As filed with the Securities and Exchange Commission on September 18, 2001
Registration No. 333-65150
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GUMP & COMPANY, INC.
(Name of small business issuer in its charter)
192 Searidge Court
Shell Beach, California 93449
(805) 773-5350
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive office)
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Delaware 6770 75-2256798
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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Mark A. DiSalvo
Gump & Company, Inc.
192 Searidge Court
Shell Beach, California 93449
(805) 773-5350 (Phone)
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Robert M. Kern, Esq.
23676 Blythe Street
West Hills, California 91304
(818) 592-0860 (Phone)
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_| ________
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|
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CALCULATION OF REGISTRATION FEE
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Title of each class of securities Amount to be Proposed Offering Proposed Aggregate Amount of
to be registered Registered Price Per Share (1) Offering Price (1) Registration Fee
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Common Stock, $0.01 par value......... 1,000,000 $0.10 $100,000 $25.00(2)
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(1) Registrant and Selling Stockholder have estimated the Offering Price Per
Share for the purpose of calculating the registration fee in accordance with
Rule 457 based on the current financial condition of the Registrant, the current
development of the Registrant's business plan, general condition of the
securities market and the Registrant's lack of a historical trading market.
Although the Registrant's common stock has been listed since February 1, 2001 on
the OTC Bulletin Board under the symbol GMPP, no trades have been reported.
(2) Amount previously paid.
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The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
Prospectus (Subject to Completion)
Dated September 18, 2001
The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. The prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Up to 1,000,000 Shares
GUMP & COMPANY, INC.
Common Stock
Although our common stock has been listed for trading since February 1,
2001 on the OTC Bulletin Board under the symbol "GMPP", there have been no
trades in our common stock and there currently exists no public market for our
stock. We can give no assurance to any purchaser of our common stock that an
active public trading market for our stock will ever develop.
These shares of common stock are being offered by Mark A. DiSalvo, our
president, chief executive officer, chief financial officer, secretary-treasurer
and sole director (the "Selling Stockholder"). The Selling Stockholder
beneficially owns 2,016,472 shares of our common stock, which represents
approximately 99% of our outstanding shares of common stock. If the Selling
Stockholder sells all of the offered 1,000,000 shares of our common stock, he
will own 1,016,472 shares or approximately 49.9% of our outstanding common
stock. The Selling Stockholder is offering to sell our common stock to obtain
funds for reimbursement of his legal, accounting and acquisition costs in
acquiring control of us.
The Selling Stockholder may offer and sell up to 1,000,000 shares of our
common stock under this prospectus. The Selling Stockholder may offer and sell
the common stock from time to time in one or more transactions, including block
transactions, on the OTC Bulletin Board, or such other markets or exchanges on
which the common stock is from time to time eligible for trading or quotation,
at prevailing market prices or at privately negotiated prices. We will not
receive any of the proceeds from the sales of the shares by the Selling
Stockholder.
The Selling Stockholder intends to offer our common stock to prospective
investors at $0.10 per share. The offering price per share of our common stock
was determined by us and the Selling Stockholder based on our current financial
condition, the current development of our business plan, general condition of
the securities market, a lack of a historical trading market for our common
stock, and the current economic conditions in the United States.
Investing in our common stock involves a high degree of risk. See "Risk
Factors" beginning on page 3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is , 2001.
TABLE OF CONTENTS
Page
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PROSPECTUS SUMMARY.............................................................1
FORWARD-LOOKING STATEMENTS.....................................................2
RISK FACTORS...................................................................3
BUSINESS.......................................................................6
MANAGEMENT.....................................................................8
PRINCIPAL STOCKHOLDERS.........................................................9
RELATED PARTY TRANSACTIONS.....................................................9
USE OF PROCEEDS...............................................................10
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.....................10
SELLING STOCKHOLDER...........................................................11
PLAN OF DISTRIBUTION..........................................................12
DESCRIPTION OF CAPITAL STOCK..................................................13
SHARES ELIGIBLE FOR FUTURE SALE...............................................15
LEGAL OPINIONS................................................................16
EXPERTS.......................................................................16
INDEMNIFICATION...............................................................16
WHERE YOU CAN FIND MORE INFORMATION...........................................16
INDEX TO FINANCIAL STATEMENTS.................................................19
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PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information regarding Gump & Company, Inc. and the 1,000,000 shares of our
common stock being offered by the Selling Stockholder appearing elsewhere in
this prospectus and our risk factors beginning on page 3. Except as otherwise
indicated, current share information provided in this prospectus reflects the
effect of two one (1) for ten (10) reverse stock splits effected on September
10, 1993 and April 16, 2001.
Our History
We are a development stage company and since our inception in 1988, we
have had no commercial operations, generated no revenues and at July 31, 2001
had $17,692 cash and no other assets. At July 31, 2001 our only liability
consisted of $714 owed to the Selling Stockholder. Since inception, our primary
activities have been directed to organizational activities and developing our
business plan. We have no employees and only have one officer and director, Mark
A. DiSalvo, who is the Selling Stockholder in this offering and our principal
stockholder.
We were initially incorporated on September 28, 1988 under the laws of the
State of Delaware as Brian Capital, Inc. As a result of the merger on September
15, 1993, we changed our name to Sea Pride Industries, Inc. On August 18, 1997,
we changed our name to Gump & Company, Inc. We had been delinquent since 1993 in
our annual and periodic filings to the Securities and Exchange Commission (the
"Commission") as required under the Securities Exchange Act of 1934 (the
"Exchange Act"). As a result of a change in control on June 7, 2000, we filed
with the Commission our Annual Report on Form 10-KSB to cover the fiscal periods
from October 31, 1993 through October 31, 1999. We are current in our Exchange
Act filings with the Commission.
On September 10, 1993, our stockholders exchanged 24,985 shares, or
approximately 75 percent of our issued and outstanding capital stock, for
126,192 shares of common stock of Sea Pride Industries, Inc. In addition, we
executed a one (1) for ten (10) reverse stock split and increased the par value
of the authorized shares of common stock from $.001 per share to $.01 per share.
Consequently, the number of common shares issued and outstanding decreased from
3,300,000 shares to 330,000 shares.
On June 7, 2000 our then principal stockholder, sole officer and director
sold 24,972 shares of our common stock to the Selling Stockholder, who purchased
16,472 shares, and Robert M. Kern, our general counsel, who purchased 8,500
shares. The new majority stockholder, Mark A. DiSalvo, became our sole officer
and director and is the Selling Stockholder in this offering.
Effective on April 16, 2001, we executed a one (1) for ten (10) reverse
stock split. Consequently, the number of common shares issued and outstanding
decreased from 330,000 shares to 33,201 shares, after rounding.
On April 25, 2001, Mark A. DiSalvo, our sole officer and director and
Selling Stockholder, purchased 2,000,000 shares of our common stock for $20,000
or $0.01 per share.
Our Business Plan
Our current business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance our stockholders' value for their investment in
our common stock. The acquisition of a business entity may be made by purchase
of stock, merger, exchange of stock, or purchase of assets. We have no capital,
and it is unlikely that we will be able to take advantage of more than one such
business opportunity, if any. We intend to seek opportunities demonstrating the
potential of long-term growth as opposed to short-term earnings.
- 1 -
At the present time we have not identified any business opportunity that
we plan to pursue, nor have we reached any agreement or definitive understanding
with any person concerning an acquisition. We can give no assurance that we will
be successful in finding or acquiring any business entity, or that any
acquisition that occurs will be on terms that are favorable to us or our
stockholders.
We have in the past engaged in preliminary negotiations with the
principals of small business enterprises, but have been unable to obtain any
agreements or commitments from such parties. We recently attempted to develop a
website that would critique and rank Internet websites based on a variety of
criteria. However, our management has abandoned this project because of our lack
of capital, our lack of technical expertise, the current negative public
perception of Internet-related businesses and our management's belief that there
is more opportunity for an acquisition of a non-Internet related business which
will offer our stockholders the opportunity to achieve appreciative value for
their investment in our common stock.
