U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
_____________________________
FORM 10-SB /A 1
_____________________________
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
____________________________
GUIDELINE CAPITAL CORPORATION
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(Name of Small Business Issuer in its charter)
Delaware 33-0379106
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6 Venture
Suite 207
Irvine, California 92618
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(Address of principal executive offices) (Zip code)
Issuer's telephone number: (949) 435-9262
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Securities to be registered pursuant to Section 12(b) of the Act:
none
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
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(Title of Class)
Page One of Thirty Nine Pages
Exhibit Index is Located at Page Thirty Seven
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TABLE OF CONTENTS
Page
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PART I
Item 1. Description of Business . . . . . . . . . . . . . 3
Item 2. Plan of Operation. . . . . . . . . . . . . . . 9
Item 3. Description of Property. . . . . . . . . . . 15
Item 4. Security Ownership of Certain
Beneficial Owners and Management . . . . . . 16
Item 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . 18
Item 6. Executive Compensation . . . . . . . . . . . 21
Item 7. Certain Relationships and
Related Transactions. . . . . . . . . . . 22
Item 8. Description of Securities. . . . . . . . . . 22
PART II
Item 1. Market for Common Equities and Related Stockholder
Matters . . . . . . . . . . . . . .. . . . 24
Item 2. Legal Proceedings. . . . . . . . . . . . . . 26
Item 3. Changes in and Disagreements with Accountants. 26
Item 4. Recent Sales of Unregistered Securities. . . . 26
Item 5. Indemnification of Directors and Officers. . . 27
PART F/S
Financial Statements . . . . . . . . . . . . . 28
PART III
Item 1. Index to Exhibits. . . . . . . . . . . . . . . 37
Item 2. Description of Exhibits. . . . . . . . . . . . 39
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PART I
Item 1. Description of Business
Guideline Capital Corporation (the "Company"), was
incorporated on August 31, 1989 under the laws of the State of
Delaware, to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions.
On January 24, 1990, the Company filed a Form S-18 with
the Securities and Exchange Commission (33-33137-LA) and an
amendment thereto on November 30, 1990. After November 30, 1990,
then management of the Company chose to submit no further
responses or amendments to the Form S-18 and effectively
abandoned the submission.
Thereafter, on or about August 1991, due to divergent
business interests and theories among management and
shareholders, all of the shareholders who were issued common
stock in August 1989 returned their certificates to the Company
to be canceled in exchange for return of the entirety of the
consideration delivered for such shares, and, on or about August
1991, the Company issued to the ten (10) shareholders described
herein 500,000 shares of common stock of the Company at $.001 per
share. On or about August 1991, the new shareholders of the
Company elected new directors and officers of the Company as
described herein.
Since all transactions between the Company and the original
shareholders were effectively rescinded and the Company's
financial condition had been effectively returned to the same
condition immediately prior to any issuance of stock in August
1989, for continuity, the newly appointed officers chose to make
the effective issuance date of the securities to the new
shareholders August 1989, as if the initial transaction with the
rescinded shareholders had not taken place.
The Company has been in the developmental stage since
inception and has had no operations to date. Other than
issuing shares to its original shareholders and the filing of
its initial Form S-18, which filing as abandoned was noted
above, the Company never commenced any operational
activities. As such, the Company can be defined as a "shell"
company, whose sole purpose at this time is to locate and
consummate a merger or acquisition with a private entity. The
Board of Directors of the Company has elected to commence
implementation of the Company's principal business purpose,
described below under "Item 2 - Plan of Operation".
The Company is filing this Registration Statement on a
voluntary basis because the primary attraction of the Company as
a merger partner or acquisition vehicle will be its status as a
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public company. Any business combination or transaction will
likely result in a significant issuance of shares and substantial
dilution to present stockholders of the Company.
The proposed business activities described herein classify
the Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities or undertake any
offering of the Company's securities, either debt or equity,
until such time as the Company has successfully implemented its
business plan described herein. Relevant thereto, each
shareholder of the Company has executed and delivered a "lock-up"
letter agreement, affirming that they shall not sell their
respective shares of the Company's common stock until such time
as the Company has successfully consummated a merger or
acquisition and the Company is no longer classified as a "blank
check" company. In order to provide further assurances that no
trading will occur in the Company's securities until a merger or
acquisition has been consummated, each shareholder has agreed to
place their respective stock certificate with the Company's legal
counsel, Bryan A. Gianesin, who will not release these respective
certificates until such time as legal counsel has confirmed that
a merger or acquisition has been successfully consummated. Bryan
A. Gianesin is also a shareholder of the Company. However,
while management believes that the procedures established to
preclude any sale of the Company's securities prior to closing of
a merger or acquisition will be sufficient, there can be no
assurances that the procedures established relevant herein will
unequivocally limit any shareholder's ability to sell their
respective securities before such closing.
Forward Looking Statements
The Company cautions readers regarding certain forward
looking statements in the following discussion and elsewhere in
this registration statement or any other statement made by, or on
the behalf of the Company, whether or not in future filings with
the Securities and Exchange Commission. Forward looking
statements are statements not based on historical information and
which relate to future operations, strategies, financial results
or other developments. Forward looking statements are
necessarily based upon estimates and assumptions that are
inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the Company's control and many of which, with respect to
future business decisions, are subject to change. These
uncertainties and contingencies can affect actual results and
could cause actual results to differ materially from those
expressed in any forward looking statements made by, or on behalf
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of, the Company. The Company disclaims any obligation to update
forward looking statements.
The Company's business is subject to numerous risk factors,
including the following:
No Operating History or Revenue and Minimal Assets. The
Company has had no operating history nor any revenues or earnings
from operations. The Company has no significant assets or
financial resources. The Company will, in all likelihood,
sustain operating expenses without corresponding revenues, at
least until the consummation of a business combination. This may
result in the Company incurring a net operating loss which will
increase continuously until the Company can consummate a business
combination with a profitable business opportunity. There is no
assurance that the Company can identify such a business
opportunity and consummate such a business combination.
Speculative Nature of Company's Proposed Operations. The
success of the Company's proposed plan of operation will depend
to a great extent on the operations, financial condition and
management of the identified business opportunity. While
management intends to seek business combination(s) with entities
having established operating histories, there can be no assurance
that the Company will be successful in locating candidates
meeting such criteria. In the event the Company completes a
business combination, of which there can be no assurance, the
success of the Company's operations may be dependent upon
management of the successor firm or venture partner firm and
numerous other factors beyond the Company's control.
Scarcity of and Competition for Business Opportunities and
Combinations. The Company is and will continue to be an
insignificant participant in the business of seeking mergers
with, joint ventures with and acquisitions of small private and
public entities. A large number of established and
well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be
desirable target candidates for the Company. Nearly all such
entities have significantly greater financial resources,
technical expertise and managerial capabilities than the Company
and, consequently, the Company will be at a competitive
disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, the
Company will also compete in seeking merger or acquisition
candidates with numerous other small public companies.
