U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
X Annual report under section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended October 31, 2000.
Commission File No: 33-26616
GUMP & COMPANY, INC.
(Name of small business in its charter)
Delaware 75-2256798
(State or other jurisdiction (IRS Employer
of Incorporation) Identification No.)
192 Searidge Court
Shell Beach, CA 93449
(Address of Principal (Zip Code)
Executive Offices)
Issuer's telephone number: (805)773-5350
Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act:
Common Stock, par value $.01
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 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 [X]
No [ ]
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will 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-KSB [ ]
State issuer's revenue for its most recent fiscal year: $ 0.
No trading market exists for the common stock of Registrant. As of January 3,
2001, nonaffiliates had 80,280 shares of which there is either a nominal or zero
market value.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 330,000 as of January 3, 2001.
DOCUMENTS INCORPORATED BY REFERENCE. None
Transitional Small Business Disclosure Format:
Yes [ ] No [X]
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
The Company was incorporated on September 28, 1988 under the laws of the
State of Delaware. The Company had been delinquent in its filings to the
Securities and Exchange Commission since it failed to file Form 10-KSB for the
fiscal year ended October 31, 1993. As a result of a change in control on June
7, 2000, management of the Company filed Form 10-KSB to cover the fiscal periods
from October 31, 1993 through October 31, 1999. The Company also filed reports
on Form 10-QSB for the six-month period ended April 30, 2000 and the three-month
period ended July 31, 2000. See Part III, Item 9. Directors, Executive Officers,
Promoters and Control Persons; Compliance With Section 16(a) of the Exchange
Act.
To date the Company's primary activities have been organizational ones,
directed at developing its business plan and raising its initial capital. The
Company has no commercial operations. The Company has no employees and owns no
real estate. The Company has no operating income and as of October 31, 2000, no
assets.
The Company's business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture, or partnership. The Company has very limited capital, and it is
unlikely that the Company will be able to take advantage of more than one such
business opportunity. The Company intends to seek opportunities demonstrating
the potential of long-term growth as opposed to short-term earnings.
At the present time the Company has not identified any business
opportunity that it plans to pursue, nor has the Company reached any agreement
or definitive understanding with any person concerning an acquisition. No
assurance can be given that the Company will be successful in finding or
acquiring a desirable business opportunity, or that any acquisition that occurs
will be on terms that are favorable to the Company or its stockholders.
The Company's search will be directed toward small and medium-sized
enterprises, which have a desire to become public corporations and which are
able to satisfy, or anticipate in the reasonably near future being able to
satisfy, the minimum asset requirements in order to qualify shares for trading
on NASDAQ (See "Investigation and Selection of Business Opportunities"). The
Company anticipates that the business opportunities presented to it will (i) be
recently organized with no operating history, or a history of losses
attributable to under-capitalization or other factors; (ii) be experiencing
financial or operating difficulties; (iii) be in need of funds to develop a new
product or service or to expand into a new market; (iv) be relying upon an
untested product or marketing concept; or (v) have a combination of the
characteristics mentioned in (i) through (iv). The Company intends to
concentrate its acquisition efforts on properties or businesses that it believes
to be undervalued. Given the above factors, investors should expect that any
acquisition candidate may have a history of losses or low profitability.
<PAGE>
The Company does not propose to restrict its search for investment
opportunities to any particular geographical area or industry, and may,
therefore, engage in essentially any business, to the extent of its limited
resources. This includes industries such as service, finance, natural
resources, manufacturing, high technology, product development, medical,
communications and others. The Company's discretion in the selection of
business opportunities is unrestricted, subject to the availability of such
opportunities, economic conditions, and other factors.
Depending upon the nature of the transaction, the current officers and
directors of the Company may resign their management positions with the Company
in connection with the Company's acquisition of a business opportunity. In the
event of such a resignation, the Company's current management would not have any
control over the conduct of the Company's business following the Company's
combination with a business opportunity.
INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES
The analysis of business opportunities will be undertaken by or under the
supervision of the Company's President, Mark A. DiSalvo. The Company
anticipates that it will consider, among other things, the following factors in
the analysis of business opportunities:
(1) Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
(2) The Company's perception of how any particular business
opportunity will be received by the investment community and by the Company's
stockholders;
(3) Whether, following the business combination, the financial
condition of the business opportunity would be, or would have a significant
prospect in the foreseeable future of becoming sufficient to enable the
securities of the Company to qualify for listing on an exchange or on a national
automated securities quotation system, such as NASDAQ;
(4) Capital requirements and anticipated availability of required
funds, to be provided by the Company or from operations, through the sale of
additional securities, through joint ventures or similar arrangements, or from
other sources;
(5) The extent to which the business opportunity can be advanced;
(6) Competitive position as compared to other companies of similar
size and experience within the industry segment as well as within the industry
as a whole;
(7) Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;
(8) The cost of participation by the Company as compared to the
perceived tangible and intangible values and potential; and
(9) The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.
No one of the factors described above will be controlling in the selection
of a business opportunity, and management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potential investors must recognize
that, because of the Company's limited capital available for investigation and
management's limited experience in business analysis, the Company may not
discover or adequately evaluate adverse facts about the opportunity to be
acquired.
<PAGE>
The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.
Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.
Acquisition candidates which have a need for an immediate cash infusion are not
likely to find a potential business combination with the Company to be an
attractive alternative.
FORM OF ACQUISITION
It is impossible to predict the manner in which the Company may participate
in a business opportunity. Specific business opportunities will be reviewed as
well as the respective needs and desires of the Company and the promoters of the
opportunity and, upon the basis of that review and the relative negotiating
strength of the Company and such promoters, the legal structure or method deemed
by management to be suitable will be selected. Such structure may include, but
is not limited to, 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 although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a transaction, the Company's existing directors may resign and new
directors may be appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in a business
opportunity through the issuance of Common Stock or other securities of the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial
additional dilution in the equity of those who were stockholders of the Company
prior to such reorganization. Any such issuance of additional shares might also
be done simultaneously with a sale or transfer of shares representing a
controlling interest in the Company by the current officers, directors and
principal shareholders. (See "Description of Business - General").
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY.
The Company does not currently maintain an office or any other facilities.
It does currently maintain a mailing address at 192 Searidge Court, Shell Beach,
California 93449, which is the office address of its president. The Company
pays no rent for the use of this mailing address. The Company does not believe
that it will need to maintain an office at any time in the foreseeable future in
order to carry out its plan of operations described herein. The Company's
telephone number is (805) 773-5350.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner of record or
beneficial owner of more than 5% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the security holders of
the Company during the fourth quarter of the fiscal year which ended
October 31, 2000.
Part II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
There presently is no trading market for the Company's Common
Stock. The Company's securities are currently held of record by a total of
approximately 360 persons.
No dividends have been declared or paid on the Company's
securities, and it is not anticipated that any dividends will be declared or
paid in the foreseeable future.
Effective on the close of business October 31, 1993, the Company effected a
ten (10) for one (1) reverse split of its issued and outstanding shares of
common stock resulting in the 3,300,000 shares outstanding immediately before
this reverse split becoming 330,000 shares. Fractional shares were rounded up to
whole shares. For this purpose, the Company's then principal shareholder,
president and sole director, John Ericsson, donated the necessary shares to
round up fractional shares to whole shares.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Liquidity and Capital Resources
The Company's plan of operations for the next twelve months is to continue
to carry out its plan of business discussed above. This includes seeking to
complete a merger or acquisition transaction with a small or medium-sized
enterprise which desires to become a public corporation. In selecting a
potential merger or acquisition candidate, the Company will consider many
factors, including, but not limited to, potential for growth and profitability,
quality and experience of management, capital requirements, and the ability of
the Company to qualify its shares for trading on NASDAQ or on an exchange.
<PAGE>
The types of business enterprises which it is believed might find a
business combination with the Company to be attractive include acquisition
candidates desiring to create a public market for their shares in order to
enhance liquidity for current shareholders, acquisition candidates which have
long-term plans for raising capital through the public sale of securities and
believe that the possible prior existence of a public market for their
securities would be beneficial, foreign companies desiring to obtain access to
U.S. customers and U.S. capital markets, and acquisition candidates which plan
to acquire additional assets through issuance of securities rather than for
cash, and believe that the possibility of development of a public market for
their securities will be of assistance in that process. Acquisition candidates
which have a need for an immediate cash infusion are not likely to find a
potential business combination with the Company to be an attractive alternative.