We do not propose to restrict our search for investment opportunities to
any particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of our limited resources. This includes
industries such as service, finance, natural resources, manufacturing, high
technology, product development, medical, communications and others. Our
management's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors, including our ability to raise capital from
private investors in the future.
Our principal executive office is located at 192 Searidge Court, Shell
Beach, California 93449 and our telephone number is (805) 773-5350.
Offering
Offering Price........................ $0.10 per share
Common stock offered by Selling
Stockholder........................... 1,000,000 shares
Common stock currently outstanding.... 2,033,201 shares
Common stock outstanding after
offering.............................. 2,033,201 shares
Use of Proceeds....................... We will not receive any of the
proceeds from the sale of the
1,000,000 shares by the Selling
Stockholder.
Dividend Policy....................... We do not anticipate paying any
cash dividends on our common
stock in the foreseeable future.
OTC Bulletin Board Symbol............. GMPP
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. The words "will,"
"may," "designed to," "outlook," "believes," "should," "anticipates," "plans,"
"expects," "intends," "estimates" and similar expressions identify these
forward-looking statements. These forward-looking statements are contained
principally under the headings "Risk Factors" and "Business." Because these
forward-looking statements are also subject to risks and uncertainties, actual
results may differ materially from the expectations expressed in the
forward-looking statements. Important factors that could cause an impairment to
our ability to implement our business plan are reflected in the forward-looking
statements including those described in "Risk Factors," as well as:
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o our ability to raise capital;
o our ability to implement our business plan including our ability to
acquire companies and manage expanding operations; and
o our ability to retain our current sole officer and director.
In addition, these forward-looking statements are subject to the other
risks and uncertainties discussed under "Management's Discussion and Analysis or
Plan of Operation."
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below and the other information
contained in this prospectus before deciding to invest in our common stock. We
believe the following risks represent the known, material risks facing us, in
addition to the risks which are related to our common stock. If any of the
following risks actually occur, our financial condition and our ability to
implement our business plan could be materially adversely affected. In that
case, you could lose a part or all of your investment in our common stock.
We Will Not Receive Any Proceeds From This Offering
The shares are being sold by our sole officer and director and principal
stockholder. We will not receive any of the proceeds from the sale of the stock.
We Have Only Nominal Assets, No Operations and No Revenues
At July 31, 2001, we had $17,692 in cash and no other assets. We have not
engaged in any commercial operations since our inception in 1988. We can give no
assurance we will ever engage in commercial operations. We will not be able to
implement our business plan unless we raise capital from private investors or
are able to consummate a merger with a private operating company.
We May Need to Obtain Financing to Implement Our Business Plan
We may be required to obtain financing to implement our business plan and
acquisition strategy. If such capital needs are met through the issuance of
equity or convertible debt securities, the percentage ownership of our
stockholders will be reduced. Our success will be determined in a large part by
our ability to obtain financing, and we can give no assurance that we will be
successful in obtaining adequate financing on favorable terms, if at all. The
absence of financing may impair our ability to implement our business plan.
Issuance of Substantial Amounts of Additional Shares Will Dilute Our
Stockholders
Although there are no present plans, agreements, commitments or
undertakings with respect to the issuance of additional shares of common stock
or securities convertible into any such shares, we may decide to issue
securities to third parties in the future in connection with possible capital
raising activities or to consummate an acquisition. Any such shares issued would
further dilute the percentage ownership of our common stock held by our
stockholders.
There Is No Public Market For Our Common Stock
Although our common stock has been listed on the OTC Bulletin Board since
February 1, 2001, there have been no trades in our common stock and we can give
no assurance that an active and liquid public market for the shares of the
common stock will develop in the future. The offering price of the common stock
was determined by us and the Selling Stockholder and may not be indicative of
the value of the shares or the price as may be traded on the OTC Bulletin Board
in the future. These factors indicate a serious lack of liquidity for our shares
of common stock . Therefore, an investor may not to be able to readily, if at
all, liquidate his investment in our common stock.
- 3 -
We Have No Agreements With Any Underwriters or Broker Dealers, and We May Be
Unable to Attract Market Makers
There is no public trading market for the shares. The development of a
public trading market depends upon not only the existence of willing buyers and
sellers, but also on market makers. The market bid and asked prices for the
shares may be significantly influenced by decisions of the market makers to buy
or sell the shares for their own account, which may be critical for the
establishment and maintenance of a liquid public market in the shares. Market
makers are not required to maintain a continuous two-sided market and are free
to withdraw firm quotations at any time. Additionally, in order to maintain our
listing on the OTC Bulletin Board, we need to have at least one registered and
active market maker. No assurance can be given that any market making activities
of any market makers will commence or be continued.
Our Future Acquisitions Entail Numerous Risks and Uncertainties
As part of our business strategy, we are seeking acquisition prospects
that have revenues and management in an industry which we expect will give our
stockholders an opportunity to increase the value of their investment in our
common stock. If consummated, any such transaction could result in a change of
control or could otherwise be material to our business or to your investment in
our common stock . Such a transaction may or may not be consummated. An
acquisition could result in numerous risks and uncertainties, including:
o potentially dilutive issuances of equity securities, which may be
freely tradable in the public market and which could result in a
change of control;
o large and immediate write-offs;
o the incurrence of debt and contingent liabilities or amortization
expenses related to goodwill and other intangible assets;
o difficulties in the assimilation of operations, personnel,
technologies, products and information systems of the acquired
companies;
o the diversion of management's attention from other business
concerns;
o replacement of current management;
o the risks of entering geographic and business markets in which we
have no or limited prior experience; and
o the risk that the acquired business will not perform as expected.
The Loss of The Services of Mark A. DiSalvo, Our Sole Officer and Director and
Selling Stockholder, Would Impair Our Ability to Implement Our Business Plan
Our future success depends entirely on the efforts and abilities of Mark
A. DiSalvo, our sole officer and director and Selling Stockholder. Mr. DiSalvo
only devotes as much of his time as is necessary for our business operations and
for implementation of our business plan. Currently Mr. DiSalvo devotes
approximately three hours per week to our business which includes seeking and
evaluating possible acquisition candidates and preparing periodic and annual
reports required to be filed with the Commission under the Exchange Act. The
loss of Mr. DiSalvo's services would impair our ability to implement our
business plan. We may not be able to attract a replacement for Mr. DiSalvo. We
have no present intentions to employ any additional personnel nor can we give
any assurance that we will be able to recruit and retain additional employees if
needed for the future operation of our business.
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Shares Eligible for Future Sale Could Have an Adverse Effect on the Market Price
of Our Stock
Sales of substantial amounts of common stock in the public market in the
future could have an adverse effect on the market price of our common stock .
There are currently 2,033,201 shares of our common stock outstanding. If the
Selling Stockholder sells all of the offered shares of common stock, we will
have 1,008,229 shares which will be freely tradable over the OTC Bulletin Board
and 1,024,972 shares of common stock outstanding which will be "restricted
securities" as that term is defined under Rule 144 promulgated under the
Securities Act. Subject to the affiliate rules and volume and holding period
limitations of Rule 144, 24,972 outstanding shares of common stock are currently
eligible for sale under Rule 144 and 1,000,000 will be eligible for sale under
Rule 144 after April 25, 2002. No prediction can be made as to the effect, if
any, that future sales of additional shares of common stock or the availability
of such shares for sale under Rule 144, other applicable exemptions or otherwise
will have on the market price of our common stock prevailing from time to time.
Sales of substantial amounts of common stock in the public market, or the
perception that such sales could occur, could adversely affect prevailing market
prices of our common stock .
