U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 33-33263-NY
GTM HOLDINGS, INC.
(Exact name of small business issuer as specified in its
charter)
Nevada 62-1407521
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5882 South 900 East, Suite 202, Salt Lake City, Utah 84121
(Address of principal executive offices)
(801) 229-1288
(Issuer's telephone number)
TRIAD WARRANTY CORPORATION, INC.
5882 South 900 East, Suite 202, Salt Lake City, Utah 84121
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as of August 18, 2000: 2,299,886
shares of common stock.
Transitional Small Business Format: Yes [ ] No [ X ]
Documents incorporated by reference: None
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FORM 10-QSB
GTM HOLDINGS, INC.
INDEX
Page
PART I. Financial Information 3
Accountant's Review Report 4
Condensed Balance Sheets for the Period
Ending June 30, 2000 and December 31,
1999 (unaudited) 5
Condensed Statement of Operations from
for the Three and Six Months Ended June
30, 2000 and 1999 and from the re-
entering of development stage on December
27, 1993 through June 30, 2000
(unaudited) 6
Condensed Statement of Cash Flows for the
Three and Six Months Ended June 30, 2000
and 1999 and from the re-entering of
development stage on December 27, 1993
through June 30, 2000 (unaudited) 7
Notes to Unaudited Condensed Financial
Statements 8
Management's Discussion and Analysis of
Financial Condition 13
PART II. Other Information 13
Legal Proceedings 13
Changes in Securities and Use of Proceeds 14
Submission of Matters to a Vote of
Securities Holders 14
Defaults upon Senior Securities 14
Exhibits and Reports on Form 8-K 14
Signatures 15
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PART I.
Financial Information
In the opinion of management, the accompanying unaudited
financial statements included in this Form 10-QSB reflect all
adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the results of operations
for the periods presented. The results of operations for the
periods presented are not necessarily indicative of the results
to be expected for the full year.
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ACCOUNTANTS' REVIEW REPORT
Board of Directors
GTM HOLDINGS, INC.
Salt Lake City, Utah
We have reviewed the accompanying condensed balance sheet of GTM
Holdings, Inc. (formerly Triad Warranty Corporation) [A
Development Stage Company] as of June 30, 2000, and the related
condensed statements of operations for the three and six months
ended June 30, 2000 and for the period from the re-entering of
development stage on December 27, 1993 through June 30, 2000, and
the statements of cash flows for the six months ended June 30,
2000 and for the period from the re-entering of development stage
on December 27, 1993 through June 30, 2000. All information
included in these financial statements is the representation of
the management of GTM Holdings, Inc.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed financial
statements reviewed by us, in order for them to be in conformity
with generally accepted accounting principles.
The accompanying condensed financial statements have been
prepared assuming the Company will continue as a going concern.
As discussed in Note 7 to the financial statements, the company
has no on-going operations, has incurred substantial losses since
its inception and has no working capital. These factors raise
substantial doubt about its ability to continue as a going
concern. Management's plans in regards to these matters are also
described in Note 7. The financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
August 11, 2000
Salt Lake City, Utah
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GTM HOLDINGS, INC.
(Formerly Triad Warranty Corporation)
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited - See Accountant's Review Report]
ASSETS
June 30, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash in bank $ - $ -
___________ ___________
Total Current Assets - -
___________ ___________
$ - $ -
____________ ____________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Liabilities of discontinued
operations $ - $ 56,380
___________ ___________
Total Current Liabilities - 56,380
___________ ___________
STOCKHOLDERS' (DEFICIT):
Common stock, $.001 par value,
25,000,000 shares authorized,
2,289,886 and 264,886 shares
issued and outstanding,
respectively 2,290 265
Capital in excess of par value 112,431 77,206
Retained deficit (76,353) (76,353)
Deficit accumulated during the
development stage (38,368) (57,498)
___________ ___________
Total Stockholders' (Deficit) - (56,380)
___________ ___________
$ - $ -
____________ ____________
Note: The Balance Sheet of December 31, 1999 was taken
from the audited financial statement at that date.