Although it has had preliminary discussions with several potential merger
or acquisition candidates, the Company is unable to predict when it may
participate in a business opportunity. It has not established any deadline for
completion of a transaction, and anticipates that the process could continue
throughout the next twelve months.
The Company's balance sheet for the fiscal year ended October 31, 2000,
reflects current assets of $0 and current liabilities in the amount of $0.
Accordingly, the Company will be required to raise additional funds, or its
shareholders will be required to advance funds in order to pay its current
liabilities and to satisfy the Company's cash requirements for the next twelve
months.
Results of Operations
In the fiscal year ended October 31, 1993 the Company had revenues of
$4,384 and expenses of $2,870 and net income of $1,514. Since 1993, the Company
has no revenue, expenses, income or loss. The Company does not anticipate a
significant change in the results of operations until such time as a business
combination is consummated, if ever.
ITEM 7. FINANCIAL STATEMENTS.
See following pages.
GUMP & COMPANY, INC.
(formerly SEA PRIDE CAPITAL CORPORATION,
formerly BRIAN CAPITAL, INC.)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998
WITH INDEPENDENT AUDITOR'S REPORT
<PAGE>
GUMP & COMPANY, INC.
INDEX TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998
---------------------------------------------------
Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . . . . . . 1
Financial Statements:
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statements of Operation. . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Stockholders' Equity . . . . . . . . . . . . . . . . . . . 4
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . 6
<PAGE>
INDEPENDENT AUDITOR'S REPORT
----------------------------
Board of Directors
GUMP & COMPANY, INC.
I have audited the accompanying balance sheet of GUMP & COMPANY, INC., as of
October 31, 2000, and the related statement of operations, stockholders' equity,
and cash flows for the year then ended. 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 GUMP & COMPANY, INC., as of October 31, 1998 and 1999, were
audited by other auditors whose report, dated March 13, 2000, expressed an
unqualified opinion on those statements.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles 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 GUMP & COMPANY, INC., as of October
31, 2000, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
As discussed in Note A of the financial statements, the Company has been
inactive since its formation on September 28, 1988. The Company presently has
no identifiable sources of additional capital to develop independent business
operations.
Gerald R. Perlstein
Los Angeles, California
January 12, 2001
<PAGE>
<TABLE>
<CAPTION>
GUMP & COMPANY, INC.
BALANCE SHEETS
ASSETS
------
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998
----------- ------------- -------------
<S> <C> <C> <C>
Current Assets $ 0 $ 0 $ 0
----------- ------------- -------------
Total Assets 0 0 0
=========== ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities 0 0 0
----------- ------------- -------------
Total Liabilities 0 0 0
STOCKHOLDERS' EQUITY
--------------------
Preferred Stock - $.01 par value,
Authorized - 2,000,000 shares
Issued - None
Common Stock - $.01 par value,
Authorized - 20,000,000 shares
Issued - 330,000 shares 3,300 3,300 3,300
Additional paid-in-capital 33,637 33,637 33,637
Accumulated deficit (36,937) (36,937) (36,937)
----------- ------------- -------------
Total Stockholders' Equity 0 0 0
----------- ------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 0 $ 0 $ 0
=========== ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
GUMP & COMPANY, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998
---------------------------------------------------
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
Expenses $ 0 $ 0 $ 0
-------- -------- --------
NET INCOME (LOSS) $ 0 $ 0 $ 0
======== ======== ========
Net Income (loss) per share 0 0 0
-------- -------- --------
Weighted average number of outstanding shares 330,000 330,000 330,000
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
GUMP & COMPANY, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998
---------------------------------------------------
ADDITIONAL
COMMON STOCK PAID-IN- ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
---------- ------- --------- -------------
<S> <C> <C> <C> <C>
Balance at October 31, 1997 330,000 $ 3,300 $ 33,637 $ (36,937)
Net income (loss) 0
---------- ------- --------- -------------
Balance at October 31, 1998 330,000 3,300 33,637 $ (36,937)
Net income (loss) 0
---------- ------- --------- -------------