The Offering Price of the Common Stock Offered by this Prospectus Was Determined
by Us and the Selling Stockholder
Although our common stock has been listed since February 1, 2001 on the
OTC Bulletin Board, there have been no trades. The offering price of the shares
being offered hereby was determined by us and the Selling Stockholder. In
determining the offering price, we and the Selling Stockholder considered such
matters as our financial condition, the present state of development of our
business plan, the general condition of the securities market and the lack of a
historical trading market in our common stock . Accordingly, the offering price
of the shares of common stock should not be considered an indication of our
actual value.
Penny Stock Rules Could Have Adverse Effect on Liquidity of Our Stock
If a trading market for our common stock should ever develop on the OTC
Bulletin Board, it is expected that our common stock will initially trade below
$5.00 per share. Since the common stock is not listed on a national exchange
such as NYSE, AMEX or the NASDAQ system or certain other national securities
exchanges, resale of our securities is subject to the requirements of the penny
stock rules absent the availability of an exemption. The Commission has adopted
rules that regulate broker/dealer practices in connection with transactions in
"penny stocks." Penny stocks are usually equities selling for under $5.00 per
share which are not registered on certain national exchanges or quoted on the
NASDAQ system. The penny stock rules require a broker/dealer to deliver a
standardized risk disclosure document to provide the customer with current bid
and ask quotations for the penny stock, the compensation of the broker/dealers
and its salespersons in those transactions, and monthly account statements
showing the market value of each penny stock held in the customer accounts, to
make a special written determination that the penny stock is a suitable
investment for the purchaser and to receive the purchaser's written agreement to
the transaction. These disclosure requirements may have the effect of reducing
the level of trading in the secondary market for a stock that becomes subject to
the penny stock rule. Since our stock will be subject to such rules, investors
in this offering may find it more difficult to sell their securities in the
future and that the market liquidity of our securities may be severely and
adversely affected by limiting the ability of broker/dealers to sell our
securities and the ability of the purchasers of this offering to sell their
securities in the secondary markets.
- 5 -
Selling Stockholder Will Continue to Control the Company
Upon completion of this offering, the Selling Stockholder will own 49.9%
of our outstanding shares of common stock . As a result, the Selling Stockholder
will be able to significantly influence the control and outcome of certain
matters requiring a stockholder vote, including the election of directors.
We Do Not Plan to Pay Dividends
We have not paid any dividends to date, and have no plans to pay any
dividends on our common stock for the foreseeable future. We can give no
assurance that we will ever pay any dividends in respect of the common stock.
BUSINESS
Plan of Operation
Since our inception in 1988, our primary activities have been directed to
organizational activities and developing our business plan. We have had no
commercial operations and have no employees. We have had no operating income and
as of July 31, 2001 had only $17,692 in cash and $714 in liabilities.
Our current business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance our stockholder's value for their investment in
our common stock. The acquisition of a business entity may be made by purchase
of stock, merger, exchange of stock, or purchase of assets. We have nominal
capital, and it is unlikely that we will be able to take advantage of more than
one such business opportunity. We intend to seek opportunities demonstrating the
potential of long-term growth as opposed to short-term earnings.
At the present time we have not identified any business opportunity that
we plan to pursue, nor have we reached any agreement or definitive understanding
with any person concerning an acquisition. We can give no assurance that we will
be successful in finding or acquiring any business entity, or that any
acquisition that occurs will be on terms that are favorable to us or our
stockholders.
We have in the past engaged in preliminary negotiations with the
principals of small business enterprises, but have been unable to obtain any
agreements or commitments from such parties. We recently attempted to develop a
website that would critique and rank Internet websites based on a variety of
criteria. However, our management has abandoned this project because of our lack
of capital, our lack of technical expertise, the current negative public
perception of Internet-related businesses and our management's belief that there
is more opportunity for an acquisition of a non-Internet related business which
will offer our stockholders the opportunity to achieve appreciative value for
their investment in our common stock.
We do not propose to restrict our search for investment opportunities to
any particular geographical area or industry, and may, therefore, engage in
essentially any business, to the extent of its limited resources. This includes
industries such as service, finance, natural resources, manufacturing, high
technology, product development, medical, communications and others. Our
management's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors, including our ability to raise capital from
private investors in the future.
Investigation and Selection of Business Opportunities
Our management believes that various types of potential merger or
acquisition candidates might find a business combination with us to be
attractive. These include acquisition candidates (1) desiring to create a public
market for their shares in order to enhance liquidity for their current
stockholders, (2) which have long-term plans for raising capital through the
public sale of securities and which believe that the possible prior existence of
a public market for their securities would be beneficial, (3) which plan to
acquire additional assets through issuance of securities rather than for cash,
and which believe that the possibility of development of a public market for
their securities will be of assistance in that process. Acquisition candidates
which have a need for an immediate cash infusion are not likely to find a
potential business combination with us to be an attractive alternative.
- 6 -
The analysis of business opportunities will be undertaken by or under the
supervision of our sole officer and director, Mark A. DiSalvo, the Selling
Stockholder. We anticipate that he will consider, among other things, the
following factors in the analysis of business opportunities:
o Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;
o His perception of how any particular business opportunity will be
received by the investment community and by our stockholders;
o Whether, following the business combination, the financial condition
of the business opportunity would be, or would have a significant
prospect in the foreseeable future of becoming sufficient to enable
our securities to qualify for listing on an exchange or on a
national automated securities quotation system, such as NASDAQ
SmallCap Market;
o Capital requirements and anticipated availability of required funds,
to be provided through the private sale of additional securities;
o The extent to which the business opportunity can be advanced;
o Competitive position as compared to other companies of similar size
and experience within the industry segment as well as within the
industry as a whole;
o Strength and diversity of existing management, or management
prospects that are scheduled for recruitment;
o The cost of our participation as compared to the perceived tangible
and intangible values and potential; and
o The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required
items as such factors relate to the target company.
No one of the factors described above will be controlling in the selection
of a business opportunity, and management will attempt to analyze all factors
appropriate to each opportunity and make a determination based upon reasonable
investigative measures and available data. Potential investors must recognize
that, because of our lack of capital for investigation and our lack of
management for business analysis, we may not discover or adequately evaluate
adverse facts about the target company, its business and management.
We are unable to predict when we may be able to acquire a business entity.
We expect, however, that the analysis of specific proposals and the selection of
a business opportunity may take several months or more.
Possible Business Transactions
We can not predict the manner in which we may participate in a business
transaction with an acquisition target. Specific business opportunities will be
reviewed as well as the respective needs and desires of our stockholders and,
upon the basis of that review and our relative negotiating strength, the legal
structure or method deemed by management to be suitable will be selected. Such
structure may include, but may not be limited to, leases, purchase and sale
agreements, licenses, joint ventures and other contractual arrangements. We may
act directly or indirectly through an interest in a partnership, corporation or
other form of organization. Implementing such structure may require our merger,
consolidation or reorganization with other corporations or other forms of
business organization, and although it is likely, we can give no assurance that
we would be the surviving entity. In addition, our present management and
stockholders most likely will not have control of a majority of the voting
shares of the company following a reorganization transaction. As part of such a
transaction, our sole director may resign and new directors may be appointed
without any vote by stockholders.
- 7 -
It is likely that we will acquire our participation in a business
transaction through the issuance of our common stock or other securities.
Although the terms of any such transaction cannot be predicted, it should be
noted that in certain circumstances the criteria for determining whether or not
an acquisition is a so-called "tax free" reorganization under the Internal
Revenue Code of 1986, depends upon the issuance to the stockholders of the
acquired company of a controlling interest (usually 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction is structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, our
current stockholders will retain in the aggregate 20% or less of the issued and
outstanding shares. This could result in substantial additional dilution in the
equity of our stockholders prior to such reorganization, including purchasers of
the shares offered by the Selling Stockholder. Any such issuance of additional
shares might also be done simultaneously with a sale or transfer of shares
representing a controlling interest our company by our sole officer, director
and Selling Stockholder.