The accompanying notes are an integral part of these unaudited
financial statements.
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GTM HOLDINGS, INC.
(Formerly Triad Warranty Corporation)
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited - See Accountant's Review Report]
Cumulative from
the Re-entering of
For the Three For the Six Development Stage
Months Ended Months Ended on December 27, 1993
June 30, June 30, through June 30,
__________________ __________________
2000 1999 2000 1999 2000
______ ________ _______ ________ ___________
REVENUE $ - $ - $ - $ - $ -
_______ ________ _______ ________ ___________
EXPENSES:
General and
administrative 29,750 - 29,750 - 30,868
_______ ________ _______ ________ ___________
LOSS FROM
OPERATIONS (29,750) - (29,750) - (30,868)
CURRENT
INCOME TAXES - - - - -
DEFERRED
INCOME TAX - - - - -
_______ ________ _______ ________ ___________
LOSS FROM
CONTINUING
OPERATIONS (29,750) - (29,750) - (30,868)
_______ ________ _______ ________ ___________
DISCONTINUED
OPERATIONS:
Gain (loss) from
operations of
warranty service
business of former
subsidiary 48,880 - 48,880 - (7,500)
_______ ________ _______ ________ ___________
NET INCOME (LOSS) $19,130 $ - $19,130 $ - $ (38,368)
________ _________ ________ _____________________
INCOME (LOSS) PER SHARE:
Income (loss) from
continuing
operations $ .01 $ - $ .01 $ - $ (.01)
Loss from
discontinued
operations
former subsidiary (.00) - (.00) - (.00)
_______ ________ _______ ________ ___________
Total Income
(Loss)
Per Share $ .01 $ - $ .01 $ - $ (.01)
________ _________ ________ __________ __________
The accompanying notes are an integral part of these unaudited
financial statements.
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GTM HOLDINGS, INC.
(Formerly Triad Warranty Corporation)
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited - See Accountant's Review Report]
Cumulative from
the Re-entering of
For the Six Development Stage
Months Ended on December 27, 1993
June 30, through June 30,
____________________
2000 1999 2000
_________ _________ ___________
Cash Flows Provided by
Operating Activities:
Net income (loss) $ 19,130 $ - $ (38,368)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation - - 1,068
Non-cash expenses 37,250 - 37,300
Changes in assets and liabilities:
Increase (decrease) in
accounts payable (56,380) - -
_________ _________ ___________
Net Cash (Used) by
Operating Activities - - -
_________ _________ ___________
Cash Flows Provided by
Investing Activities: - - -
_________ _________ ___________
Net Cash (Used) by
Investing Activities - - -
_________ _________ ___________
Cash Flows Provided by Financing
Activities: - - -
_________ _________ ___________
Net Cash Provided by
Financing Activities - - -
_________ _________ ___________
Net Increase (Decrease) in Cash - - -
Cash at Beginning of the Year - - -
_________ _________ ___________
Cash at End of the Year $ - $ - $ -
_________ _________ ___________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the six months ended June 30, 2000: The Company issued
2,000,000 shares of common stock to reduce a payable to related party of
$36,790, and also issued 25,000 shares of common stock for
services rendered.
For the six months ended June 30, 1999: None
The accompanying notes are an integral part of these Unaudited
Financial Statements.
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GTM HOLDINGS, INC.
(Formerly Triad Warranty Corporation)
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Triad Warranty Corporation, Inc. (formerly
"Fulton Ventures, Inc.") was organized under the laws of the
State of Nevada on September 21, 1989. On May 22, 2000 Triad
Warranty Corporation changed their name to GTM Holdings, Inc.
GTM Holdings, Inc. (the Company) was formed to purchase, merge
with or acquire any business or assets which management
believed had potential for being profitable. On June 14,
1990, the Company exchanged 2,464,829 of its common shares for
all the outstanding shares of Triad Warranty Corporation.