No Agreement for Business Combination or Other Transaction-
No Standards for Business Combination. The Company has no
arrangement, agreement or understanding with respect to engaging
in a merger with, joint venture with or acquisition of, a private
or public entity. There can be no assurance the Company will be
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successful in identifying and evaluating suitable business
opportunities or in concluding a business combination.
Management has not identified any particular industry or specific
business within an industry for evaluation by the Company. There
is no assurance the Company will be able to negotiate a business
combination on terms favorable to the Company. The Company has
not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria
which it will require a target business opportunity to have
achieved, and without which the Company would not consider a
business combination in any form with such business opportunity.
Accordingly, the Company may enter into a business combination
with a business opportunity having no significant operating
history, losses, limited or no potential for earnings, limited
assets, negative net worth or other negative characteristics.
Continued Management Control, Limited Time Availability.
While seeking a business combination, management anticipates
devoting up to twenty hours per month to the business of the
Company. None of the Company's officers has entered into a
written employment agreement with the Company and none is
expected to do so in the foreseeable future. The Company has not
obtained key man life insurance on any of its officers or
directors. Notwithstanding the combined limited experience and
time commitment of management, loss of the services of any of
these individuals would adversely affect development of the
Company's business and its likelihood of continuing operations.
See "Item 5 - Directors, Executive Officers, Promoters and
Control Persons."
Conflicts of Interest - General. Officers and directors of
the Company may in the future participate in business ventures
which could be deemed to compete directly with the Company.
Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's officers
or directors are involved in the management of any firm with
which the Company transacts business. Management has adopted a
policy that the Company will not seek a merger with, or
acquisition of, any entity in which management serve as officers,
directors or partners, or in which they or their family members
own or hold any ownership interest.
Reporting Requirements May Delay or Preclude Acquisition.
Sections 13 and 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act"), require companies subject thereto to
provide certain information about significant acquisitions,
including certified financial statements for the company
acquired, covering one, two, or three years, depending on the
relative size of the acquisition. The time and additional costs
that may be incurred by some target entities to prepare such
statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by the
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Company. Acquisition prospects that do not have or are unable to
obtain the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the 1934 Act
are applicable.
Lack of Market Research or Marketing Organization. The
Company has neither conducted, nor have others made available to
it, results of market research indicating that market demand
exists for the transactions contemplated by the Company.
Moreover, the Company does not have, and does not plan to
establish, a marketing organization. Even in the event demand is
identified for a merger or acquisition contemplated by the
Company, there is no assurance the Company will be successful in
completing any such business combination.
Lack of Diversification. The Company's proposed operations,
even if successful, will in all likelihood result in the Company
engaging in a business combination with a business opportunity.
Consequently, the Company's activities may be limited to those
engaged in by business opportunities which the Company merges
with or acquires. The Company's inability to diversify its
activities into a number of areas may subject the Company to
economic fluctuations within a particular business or industry
and therefore increase the risks associated with the Company's
operations.
Regulation. Although the Company will be subject to
regulation under the Securities Exchange Act of 1934, management
believes the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a
number of entities, the Company could be subject to regulation
under the Investment Company Act of 1940. In such event, the
Company would be required to register as an investment company
and could be expected to incur significant registration and
compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to
the status of the Company under the Investment Company Act of
1940 and, consequently, any violation of such Act would subject
the Company to material adverse consequences.
Probable Change in Control and Management. A business
combination involving the issuance of the Company's Common Shares
will, in all likelihood, result in shareholders of a private
company obtaining a controlling interest in the Company. Any
such business combination may require management of the Company
to sell or transfer all or a portion of the Company's Common
Shares held by them, or resign as members of the Board of
Directors of the Company. The resulting change in control of the
Company could result in removal of one or more present officers
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and directors of the Company and a corresponding reduction in or
elimination of their participation in the future affairs of the
Company.
Reduction of Percentage Share Ownership Following Business
Combination. The Company's primary plan of operation is based
upon a business combination with a private concern which, in all
likelihood, would result in the Company issuing securities to
shareholders of any such private company. The issuance of
previously authorized and unissued Common Shares of the Company
would result in reduction in percentage of shares owned by
present and prospective shareholders of the Company and may
result in a change in control or management of the Company.
Disadvantages of Blank Check Offering. The Company may
enter into a business combination with an entity that desires to
establish a public trading market for its shares. A business
opportunity may attempt to avoid what it deems to be adverse
consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may
include, but are not limited to, time delays of the registration
process, significant expenses to be incurred in such an offering,
loss of voting control to public shareholders and the inability
or unwillingness to comply with various federal and state laws
enacted for the protection of investors.
Taxation. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination
the Company may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both
companies, pursuant to various federal and state tax provisions.
The Company intends to structure any business combination so as
to minimize the federal and state tax consequences to both the
Company and the target entity; however, there can be no
assurance that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties
will obtain the intended tax-free treatment upon a transfer of
stock or assets. A non-qualifying reorganization could result in
the imposition of both federal and state taxes which may have an
adverse effect on both parties to the transaction.
Requirement of Audited Financial Statements May Disqualify
Business Opportunities. Management of the Company believes that
any potential business opportunity must provide audited financial
statements for review, for the protection of all parties to the
business combination. One or more attractive business
opportunities may choose to forego the possibility of a business
combination with the Company, rather than incur the expenses
associated with preparing audited financial statements.
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Item 2. Plan of Operation
The Company intends to seek to acquire assets or shares of
an entity actively engaged in business which generates revenues,
in exchange for its securities. The Company has no particular
acquisitions in mind and has not entered into any negotiations
regarding such an acquisition. None of the Company's officers,
directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any
other company regarding the possibility of an acquisition or
merger between the Company and such other company as of the date
of this Registration Statement.
The Company has no full time employees. The Company's
President and Secretary have agreed to allocate a portion of
their time to the activities of the Company, without
compensation. These officers anticipate that the business plan
of the Company can be implemented by their devoting minimal time
per month to the business affairs of the Company and,
consequently, conflicts of interest may arise with respect to the
limited time commitment by such officers. See "Item 5 -
Directors, Executive Officers, Promoters and Control Persons -
Resumes."
The Company's officers and directors may, in the future,
become involved with other companies who have a business purpose
similar to that of the Company. As a result, additional
potential conflicts of interest may arise in the future. If such
a conflict does arise and an officer or director of the Company
is presented with business opportunities under circumstances
where there may be a doubt as to whether the opportunity should
belong to the Company or another "blank check" company they are
affiliated with, they will disclose the opportunity to all such
companies. If a situation arises in which more than one company
desires to merge with or acquire that target company and the
principals of the proposed target company has no preference as to
which company will merger or acquire such target company, the
company which first filed a registration statement with the
Securities and Exchange Commission will be entitled to proceed
with the proposed transaction.