Employees
We have no employees. Our sole officer and director and Selling
Stockholder receives no compensation, and none is being accrued. He devotes only
as much of his time to our business as necessary.
Facilities
We do not currently maintain an office or any other facilities. We
currently maintain an office at no cost at 192 Searidge Court, Shell Beach,
California 93449, which is the office address of our sole officer and director
and the Selling Stockholder. We do not believe that we will need to maintain an
office elsewhere at anytime in the foreseeable future in order to develop and
implement our business plan. Our telephone number is (805) 773-5350 and our fax
number is (413) 215-2674.
MANAGEMENT
Directors and Executive Officers
The following person is our current sole executive officer and director:
Name Age Position
--------------- --- ---------------------------------------------------
Mark A. DiSalvo 50 President, Chief Executive Officer, Chief Financial
Officer, Secretary-Treasurer and Director
Mark DiSalvo has been our president, chief executive officer, chief
financial officer, secretary-treasurer, sole director and principal stockholder
since June 7, 2000. Mr. DiSalvo has been self-employed as a business consultant
for over 10 years. He has managed his personal portfolio of securities and real
estate investments for the past 20 years. As a business consultant, he provides
consulting services to small and development-stage companies relating to
possible merger and acquisition candidates. Mr. DiSalvo is the sole stockholder,
officer and director of California Brokerage Services, Inc., which is a personal
holding company for Mr. DiSalvo's business investments. California Brokerage
Services is not a licensed broker-dealer firm and does not engage in any
securities transactions for any party other than Mr. DiSalvo. He served as a
director of Stan Lee Media, Inc., formerly known as Boulder Capital
Opportunities, Inc., a public development stage company from August 1997 to July
1999. He served from March 1997 to July 1998 as president, chairman of the
board, chief executive officer and secretary-treasurer of Prodeo Technologies,
Inc., a public development stage company, formerly known as SITEK, Incorporated
and Dentmart Group, Ltd. Mr. DiSalvo only devotes as much of his time as is
necessary for management of our business and implementation of our business
plan. Currently, Mr. DiSalvo devotes approximately three hours per week for our
business which includes seeking and evaluating possible acquisition candidates
and preparation of periodic and annual reports required to be filed with the
Commission under the Exchange Act.
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Our board of directors is elected annually by our stockholders. Directors
receive no cash compensation for their services to us as directors, but are
reimbursed for expenses actually incurred in connection with attending meetings
of the board of directors.
We do not currently have an audit committee, a nominating committee or a
compensation committee.
Executive Compensation
Mark A. DiSalvo, our sole executive officer does not currently receive any
compensation nor are we accruing any compensation for his services. He has not
received any compensation since his election as an officer and director in June
2000.
PRINCIPAL STOCKHOLDERS
The following table sets forth the beneficial ownership of our common
stock as of September 12, 2001, by (i) each person known by us to beneficially
own 5% or more of our outstanding common stock, (ii) our sole executive officer
and director, and (iii) all of our executive officers and directors as a group.
The table also reflects the sale by the Selling Stockholder of the shares
offered by this prospectus. Except as otherwise indicated, all shares are
beneficially owned, and investment and voting power is held by the persons named
as owners.
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering
-------------------------- --------------------------
No. of Shares % No. of Shares %
--------------- --------- --------------- ---------
Mark A. DiSalvo(1) 2,016,472(2) 99.2% 1,016,472(3) 49.9%
-----------------------
(1) Mr. DiSalvo's address is 192 Searidge Court, Shell Beach, California
93449. Mr. DiSalvo is our sole officer and director.
(2) Mr. DiSalvo is the beneficial owner of 16,472 shares of our common stock
issued in the name of California Brokerage Services, Inc., which is a
personal holding company for Mr. DiSalvo's investments. Mr. DiSalvo is the
sole stockholder, officer and director of California Brokerage Services,
Inc.
(3) Assumes the sale of 1,000,000 shares offered by the Selling Stockholder.
RELATED PARTY TRANSACTIONS
On September 10, 1993, our then principal stockholders, David Goodnight,
C. Jack Bean, Matt Heinzelmann, K. David Beardsley and Angel Generes agreed to
exchange all of their respective shares of our capital stock for 126,192 shares
of common stock of Sea Pride Industries, Inc., a privately held Delaware
corporation ("Sea Pride") of which John D. Ericsson was the principal
stockholder and president. Also on September 10, 1993, we changed our name to
Sea Pride, David Goodnight, Matt Heinzelmann and K. David Beardsley resigned as
our officers and directors, and John D. Ericsson was elected as our president,
treasurer and sole director. Mr. Ericsson served in these capacities until June
7, 2000 when Mark A. DiSalvo acquired control of our company. The exchange of
shares was the result of arms length negotiations. John D. Ericsson owned
approximately 24,972 shares, or approximately 75.69% of our issued and
outstanding stock.
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On June 7, 2000, our then principal stockholder, sole officer and
director, John D. Ericsson, sold 16,472 shares of our common stock to California
Brokerage Services, Inc. and 8,500 shares to Robert M. Kern, our general
counsel. Mark DiSalvo, our sole officer, director and Selling Stockholder is the
sole stockholder, officer and director of California Brokerage Services, Inc.
Also, on June 7, 2000, John D. Ericsson resigned as an officer and director and
Mr. DiSalvo was elected as our sole officer and director. The purchase of our
shares by California Brokerage Services, Inc. and Robert M. Kern was the result
of arms length negotiations between the parties. After this transaction,
California Brokerage Services, Inc., owned a total of 16,472 shares, or
approximately 50% of our issued and outstanding stock.
In order to raise working capital, on April 25, 2001, we sold 2,000,000
shares of our common stock to Mark A. DiSalvo for $20,000 or $.01 per share. The
purchase price paid for our shares by Mr. DiSalvo was based on the $0.01 per
share par value of our common stock. Mr. DiSalvo currently is the beneficial
owner of 2,016,472 shares of our common stock, or approximately 99.2% of our
issued and outstanding stock.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the Selling Stockholder
of the shares of common stock offered by this prospectus.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in this
prospectus. This discussion contains forward-looking statements that involve
risks and uncertainties.
Plan of Operation
From our inception in 1988 through July 31, 2001, as a development stage
company, we have generated no revenues and had an accumulated deficit during our
development stage of $39,959. Accordingly, our financial results, from inception
to July 31, 2001, are not meaningful as an indication of future operations. We
do not anticipate a significant change in our results of operation until such
time as an acquisition or business combination is consummated.
Our present plan of operations for the next twelve months is to continue
to attempt to implement our plan of business. These activities include seeking
to complete a merger or acquisition transaction with a small- or medium-sized
operating enterprise which may allow our stockholders an opportunity to achieve
appreciative value for their investment in our common stock. In selecting a
potential merger or acquisition candidate, our management will consider many
factors, including, but not limited to, potential for growth and profitability,
quality and experience of management, capital requirements, and the ability of
the acquired company to qualify its shares for trading on NASDAQ SmallCap Market
or on a national exchange.
The types of business enterprises that we believe might find a business
combination with us to be attractive include (1) candidates desiring to create a
public market for their shares to enhance liquidity for current stockholders,
(2) acquisition candidates which have long-term plans for raising capital
through the public sale of securities and believe that the possible prior
existence of a public market for their securities would be beneficial, (3)
foreign companies desiring to obtain access to U.S. customers and U.S. capital
markets, and (4) acquisition candidates which plan to acquire additional assets
through issuance of securities rather than for cash.
We have in the past engaged in preliminary negotiations with principals of
small business enterprises but have been unable to obtain any agreements or
commitments from such parties. We recently attempted to develop a website that
would critique and rank Internet sites based on a variety of criteria. However,
management abandoned this project because of our lack of capital and technical
expertise and because of the current negative perception of Internet related
businesses. We incurred nominal expenses in pursuing this business prospect.