Triad Warranty Corporation was organized under the laws of the
state of Texas on November 21, 1988. The purpose of this
Company was to provide extended warranty service coverage for
heating and air conditioning units and their component parts
and various other consumer products. This Company began
operations in January 1989, in Dallas Texas. The Board of
Directors met on December 27, 1993, and determined it was in
the best interest of Triad Warranty Corporation, Inc. (Nevada)
and its sole operating subsidiary, Triad Warranty Corporation,
to separate ownership. To effect this transaction, selected
shareholders in the Company were issued his or her pro rata
shares in Triad Warranty Corporation, and the original
2,464,829 shares of common stock were returned to the Company
for cancellation. This transaction was accounted for in the
financial statement of the Company as a discontinued operation
as of December 27, 1993. The Company is considered to have re-
entered into a new development stage on December 27,1993.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit.
In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows
at June 30, 2000 and 1999 and for the periods then ended have
been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial
statements and notes thereto included in the Company's
December 31, 1999 audited financial statements. The results
of operations for the periods ended June 30, 2000 are not
necessarily indicative of the operating results for the full
year.
Development Stage - The Company is considered a development
stage company as defined in SFAS no. 7. Consequently,
cumulative numbers have been provided from December 27, 1993
forward to reflect the change in control and the change in the
Company's planned operations which was effective as of 1994.
During 2000 the Company under went a change in ownership
control which has resulted in a change in the officers and
Board of Director's of the Company.
8
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GTM HOLDINGS, INC.
(Formerly Triad Warranty Corporation)
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]
Loss Per Share - The computation of loss per share of common
stock is based on the weighted average number of shares
outstanding during the periods presented, in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" [See Note 6].
Cash and Cash Equivalents - For purposes of the statement of
cash flows, the Company considers all highly liquid debt
investments purchased with a maturity of three months or less
to be cash equivalents.
Accounting Estimates - The preparation of financial statement
in conformity with generally accepted accounting principles
required management to make estimates and assumptions that
effect the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at the date
of the Financial Statement, and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimated by management.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure
about Pensions and Other Postretirement Benefits", SFAS No.
133, "Accounting for Derivative Instruments and Hedging
Activities", SFAS No. 134, "Accounting for Mortgage-Backed
Securities.", SFAS No. 135, "Rescission of FASB Statement
No. 75 and Technical Corrections" were SFAS No. 136,
"Transfers of Assets to a not for profit organization or
charitable trust that raises or hold contributions for
others", "accounting for derivative instruments and Hedging
Activities - deferral of the effective date of FASB statement
No. 133 (an amendment of FASB Statement No. 133.),"and SFAS
No. 137 recently issued. SFAS No. 132, 133, 134, 135, 136 and
137 have no current applicability to the Company or their
effect on the financial statement would not have been
significant.
NOTE 2 - CAPITAL STOCK
Common Stock - During May 2000, the Company issued 2,000,000
shares of its previously authorized, but unissued common stock
to reimburse a related party for Company expenses paid by the
related party in the amount of $36,790. The Company also
issued 25,000 shares during June 2000 to an officer for
services rendered, valued at $460.
During 1994, the Company issued 50,000 shares of its
previously authorized, but unissued common stock for services
rendered, valued at $50.
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GTM HOLDINGS, INC.
(Formerly Triad Warranty Corporation)
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" which requires the liability
approach for the effect of income taxes.
The Company has available at June 30, 2000, unused operating
loss carryforwards of approximately $38,000, which may be
applied against future taxable income and which expire in
various years through 2019. If certain substantial changes in
the Company's ownership should occur, there could be an annual
limitation on the amount of net operating loss carryforwards
which can be utilized. The amount of and ultimate realization
of the benefits from the operating loss carryforwards for
income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company and other future
events, the effects of which cannot be determined. Because of
the uncertainty surrounding the realization of the loss
carryforwards the Company has established a valuation
allowance equal to the tax effect of the loss carryforwards
(approximately $13,000) at June 30, 2000 and, therefore, no
deferred tax asset has been recognized for the loss
carryforwards. The change in the valuation allowance is equal
to the tax effect of the current period's net (loss)
approximately ($6,500).