Balance at October 31, 1999 330,000 $ 3,300 $ 33,637 $ (36,937)
Net income (loss) 0
---------- ------- --------- -------------
Balance at October 31, 2000 330,000 $ 3,300 $ 33,637 $ (36,937)
========== ======= ========= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
GUMP & COMPANY, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED OCTOBER 31, 2000, 1999 AND 1998
---------------------------------------------------
2000 1999 1998
----- ----- -----
<S> <C> <C> <C>
Cash Flows from operating activities:
Net income (loss) $ 0 $ 0 $ 0
Adjustments to reconcile net income (loss) to net
cash provided (used in) operating activities 0 0 0
----- ----- -----
Cash provided by (used in) operating activities 0 0 0
Cash Flows from Investing Activities 0 0 0
Cash Flows from Financing Activities 0 0 0
----- ----- -----
Net Increase (Decrease) in cash 0 0 0
Cash at beginning of year 0 0 0
----- ----- -----
Cash at end of year $ 0 $ 0 $ 0
===== ===== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
GUMP & COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2000, 1999 AND 1998
-------------------------------
NOTE A -- ORGANIZATION AND BUSINESS
----------------------------------------
The Company was incorporated on September 28, 1988 under the laws of the State
of Delaware under the name of Brian Capital, Inc. On September 15, 1993, the
Company changed its name to Sea Pride Industries, Inc. On August 18, 1997, the
Company changed its name to GUMP & COMPANY, INC. The Company is registered with
the Securities and Exchange Commission.
The Company was organized as an inactive, publicly held corporation to pursue a
business combination with a privately held entity believed to have growth and
profit potential, irrespective of the industry in which it is engaged. It is
intended that the Company not engage in active business operations prior to its
combination with another enterprise.
On September 10, 1993, stockholders of the Company exchanged 2,498,601 shares or
approximately 75 percent of the issued and outstanding capital stock of the
Company for 126,192 shares of common stock of Sea Pride Industries, Inc. In
addition, the Company executed a one (1) for ten (10) reverse stock split and
increased the par value of the authorized shares of common and preferred stock
from $.001 per share to $.01 per share. Consequently, the number of common
shares issued and outstanding decreased from 3,300,000 shares to 330,000 shares.
On June 7, 2000 the then principal stockholder, sole officer and director of the
Company sold all of his shares, totaling 249,720 shares, of the common stock of
the Company. The new majority shareholder became the sole officer and a
director of the Company.
The Company has no business operations or identifiable sources of additional
capital to develop independent business operations. The Company was audited by
another firm of auditors for the period November 1, 1992 through October 31,
1999. Their unqualified opinion was dated March 13, 2000.
Part III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The directors and executive officers currently serving the Company are as
follows:
Name Age Positions Held and Tenure
Mark DiSalvo 49 President, Treasurer, Secretary and Director
<PAGE>
The directors named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year
terms at the annual stockholders' meeting. Officers will hold their positions
at the pleasure of the board of directors, absent any employment agreement, of
which none currently exists or is contemplated. There is no arrangement or
understanding between any of the directors or officers of the Company and any
other person pursuant to which any director or officer was or is to be selected
as a director or officer.
The directors and officers will devote their time to the Company's affairs on an
"as needed" basis, which, depending on the circumstances, could amount to as
little as two hours per month, or more than forty hours per month, but more than
likely will fall within the range of five to ten hours per month.
Biographical Information
Mark DiSalvo is currently self-employed as a business consultant, providing
consulting services relating to mergers and acquisitions. Mr. DiSalvo is the
President of the Company. Mr. DiSalvo has also been engaged in the securities
business in various capacities from 1984 to the present. Mr. DiSalvo served as
a director of Stan Lee Media, Inc. (formerly Boulder Capital Opportunities,
Inc.), a publicly traded development stage company from August 1997 to July
1999. Mr. DiSalvo served as President, Chairman of the Board of Directors,
Chief Executive Officer, Treasurer and Secretary of Prodeo Technologies Inc., a
publicly traded development stage company (formerly SITEK, Incorporated,
formerly Dentmart Group, Ltd.) from March 1997 to July 1998.