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We are not presently in discussions with any prospective acquisition or
merger candidates. We are also unable to predict when we may effect a business
opportunity. We have not established any deadline for completion of a
transaction, and anticipate that the process could continue throughout the next
twelve months.
Our balance sheet at July 31, 2001 reflects current assets of $17,692 and
current liabilities in the amount of $714. Accordingly, we may be required to
raise additional funds from private investors, or our principal stockholder may
be required to advance funds, in order to pay our current liabilities and to
satisfy our cash requirements for the next twelve months.
Our Liquidity and Capital Resources
As of July 31, 2001, we had $17,692 in cash and cash equivalents. To date,
we have had negative cash flows. We expect losses from operations and negative
cash flow to continue for the foreseeable future. Until an acquisition or merger
transaction is completed, we do not expect to generate any revenues. Even if we
consummate an acquisition, we may not sustain or increase revenues on a
quarterly or annual basis in the future. We may need to raise up to $100,000 to
cover expenses associated with maintaining our reporting status under the
Exchange Act, including legal and accounting expenses, general corporate
maintenance and evaluating business opportunities, including the retention of
consultants to help evaluate such prospects. We anticipate that capital will be
raised through the sale of our debt or equity securities or from loans to us by
our sole officer and director. We cannot be certain that any required financing
will be available on terms favorable to us or that our sole officer and director
will fund our additional operations expenses. If funds are raised by the
issuance of our equity securities, then existing stockholders may experience
dilution of their ownership interest and such securities may have rights senior
to those of the then existing holders of our common stock. If additional funds
are raised by our issuance of debt instruments, we may be subject to certain
limitations on our operations. If adequate funds are not available or not
available on acceptable terms, we may be unable to fund our operations or ever
implement our business plan.
SELLING STOCKHOLDER
This prospectus covers the offer and sale of up to 1,000,000 shares of our
common stock by Mark A. DiSalvo, our sole officer, director and principal
stockholder.
Material Terms of the Selling Stockholder Agreement
On September 5, 2001, we entered into a selling stockholder agreement with
Mark A. DiSalvo and agreed to file a registration statement and a related
prospectus with the Commission covering the offer and sale of up to 1,000,000
shares of our common stock owned by Mr. DiSalvo. The agreement provides for
certain representations and warranties between us and the Selling Stockholder.
We also have agreed to indemnify the Selling Stockholder and the Selling
Stockholder has agreed to indemnify us against various liabilities, including
liabilities under the Securities Act. We agreed to keep the registration
statement effective until the earlier of the date that all of the common stock
covered by the registration statement has been sold or the date that is 90 days
after the effective date of the registration statement of which this prospectus
is a part. Mr. DiSalvo will pay all expenses relating to this registration
statement and the offering and sale of the 1,000,000 shares of our common stock.
We will extend the time that this prospectus is effective if during this 90-day
period we suspend the use of this prospectus.
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Selling Stockholder Table - Beneficial Ownership and Shares Offered for Sale
The following table lists the name of the Selling Stockholder, the number
of shares of common stock beneficially owned by the Selling Stockholder as of
the date of this prospectus, and the number of shares which may be offered for
sale by this prospectus. The Selling Stockholder provided to us the information
regarding his share ownership. The Selling Stockholder may offer all, some or
none of his common stock from time to time. We can not give a definitive
estimate as to the number of shares that will be owned by the Selling
Stockholder after the offering. We prepared the following table based on the
assumption that the Selling Stockholder will sell all of the shares of common
stock covered by this prospectus. As of the date of this prospectus, we had
2,033,201 shares of common stock outstanding.
Number of
Number of Number of Shares of Percentage of
Shares of Shares of Common Stock Common Stock
Common Stock Common Stock Percentage of Beneficially Beneficially
Registered for Beneficially Outstanding Owned After Owned After
Selling Stockholder Sale Hereby Owned (1) Common Stock Offering Offering
---------------------- -------------- ------------ ------------- ------------ -------------
Mark A. DiSalvo 1,000,000 2,016,472(2) 99.2% 1,016,472(2) 49.9%
--------------------
(1) Percentage ownership is based on 2,033,201 shares of our common stock
outstanding as of the date of this prospectus. Beneficial ownership is
determined in accordance with the rules of the Commission. In computing
the number of shares beneficially owned by a person and the percentage
ownership of that person, shares of common stock subject to options or
warrants held by that person that are currently exercisable or will become
exercisable within 60 days after the date of this prospectus are deemed
outstanding, while such shares are not deemed outstanding for purposes of
computing percentage ownership of any other person. The person named in
this table has sole voting and investment power with respect to all shares
beneficially owned, subject to community property laws where applicable.
(2) Includes 16,472 shares owned by California Brokerage Services, Inc. of
which Mr. DiSalvo is the sole stockholder, officer and director. Mr.
DiSalvo is deemed to have beneficial ownership of the 16,472 shares.
PLAN OF DISTRIBUTION
This prospectus covers the offer and sale of shares of common stock by the
Selling Stockholder and his pledgees, donees, assignees and other successors in
interest. The Selling Stockholder may sell his shares in the over-the-counter
market or through any other facility on which the shares are traded, or in
private transactions. These sales may be at market prices or at negotiated
prices. The Selling Stockholder currently anticipates that he will offer the
1,000,000 shares to prospective investors at $0.10 per share. The Selling
Stockholder may use the following methods when selling shares:
o ordinary brokerage transactions;
o block trades in which the broker or dealer attempts to sell the
shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by the
broker or dealer for its account pursuant to this prospectus;
o privately negotiated transactions;
o any combination of these methods of sale; or
o any other legal method.
The Selling Stockholder may engage in short sales of the common stock and
deliver shares to close out his short positions. The Selling Stockholder may
also enter into put or call options or other transactions with broker-dealers or
others, which require delivery to those persons of shares covered by this
prospectus.
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The Commission has adopted rules that regulate broker/dealer practices in
connection with transactions in "penny stocks." Our common stock may be
considered a penny stock and thus subject to such rules.
Brokers, dealers or other agents participating in the distribution of the
shares of common stock may receive compensation in the form of discounts or
commissions from the Selling Stockholder, as well as the purchaser if they act
as agent for the purchaser. The discount or commission in a particular
transaction could be more than the customary amount. We know of no existing
arrangements between Selling Stockholder and any underwriter, broker, dealer or
agent relating to the sale or distribution of the shares.
The Selling Stockholder and any brokers or dealers that participate in the
sale of the shares may be deemed to be "underwriters" within the meaning of the
Securities Act. The Selling Stockholder and any such broker or dealer
participating in the sale of the shares will be subject to the prospectus
delivery requirements of the Securities Act. Any discounts, commissions or other
compensation received by these persons and any profit on the resale of the
shares by them as principals might be deemed to be underwriters' compensation.
The Selling Stockholder may agree to indemnify any broker, dealer or agent that
participates in the sale of the shares against various liabilities, including
liabilities under the Securities Act.
Upon our being notified by the Selling Stockholder that any particular
offer of the shares is made, to the extent required, we will file a supplement
to this prospectus which identifies the number of shares offered, the name of
any participating broker or dealer, the amount of discounts and commissions, and
any other material information.
The Selling Stockholder and any other person participating in a
distribution will be subject to the applicable provisions of the Exchange Act
and its rules and regulations. For example, the anti-manipulative provisions of
Regulation M may limit the ability of the Selling Stockholder or others to
engage in stabilizing and other market making activities.
The Selling Stockholder may also sell his shares pursuant to Rule 144
under the Securities Act, rather than pursuant to this prospectus, so long as he
meets the criteria and conform to the requirements of the rule.
We will not receive any of the proceeds from the sale of the shares by the
Selling Stockholder. The Selling Stockholder will pay the registration and other
offering expenses related to this offering, including all underwriting discounts
and brokerage commissions incurred in connection with the offering. Pursuant to
the selling stockholder agreement, we have agreed to indemnify the Selling
Stockholder, and the Selling Stockholder has agreed to indemnify us, against
various liabilities, including liabilities under the Securities Act.