NOTE 4 - DISCONTINUED OPERATIONS
The accompanying Financial Statement as of June 30, 2000 and
for the six months ended June 30, 2000 and 1999, have been
reclassified to reflect management's decision to discontinue
the Company's operations in the Warranty Service Business on
December 27, 1993. The Company's previous operations through
its former subsidiary in the Warranty Service Business are
included as Discontinued Operations in the financial
statements of the Company.
During May 2000, the Company settled a judgment in the amount
of $56,380 which was related to the previously discontinued
operations. The judgment was settled for $7,500, resulting in
a change to the estimated loss on discontinued operations of
$48,880.
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - During April 2000 a related party
paid $22,500 to a former officer of the Company for consulting
services rendered to the Company.
During June 2000, the Company issued 25,000 shares of common
stock to an officer for services rendered, valued at $460.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
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GTM HOLDINGS, INC.
(Formerly Triad Warranty Corporation)
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 5 - RELATED PARTY TRANSACTIONS (CONTINUED)
Company to use his home as a mailing address, as needed, at no
expense to the Company.
Expenses Paid By Related Party - An entity related to an
officer of the Company paid expenses on behalf of the Company
to totaling $36,790. The Company issued 2,000,000 shares of
common stock valued at $36,790 to repay the debt.
NOTE 6 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income
(loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock
for the six months ended June 30, 2000 and 1999 and for the
period from the re-entering of development stage on December
27, 1993 through June 30, 2000:
Cumulative from
the Re-entering of
For the Three For the Six Development Stage
Months Ended Months Ended on December 27,
June 30, June 30, 1993 through
___________________ _______________ June 30,
2000 1999 2000 1999 2000
_________ _________ _________ _________ _________
Income (loss) from
continuing operations
available to common
stockholders
(numerator) $ (29,750) $ - $ (29,750) $ - $ (30,868)
_________ _________ _________ _________ _________
Loss from
discontinued
operations available
to common
stockholders
(numerator) $ 48,880 $ - $ 48,880 $ - $ (7,500)
_________ _________ _________ _________ _________
Weighted average
number of common
shares outstanding
used in earnings
per share during
the period
(denominator) 1,986,589 264,886 1,425,738 264,886 2,580,042
_________ _________ _________ _________ _________
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GTM HOLDINGS, INC.
(Formerly Triad Warranty Corporation)
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 6 - EARNINGS (LOSS) PER SHARE (CONTINUED)
Dilutive earnings per share was not presented, as the Company
had no common equivalent shares for all periods presented that
would effect the computation of diluted earnings (loss) per
share.
Treasury stock which was being held by the Company for
cancellation has not been included in the calculations as it
was considered cancelled for all periods presented.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles,
which contemplate continuation of the Company as a going
concern. However, the Company has incurred losses since its
inception and has not yet been successful in establishing
profitable operations. Further, the Company has no working
capital to pay its expenses. These factors raise substantial
doubt about the ability of the Company to continue as a going
concern. In this regard, management is proposing to raise any
necessary additional funds not provided by operations through
loans or through sales of its common stock or through a
possible business combination with another company. There is
no assurance that the Company will be successful in raising
this additional capital or achieving profitable operations.
The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
NOTE 8 - SUBSEQUENT EVENTS
During July 2000, the Company issued 10,000 shares of common
stock to an officer of the Company for services rendered.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
Forward-Looking Statements
This Form 10-QSB includes, without limitation, certain
statements containing the words "believes", "anticipates",
"estimates", and words of a similar nature, constitute "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. This Act provides a "safe harbor"
for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify
these statements as forward looking and provide meaningful,
cautionary statements identifying important factors that could
cause actual results to differ from the projected results. All
statements other than statements of historical fact made in this
Form 10-QSB are forward-looking. In particular, the statements
herein regarding industry prospects and future results of
operations or financial position are forward-looking statements.
