due to the absence of any significant trading volume and the
small number of brokerage firms acting as market makers. The market for low
priced securities not traded on a national exchange or included in the NASDAQ
system is generally less liquid and more volatile than such national exchange
and NASDAQ markets and rapid and extreme fluctuations in market prices are
not uncommon. No assurance can be given that the current over-the-counter
market for the Company's common stock will continue or that the prices in
such market will be maintained at their present levels. (See "DESCRIPTION OF
SECURITIES: Market Price for Common Stock.")
Control by Principal Shareholders
The officers, directors and principal shareholders of the Company own
approximately 57.5% of the Company's outstanding shares of common stock.
As a result, these shareholders will be able to control the management and
policies of the Company through their ability to determine the outcome of
elections for the Company's board of directors and other matters requiring
the vote or consent of shareholders.
Lack of Revenues and Dividends
The Company has had no revenues from principal operations, and it cannot
predict when, if ever, it will realize any material revenue or realize a
profit from any operations it may subsequently undertake. The Company has
paid no dividends and does not propose to pay them in the foreseeable future.
Possible Sale of Common Stock Pursuant to Rule 144
As of March 31, 1999, there were 4,375,000 shares of the Company's
common stock issued and outstanding of which approximately 1,750,000 shares
are "free trading" or are eligible for sale under Rule 144. The remaining
2,625,000 shares are "restricted securities" as that term is defined in Rule
144 promulgated under the Securities Act of 1933, as amended (the "Act"),
which were issued on March 2, 1999. Rule 144 provides, in essence, that so
long as there is available current public information about the Company, a
person holding restricted securities for a period of at least one year may
sell in each 90 day period (provided he is not part of a control group acting
in concert), an amount equal to the greater of the average weekly trading
volume of the stock during the four calendar weeks preceding the sale or 1%
of the Company's outstanding shares of Common Stock. In addition, a person
who has not been an affiliate of the Company at any time during the three
months preceding a sale, and who has owned his or her restricted shares for
at least two years within the meaning of Rule 144, would be entitled to sell
such shares under Rule 144 without restriction. The possibility of sales
under rule 144 may, in the future, have a depressive affect on the price of
the Company's securities in any market which may develop.
<PAGE>
Item 2. Plan of Operation
During the next twelve months, and thereafter if required, the
officers and directors of the Company will utilize their business contacts
in an effort to locate a business opportunity for acquisition or
participation by the Company. Such contacts may include investment bankers
and other securities professionals, lawyers, accountants, industry
consultants, members of management of public and private companies,
business brokers, and personal acquaintances. When and if a potential
business opportunity is located, the Company's officers and directors may
incur travel expenses in connection with their review of such opportunity
and, if they determine to proceed further, may also incur expenses for the
engagement of professionals such as lawyers and accountants to assist in a
"due diligence" review of the opportunity and the negotiation and
preparation of the necessary legal documents. While the precise nature and
amount of such expenses cannot be foreseen at this time, the Company
anticipates that its current assets will be adequate to pay such expenses
during the next twelve months. As of March 31, 1999, the Company had net
assets in the form of cash and cash equivalents in the approximate amount
of $250,000. The Company anticipates that the interest income it earns on
such amount will be sufficient to pay the majority of the Company's limited
operating expenses including rent, filing fees, and routine legal and
accounting fees for the next twelve months, leaving the majority of such
assets available for expenses incurred in connection with the location,
evaluation, and acquisition of a business opportunity.
The Company cannot presently foresee the cash requirements of any
business opportunity which may ultimately be acquired by the Company.
However, since it is likely that any such business will be involved in active
business operations, the Company anticipates that any such acquisition will
result in increased cash requirements as well as increases in the number of
employees of the Company.
Item 3. Description of Property.
The Company does not own any property and conducts its limited
operations from the office of its president. (See "Item 1. Description of
Business: Facilities.")
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of April 26, 1999, the number of
shares of the Company's common stock, par value $0.001, owned of record or
beneficially by each person known to be the beneficial owner of 5% or more of
the issued and outstanding shares of the Company's common stock, and by each
of the Company's officers and directors, and by all officers and directors as
a group. As of such date, the Company had a total of 4,375,000 shares of
common stock issued and outstanding.
Number of
Name Shares Owned(1) Percent of Class
Principal Shareholders
Byron B. Barkley(2) 375,000 8.6%
Tyler K. Rainey(3) 390,000 8.9%
Officers and Directors(4)
T. Kent Rainey (5) 900,000 20.6%
William P. Archer 750,000 17.1%
Vicki L. Rainey (5) 200,000 4.6%
<PAGE>
All Officers and Directors 1,850,000 42.3%
as a Group (3 persons)(5)
_________________________________
(1) Unless otherwise indicated, all shares are or will be held
beneficially and of record by the person indicated.
(2) Mr. Barkley's address is 39 West Market Street, Salt Lake City, Utah
84101.
(3) Mr. Tyler Rainey's address is 744 E. Rosemore Court, Murray, Utah
84107. Mr. Tyler Rainey is the adult son of T. Kent and Vicki Rainey.
(4) The address for each of the Company's officers and directors is 175
South Main Street, Suite 1210, Salt Lake City, Utah 84111.
(5) T. Kent Rainey and Vicki L. Rainey are husband and wife and each
disclaims beneficial ownership of the shares held by the other. The
share amounts include 100,000 shares held of record by their daughter.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth the names, ages, and titles of each of
the executive officers and directors of the Company.