In order to comply with some states' securities laws, if applicable, the
shares will be sold in those states only through registered or licensed brokers
or dealers. In addition, in some states the shares may not be sold unless they
have been registered or qualified for sale or an exemption from registration or
qualification is available and is satisfied.
DESCRIPTION OF CAPITAL STOCK
As of the date of this prospectus, there were 2,033,201 shares of our
common stock outstanding. We are authorized to issued 20,000,000 shares of
common stock, $0.01 par value, and 2,000,000 shares of preferred stock. $0.001
par value. No shares of preferred stock are outstanding.
The following summary description of our capital stock is not complete and
is qualified in its entirety by our certificate of incorporation and bylaws that
have been filed, or are incorporated by reference, as exhibits to the
registration statement on Form SB-2 of which this prospectus forms a part. This
description is also qualified by the provisions of applicable Delaware law.
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Common Stock
The holders of common stock are entitled to one vote per share on all
matters to be voted on by the stockholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by the board of directors out of funds legally available for that
purpose. See "Shares Eligible For Future Sale - Dividend Policy" for a
description of our policy of distribution of dividends. In the event of a
liquidation, dissolution or winding up of our company, the holders of common
stock are entitled to share ratably in all assets remaining after payment of
liabilities, subject to prior distribution rights of preferred stock, if any,
then outstanding. The common stock has no preemptive or conversion rights or
other subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully
paid and nonassessable.
Preferred Stock
Our board of directors has the authority, without action by the
stockholders, to designate and issue preferred stock in one or more series and
to designate the rights, preferences and privileges of each series, any or all
of which may be greater than the rights of the common stock. It is not possible
to state the actual effect of the issuance of any shares of preferred stock upon
the rights of holders of the common stock until the board of directors
determines the specific rights of the holders of such preferred stock. However,
the effects might include, among other things, restricting dividends on the
common stock, diluting the voting power of the common stock, impairing the
liquidation rights of the common stock and delaying or preventing a change in
control of our company without further action by our stockholders. We have no
present plans to issue any shares of preferred stock.
Delaware Anti-Takeover Law and Certain Charter and Bylaw Provisions
Provisions of Delaware law and our certificate of incorporation and bylaws
could make it more difficult for a third party to acquire our company and remove
the incumbent officers and directors. These provisions, summarized below, are
expected to discourage certain types of coercive takeover practices and
inadequate takeover bids and to encourage persons seeking to acquire control of
our company to first negotiate with our management. We believe that the benefits
of increased protection of our management's ability to negotiate with the
proponent of an unfriendly or unsolicited proposal to acquire or restructure our
company outweigh the disadvantages of discouraging such proposals because, among
other things, negotiation of such proposals could result in an improvement of
their terms.
We are subject to Section 203 of the Delaware General Corporation Law
("DGCL"), which regulates corporate acquisitions. In general, Section 203
prohibits a publicly held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years
following the date the person became an interested stockholder, unless:
o the board of directors approved the transaction in which such
stockholder became an interested stockholder prior to the date the
interested stockholder attained such status;
o upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, he or she owned at
least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding shares owned by persons
who are directors and also officers and shares in employee stock
plans in which the participants have no right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
o on or subsequent to such date the business combination is approved
by the board of directors and authorized by 662/3% vote at an annual
or special meeting of stockholders.
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A business combination generally includes a merger, asset or stock sale,
or other transaction resulting in a financial benefit to the interested
stockholder. In general, an "interested stockholder" is a person who, together
with affiliates and associates, owns, or within three years prior to the
determination of interested stockholder status, did own, 15% or more of a
corporation's voting stock.
Our certificate of incorporation permits the board of directors to issue
preferred stock with voting or other rights without any stockholder action. The
authorization of undesignated preferred stock makes it possible for our board of
directors to issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to change control of our company.
These and other provisions may have the effect of deterring hostile takeovers or
delaying changes in control or management of our company.
SHARES ELIGIBLE FOR FUTURE SALE
We currently have 2,033,201 shares of common stock outstanding. If all the
shares offered hereby are sold by the Selling Stockholder, 1,008,229 shares will
be freely tradable on the OTC Bulletin Board and 1,024,972 shares of our common
stock will be deemed "restricted securities," as that term is defined under Rule
144 promulgated under the Securities Act. Subject to the applicable affiliate
rules and volume and holding period limitations of Rule 144, 24,972 shares are
eligible for sale under Rule 144 and 1,000,000 shares will be eligible for sale
under Rule 144 after April 25, 2002.
Under Rule 144, and subject to satisfaction of certain other conditions, a
person, including an affiliate of the our company (or persons whose shares are
aggregated into such affiliate), who has owned restricted shares of common stock
beneficially for at least one year is entitled to sell, within any three-month
period, a number of shares that does not exceed the greater of one percent of
the total number of outstanding shares of the same class or the average weekly
trading volume of our common stock during the four calendar weeks preceding the
sale. A person who has not been an affiliate of our company for at least the
three months immediately preceding the sale and who has beneficially owned
shares of our common stock for at least two years is entitled to sell such
shares under Rule 144(k) without regard to any of the limitations described
above.
The possibility that substantial amounts of our common stock may be sold
in the public market in the future may adversely affect the prevailing market
price for our common stock and could impair our ability in the future to raise
capital through the sale of our equity securities.
Dividend Policy
We have never declared or paid cash dividends on our capital stock. We
currently intend to retain all available funds and any future earnings for use
in the operation and expansion of our business and do not anticipate paying any
cash dividends in the near future.
Market For Common Stock and Related Stockholder Matters
Although our common stock has been listed for trading on the OTC Bulletin
Board since February 1, 2001, there presently is no trading market for our
common stock. We have 2,033,201 outstanding shares of common stock held of
record by approximately 360 persons.
We currently have six listed market markets in our common stock, but no
trades have occurred in our common stock since our listing on the OTC Bulletin
Board on February 1, 2001. We can give no assurance that an active trading
market will ever develop in the future for our common stock.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Securities
Transfer Corporation, 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034.
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LEGAL OPINIONS
Our counsel, Robert M. Kern, has issued a legal opinion regarding the
legality of the shares of our common stock offered by the Selling Stockholder by
this prospectus. Mr. Kern owns 8,500 shares of our common stock.
EXPERTS
Our financial statements included in this prospectus as of and for the
years ended October 31, 2000, 1999 and 1998, and for the nine months ended July
31, 2001, have been included in reliance on the report of Gerald R. Perlstein,
independent certified public accountants, given on the authority of this firm as
experts in accounting and auditing.
INDEMNIFICATION
As authorized by Section 145 of the General Corporation Law of the State
of Delaware, or DGCL, provides that each of our directors and officers may be
indemnified by us against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred in connection
with the defense or settlement of any threatened, pending or completed legal
proceedings in which he is involved by reason of the fact he is or was a
director or officer of our company if he acted in good faith and in a manner
that he reasonably believed to be in or not opposed to our best interests, and,
with respect to any criminal action or proceeding, if he had no reasonable cause
to believe that his conduct was unlawful. If the legal proceeding, however, is
by or in the right of our company, the director or officer may not be
indemnified in respect of any claim, issue or matter as to which he shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to our company unless a court determines otherwise.
Our Certificate of Incorporation provides that a director of our company
shall not be personally liable to our company or our stockholders for monetary
damages for breach of fiduciary duty as a director, except as limited by the
DGCL. Our Bylaws provide for the indemnification of our directors or officers
and our employees and agents under certain circumstances. We intend these
provisions to provide indemnification for appropriate persons to the fullest
extent permitted by law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers or control persons
pursuant to the foregoing provisions, we have been informed that in the opinion
of the Commission such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Commission. You may read and copy any document we file at
the Commission's public reference rooms in Washington, D.C., New York, and
Chicago. Please call the Commission at 1-800-SEC-0330 for further information on
the public reference rooms. Our Commission filings are also available to the
public from commercial document retrieval services and at the Commission's web
site at http://www.sec.gov.