Forward-looking statements reflect management's current
expectations and are inherently uncertain. The Company's actual
results may differ significantly from management's expectations.
Results of Operations
For the Three and Six Months Period Ended June 30, 2000 and 1999
The Company had no revenue from continuing operations for the
three and six months period ended June 30, 2000 and 1999,
respectively.
General and administrative expenses for the three and six
months period June 30, 2000 and 1999 consisted of general
corporate administration, legal and professional expenses, and
accounting costs. These costs were $29,750 and $-0- for the
three and six months ended June 30, 2000 and 1999, respectively.
The Company realized a gain of $48,880 and $-0- for the three
and six months period ended June 30, 2000 and 1999, respectively.
This gain is attributed to the Company's settlement of its
outstanding judgment originally in the amount of $56,380 for $
$7,500.
As a result of the foregoing factors, the Company realized a
net income gain of $19,130 and $-0- for the three and six months
period ended June 30, 2000 and 1999, respectively.
Liquidity and Capital Resources
At June 30, 2000, the Company had $-0- cash, non-cash expenses
of $37,250 and a decrease in accounts receivable of $56,380.
The Company believes that its current cash needs can be met
for at least the next twelve months by
loans from the principals of the Company. The Company has no
material commitments for capital expenditures for the next twelve
months.
PART II. OTHER INFORMATION
Legal Proceedings:
Warren Supply Company vs. Triad Warranty Corporation, Inc.,
Triad Warranty Corporation, and Harold Scott. In June, 1995, the
Company became subject to a judgment in the amount of $56,379 in
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favor of Warren Supply Company. In May 2000 the Company
negotiated a settlement for the outstanding judgment in the
amount of $7,500.
Changes in Securities and Use of Proceeds:
In May 2000, the Company issued 2,000,000 shares of its
previously authorized but unissued common stock to reimburse a
related party for Company expenses paid by the related party in
the amount of $36,790. The shares issued were not in connection
with any public offering. The Company relied upon Section 4(2)
of the Securities Act to effect the transaction.
In June 2000 the Company issued 25,000 shares of common stock
to an officer for services rendered, valued at $460.00. The
shares issued were not in connection with any public offering.
The Company relied upon Section 4(2) of the Securities Act to
effect the transaction.
In July 2000 the Company issued 10,000 shares of common stock
to an officer for services rendered, valued at $184. The shares
issued were not in connection with any public offering. The
Company relied upon Section 4(2) of the Securities Act to effect
the transaction.
Defaults upon Senior Securities:
None
Submission of Matters to a Vote of Securities Holders:
A special meeting of stockholders was held on May 22, 2000.
Two proposals were submitted for a vote by the stockholders.
There were 2,264,886 shares eligible to vote at the special
meeting.
The first proposal was the election of the Board of
Directors.
Name For Against Abstain
Kip Eardley 2,000,000 -0- 264,886
John Chymboryk 2,000,000 -0- 264,886
The second proposal was to change the Corporation's name from
Triad Warranty Corporation, Inc., to GTM Holdings, Inc.
For Against Abstain
2,000,000 -0- 264,886
Exhibits and Reports on Form 8-K.
Reports on Form 8-K: None.
Exhibits: Included with the electronic filing of this report are
the following exhibits:
Exhibit SEC Ref. Title of Document Location
No. No.
1 3 Certificate of Incorporation, Attached
as Amended
2 27 Financial Data Schedule Attached
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SIGNATURES
In accordance with the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned
thereunto duly authorized.
GTM Holdings, Inc
Date: August 21, 2000 By: /s/ Kip Eardley, President, Secretary,
Treasurer and Director
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