Name Age Title
T. Kent Rainey 50 President and Director
William P. Archer 49 Vice President and Director
Vicki L. Rainey 50 Secretary, Treasurer and Director
*The term of office of each director is one year and until his or
her successor is elected at the Company's annual shareholders' meeting
and is qualified, subject to removal by the shareholders. The term of
office for each officer is for one year and until a successor is elected
at the annual meeting of the board of directors and is qualified,
subject to removal by the board of directors. Each of the Company's
officers and directors has served in the capacities indicated above
since March 2, 1999.
Certain biographical information with respect to each of such persons is
set forth below.
T. Kent Rainey, age 50, is a co-owner and operator of Rainey Financial
Group, a small private company owned and operated by T. Kent Rainey and Vicki
L.Rainey which is engaged in the business of factoring accounts receivable
and making short-term loans. Rainey Financial is not a licensed financial
institution and holds no special licenses or permits other than the general
licenses required to operate a business. Mr. Rainey has also been actively
involved in managing his own investments during the past 25 years. He
graduated from Utah State University in 1970 with a degree in accounting.
Mr. Rainey is the husband of Vicki L. Rainey.
<PAGE>
William P. Archer, age 49, is and has since 1994 been Vice President of
Archer Supply, Inc., a private company holding and managing investments,
primarily in real estate. From 1968 to 1994, he was an owner and operator of
Auto Parts Unlimited, an automotive warehouse and 9 retail stores, where he
held the title of Vice President and Sales Manager. From 1989 to 1991, he
was a member of the National Advisory Board of TRW, Inc.
Vicki L. Rainey, age 50, is a co-owner and operator of Rainey Financial
Group and manages her own investments. Ms. Rainey graduated cum laude from the
University of Utah in 1989 with a B.A. degree in History. Ms. Rainey is the
wife of T. Kent Rainey.
Item 6. Executive Compensation
The Company's officers do not receive any compensation from the Company
for serving in such capacities. The Company has not paid any compensation to
any officer during the past three years.
The Company has no retirement, pension, profit sharing, or insurance or
medical reimbursement plans covering its officers or directors, and is not
contemplating implementing any such plans at this time.
No advances have been made or contemplated by the Company to any of its
officers or directors.
Item 7. Certain Relationships and Related Transactions
On March 2, 1999, the Company sold an aggregate of 2,625,000 shares of
its restricted common stock to seven investors, including the Company's
current officers and directors, for $105,000 pursuant to the terms of a Stock
Purchase Agreement between the Company and T. Kent Rainey dated as of
February 10, 1999. The terms of the transaction were negotiated at arm's
length by Mr. Rainey and the former members of management of the Company and
the transaction was approved by the Company's shareholders on February 23,
1999. Of the 2,625,000 shares sold, the Company's officers and directors
acquired the following numbers of shares: T. Kent Rainey, 800,000; William P.
Archer, 750,000; and Vicki L. Rainey, 100,000. Mark N. Schneider, legal
counsel to the Company, acquired 125,000 shares.
The Company utilizes office space at the office of T. Kent Rainey, its
president. Such space is subleased to the Company on a month-to-month basis
for a monthly rental of $180 plus its portion of office expenses estimated at
an additional $50 to $70 per month.
Item 8. Legal Proceedings
The Company is not a party to any pending legal proceedings and no such
action by or against it, to the best of its knowledge, has been threatened.
Item 9. Market for Common Equity and Related Stockholder Matters
The Company's common stock has been eligible for trading on the OTC
Bulletin Board under the symbol "CTCY" since approximately September, 1998.
There was no trading market for the Company's common stock prior to that
date. The following table sets forth the high and low bid quotations for the
Company's common stock on the OTC Bulletin Board for each of the last three
calendar quarters.
<PAGE>
High Bid Low Bid
1998
Third Quarter $0.03125 $0.03125
Fourth Quarter $0.03125 $0.03125
1999
First Quarter $0.125 $0.03125
The foregoing quotations represent inter-dealer prices without retail mark-
up, mark-down, or commission, and may not represent actual transactions.
Despite the publication of quotations, there is currently no active trading
market for the Company's stock, and there can be no assurance that an active
or liquid trading market for the Company's stock will develop in the future.
No dividends have been paid on the Company's securities, and the Company
does not anticipate paying dividends in the foreseeable future.
At April 26, 1999, there were approximately 87 holders of record of
the Company's common stock, including broker-dealers and clearing firms
holding shares on behalf of their clients, as reported by the Company's
transfer agent.
Transfer Agent
Atlas Stock Transfer Company, 5899 South State Street, Salt Lake City,
Utah 84107, Telephone (801) 266-7151, serves as transfer agent and registrar
for the Company's common stock.
Item 10. Recent Sales of Unregistered Securities
On March 1, 1999, the Company sold an aggregate of 2,625,000 shares of
its restricted common stock to seven sophisticated investors, including
three officers and directors of the Company, for $105,000. No underwriter
was involved in the transactions and the shares were sold by the Company
directly to the investors. The shares were sold without registration under
the Securities Act of 1933, as amended (the "Securities Act"), in reliance
on the exemption from such registration requirements provided by Section
4(2) of the Securities Act for transactions not involving any public
offering. The shares were sold without general advertising or
solicitation, the purchasers acknowledged that they were purchasing
"restricted securities" which had not been registered under the Securities
Act and which were subject to certain restrictions on resale, and the
certificates representing the shares were imprinted with the usual and
customary restricted stock legend. The shares were sold to the investors
pursuant to the terms of a Stock Purchase Agreement between the Company and
T. Kent Rainey dated as of February 10, 1999, which was approved by the
Company's shareholders on February 23, 1999. Of the 2,625,000 shares sold,
the Company's officers and directors acquired the following numbers of
shares: T. Kent Rainey, 800,000; William P. Archer, 750,000; and Vicki L.