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You can request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Gump & Company, Inc.
Attn: Mark A. DiSalvo
192 Searidge Court
Shell Beach, California 93449
(805) 773-5350
You should rely only on the information contained in this prospectus or
any supplement thereto. We have not authorized anyone else to provide you with
different information. The Selling Stockholder will not make an offer of these
shares in any state where the offer is not permitted. You should not assume that
the information in this prospectus or any supplement is accurate on any date
other than the date on the front of those documents.
This prospectus is part of a registration statement on Form SB-2 we filed
with the Commission. More information about the shares being offered by the
Selling Stockholder is contained in that registration statement and the exhibits
filed along with the registration statement. Because information about contracts
referred to in this prospectus is not always complete, you should read the full
contracts, which are incorporated by reference in this prospectus. You may read
and copy the full registration statement and its exhibits at the Commission's
public reference rooms or their web site.
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GUMP & COMPANY, INC.
(A development stage company)
Financial Statements
For the Nine Months Ended July 31, 2001 and
the Years Ended October 31, 2000, 1999 and 1998 and
for the period September 28, 1988 (date of inception)
to July 31, 2001
with Independent Auditor's Report
GUMP & COMPANY, INC.
(A development stage company)
INDEX TO FINANCIAL STATEMENTS
For the Nine Months Ended July 31, 2001 and
the Years Ended October 31, 2000, 1999 and 1998 and
for the Period September 28, 1988 (Date of Inception)
to July 31, 2001
Independent Auditor's Report..................................................20
Financial Statements:
Balance Sheets.......................................................21
Statements of Operations.............................................22
Statements of Stockholders' Equity................................23-24
Statements of Cash Flows.............................................25
Notes to Financial Statements.....................................26-28
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INDEPENDENT AUDITOR'S REPORT
Board of Directors GUMP & COMPANY, INC.
I have audited the accompanying balance sheets of GUMP & COMPANY, INC. (a
development stage company), as of July 31, 2001 and for the years ended October
31, 2000, 1999 and 1998 and the related statements of operations, stockholders'
equity, and cash flows for the nine months and years then ended, and for the
period September 28, 1988 (date of inception) to July 31, 2001. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit. The
financial statements of GUMP & COMPANY, INC., as of October 31, 1998 and 1999,
and for the period September 28, 1988 (date of inception) to October 31, 1999,
were audited by other auditors whose report, dated March 13, 2000, expressed an
unqualified opinion on those statements.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, based on my audit and the aforementioned report of other
auditors, the financial statements referred to above present fairly, in all
material respects, the financial position of GUMP & COMPANY, INC. (a development
stage company), as of July 31, 2001 and October 31, 2000, 1999 and 1998 and the
results of its operations and its cash flows for the nine months and years then
ended, and for the period September 28, 1988 (date of inception) to July 31,
2001, in conformity with generally accepted accounting principles.
As discussed in Note A of the financial statements, the Company has not engaged
in any significant business activity since its formation on September 28, 1988.
The Company is proposing to develop certain business operations although it
presently has no identifiable sources of additional capital to develop these
operations.
Gerald R. Perlstein
Los Angeles, California
August 26, 2001
- 20 -
GUMP & COMPANY, INC.
(A development stage company)
Balance Sheets
ASSETS
------
October 31, October 31, October 31,
July 31, 2001 2000 1999 1998
------------- ----------- ----------- -----------
Current Assets:
Cash $ 17,692 $ 0 $ 0 $ 0
-------- -------- -------- --------
Total Current Assets and Assets 17,692 0 0 0
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities
Due to Stockholder 714 0 0 0
-------- -------- -------- --------
Total Current Liabilities 714 0 0 0
Stockholders' Equity
Preferred Stock - $.001 par value,
Authorized - 2,000,000 shares
Issued - None
Common Stock - $.01 par value,
Authorized - 20,000,000 shares
Issued - 2,033,201 shares at July 31, 2001
and 330,000 shares at October 31, 2000,
1999 and 1998 20,332 3,300 3,300 3,300
Additional paid-in-capital 36,605 33,637 33,637 33,637
Accumulated deficit during development stage (39,959) (36,937) (36,937) (36,937)
-------- -------- -------- --------
Total Stockholders' Equity 16,978 0 0 0
-------- -------- -------- --------
Total Liabilities and Stockholders' Equity $ 17,692 $ 0 $ 0 $ 0
======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
- 21 -
GUMP & COMPANY, INC.
(A development stage company)
Statements of Operations
For the Nine Months Ended July 31, 2001 and
the Years Ended October 31, 2000, 1999 and 1998 and
for the Period September 28, 1988 (Date of Inception)
to July 31, 2001
2001 2000 1999 1998 Since Inception
--------- --------- --------- --------- ---------------
Revenues $ 0 $ 0 $ 0 $ 0 $ 0
Expenses 3,022 0 0 0 39,959
--------- --------- --------- --------- ---------
Net Income (loss) $ (3,022) $ 0 $ 0 $ 0 $ (39,959)
========= ========= ========= ========= =========
Net Income (loss) per share nil 0 0 0 nil
Weighted average number of 447,201 330,000 330,000 330,000 447,201
outstanding shares
The accompanying notes are an integral part of the financial statements.
- 22 -
GUMP & COMPANY, INC.
(A development stage company)
Statements of Stockholders' Equity
Total
Additional Stockholders'
Common Stock Paid-In- Accumulated Equity
Shares Amount Capital Deficit (Deficit)
---------- ---------- ---------- ---------- ----------
Issuance of common stock for cash 750,000 $ 750 -- -- $ 750
Capital contribution -- -- $ 7,811 -- 7,811
Net loss -- -- -- (7,811) (7,811)
---------- ---------- ---------- ---------- ----------
Balance at October 31, 1988 750,000 750 7,811 (7,811) 750
Issuance of common stock under stock 1,250,000 1,250 -- -- 1,250
bonus plan
Capital contribution -- -- 3,002 -- 3,002
Net loss -- -- -- (7,990) (7,990)
---------- ---------- ---------- ---------- ----------
Balance October 31, 1989 2,000,000 2,000 10,813 (15,801) (2,988)
Capital contribution -- -- 11,124 -- 11,124
Net loss -- -- -- (7,120) (7,120)
---------- ---------- ---------- ---------- ----------
Balance October 31, 1990 2,000,000 2,000 21,937 (22,921) 1,016
Net loss -- -- -- (7,356) (7,356)
---------- ---------- ---------- ---------- ----------
Balance October 31, 1991 2,000,000 2,000 21,937 (30,277) (6,340)
Issuance of common stock for cash 1,000,000 1,000 9,000 -- 10,000
Issuance of stock for legal services 300,000 300 2,700 -- 3,000
Net loss -- -- -- (8,174) (8,174)
---------- ---------- ---------- ---------- ----------
Balance October 31, 1992 3,300,000 3,300 33,637 (38,451) (1,514)
One for ten reverse stock split (par (2,970,000) -- -- -- --
value increased from $0.001 to $0.01)
Net income -- -- -- 1,514 1,514
---------- ---------- ---------- ---------- ----------
Balance October 31, 1993 330,000 3,300 33,637 (36,937) 0
The accompanying notes are an integral part of the financial statements.
- 23 -
GUMP & COMPANY, INC.
(A development stage company)
Statements of Stockholders' Equity (continued)
Total
Additional Stockholders'
Common Stock Paid-In- Accumulated Equity
Shares Amount Capital Deficit (Deficit)
---------- ---------- ---------- ---------- ----------
No activity: November 1, 1993
through October 31, 2000
One for ten reverse stock split (296,799) (2,968) 2,968 -- --
Issuance of common stock for cash 2,000,000 20,000 -- -- 20,000
Net loss -- -- -- (3,022) (3,022)
---------- ---------- ---------- ---------- ----------
Balance July 31, 2001 2,033,201 $ 20,332 $ 36,605 ($ 39,959) $ 17,692
========== ========== ========== ========== ==========
The accompanying notes are an integral part of the financial statements.