The Bylaws of the Company provide that the Company shall
possess and may indemnify officers and/or directors of the
Company for liabilities, which can include liabilities arising
under the securities laws. Therefore, assets of the Company
could be used or attached to satisfy any liabilities subject to
such indemnification. See "Part II - Item 5 - Indemnification of
Directors and Officers."
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General Business Plan
The Company's purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business
opportunities presented to it by persons or firms who or which
desire to seek the perceived advantages of an Exchange Act
registered corporation. The Company will not restrict its search
to any specific business, industry, or geographical location and
the Company may participate in a business venture of virtually
any kind or nature. This discussion of the proposed business is
purposefully general and is not meant to be restrictive of the
Company's virtually unlimited discretion to search for and enter
into potential business opportunities. Management anticipates
that it may be able to participate in only one potential business
venture because the Company has nominal assets and limited
financial resources. See "Part F/S - "Financial Statements."
This lack of diversification should be considered a substantial
risk to shareholders of the Company because it will not permit
the Company to offset potential losses from one venture against
gains from another.
The Company may seek a business opportunity with entities
which have recently commenced operations, or which wish to
utilize the public marketplace in order to raise additional
capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate
purposes. The Company may acquire assets and establish wholly
owned subsidiaries in various businesses or acquire existing
businesses as subsidiaries.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Due to general economic conditions, rapid technological
advances being made in some industries and shortages of available
capital, management believes that there are numerous firms
seeking the perceived benefits of a publicly registered
corporation. Such perceived benefits may include facilitating or
improving the terms on which additional equity financing may be
sought, providing liquidity for incentive stock options or
similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes), for all shareholders and
other factors. Potentially, available business opportunities may
occur in many different industries and at various stages of
development, all of which will make the task of comparative
investigation and analysis of such business opportunities
extremely difficult and complex.
The Company has, and will continue to have, no capital with
which to provide the owners of business opportunities with any
significant cash or other assets. However, management believes
the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership
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interest in a publicly registered company without incurring the
cost and time required to conduct an initial public offering.
The owners of the business opportunities will, however, incur
significant legal and accounting costs in connection with
acquisition of a business opportunity, including the costs of
preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related
reports and documents. The Securities Exchange Act of 1934 (the
"34 Act"), specifically requires that any merger or acquisition
candidate comply with all applicable reporting requirements,
which include providing audited financial statements to be
included within the numerous filings relevant to complying with
the 34 Act. Nevertheless, the officers and directors of the
Company have not conducted market research and are not aware of
statistical data which would support the perceived benefits of a
merger or acquisition transaction for the owners of a business
opportunity.
The analysis of new business opportunities will be
undertaken by, or under the supervision of, the officers and
directors of the Company, none of whom is a professional business
analyst. Management intends to concentrate on identifying
preliminary prospective business opportunities which may be
brought to its attention through present associations of the
Company's officers and directors, or by the Company's
shareholders. In analyzing prospective business opportunities,
management will consider such matters as the available technical,
financial and managerial resources; working capital and other
financial requirements; history of operations, if any; prospects
for the future; nature of present and expected competition; the
quality and experience of management services which may be
available and the depth of that management; the potential for
further research, development, or exploration; specific risk
factors not now foreseeable but which then may be anticipated to
impact the proposed activities of the Company; the potential for
growth or expansion; the potential for profit; the perceived
public recognition of acceptance of products, services, or
trades; name identification; and other relevant factors.
Officers and directors of the Company expect to meet personally
with management and key personnel of the business opportunity as
part of their investigation. To the extent possible, the Company
intends to utilize written reports and personal investigation to
evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements
cannot be obtained within a reasonable period of time after
closing of the proposed transaction.
Management of the Company, while not especially experienced
in matters relating to the new business of the Company, shall
rely upon their own efforts and, to a much lesser extent, the
efforts of the Company's shareholders, in accomplishing the
business purposes of the Company. It is not anticipated that any
outside consultants or advisors will be utilized by the Company
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to effectuate its business purposes described herein. However,
if the Company does retain such an outside consultant or advisor,
management will review such consultant or advisor's
credentials as well as his or her experience and reputation in
providing advice to management in implementing its business plan,
which services will be limited to analysis of a prospective
merger or acquisition candidate to assist management in
evaluating a particular candidate and any cash fee earned by
such party will need to be paid by the prospective
merger/acquisition candidate, as the Company has no cash
assets with which to pay such obligation. There have been no
contracts or agreements with any outside consultants and none are
anticipated in the future.
The Company will not restrict its search for any specific
kind of firms, but may acquire a venture which is in its
preliminary or development stage, which is already in operation,
or in essentially any stage of its corporate life. It is
impossible to predict at this time the status of any business in
which the Company may become engaged, in that such business may
need to seek additional capital, may desire to have its shares
publicly traded, or may seek other perceived advantages which the
Company may offer. However, the Company does not intend to
obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as
the Company has successfully consummated such a merger or
acquisition.
It is anticipated that the Company will incur nominal
expenses in the implementation of its business plan described
herein. Because the Company has no capital with which to pay
these anticipated expenses, present management of the Company
will pay these charges with their personal funds, as interest
free loans to the Company. However, the only opportunity which
management has to have these loans repaid will be from a
prospective merger or acquisition candidate. Management has
agreed among themselves that the repayment of any loans made on
behalf of the Company will not impede, or be made conditional in
any manner, to consummation of a proposed transaction.
The Company is subject to the assessment of penalties in
the minimum amount of $800 to a maximum amount of $1,800 for
failure to file federal income tax returns since its inception
(see Note 2 to Financial Statements). Because the Company has no
capital with which to pay this obligation, the anticipated
penalty will need to be paid by the prospective
merger/acquisition candidate as a successor to the Company, and
such assumption of this obligation will be a part of the
negotiations with the prospective merger/acquisition
candidate.
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Acquisition of Opportunities
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the
consummation of a transaction, it is probable that the present
management and shareholders of the Company will no longer be in
control of the Company. In addition, the Company's directors
may, as part of the terms of the acquisition transaction, resign
and be replaced by new directors without a vote of the Company's
shareholders or may sell their stock in the Company. Any terms
of sale of the shares presently held by officers and/or directors
of the Company will be also afforded to all other shareholders of
the Company on similar terms and conditions. Any and all such
sales will only be made in compliance with the securities laws of
the United States and any applicable state.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or a part of
such securities immediately after the transaction is consummated
or at specified times thereafter. If such registration occurs,
of which there can be no assurance, it will be undertaken by the
surviving entity after the Company has successfully consummated a
merger or acquisition and the Company is no longer considered a
"shell" company. Until such time as this occurs, the Company
will not attempt to register any additional securities. The
issuance of substantial additional securities and their potential
sale into any trading market which may develop in the Company's
securities may have a depressive effect on the value of the
Company's securities in the future, if such a market develops, of
which there is no assurance.