Rainey, 100,000. Mark N. Schneider, legal counsel to the Company, acquired
125,000 shares.
Item 11. Description of Securities
The Company's articles of incorporation authorize 50,000,000 shares of
Common Stock, $0.001, par value per share. The shares of Common Stock have no
pre-emptive or other subscription rights, have no conversion rights, and are
not subject to redemption. The holders of shares of Common Stock are
<PAGE>
entitled to one vote for each share held. The Common Stock has noncumulative
voting rights. The holders of Common Stock are entitled to dividends when,
as, and if, declared by the board of directors from funds legally available
therefor. The Company has not paid a dividend since its incorporation and it
is not anticipated that funds will be available for the payment of dividends
in the foreseeable future.
Item 12. Indemnification of Directors and Officers
The Articles of Incorporation and Bylaws of the Company provide for the
indemnification of directors and officers of the Company and others. The
following discussion is qualified by reference to the Articles of Incorpora-
tion and Bylaws of the Company which are included as exhibits to this
registration statement.
Article VII of the Company's Articles of Incorporation provides as
follows:
The Corporation shall indemnify any and all persons who may serve or
who have served at any time as directors or officers or who at the
request of the Board of Directors of the Corporation may serve or at any
timehave served as directors or officers of another corporation in which
the Corporation at such time owned or may own shares of stock or of which
it was or may be a creditor, and their respective heirs, administrators,
successors, and assigns, against any and all expenses, including amounts
paid upon judgments, counsel fees, and amounts paid in settlement of
them, are made parties, or a party, or which may be asserted against
them or any of them, by reason of being or having been directors or
officers of the Corporation, or of such other corporation, except in
relation to matters as to which any such director or officer or former
director or officer or person shall be adjudged in any action, suit, or
proceeding to be liable for his own negligence or misconduct in the
performance of his duty. Such indemnification shall be in addition to
any other rights to which those indemnified may be entitled under any
law, bylaw, agreement, vote of a stockholder, or otherwise.
Section 8 of the Company's bylaws provides in relevant part as follows:
Section 8.01 Indemnification: Third Party Actions. The
corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceedings, whether civil, criminal,
administrative, or investigative, except an action by or in the right of
the corporation, by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses, including attorneys' fees, judgments,
fines, and amounts paid in settlement actually and reasonably incurred
by him in connection with the action, suit, or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or on a plea of
nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was
unlawful.
Section 8.02 Indemnification: Corporate Actions. The corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was
<PAGE>
serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense
or settlement of the action or suit, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be
made in respect of any claim, issue, or matter as to which such a person
shall have been adjudged to be liable to the corporation, unless and
only to the extent that the court in which the action or suit was
brought shall determine on application that, despite the adjudication of
liability but in view of all circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the
court deems proper.
In addition, the personal liability of the Company's directors to the
Company is limited by Article XIV of the Articles of Incorporation, as
amended, which provides as follows:
A director of the Corporation shall have no personal liability to
the Corporation or its stockholders for monetary damages for any action
taken or failure to take any action, as a director, except (i) the
amount of a financial benefit received by a director to which he is not
entitled, (ii) the intentional infliction of harm on the Corporation or
the shareholders, (iii) for liability arising from any action under
section 16-10a-842 of the Utah Revised Business Corporation Act as it
may from time to time be amended or any successor provision thereto, or
(iv) an intentional violation of criminal law.
Insofar as indemnification by the Company for liabilities arising under
the Securities Act may be permitted to officers and directors of the Company
pursuant to the foregoing provisions or otherwise, the Company is aware that
in the opinion of the Securities and Exchange Commission, such indemnifica
tion is against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
Item 13. Financial Statements
See Item 15 for a description of the financial statements being filed
with this Registration Statement.
Item 14. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
Item 15. Financial Statements and Exhibits
(a) Financial Statements. The following financial statements are being
filed with this Registration Statement and are located immediately following
the signature page.
(i) Unaudited Financial Statements at March 31, 1999
Accountants Disclaimer of Opinion
Unaudited Balance Sheet, March 31, 1999
Unaudited Statements of Operations for the three months ended
March 31, 1999, and from inception on May 21, 1985 through March
31, 1999
Unaudited Statements of Comprehensive Income for the three months
ended March 31, 1999, and from inception on May 21, 1985 through
March 31, 1999
Unaudited Statements of Stockholders' Equity from inception on
May 21, 1985 through March 31, 1999
<PAGE>
Unaudited Statements of Cash Flows for the three months ended
March 31, 1999, and from inception on May 21, 1985 through March
31, 1999
Notes to Unaudited Financial Statements
(ii) Audited Financial Statements at December 31, 1998 and 1997
Report of Independent Certified Accountants
Balance Sheets, December 31, 1998 and 1997
Statements of Earnings for the years ended December 31, 1998 and
1997, and cumulative from inception
Statement of Stockholders' Equity, cumulative from inception
Statements of Cash Flows for the years ended December 31, 1998
and 1997,and cumulative from inception
Notes to Financial Statements
(b) Exhibits. The following exhibits are included with this Registration
Statement.
Exhibit SEC
No. Reference No. Title of Document Location
3.1 3 Articles of Incorporation Original Filing
and amendments thereto
3.2 3 Bylaws Original Filing
27 27 Financial Data Schedule This Filing
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.