Previous Management and Control Persons
On June 7, 2000, the then principal shareholder, sole officer and director
of the Company, John D. Ericsson, sold all of his shares of the capital stock of
the Company. 164,720 shares were sold to California Brokerage Services, Inc. (of
which Mr. DiSalvo, an officer and director of the Company, may be deemed to be
the beneficial owner) and 85,000 shares were sold to Robert M. Kern. In
connection with the consummation of that sale, on June 7, 2000, John D. Ericsson
resigned as an officer and director of the Company and elected Mr. DiSalvo as
the sole officer and director of the Company. See Item 12, Certain Relationships
and Related Transactions.
On September 10, 1993, the then principal shareholders of the Company,
David Goodnight, C. Jack Bean, Matt Heinzelmann, K. David Beardsley and Angel
Generes agreed to exchange all of their respective shares of capital stock of
the Company for 126,192 shares of common stock of Sea Pride Industries, Inc., a
privately held Delaware corporation ("Sea Pride"), owned by Sea Pride's
principal shareholder and president, John D. Ericsson. In connection with the
consummation of that exchange agreement on September 10, 1993, David Goodnight,
Matt Heinzelmann and K. David Beardsley resigned as officers and directors of
the Company and elected John D. Ericsson as President, Treasurer and sole
director of the Company. He served in these capacities until June 7, 2000. See
Item 12, Certain Relationships and Related Transactions.
<PAGE>
Compliance With Section 16(a) of the Exchange Act.
To the best knowledge and belief of the Company, all current officers,
directors and principal shareholders have made and will make appropriate
ownership reports.
ITEM 10. EXECUTIVE COMPENSATION.
No officer or director received any remuneration from the Company during
the fiscal year. Until the Company acquires additional capital, it is not
intended that any officer or director will receive compensation from the Company
other than reimbursement for out-of-pocket expenses incurred on behalf of the
Company. See Item 12 "Certain Relationships and Related Transactions." The
Company has no stock option, retirement, pension, or profit-sharing programs for
the benefit of directors, officers or other employees, but the Board of
Directors may recommend adoption of one or more such programs in the future.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the end of the Company's most recent
fiscal year, the number of shares of Common Stock owned of record and
beneficially by executive officers, directors and persons who hold 5.0% or more
of the outstanding Common Stock of the Company. Also included are the shares
held by all executive officers and directors as a group.
Name and Number of Shares Percent
Address Owned Beneficially of Class
Owned
Mark A. DiSalvo 164,720 49.92%
192 Searidge Court
Shell Beach, CA 93449
Robert M. Kern 85,000 25.76%
192 Searidge Court
Shell Beach, CA 93449
All directors and
executive officers
(1 person) 164,720 49.92%
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Changes of Control
On June 7, 2000, the then principal shareholder, sole officer and director
of the Company, John D. Ericsson, sold all of his shares of the capital stock
of the Company. 164,720 shares were sold to California Brokerage Services, Inc.
(of which Mr. Mark DiSalvo, an officer and director of the Company, may be
deemed to be the beneficial owner) and 85,000 shares were sold to Robert M.
Kern, which made Mr. Kern a principal shareholder of the Company. In
connection with the consummation of that sale, on June 7, 2000, John D. Ericsson
resigned as an officer and director of the Company and elected Mr. DiSalvo as
the sole officer and director of the Company. The price paid for
purchase of shares by California Brokerage Services, Inc. and Robert M. Kern
was the result of arms length negotiations. Following completion of the
transactions described herein, California Brokerage Services, Inc., and Robert
M. Kern owned a total of 249,720 shares, or approximately 75.67% of the
Company's issued and outstanding stock.
On September 10, 1993, the then principal shareholders of the Company,
David Goodnight, C. Jack Bean, Matt Heinzelmann, K. David Beardsley and Angel
Generes agreed to exchange all of their respective shares of capital stock of
the Company for 126,192 shares of common stock of Sea Pride Industries, Inc., a
privately held Delaware corporation ("Sea Pride"), owned by Sea Pride's
principal shareholder and president, John D. Ericsson. In connection with the
consummation of that exchange agreement on September 10, 1993, David Goodnight,
Matt Heinzelmann and K. David Beardsley resigned as officers and directors of
the Company and elected John D. Ericsson as President, Treasurer and sole
director of the Company. He served in these capacities until June 7, 2000. The
price paid for purchase of shares by John D. Ericsson was the result of arms
length negotiations. Following completion of the transactions described herein,
John D. Ericsson owned a total of 249,851 (post-split) shares, or approximately
75.69% of the Company's issued and outstanding stock.