While the actual terms of a transaction to which the Company
may be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
avoid the creation of a taxable event and thereby structure the
acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the
"Code"). In order to obtain tax-free treatment under the Code,
it may be necessary for the owners of the acquired business to
own 80% or more of the voting stock of the surviving entity. In
such event, the shareholders of the Company, would retain less
than 20% of the issued and outstanding shares of the surviving
entity, which would result in significant dilution in the equity
of such shareholders.
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As part of the Company's investigation, officers and
directors of the Company will meet personally with management and
key personnel, may visit and inspect material facilities, obtain
independent analysis of verification of certain information
provided, check references of management and key personnel, and
take other reasonable investigative measures, to the extent of
the Company's limited financial resources and management
expertise. The manner in which the Company participates in an
opportunity will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties,
the management of the opportunity and the relative negotiation
strength of the Company and such other management.
With respect to any merger or acquisition, negotiations with
target company management is expected to focus on the percentage
of the Company which the target company shareholders would
acquire in exchange for all of their shareholdings in the target
company. Depending upon, among other things, the target
company's assets and liabilities, the Company's shareholders will
in all likelihood hold a substantially lesser percentage
ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to
significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition
effected by the Company can be expected to have a significant
dilutive effect on the percentage of shares held by the Company's
then shareholders.
The Company will participate in a business opportunity only
after the negotiation and execution of appropriate written
agreements. Although the terms of such agreements cannot be
predicted, generally such agreements will require some specific
representations and warranties by all of the parties thereto,
will specify certain events of default, will detail the terms of
closing and the conditions which must be satisfied by each of the
parties prior to and after such closing, will outline the manner
of bearing costs, including costs associated with the Company's
attorneys and accountants, will set forth remedies on default and
will include miscellaneous other terms.
As stated herein above, the Company will not acquire or
merge with any entity which cannot provide independent audited
financial statements within a reasonable period of time after
closing of the proposed transaction. The Company is subject to
all of the reporting requirements included in the 34 Act.
Included in these requirements is the affirmative duty of the
Company to file independent audited financial statements as part
of its Form 8-K to be filed with the Securities and Exchange
Commission upon consummation of a merger or acquisition, as well
as the Company's audited financial statements included in its
annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or
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within time parameters necessary to insure the Company's
compliance with the requirements of the 34 Act, or if the audited
financial statements provided do not conform to the
representations made by the candidate to be acquired in the
closing documents, the closing documents will provide that the
proposed transaction will be voidable, at the discretion of the
present management of the Company. If such transaction is
voided, the agreement will also contain a provision providing for
the acquisition entity to reimburse the Company for all costs
associated with the proposed transaction.
Year 2000 Disclosure
Many existing computer programs use only two digits to
identify a year in the date field. These programs were designed
and developed without considering the impact of the upcoming
change in the century. If not corrected, many computer
applications could fail or create erroneous results by or at the
Year 2000. As a result, many companies will be required to
undertake major projects to address the Year 2000 issue. Because
the Company has no assets, including any personal property such
as computers, it is not anticipated that the Company will incur
any negative impact as a result of this potential problem.
However, it is possible that this issue may have an impact on the
Company after the Company successfully consummates a merger or
acquisition. Management intends to address this potential
problem with any prospective merger or acquisition candidate.
There can be no assurances that new management of the Company
will be able to avoid a problem in this regard after a merger or
acquisition is so consummated.
Competition
The Company will remain an insignificant participant among
the firms which engage in the acquisition of business
opportunities. There are many established venture capital and
financial concerns which have significantly greater financial and
personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial
resources and limited management availability, the Company will
continue to be at a significant competitive disadvantage compared
to the Company's competitors.
Item 3. Description of Property
The Company has no properties and at this time has no
agreements to acquire any properties. The Company intends to
attempt to acquire assets or a business in exchange for its
securities which assets or business is determined to be desirable
for its objectives.
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<PAGE>
The Company operates from its offices at 6 Venture, Suite
207, Irvine, California 92618. This space is provided to the
Company on a rent free basis by Bryan A. Gianesin, a
principal shareholder of and legal counsel to the
Company, and it is anticipated that this arrangement will remain
until such time as the Company successfully consummates a merger
or acquisition. Management believes that this space will meet
the Company's needs for the foreseeable future.
Mr. Gianesin has offered the use of his conference room
at his offices at 6 Venture, Suite 207, Irvine, California, for
meetings for the officers and directors of the Company at no
charge and as a convenient repository for the books and records
of the Company. Further, as legal counsel, Mr. Gianesin will
advise the Company on material issues pertinent to its business
opportunities. Moreover, Adam Stull and Libbie Stull are brother
and sister and are also tenants at 6 Venture, Suite 207, Irvine,
California 96218, in the same office complex as Mr. Gianesin, and
the address provides a convenient meeting place for
management.
Item 4. Security Ownership of Certain Beneficial Owners and
Management
The table below lists the beneficial ownership of the
Company's voting securities by each person known by the Company
to be the beneficial owner of more than 5% of such securities, as
well as the securities of the Company beneficially owned by all
directors and officers of the Company. Unless otherwise
indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
- -----------------------------------------------------------------
Common Adam Stull (1) 125,000 25%
6 Venture, Ste. 207
Irvine, CA 92618
Common Libbie Stull (1) 100,000 20%
6 Venture, Ste. 207
Irvine, CA 92618
Common George Unwin (1) 100,000 20%
23721 Arjay Way
Laguna Niguel, CA 92618
Common Bryan A. Gianesin 25,000 5%
6 Venture, Ste. 207
Irvine, CA 92618
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<PAGE>
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
- -----------------------------------------------------------------
Common Joyce Unwin 25,000 5%
1141 Appian Way
Santa Ana, CA 92705
Common Mary Jackson 25,000 5%
23422 Dune Mear Road
Lake Forest, CA 92630
Common Cleora Louey 25,000 5%
27068 La Paz, #218
Aliso Viejo, CA 92656
Common Joseph Gianesin 25,000 5%
1503 Buena Ventura Cr.
Colorado Springs, CO 80907
Common Kristin Walker 25,000 5%
6700 N. Halfmoon, #B
Bakersfield, CA 93309
Common Lee Goldberg 25,000 5%
23 Michelangelo
Aliso Viejo, CA 92656
Common All Officers and 325,000 65%
Directors as a
Group (3 persons)
_________________________
(1) Officer and/or director.
The above named persons hold all of the issued and
outstanding Common Shares of the Company.