CONCEPT CAPITAL CORPORATION
(Registrant)
Date: August 10, 1999 By /s/ T. Kent Rainey
T. Kent Rainey, President
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 1999
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
CONTENTS
PAGE
- Accountant's Disclaimer of Opinion 1
- Unaudited Balance Sheet, March 31, 1999 2
- Unaudited Statements of Operations,
for the three months ended March 31,
1999, and from inception on May 21, 1985
through March 31, 1999 3
- Unaudited Statements of Comprehensive Income,
Income, for the three months ended March 31,
1999, and from inception on May 21, 1985
through March 31, 1999 4
- Unaudited Statement of Stockholders' Equity,
from inception on May 21, 1985 through
March 31, 1999 5 - 7
- Unaudited Statements of Cash Flows
for the three months ended March 31, 1999,
and from inception on May 21, 1985 through
March 31, 1999 8
- Notes to Unaudited Financial Statements 9 - 11
<PAGE>
ACCOUNTANT'S DISCLAIMER OF OPINION
Board of Directors
CONCEPT CAPITAL CORPORATION
Salt Lake City, Utah
The accompanying balance sheet of Concept Capital Corporation as of March 31,
1999 and the related statements of operations, statements of comprehensive
income, stockholders' equity and cash flows for the three months ended March
31, 1999 and from inception on May 21,1985 through March 31, 1999 were not
audited by us and, accordingly, we do not express an opinion on them.
/s/ PRITCHETT, SILER & HARDY, P.C.
PRITCHETT, SILER & HARDY, P.C.
April 13, 1999
Salt Lake City, Utah
-1-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED BALANCE SHEET
[Unaudited - See Accountant's Disclaimer of Opinion]
ASSETS
March 31,
1999
___________
CURRENT ASSETS:
Cash in bank $254,490
___________
Total Current Assets $254,490
___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable 431
___________
Total Current Liabilities 431
___________
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
50,000,000 shares authorized,
4,375,000 shares issued and
outstanding 4,375
Capital in excess of par value 244,380
Earning (Deficit) accumulated during
the development stage 5,304
___________
Total Stockholders' Equity 254,059
___________
$254,490
___________
The accompanying notes are an integral part of these unaudited financial
statements.
-2-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENTS OF OPERATIONS
[Unaudited - See Accountant's Disclaimer of Opinion]
From Inception
For the Three on May 21,
Months Ended 1985 Through
March 31, March 31,
1999 1999
____________ ___________
REVENUE:
Interest, dividends, and capital gain
distributions $ 2,817 $ 123,817
Gain from sale of available-for-sale
securities 10,138 19,334
____________ ___________
Total Revenues 12,955 143,151
____________ ___________
EXPENSES:
General and administrative 14,025 69,275
Loss on sale or abandonment of
available-for-sale securities - 61,763
Amortization - 500
____________ ___________
Total Expenses 14,025 131,538
____________ ___________
INCOME (LOSS) BEFORE INCOME TAXES (1,070) 11,613
CURRENT TAX EXPENSE - 6,309
DEFERRED TAX EXPENSE - -
____________ ___________
NET INCOME (LOSS) $ (1,070) $ 5,304
____________ ___________
INCOME (LOSS) PER COMMON SHARE $ (.00) $ .00
____________ ___________
The accompanying notes are an integral part of these unaudited financial
statements.
-3-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
[Unaudited - See Accountant's Disclaimer of Opinion]
From Inception
For the Three on May 21,
Months Ended 1985 Through
March 31, March 31,
1999 1999
_____________ ______________
NET INCOME (LOSS) $ (1,070) $ 5,304
OTHER COMPREHENSIVE
INCOME:
Reclassification adjustment
for realized gains on
available-for-sale
securities which were
recognized in prior periods
as unrealized holding gains
on securities available for
sale (10,138) -
_____________ ______________
COMPREHENSIVE INCOME (LOSS) $ (11,208) $ 5,304
_____________ ______________
The accompanying notes are an integral part of these unaudited financial
statements.
-4-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MAY 21, 1985
THROUGH DECEMBER 31, 1998
[Unaudited - See Accountant's Disclaimer of Opinion]
Earning
(Deficit) Unrealized
Accumulated Gain on
Common Stock Capital in During the Available-for-
_________________ Excess of Development Sale Securities,
Shares Amount Par Value Stage Net of Tax
Effect
_________ _______ __________ ____________ _______________
BALANCE, May 21, 1985 - $ - $ - $ - $ -
Issuance of 300,000
shares common stock
for cash,May 1985
at $.04 per share 300,000 300 11,700 - -
Net income for the
period ended
December 31, 1985 - - - 341 -
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1985 300,000 300 11,700 341 -
Issuance of 1,450,000
shares common stock
for cash, July 1986
at $.10 per share,
net of stock
offering costs 1,450,000 1,450 130,305 - -
Net income for the
period ended
December 31, 1986 - - - 3,243 -
_________ _______ __________ _____________ _______________
BALANCE,
December 31, 1986 1,750,000 1,750 142,005 3,584 -
Net loss for the
period ended
December 31, 1987 - - - (3,555) -
_________ _______ __________ _____________ _______________
BALANCE,
December 31, 1987 1,750,000 1,750 142,005 29 -
Net income for the
period ended
December 31, 1988 - - - 5,965 -
_________ _______ __________ _____________ _______________
BALANCE,
December 31, 1988 1,750,000 1,750 142,005 5,994 -
Net income for the
period ended
December 31, 1989 - - - 8,787 -
_________ _______ __________ ____________ ________________
BALANCE,
December 31, 1989 1,750,000 1,750 142,005 14,781 -
Net loss for the
period ended
December 31, 1990 - - - (23,653) -
_________ _______ __________ ____________ ________________
[Continued]
-5-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MAY 21, 1985
THROUGH DECEMBER 31, 1998
[Unaudited - See Accountant's Disclaimer of Opinion]
[Continued]
Earning
(Deficit) Unrealized
Accumulated Gain on
Common Stock Capital in During the Available-for-
_________________ Excess of Development Sale Securities,
Shares Amount Par Value Stage Net of Tax
Effect