Indemnification of Officers and Directors
The Company's Certificate of Incorporation provides that officers and
directors shall not be personally liable to the Company or its stockholders for
damages for breach of fiduciary duty, to the extent provided by Delaware.
Under Delaware law a corporation may indemnify, and the Company's Bylaws
requires indemnification of, an officer or director if he acted in good faith
and in a manner in which he reasonably believed to be in or not opposed to the
best interests of the corporation; provided, however, under Delaware law no
indemnification shall be made in actions by or in the right of the corporation
if such officer or director has been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation, unless the court
orders otherwise. Under Delaware law, an officer or director that is successful
in any action shall be indemnified. Also, any indemnification, unless ordered by
the court, shall only be made if determined appropriate by the stockholders, or
disinterested directors or, under certain circumstances, independent legal
counsel. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable.
<PAGE>
In order to raise working capital, on January 6, 1992, the Company approved
the sale of 25,000 (post-split) shares of common stock for $.10 per share (or
$2,500) to each of K. David Beardsley, David B. Goodnight, Matt Heinzelmann
and C. Jack Bean. The Company consummated the sale of the total of 100,000
(post-split) shares for $10,000 at various times prior to October 31, 1992.
Messrs. Beardsley, Goodnight and Heinzelmann were officers and directors of the
company at the time. Mr. Bean was a principal shareholder. They each agreed
to purchase their respective shares for investment and not further distribution.
The Company relied on the private offering exemption contained in section 4(2)
of the Securities Act of 1933, as amended as the exemption from the registration
requirements of said Act.
Conflicts of Interest
None of the officers of the Company will devote more than a portion of his
or her time to the affairs of the Company. There will be occasions when the
time requirements of the Company's business conflict with the demands of the
officers' other business and investment activities. Such conflicts may require
that the Company attempt to employ additional personnel. There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the Company.
Although management has no current plans to cause the Company to do so, it
is possible that the Company may enter into an agreement with an acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's current principal stockholders to the acquisition candidate or
principals thereof, or to other individuals or business entities, or requiring
some other form of payment to the Company's current stockholders, or requiring
the future employment of specified officers and payment of salaries to them. It
is more likely than not that any sale of securities by the Company's current
stockholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such stockholders. Any payment to current
stockholders in the context of an acquisition involving the Company would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.
ITEM 13. EXHIBITS AND REPORTS ON FORM 10-KSB.
a. The Exhibits listed below are filed as part of this Annual Report.
Exhibit No. Document
3.1 Articles of Incorporation (incorporated by reference to Exhibit No.
3(a) to Form S-1 filed with the Securities and Exchange Commission on behalf of
the Company on January 24, 1989)
3.2 Bylaws (incorporated by reference to Exhibit No. 3(b) to Form S-1
filed with the Securities and Exchange Commission on behalf of the Company on
January 24, 1989)
<PAGE>
3.3 Certificate of Amendment of Certificate of Incorporation filed
August 18, 1997 (Incorporated by reference to Form 10-KSB for the fiscal year
ended October 31, 2000 filed with the Securities and Exchange Commission).
3.4 Certificate of Amendment of Certificate of Incorporation filed
September 27, 1993 (Incorporated by reference to Form 10-KSB for the fiscal year
ended October 31, 2000 filed with the Securities and Exchange Commission).
4.1 Specimen Stock Certificate (Incorporated by reference to Form 10-KSB
for the fiscal year ended October 31, 2000 filed with the Securities and
Exchange Commission)
10.1 Stock Purchase Agreement dated June 7, 2000 (Incorporated by
reference to Form 10-KSB for the fiscal year ended October 31, 2000 filed with
the Securities and Exchange Commission).
27 Financial Data Schedule
The Company filed no reports on Form 8-K during the last quarter of its fiscal
year ending October 31, 2000.
Signatures
In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
GUMP & COMPANY, INC.
By: /s/ Mark DiSalvo
-----------------------------
Mark DiSalvo
President, Chief Financial Officer and Director
Date: January 12, 2001
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