(b) Security Ownership of Management.
The following table sets forth the beneficial ownership for
each class of equity securities of Guideline Capital Corporation
beneficially owned by all directors and officers of the Company.
17
<PAGE>
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
- ---------------------------------------------------------------
Common Adam Stull 125,000 25%
6 Venture, Ste. 207
Irvine, CA 92618
Common Libbie Stull 100,000 20%
6 Venture, Ste. 207
Irvine, CA 92618
Common George Unwin 100,000 20%
23721 Arjay
Laguna Niguel, CA 92618
Common All Officers and 325,000 65%
Directors as a
Group (3 persons)
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
The directors and officers of the Company are as follows:
Name Age Position
---- --- --------
Adam Stull 37 President, Director
Libbie Stull 42 Secretary, Director
George Unwin 51 Director
The above listed officers and directors will serve until the
next annual meeting of the shareholders or until their death,
resignation, retirement, removal, or disqualification, or until
their successors have been duly elected and qualified. Vacancies
in the existing Board of Directors are filled by majority vote of
the remaining Directors. Officers of the Company serve at the
will of the Board of Directors. Adam Stull and Libbie Stull are
brother and sister.
The Company does not presently intend to issue any
additional stock to management or promotors or their affiliates
or associates in exchange for their services or for any other
consideration. However, if a business opportunity is found which
meet the criteria for the Company, incentive stock options may be
considered for management only by the Board of Directors, but
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<PAGE>
only under a strict set of criteria based upon the performance of
the Company.
There are no agreements or understanding for any officer or
director to resign at the understanding of any other person and
none of the officers or directors are acting on behalf or will
act at the direction of any other person.
Only the participation of the named officers and directors
will be material to the operations of the Company and no
promotors exist who will act on behalf of the Company.
Resumes
Adam Stull, President and a director. Mr. Stull has held
his positions with the Company since shortly after its inception.
From October 1997 through the present, Mr. Stull has been a
partner of Goldberg Burke & Stull, LLP, Attorneys, Irvine,
California, engaged in the practice of law, emphasizing criminal
law and general business matters. Prior to that, Mr. Stull was a
partner in the firm of Stull & Stull, Bakersfield, California
from January 1994 to September 1997. From 1993 to 1994, Mr.
Stull was an assistant at Pacific Coast Chemicals, Berkeley,
California. Mr. Stull received a Juris Doctor degree from
California Western School of Law, San Diego in 1988 and a
Bachelor of Arts degree from the University of California, Santa
Barbara in 1984. Mr. Stull will devote approximately 20 hours
per month to the business of the Company.
Libbie Stull, Secretary and Director. Ms. Stull has held
her position with the Company since shortly after its inception.
Since 1997, Ms. Stull has been employed by Goldberg Burke &
Stull, LLP, Attorneys, Irvine, California, engaged in the
practice of law, emphasizing civil litigation and general
business matters. Prior to that, Ms. Stull was a partner in the
firm of Stull & Stull, Bakersfield, California from 1994 to 1997.
Ms. Stull was engaged in a general law practice as a sole
practitioner from 1990 to 1993. Ms. Stull received a Juris Doctor
degree from Hastings College of Law, San Francisco, California in
1981 and a Bachelor of Arts, Political Science degree from UCLA
in 1978. Ms. Stull will devote approximately 10 hours per
month to the business of the Company.
George Unwin, Director. Mr. Unwin has held his position with
the Company since shortly after its inception. Since 1993, Mr.
Unwin has been a self-employed, free-lance writer of advertising
and marketing materials in Southern California. He creates
advertising and marketing materials for a host of private clients
and has written advertising copy for numerous local newspaper and
magazine publishers. Mr. Unwin will devote approximately 10
hours per month to the business of the Company.
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<PAGE>
Prior "Blank Check" Experience
No officer or director of the Company has been an officer or
director of any "blank check" public reporting company , and no
officer or director has ever promoted, is promoting or will be
promoting any other blank check company during their tenure as an
officer and director of the Company.
Conflicts of Interest
Members of the Company's management are associated with
other firms involved in a range of business activities.
Consequently, there are potential inherent conflicts of interest
in their acting as officers and directors of the Company.
Insofar as the officers and directors are engaged in other
business activities, management anticipates it will devote only a
minor amount of time to the Company's affairs.
The officers and directors of the Company are now and may in
the future become shareholders, officers or directors of other
companies which may be formed for the purpose of engaging in
business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in
the future with respect to such individuals acting on behalf of
the Company or other entities. Moreover, additional conflicts of
interest may arise with respect to opportunities which come to
the attention of such individuals in the performance of their
duties or otherwise. The Company does not currently have a right
of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate
to the Company's proposed business operations.
The officers and directors are, so long as they are officers
or directors of the Company, subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to their attention, either in the performance of their
duties or in any other manner, will be considered opportunities
of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the
officer or director. If the Company or the companies in which
the officers and directors are affiliated with both desire to
take advantage of an opportunity, then said officers and
directors would abstain from negotiating and voting upon the
opportunity. However, all directors may still individually take
advantage of opportunities if the Company should decline to do
so. Furthermore, no officer or director of the Company has
ever promoted, is promoting or will be promoting any other blank
check company during their tenure as an officer and director of
the Company. Accordingly, there presently exists no conflict of
interest in this regard. Except as set forth above, the
Company
20
<PAGE>
has not adopted any other conflict of interest policy with
respect to such transactions.
Investment Company Act of 1940
Although the Company will be subject to regulation under the
Securities Act of 1933 and the Securities Exchange Act of 1934,
management believes the Company will not be subject to regulation
under the Investment Company Act of 1940 insofar as the Company
will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business
combinations which result in the Company holding passive
investment interests in a number of entities, the Company could
be subject to regulation under the Investment Company Act of
1940. In such event, the Company would be required to register
as an investment company and could be expected to incur
significant registration and compliance costs. The Company has
obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences. The
Company's Board of Directors unanimously approved a resolution
stating that it is the Company's desire to be exempt from the
Investment Company Act of 1940 via Regulation 3a-2 thereto.
Item 6. Executive Compensation.
None of the Company's officers and/or directors receive any
compensation for their respective services rendered unto the
Company, nor have they received such compensation in the past.
They all have agreed to act without compensation until authorized
by the Board of Directors, which is not expected to occur until
the Company has generated revenues from operations after
consummation of a merger or acquisition. As of the date of this
Registration Statement, the Company has no funds available to pay
directors. Further, none of the directors are accruing any
compensation pursuant to any agreement with the Company and
the Company does not intend to issue any securities to its
officers and/or directors in consideration for their
services .