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1990 1,750,000 $ 1,750 $ 142,005 $ (8,872) $ -
Net income for the
period ended
December 31, 1991 - - - 4,298 -
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1991 1,750,000 1,750 142,005 (4,574) -
Net loss for the
period ended
December 31, 1992 - - - (11,362) -
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1992 1,750,000 1,750 142,005 (15,936) -
Net loss for the
period ended
December 31, 1993 - - - (1,172) -
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1993 1,750,000 1,750 142,005 (17,108) -
Net loss for the
period ended
December 31, 1994 - - - (13,921) -
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1994 1,750,000 1,750 142,005 (31,029) -
Net income for the
period ended
December 31, 1995 - - - 7,218 -
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1995 1,750,000 1,750 142,005 (23,811) -
Appreciation (decline)
in available-for-sale
securities, net of
income tax effect - - - - 7,401
Net income for the
period ended
December 31, 1996 - - - 7,589 -
_________ _______ __________ ____________ _______________
[Continued]
-6-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MAY 21, 1985
THROUGH DECEMBER 31, 1998
[Unaudited - See Accountant's Disclaimer of Opinion]
[Continued]
Earning
(Deficit) Unrealized
Accumulated Gain on
Common Stock Capital in During the Available-for-
_________________ Excess of Development Sale Securities,
Shares Amount Par Value Stage Net of Tax
Effect
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1996 1,750,000 $ 1,750 $ 142,005 $ (16,222) $ 7,401
Appreciation (decline)
in available-for-sale
securities, net of
income tax effect - - - - 14,362
Net income for the
period ended
December 31, 1997 - - - 7,366 -
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1997 1,750,000 1,750 142,005 (8,856) 21,763
Appreciation (decline)
in available-for-sale
securities, net of
income tax effect - - - - (4,321)
Net income for the
period ended
December 31, 1998 - - - 15,230 -
_________ _______ __________ ____________ _______________
BALANCE,
December 31, 1998 1,750,000 1,750 142,005 6,374 17,442
Sale of available-
for-sale
securities - - - - (17,442)
Issuance of 2,625,000
shares common stock
for cash, March,
1999 at $.04 per
share 2,625,000 2,625 102,375 - -
Net loss for the
period ended
March 31, 1999 - - - (1,070) -
__________ _______ __________ ____________ _______________
BALANCE,
March 31, 1999 4,375,000 $ 4,375 $ 244,380 $ 5,304 $ -
__________ _______ __________ ____________ ______________
The accompanying notes are an integral part of these unaudited financial
statements.
-7-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
UNAUDITED STATEMENTS OF CASH FLOWS
[Unaudited - See Accountant's Disclaimer of Opinion]
From Inception
For the Three on May 21,
Months Ended 1985 Through
March 31, March 31,
1999 1999
_____________ ______________
Cash Flows From Operating Activities:
Net income (loss) $ (1,070) $ 5,304
Adjustments to reconcile net income
(loss) to net cash used by operating
activities:
Amortization expense - 500
Net realized (gain) loss on
disposition of securities (10,138) 42,429
Changes in assets and liabilities:
(Decrease) increase in accounts
payable (169) 431
(Decrease) increase in income
tax payable (1,623) -
_____________ ______________
Net Cash Provided (Used) by
Operating Activities (13,000) 48,664
_____________ ______________
Cash Flows From Investing Activities:
Payment of organization costs - (500)
Proceeds from sale of securities 132,637 259,032
Purchase of securites - (301,461)
_____________ ______________
Net Cash Provided (Used) by
Investing Activities 132,637 (42,929)
_____________ ______________
Cash Flows From Financing Activities:
Proceeds from common stock issuance 105,000 262,000
Payments for stock offering costs - (13,245)
_____________ ______________
Net Cash Provided by Financing
Activities 105,000 248,755
_____________ ______________
Net Increase (Decrease) in Cash 224,637 254,490
Cash at Beginning of Period 29,853 -
_____________ ______________
Cash at End of Period $ 254,490 $ 254,490
_____________ ______________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ 1,623 $ 6,309
Supplemental Schedule of Noncash Investing and Financing Activities:
For the three months ended March 31, 1999:
Unrealized gains on available-for-sale securities in the amount of $21,801
were reversed due to the sale of the underlying securities.
The accompanying notes are an integral part of these unaudited financial
statements.
-8-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the State of Utah
on May 21, 1985. The Company is seeking potential business opportunities for
acquisition or participation. The Company has not yet generated significant
revenues from its planned principal operations and is considered a development
stage company as defined in SFAS No. 7. The Company has, at the present time,
not paid any dividends and any dividends that may be paid in the future will
depend upon the financial requirements of the Company and other relevant
factors.
Financial Statements - The accompanying financial statements have been
prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows at
March 31, 1999 and for all the periods presented have been made.
Accounting 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, the disclosures 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 estimated
by management.
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.
Concentration of Credit Risk - At March 31, 1999 the Company maintained its
cash balances primarily at one bank. The Company's cash balances are insured
by the Federal Deposit Insurance Corporation up to a maximum of $100,000.
Investments - Investments in available-for-sale securities are carried at fair
value. Unrealized gains and losses, net of the deferred tax effects, are
included as a separate element of stockholders' equity. Realized gains and
losses are based on the difference between sales price and actual cost of the
securities and are included in earnings.
Income (Loss) Per Share - The computation of income (loss) per share is based
on the weighted average number of shares outstanding during the period
presented in accordance with statement of Financial Standard No. 128,
"Earnings Per Share" [See Note 6].
Comprehensive Income - The Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income", during 1999.
Recently Enacted Accounting Standards - SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," SFAS No. 132, "Employer's
Disclosure about Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," and SFAS No.
134, "Accounting for Mortgage-Backed Securities." were recently issued. SFAS
No. 131, 132, 133 and 134 have no current applicability to the Company or
their effect on the financial statements would not have been significant.
-9-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 2 - AVAILABLE-FOR-SALE SECURITIES
The Company had previously invested in mutual fund shares which were accounted
for as investments available-for-sale. At December 31, 1998, these shares had
unrealized gains of $21,801 (with an estimated tax effect of $4,359). During
the three months ended March 31, 1999 the Company sold all of its holdings and
realized a gain of $10,138 from the proceeds of $132,637.
NOTE 3 - COMMON STOCK
During March, 1999, the Company issued 2,625,000 shares of common stock for
cash proceeds of $105,000 ($.04 per share) to an individual and six other
investors. The issuance of common stock resulted in a change of control of
the Company [See Note 4].
During 1985, the Company completed a public offering of 1,450,000 shares of
common stock for gross proceeds of $145,000, or $.10 per share. Offering
costs of $13,245 were offset against the proceeds of the offering.
In connection with its organization, the Company issued 300,000 shares of
common stock to its original officers and directors and their associates for
total proceeds of $12,000, or $.04 per share
NOTE 4 - CHANGE IN CONTROL
During March, 1999, an individual and six other investors purchased 2,625,000
shares of common stock of the Company [See Note 3] giving them a 60% control-
ling interest in the company. The former officers and directors resigned and
the individual was elected as the new president and member of the board of
directors.
NOTE 5 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability equal
to the expected future tax benefit/expense of temporary reporting differences
between book and tax accounting methods and any available operating loss or
tax credit carryforwards. At March 31, 1999, the Company has estimated
available unused operating loss carryforwards of approximately $1,000, which
may be applied against future taxable income and which expire in to 2014. The
amount of the net operating loss carryforward which can be utilized by the
Company will be subject to annual limitations due to the substantial change in
ownership which has occurred in the Company.
The amount of and ultimate realization of the benefits from the operating loss
carryforwards for income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and other future events, the
effects of which cannot be determined. Because of the uncertainty surrounding
the realization of the loss carryforwards the Company has established a
valuation allowance equal to the amount of the loss carryforwards and,
therefore, no deferred tax asset has been recognized for the loss
carryforwards. The net deferred tax asset is approximately $340 as of March
31, 1999, with an offsetting valuation allowance at March 31, 1999 of the same
amount. The change in the valuation allowance for 1999 is approximately $340.
-10-
<PAGE>
CONCEPT CAPITAL CORPORATION
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 6 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income (loss) per share
and the effect on income and the weighted average number of shares of dilutive
potential common stock for the three months ended March 31, 1999, and from
inception on May 21, 1985 through March 31, 1999:
From Inception
For the Three on May 21,
Months Ended 1985 Through
March 31, March 31,
1999 1999
___________ ___________
Income (loss) from continuing
operations applicable to
common stock $ (1,070) $ 5,304
___________ ___________
Weighted average number of
common shares outstanding
used in earnings per share
during the period 2,595,833 1,642,725
___________ ___________
Dilutive earnings per share was not presented, as the Company had no common
equivalent shares for all periods presented that would effect the computation
of diluted earnings (loss) per share.
NOTE 7 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any compensation to its
officers and directors during the three months ended March 31, 1999.
Rent - The Company shares office space with entities related to an
officer/shareholder of the Company. Beginning in April 1999, the Company has
agreed to pay $180 rent per month for its share of the office space plus
its portion of office expenses, expected to be approximately $50 TO $70
per month.
-11-
<PAGE>
CONCEPT CAPITAL CORPORATION
(A CORPORATION
IN THE DEVELOPMENT STAGE)
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
DECEMBER 31, 1998 AND 1997
<PAGE>
C O N T E N T S
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
BALANCE SHEETS 2
STATEMENTS OF EARNINGS 3
STATEMENT OF STOCKHOLDERS' EQUITY 4
STATEMENTS OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 8
<PAGE>
Report of Independent Certified Public Accountants
Board of Directors
Concept Capital Corporation
We have audited the accompanying balance sheets of Concept Capital
Corporation (a corporation in the development stage) as of December 31,
1998 and 1997, and the related statements of earnings, stockholders'
equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we 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. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Concept
Capital Corporation as of December 31, 1998 and 1997, and the results of
its operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/s/ Foote, Passey, Griffin and Company
Salt Lake City, Utah
January 25, 1999
-1-
<PAGE>
FINANCIAL STATEMENTS
<PAGE>
Concept Capital Corporation
(A Corporation in the Development Stage)
BALANCE SHEETS
December 31,
ASSETS
1998 1997
___________ ___________
CURRENT ASSETS
Cash and cash equivalents $ 29,853 $ 36,932
Available-for-sale securities,
at fair value 144,300 125,528
___________ ___________
Total current assets $ 174,153 $ 162,460
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 600 $ 600
Income taxes payable 1,623 100
Deferred income taxes 4,359 5,098
___________ ___________
Total current liabilities 6,582 5,798
___________ ___________
STOCKHOLDERS' EQUITY
Common stock - authorized,
50,000,000 shares of $.001
par value; issued and
outstanding, 1,750,000 shares 1,750 1,750
Capital in excess of par value 142,005 142,005
Earnings (deficit) accumulated
during the development stage 6,374 (8,856)
Unrealized gain on available-for-
sale securities, net of tax effect 17,442 21,763
___________ ___________
167,571 156,662
___________ ___________
$ 174,153 $ 162,460
___________ ___________
The accompanying notes are an integral part of these statements.