It is possible that, after the Company successfully
consummates a merger or acquisition with an unaffiliated entity,
that entity may desire to employ or retain one or a number of
members of the Company's management for the purposes of providing
services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a
policy whereby the offer of any post-transaction remuneration to
members of management will not be a consideration in the
Company's decision to undertake any proposed transaction. Each
member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible
compensation to be paid to them by any entity which proposes to
21
<PAGE>
undertake a transaction with the Company and further, to abstain
from voting on such transaction. Therefore, as a practical
matter, if each member of the Company's Board of Directors is
offered compensation in any form from any prospective merger or
acquisition candidate, the proposed transaction will not be
approved by the Company's Board of Directors as a result of the
inability of the Board to affirmatively approve such a
transaction.
It is possible that persons associated with management may
refer a prospective merger or acquisition candidate to the
Company. In the event the Company consummates a transaction with
any entity referred by associates of management, it is possible
that such an associate will be compensated for their referral in
the form of a finder's fee. It is anticipated that this fee will
be either in the form of restricted common stock issued by the
Company as part of the terms of the proposed transaction, or will
be in the form of cash consideration. However, if such
compensation is in the form of cash, such payment will be
tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such
finder's fee cannot be determined as of the date of this
Registration Statement, but is expected to be comparable to
consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either
directly or indirectly, as a result of their respective efforts
to implement the Company's business plan outlined herein.
No retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted by
the Company for the benefit of its employees.
Item 7. Certain Relationships and Related Transactions.
There have been no related party transactions, or any other
transactions or relationships required to be disclosed pursuant
to Item 404 of Regulation S-B.
Item 8. Description of Securities.
The Company's authorized capital stock consists of
15,000,000 shares, all of which are Common Shares, par value
$0.001 per share. There are 500,000 Common Shares issued and
outstanding as of the date of this filing. There are no
preferred shares authorized, issued or outstanding.
Common Stock. All shares of Common Stock have equal voting
rights and, when validly issued and outstanding, are entitled to
one vote per share in all matters to be voted upon by
shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued
only as fully-paid and nonassessable shares. Cumulative voting
22
<PAGE>
in the election of directors is not permitted, which means that
the holders of a majority of the issued and outstanding shares of
Common Stock represented at any meeting at which a quorum is
present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining
shares of Common Stock will not be able to elect any directors.
In the event of liquidation of the Company, each shareholder is
entitled to receive a proportionate share of the Company's assets
available for distribution to shareholders after the payment of
liabilities and after distribution in full of preferential
amounts, if any. All shares of the Company's Common Stock issued
and outstanding are fully-paid and nonassessable. Holders of the
Common Stock are entitled to share pro rata in dividends and
distributions with respect to the Common Stock, as may be
declared by the Board of Directors out of funds legally available
therefor.
The proposed business activities described herein classify
the Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein. Relevant thereto, each shareholder of the
Company has executed and delivered a "lock-up" letter agreement,
affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has
successfully consummated a merger or acquisition and the Company
is no longer classified as a "blank check" company. In order to
provide further assurances that no trading will occur in the
Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their
respective stock certificate with the Company's legal counsel,
Bryan A. Gianesin, who will not release these respective
certificates until such time as legal counsel has confirmed that
a merger or acquisition has been successfully consummated. Mr.
Gianesin is also a shareholder of the Company. However, while
management believes that the procedures established to preclude
any sale of the Company's securities prior to closing of a merger
or acquisition will be sufficient, there can be no assurances
that the procedures established relevant herein will
unequivocally limit any shareholder's ability to sell their
respective securities before such closing.
23
<PAGE>
PART II
Item 1. Market Price for Common Equity and Related Stockholder
Matters.
There is no trading market for the Company's Common Stock
at present and there has been no trading market to date.
Management has not undertaken any discussions, preliminary or
otherwise, with any prospective market maker concerning the
participation of such market maker in the aftermarket for the
Company's securities and management does not intend to initiate
any such discussions until such time as the Company has
consummated a merger or acquisition. There is no assurance that a
trading market will ever develop or, if such a market does
develop, that it will continue.
a. Market Price. The Company's Common Stock is not quoted
at the present time.
The Securities and Exchange Commission adopted Rule 15g-9,
which established the definition of a "penny stock," for purposes
relevant to the Company, as any equity security that has a market
price of less than $5.00 per share or with an exercise price of
less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require: (i) that a broker or dealer approve a person's account
for transactions in penny stocks; and (ii) the broker or dealer
receive from the investor a written agreement to the transaction,
setting forth the identity and quantity of the penny stock to be
purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and
objectives of the person; and (ii) make a reasonable
determination that the transactions in penny stocks are suitable
for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the
risks of transactions in penny stocks. The broker or dealer must
also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the Commission relating to the
penny stock market, which, in highlight form, (i) sets forth the
basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a
signed, written agreement from the investor prior to the
transaction. Disclosure also has to be made about the risks of
investing in penny stock in both public offering and in secondary
trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the
securities and the rights and remedies available to an investor
in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information
for the penny stock held in the account and information on the
limited market in penny stocks.
24
<PAGE>
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has established criteria for
continued NASDAQ eligibility. In order to continue to be
included on NASDAQ, a company must maintain $2,000,000 in total
assets, a $200,000 market value of its publicly-traded securities
and $1,000,000 in total capital and surplus. In addition,
continued inclusion requires two market-makers and a minimum bid
price of $1.00 per share, provided, however, that if a company
falls below such minimum bid price it will remain eligible for
continued inclusion on NASDAQ if the market value of its
publicly-traded securities is at least $1,000,000 and the Company
has $2,000,000 in capital and surplus. The NASD is presently
considering increasing these standards, but as of the date of
this Registration Statement, no definitive action has been taken
in this regard.
Management intends to strongly consider undertaking a
transaction with any merger or acquisition candidate which will
allow the Company's securities to be traded without the aforesaid
limitations. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange,
or be able to maintain the maintenance criteria necessary to
insure continued listing. The failure of the Company to qualify
its securities or to meet the relevant maintenance criteria after
such qualification in the future may result in the discontinuance
of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter
market. As a result, a shareholder may find it more difficult to
dispose of, or to obtain accurate quotations as to the market
value of, the Company's securities.
b. Holders. There are ten (10) holders of the Company's
Common Stock. In August 1989, the Company issued 500,000 of its
Common Shares for an aggregate of $500 in cash ($.001 per
share). All of the issued and outstanding shares of the
Company's Common Stock were issued pursuant to exemption
from the registration requirements included under Rule
504 of Regulation D of the Securities Act of 1933 , as
amended. The holders of the Common Stock were either "accredited
investors" (as that term is defined in the 1933 Act) or were
provided all information necessary in order to allow each
investor to exercise their respective business judgment as to the
merits of the investment.
As of the date of this Registration Statement, 500,000
shares of the Company's Common Stock are eligible for sale under
Rule 144 promulgated under the Securities Act of 1933, as
amended, subject to certain limitations included in said Rule.