-2-
<PAGE>
Concept Capital Corporation
(A Corporation in the Development Stage)
STATEMENTS OF EARNINGS
Cumulative
Year ended December 31, from
1998 1997 inception
____________ ____________ __________
Revenue
Interest, dividends and
capital gain distributions $ 21,073 $ 10,457 $ 121,000
Gain on sale of available-
for-sale securities - 1,301 9,196
____________ ____________ __________
21,073 11,758 130,196
____________ ____________ __________
Expenses
Administrative 4,220 4,292 55,250
Loss on sale or abandonment
of available-for-sale
securities - - 61,763
Amortization - - 500
____________ ____________ __________
4,220 4,292 117,513
____________ ____________ __________
Income before provision
for income taxes 16,853 7,466 12,683
Provision for income
taxes 1,623 100 6,309
____________ ____________ __________
NET EARNINGS $ 15,230 $ 7,366 $ 6,374
____________ ____________ __________
BASIC AND DILUTED EARNINGS
PER SHARE $ .009 $ .005 $ .004
____________ ____________ __________
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
Concept Capital Corporation
(A Corporation in the Development Stage)
STATEMENT OF STOCKHOLDERS' EQUITY
Unrealized
Earnings gain on
(deficit) available-
Capital accumulated for-sale
in excess during the securities,
Common of par development net of tax
stock value stage effect Total
________ __________ ____________ ___________ _________
May 21, 1985, issued
300,000 shares of
common stock at
$.04 per share $ 300 $ 11,700 $ - $ - $ 12,000
Net earnings - - 341 - 341
________ __________ ____________ ___________ _________
Balance at
December 31, 1985 300 11,700 341 - 12,341
July 22, 1986, issued
1,450,000 shares
of common stock at
$.10 per share 1,450 143,550 - - 145,000
Stock issuance costs - (13,245) - - (13,245)
Net earnings - - 3,243 - 3,243
________ __________ ____________ ___________ _________
Balance at
December 31, 1986 1,750 142,005 3,584 - 147,339
Net loss - - (3,555) - (3,555)
Balance at
December 31, 1987 1,750 142,005 29 - 143,784
Net earnings - - 5,965 - 5,965
________ __________ ____________ ___________ _________
Balance at
December 31, 1988 1,750 142,005 5,994 - 149,749
Net earnings - - 8,787 - 8,787
________ _________ ____________ ___________ _________
Balance at
December 31, 1989 1,750 142,005 14,781 - 158,536
Net loss - - (23,653) - (23,653)
________ _________ ____________ ___________ _________
Balance at
December 31, 1990 1,750 142,005 (8,872) - 134,883
Net earnings - - 4,298 - 4,298
________ _________ ____________ ___________ _________
Balance at
December 31, 1991 1,750 142,005 (4,574) - 139,181
Net loss - - (11,362) - (11,362)
________ _________ ____________ ___________ _________
Balance at
December 31, 1992 1,750 142,005 (15,936) - 127,819
(Continued)
-4-
<PAGE>
Concept Capital Corporation
(A Corporation in the Development Stage)
STATEMENT OF STOCKHOLDERS' EQUITY - CONTINUED
Unrealized
Earnings gain on
(deficit) available-
Capital accumulated for-sale
in excess during the securities,
Common of par development net of tax
stock value stage effect Total
________ _________ ____________ ___________ _________
Net loss - - (1,172) - (1,172)
________ _________ ____________ ___________ _________
Balance at
December 31, 1993 1,750 142,005 (17,108) - 126,647
Net loss - - (13,921) - (13,921)
________ _________ ____________ ___________ _________
Balance at
December 31, 1994 1,750 142,005 (31,029) - 112,726
Net earnings - - 7,218 - 7,218
________ _________ ____________ ___________ _________
Balance at
December 31, 1995 1,750 142,005 (23,811) - 119,944
Appreciation on
available-for-
sale securities,
net of income
tax effect - - - 7,401 7,401
Net earnings - - 7,589 - 7,589
________ _________ ____________ ___________ _________
Balance at
December 31, 1996 1,750 142,005 (16,222) 7,401 134,934
Appreciation on
available-for-
sale securities,
net of income
tax effect - - - 14,362 14,362
Net earnings - - 7,366 - 7,366
________ _________ ____________ ___________ _________
Balance at
December 31, 1997 1,750 142,005 (8,856) 21,763 156,662
Decline in available-
for-sale
securities,
net of income
tax effect - - - (4,321) (4,321)
Net earnings - - 15,230 - 15,230
________ _________ ____________ ___________ _________
Balance at
December 31, 1998 $ 1,750 $ 142,005 $ 6,374 $ 17,442 $ 167,571
________ _________ ____________ ___________ _________
The accompanying notes are an integral part of this statement.
-5-
<PAGE>
Concept Capital Corporation
(A Corporation in the Development Stage)
STATEMENTS OF CASH FLOWS
Cumulative
Year ended December 31, from
1998 1997 inception
__________ ____________ __________
Increase (Decrease) in Cash and
Cash Equivalents
Cash flows from operating activities
Net earnings $ 15,230 $ 7,366 $ 6,374
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Amortization - - 500
Net realized (gain) loss
on disposition of
securities, net - (1,301) 52,567
Change in assets and liabilities
Receivables - 812 -
Organization costs - - (500)
Accounts payable - (100) 600
Income taxes payable 1,523 (337) 1,623
__________ ___________ __________
Net cash provided by
operating activities 16,753 6,440 61,164
__________ ___________ __________
Cash flows from investing activities
Proceeds from sale of securities - 20,882 126,395
Purchase of securities (23,832) (19,581) (301,461)
__________ ___________ __________
Net cash provided by
(used in) investing
activities (23,832) 1,301 (175,066)
__________ ___________ __________
Cash flows from financing activities
Proceeds from the issuance of
common stock - - 157,000
Costs incurred for the
issuance of common stock - - (13,245)
__________ ___________ __________
Net cash provided by
financing activities - - 143,755
__________ ___________ __________
(Continued)
-6-
<PAGE>
Concept Capital Corporation
(A Corporation in the Development Stage)
STATEMENTS OF CASH FLOWS - CONTINUED
Cumulative
Year ended December 31, from
1998 1997 inception
__________ ___________ ___________
Net increase (decrease) in cash
and cash equivalents $ (7,079) $ 7,741 $29,853
Cash and cash equivalents
at beginning of period 36,932 29,191 -
__________ ___________ ___________
Cash and cash equivalents
at end of period $ 29,853 $ 36,932 $29,853
__________ ___________ ___________
Cash paid during the year for:
Interest $ - $ -
Income taxes $ 100 $ 437
Non-cash transaction:
During 1997, the Company recorded unrealized gains on available-for-sale
securities of $18,278 for which deferred taxes of $3,916 were recognized
as a reduction in the unrealized gains.
During 1998, the Company recorded unrealized losses on available-for-sale
securities of $5,060 for which deferred taxes of $739 were recognized as
a reduction in the unrealized gains.
The accompanying notes are an integral part of these statements.
-7-
<PAGE>
Concept Capital Corporation
(A Corporation in the Development Stage)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE A - SUMMARY OF ACCOUNTING POLICIES
A summary of accounting policies consistently applied in the preparation
of the accompanying financial statements follows.
1. Business activity
Concept Capital Corporation (the Company) was incorporated in the State
of Utah on May 21, 1985. The Company's primary operating strategy is to
investigate, evaluate and acquire an interest in a business opportunity,
and to provide management consulting and advisory services.
2. Stock issuance costs
Legal, accounting and other costs of stock offerings are capitalized and
charged to capital in excess of par value when the stock is issued.
3. Investments
Investments in available-for-sale securities are carried at the fair
value. Unrealized gains and losses, net of the deferred tax effects,
are included as a separate element of stockholders' equity. Realized
gains or losses are based on the difference between sales price and
actual cost of the securities and are included in earnings.
4. Income taxes
The Company provides for income taxes based on income reported for
financial reporting purposes. Certain charges to earnings differ as to
timing from those deducted for tax purposes. The tax effects of these
differences, if any, are recorded as deferred income taxes.
5. Earnings per share
Earnings per share is based on the weighted average number of shares of
common stock outstanding in each period. There are no stock options or
other arrangements that would cause a dilutive effect on earnings per
share.
(Continued)
-8-
<PAGE>
NOTE A - SUMMARY OF ACCOUNTING POLICIES - CONTINUED
6. Cash equivalents
Cash and cash equivalents include all cash balances and highly liquid
investments with an original maturity of three months or less.
7. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Actual results could differ from these estimates.
NOTE B - AVAILABLE-FOR-SALE SECURITIES
The Company has acquired mutual fund shares for investment purposes.
These shares had unrealized gains of $21,801 at December 31, 1998, and
$26,861 at December 31, 1997.
NOTE C - INCOME TAXES
The Company's provision for income taxes consists of the following:
1998 1997
______ _______
Current
Federal $ 780 $ -
State 843 100
_______ _______
$1,623 $ 100
Deferred taxes payable were $4,359 at December 31, 1998 and $5,098 at
December 31, 1997. They consist of deferred taxes resulting from
unrealized gains on available-for-sale securities.
The effective tax rate differs from the U.S. Federal statutory rate due
to progressive statutory rates and the use of the 70% corporate exclu
sion on certain dividends received.
NOTE D - CONCENTRATIONS OF CREDIT RISK
The Company invests in cash equivalents and available-for-sale securities
with a national broker-dealer firm. The balances are insured by the
Securities Investor Protection Corporation up to a maximum of $500,000
including up to $100,000 on cash balances.
-9-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from financial statements for the three month period ended
March 31, 1999 and for the years ended December 31, 1998 and 1997,
and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998 DEC-31-1997
<PERIOD-END> MAR-31-1999 DEC-31-1998 DEC-31-1997
<CASH> 254,490 29,853 36,932
<SECURITIES> 0 144,300 125,528
<RECEIVABLES> 0 0 0
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 254,490 174,153 162,460
<PP&E> 0 0 0
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 254,490 174,153 162,460
<CURRENT-LIABILITIES> 431 6,582 5,798
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 4,375 1,750 1,750
<OTHER-SE> 249,684 165,821 154,912
<TOTAL-LIABILITY-AND-EQUITY> 254,490 174,153 162,460
<SALES> 0 0 0
<TOTAL-REVENUES> 12,955 21,073 11,758
<CGS> 0 0 0
<TOTAL-COSTS> 0 0 0
<OTHER-EXPENSES> 14,025 4,220 4,292
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> (1,070) 16,853 7,466
<INCOME-TAX> 0 1,623 100
<INCOME-CONTINUING> (1,070) 15,230 7,366
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (1,070) 15,230 7,366
<EPS-BASIC> 0 .009 .005
<EPS-DILUTED> 0 .009 .005
</TABLE>