In general, under Rule 144, a person (or persons whose shares are
aggregated), who has satisfied a one year holding period, under
certain circumstances, may sell within any three-month period a
25
<PAGE>
number of shares which does not exceed the greater of one percent
of the then outstanding Common Stock or the average weekly
trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has
satisfied a two-year holding period and who is not, and has not
been for the preceding three months, an affiliate of the Company.
c. Dividends. The Company has not paid any dividends to
date and has no plans to do so in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or
against the Company.
Item 3. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
The Company has not changed accountants since its
formation and there are no disagreements with the findings of
said accountants.
Item 4. Recent Sales of Unregistered Securities.
In August, 1989 the Company issued 500,000 shares of its
common stock to 10 persons at a price of $.001 per share. All of
the shares of Common Stock of the Company previously issued have
been issued for investment purposes in a "private transaction"
and are "restricted" shares as defined in Rule 144 under the
Securities Act of 1933, as amended (the "Act"). These shares may
not be offered for public sale except under Rule 144, or
otherwise, pursuant to the Act.
As of the date of this Registration Statement, all of the
issued and outstanding shares of the Company's Common Stock are
eligible for sale under Rule 144 promulgated under the Securities
Act of 1933, as amended, subject to certain limitations included
in said Rule. However, all of the shareholders of the Company
have executed and delivered a "lock-up" letter agreement which
provides that each such shareholder shall not sell their
respective securities until such time as the Company has
successfully consummated a merger or acquisition. Further, each
shareholder has placed their respective stock certificate with
the Company's legal counsel, Bryan A. Gianesin, who has agreed
not to release any of the certificates until the Company has
closed a merger or acquisition. Mr. Gianesin is also a
shareholder of the Company. Any liquidation by the current
shareholders after the release from the "lock-up" selling
limitation period may have a depressive effect upon the trading
prices of the Company's securities in any future market which may
develop.
26
<PAGE>
In general, under Rule 144, a person (or persons whose
shares are aggregated) who has satisfied a one year holding
period, under certain circumstances, may sell within any three-
month period a number of shares which does not exceed the greater
of one percent of the then outstanding Common Stock or the
average weekly trading volume during the four calendar weeks
prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quantity limitation
by a person who has satisfied a two year holding period and who
is not, and has not been for the preceding three months, an
affiliate of the Company.
Item 5. Indemnification of Directors and Officers.
The Company's Bylaws include provisions providing for the
indemnification of officers and directors and other persons
against expenses, judgments, fines and amounts paid in settlement
in connection with threatened, pending or completed suits or
proceedings against such persons by reason of serving or having
served as officers, directors or in other capacities, except in
relation to matters with respect to which such persons shall be
determined not to have acted in good faith and in the best
interests of the Company. With respect to matters as to which
the Company's officers and directors and others are determined to
be liable for misconduct or negligence, including gross
negligence in the performance of their duties to the Company,
Delaware law provides for indemnification only to the extent that
the court in which the action or suit is brought determines that
such person is fairly and reasonably entitled to indemnification
for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to officers, directors or persons
controlling the Company pursuant to the foregoing, the Company
has been informed that in the opinion of the U.S. Securities and
Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act, and is therefore unenforceable.
In accordance with the laws of the State of Delaware, the
Company's Bylaws authorize indemnification of a director,
officer, employee, or agent of the Company for expenses incurred
in connection with any action, suit, or proceeding to which he or
she is named a party by reason of his having acted or served in
such capacity, except for liabilities arising from his own
misconduct or negligence in performance of his or her duty. In
addition, even a director, officer, employee, or agent of the
Company who was found liable for misconduct or negligence in the
performance of his or her duty may obtain such indemnification
if, in view of all the circumstances in the case, a court of
competent jurisdiction determines such person is fairly and
reasonably entitled to indemnification. Insofar as
indemnification for liabilities arising under the Securities Act
27
<PAGE>
of 1933, as amended, may be permitted to directors, officers, or
persons controlling the issuing 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 the Act and is therefore
unenforceable.
PART F/S
Financial Statements.
The following financial statements are attached to this
Registration Statement and filed as a part thereof. See page
29 .
1) Table of Contents - Financial Statements
2) Independent Auditors' Report
3) Balance Sheets
4) Statement of Revenues and Expenses
5) Statement of Cash Flows
6) Statement of Changes in Stockholders' Equity
7) Notes to Financial Statements
28
<PAGE>
GUIDELINE CAPITAL CORPORATION
(a Development Stage Company)
(A Delaware corporation)
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR'S REPORT
For the Fiscal Years Ended June 30, 1998
and June 30, 1997
and for the Period August 31, 1989 (inception)
through June 30, 1998
29
<PAGE>
INDEX
PAGE
Independent Auditor's Report 1
Balance Sheets 2
Statements of Revenues and Expenses 3
Statements of Cash Flows 4
Statements of Changes in Stockholders' Equity/(Deficit) 5
Notes to Financial Statements 6
30
<PAGE>
GARY A. CASE
CERTIFIED PUBLIC ACCOUNTANT
Brea Corporate Plaza
3230 E. Imperial Highway, Ste. 200
Brea, California 92821-6734
Telephone: (714)986-1850
Facsimile: (714)986-1855
INDEPENDENT AUDITOR'S REPORT
TO THE BOARD OF DIRECTORS
OF GUIDELINE CAPITAL CORPORATION
We have audited the accompanying balance sheets of GUIDELINE CAPITAL CORPORATION
(a Development Stage Company) as of June 30, 1998 and June 30, 1997, the related
statements of Revenues and Expenses, Changes in Stockholders' Equity/(Deficit)
and Cash Flows for the Fiscal Years ended June 30, 1998, June 30, 1997, and the
period August 31, 1989 (inception) through June 30, 1998. 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 audit.
We conducted the audit in accordance with generally accepted audit 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 the audit provides a reasonable basis for our
opinion.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage of operations and
has not generated revenues from operations. Because the Company is in the
development stage of operations, substantial doubt is raised about its ability
to continue as a going concern. The Company's plans in regard to these matters
are also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GUIDELINE CAPITAL CORPORATION
as of June 30, 1998 and June 30, 1997 and the results of its operations and its
cash flows for the Fiscal Years ended June 30, 1998 and June 30, 1997, and the
period August 31, 1989 (inception) through June 30, 1998 in conformity with
generally accepted accounting principals.
s/Gary A. Case
_____________________________________
GARY A. CASE, CPA
Brea, California
July 17, 1998
1
31
<PAGE>
<TABLE>
GUIDELINE CAPITAL CORPORATION
(a Development Stage Company)
(A Delaware corporation)
BALANCE SHEETS
<CAPTION>
ASSETS: June 30, June 30,
1998 1997
-------- --------
<S> <C> <C>
Current Assets $ 0 $ 0
Organization Costs (net of $500
accumulated amortization) 0 0
Total Assets $ 0 0
======== ========
LIABILITIES
Current Liabilities
Accounts Payable $ 800 $ 700
Total Current Liabilities 800 700
Total Liabilities 800 700
STOCKHOLDERS' EQUITY
Common Stock - Par Value $.001 per shares;
15,000,000 Shares Authorized
500,000 Shares Issued and Outstanding 500 500
Additional Paid-In Capital -- --
Retained Deficit, accumulated in the
development stage ( 1,300) ( 1,200)
Total Stockholders' Equity ( 800) ( 700)
Total Liabilities and Stockholders' Equity $ 0 $ 0
======== ========
<FN>
See accompanying notes and accountant's report.
</TABLE>
2
32
<PAGE>
<TABLE>
GUIDELINE CAPITAL CORPORATION
(a Development Stage Company)
(A Delaware corporation)
STATEMENT OF REVENUES AND EXPENSES
<CAPTION>
Period
8/31/89
Fiscal Fiscal (Inception)
Year Ended Year Ended to
6/30/98 6/30/97 6/30/98
------- ------- -------
<S> <C> <C> <C>
REVENUE:
Total Revenue $ 0 $ 0 $ 0
EXPENSES:
Amortization Cost 0 0 500
Taxes and Licenses 100 100 800
Total Expenses 100 100 1,300
Net Income/(Loss) $ ( 100) $( 100) $(1,300)
======= ====== =======
Net loss per share $ .0002 $.0002 $ .0026
======= ====== =======
<FN>
See accompanying notes and accountant's report.
</TABLE>
3
33
<PAGE>
<TABLE>
GUIDELINE CAPITAL CORPORATION
(a Development Stage Company)
(A Delaware corporation)
STATEMENT OF CASH FLOWS
<CAPTION>
Period
8/31/89
Fiscal Fiscal (Inception)
Year Ended Year Ended to
6/30/98 6/30/97 6/30/98
------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Operating Activities $ 0 $ 0 $ 0
Cash Paid for Operating Activities 0 0 0
Net Cash Used By Operating Activities 0 0 0
CASH FLOWS FROM INVESTING ACTIVITIES
Net Cash Used in Investing Activities 0 0 (500)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Cash From Financing Activities 0 0 500
Net Decrease in Cash and Cash Equivalents 0 0 0
Cash and Cash Equivalents at
Beginning of Period 0 0 0
Cash and Cash Equivalents at End of Period $ 0 $ 0 $ 0
======= ======= =======
Reconciliation of Net Profit to Net Cash
Provided by Operating Activities:
Net Income/(Loss) $ ( 100) $ ( 100) $(1,300)
Adjustments to Reconcile Net Income
to Net Provided by Operating Activities:
Amortization and Depreciation Expense 0 0 500
Increase in Accounts Payable 100 100 800
Total Adjustments 100 100 1,300
NET CASH PROVIDED BY
OPERATING ACTIVITIES $ 0 $ 0 $ 0
======= ======= =======
<FN>
See accompanying notes and accountant's report.
</TABLE>
4
34
<PAGE>
<TABLE>
GUIDELINE CAPITAL CORPORATION
(a Development Stage Company)
(A Delaware corporation)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT)
<CAPTION>
Number of Additional Retained
Common Common Paid-In Earnings
Shares Stock Capital (Deficit) Total
------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Balance as at August 31, 1989 - - - - -
Issuance of Common Stock 500,000 $ 500 $ 500
Net Income (Loss)
from August 31, 1989 (inception)
to June 30, 1991 _______ ________ ________ (283) (283)
Balance at June 30, 1991 0 0 0 (283) 217
Net Income (Loss)
from July 1, 1991
to June 30, 1996 _______ ________ ________ (817) (817)
Balance as at June 30, 1996 500,000 500 0 (1,100) (600)
Net Income (Loss) _______ ________ ________ (100) (100)
Balance at June 30, 1997 500,000 500 0 (1,200) (700)
Net Income (Loss) _______ ________ ________ (100) (100)
Balance as at June 30, 1998 500,000 $ 500 $ 0 $ (1,300) $ (800)
======= ======== ======== ======== =======
<FN>
See accompanying notes and accountant's report.
</TABLE>
5
35
<PAGE>
GUIDELINE CAPITAL CORPORATION
(a Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
as of June 30, 1998 and June 30, 1997
NOTE 1: SUMMARY SIGNIFICANT ACCOUNTING POLICIES
The Guideline Capital Corporation, a Delaware Corporation, was incorporated on
August 31, 1989. The Company intends to engage in one or more mergers with or
acquisitions of target entities which may be private companies, partnerships,
or sole proprietorship.
The Company is in the development stage, not yet commencing its planned
principal operations. The company has not yet generated any revenue. The
Company is currently negotiating to merge or acquire certain target entities
with profitable operations or substantial capital.
Net loss per common share is based on the weighted average of common shares
outstanding during the period. As of June 30, 1998 and June 30, 1997, there
were 500,000 outstanding shares of common stock.
NOTE 2: INCOME TAXES
The Company has not filed required federal income tax returns from inception
through 1997. Due to the late filing of these tax returns a minimum penalty of
$800.00 has been accrued and included in accounts payable on the balance sheet.
NOTE 3: CAPITALIZATION
Guideline Capital Corporation initially authorized 15,000,000 shares of common
stock at a par value $.001 per share.
On August 31, 1989, Guideline Capital Corporation issued 500,000 shares of
stock at $.001 per share for $500. These shares have been issued to ten
individuals based on the cash contributed.
NOTE 4: RELATED PARTY EVENTS
The Company maintains its principal offices in space provided by a shareholder
of the company on a rent free basis. The office is located 6 Venture, Suite
207, Irvine, California.
NOTE 5: YEAR END DATE
The Company's year end is June 30.
6
36
<PAGE>
PART III
Item 1. Exhibit Index
No. Sequential
- --- Page No.
-------
(3) Certificate of Incorporation and Bylaws
3.1 Certificate of Incorporation *
3.2 Bylaws *
(4) Instruments Defining the Rights of Holders
4.1 Form of Lock-up Agreements Executed
by the Company's Shareholders *
(27) Financial Data Schedule
27.1 Financial Data Schedule 39
___________________
* Previously filed as part of the Registrant's initial filing
of its Registration Statement on Form 10-SB on or about August 6,
1998.
37
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
GUIDELINE CAPITAL CORPORATION
(Registrant)
Date: October 21, 1998
By: /s/ ADAM STULL
----------------------------
Adam Stull,
President
38
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 1998, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 800
<BONDS> 0
0
0
<COMMON> 500
<OTHER-SE> (1,300)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (100)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (100)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