- 24 -
GUMP & COMPANY, INC.
(A development stage company)
Statements of Cash Flows
For the Nine Months Ended July 31, 2001 and
the Years Ended October 31, 2000, 1999 and 1998 and
for the Period September 28, 1988 (Date of Inception)
to July 31, 2001
2001 2000 1999 1998 Since Inception
-------- -------- -------- -------- ---------------
Cash Flows from operating activities:
Net income (loss) $ (3,022) $ 0 $ 0 $ 0 $(39,959)
Adjustments to reconcile net income
(loss) to net cash provided (used
in) operating activities
Issuance of stock for bonus and legal
services 0 0 0 0 4,250
Increase in due to stockholder 714 0 0 0 714
-------- --------
Cash provided by (used in) operating
activities (2,308) 0 0 0 (34,995)
-------- --------
Cash flows from investing activities: 0 0 0 0 0
Cash flows from financing activities: 0 0 0 0 0
Proceeds from capital contributions 0 0 0 0 21,937
Proceeds from issuance of common stock 20,000 0 0 0 30,750
-------- --------
Net cash provided by financing activities 20,000 0 0 0 52,687
-------- --------
Net increase in cash 17,692 0 0 0 17,692
Cash at beginning of years and period 0 0 0 0 0
-------- -------- -------- -------- --------
Cash at end of year $ 17,692 $ 0 $ 0 $ 0 $ 17,692
======== ======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
- 25 -
GUMP & COMPANY, INC.
(A development stage company)
Notes to Financial Statements
July 31, 2001, October 31, 2000, 1999 and 1998
and for the Period September 28, 1988 (Date of Inception)
to July 31, 2001
----------------
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
-------------------------------------------------------------------
A. Organization and Business
-------------------------
The Company was incorporated on September 28, 1988 under the laws of
the State of Delaware under the name of Brian Capital, Inc. On
September 15, 1993, the Company changed its name to Sea Pride
Industries, Inc. On August 18, 1997, the Company changed its name to
GUMP & COMPANY, INC. The Company is registered with the Securities and
Exchange Commission.
The Company was organized as a publicly held corporation to pursue a
business combination with a privately held entity believed to have
growth and profit potential, irrespective of the industry in which it
is engaged.
On September 10, 1993, stockholders of the Company exchanged 2,498,601
shares or approximately 75 percent of the issued and outstanding
capital stock of the Company for 126,192 shares of common stock of Sea
Pride Industries, Inc. In addition, the Company executed a one (1) for
ten (10) reverse stock split and increased the par value of the
authorized shares of common and preferred stock from $.001 per share
to $.01 per share. Consequently, the number of common shares issued
and outstanding decreased from 3,300,000 shares to 330,000 shares.
On June 7, 2000 the then principal stockholder, sole officer and
director of the Company sold all of his shares, totaling 249,792
shares, of the common stock of the Company. The new majority
stockholder became the sole officer and a director of the Company.
Effective on April 16, 2001 the Company executed a one (1) for ten
(10) reverse stock split. Consequently, the number of common shares
issued and outstanding decreased from 330,000 shares to 33,201 shares,
after rounding.
On April 25, 2001 the principal stockholder purchased 2,000,000 shares
of the Company's common stock at the stated par value.
The Company has no business operations or identifiable sources of
additional capital to develop independent business operations.
However, the Company has plans to seek and acquire one or more
properties or businesses and to pursue other related activities
intended to enhance the stockholders' value for their investments in
the Company.
B. Loss Per Share
--------------
Loss per share of common stock is computed using the weighted number
of common shares outstanding during the period shown. Common stock
equivalents are not included in the determination of the weighted
average number of shares outstanding, as they would be antidilutive.
- 26 -
C. Development Stage Company
-------------------------
The Company is an enterprise in the development stage as defined by
Statement No. 7 of the Financial Accounting Standards Board and has
not engaged in any significant business other than organizational
efforts.
D. Impairments of Long Lived Assets
--------------------------------
The Company evaluates its long-lived assets by measuring the carrying
amount of the assets against the estimated undiscounted future cash
flows associated with them. If such evaluations indicate the future
undiscounted cash flows of certain long-lived assets are not
sufficient to recover the carrying value of such assets; the assets
are adjusted to their fair values. No adjustment to the carrying
values of the assets has been made.
E. Statement of Cash Flows
-----------------------
Supplemental disclosure of cash flow information is as follows:
Cash paid during the period September 28, 1988 to July 31, 2001.
Interest 0
Income taxes 0
F. Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that effect reported amounts of assets and liabilities
at the date of the financial statements, and revenues and expenses
during the reporting period. Actual results could differ from
estimates and assumptions made.
G. Management Representation
-------------------------
The financial statements and notes are representations of the
Company's management, which is responsible for their integrity and
objectivity. They include all adjustments deemed necessary in order to
make the financial statements not misleading. Management represents
that these financial statements conform to generally accepted
accounting principles and have been consistently applied in the
preparation of the financial statements.
H. Research and Development
------------------------
Research and development expenditures are charged to operations as
incurred. The Company has not incurred costs of this nature through
July 31, 2001.
2. FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The Company has used market information for similar instruments and
applied judgment to estimate fair value of financial instruments. At
July 31, 2001 the fair value of cash, and due to stockholder
approximated carrying values because of the short-term nature of these
instruments.
3. COMMITMENTS AND CONTINGENCIES
-----------------------------
The Company is not presently involved in any litigation.
- 27 -
4. INCOME TAXES
------------
The Company presently owes no income taxes.
5. SUBSEQUENT EVENTS
-----------------
A. Sale To The Public
------------------
The Company has filed a Registration Statement on Form SB-2 with the
Securities and Exchange Commission in order for the Company's sole
officer and director to offer up to 1,000,000 shares of common stock
in a public offering. No proceeds will be received by the Company. No
cost will be incurred by the Company.
- 28 -
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Delaware General Corporation Law
Section 145(a) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a corporation may indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 145(b) of the DGCL states that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a present or
former director or officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.
Section 145(d) of the DGCL states that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon a determination
that indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in subsections (a) and (b). Such determination shall be
made, with respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by a majority vote of such directors,
even though less than a quorum, or (3) if there are no such directors, or if
such directors so direct, by independent legal counsel in a written opinion, or
(4) by the stockholders.
II-1
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation as authorized in
Section 145. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon such
terms and conditions, if any, as the corporation deems appropriate.
Section 145(f) of the DGCL states that the indemnification and
advancement of expenses provided by, or granted pursuant to, the other
subsections of Section 145 shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office.
Section 145(g) of the DGCL provides that a corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the corporation would have the power to indemnify such person against such
liability under Section 145.
Section 145(j) of the DGCL states that the indemnification and
advancement of expenses provided by, or granted pursuant to, Section 145 shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent, and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Certificate of Incorporation
Our certificate of incorporation provides that a directors shall not be
personally liable to us or our stockholders for monetary damages for breach of
fiduciary duty as a director, except as limited by the DGCL. If the DGCL is
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director, in addition to the limitation on
personal liability described above, shall be limited to the fullest extent
permitted by the amended DGCL. Further, any repeal or modification of such
provision of our Certificate of Incorporation stockholders shall be prospective
only, and shall not adversely affect any limitation on the personal liability of
a director existing at the time of such repeal or modification.
Bylaws
Our bylaws provide that we (i) shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by reason of the fact that such person is or was a
director or officer, or is or was serving at our request as a director or
officer of another corporation, partnership, joint venture, trust, other
enterprises or employee benefit plan and (ii) upon a determination by the Board
of Directors that indemnification is appropriate, we may indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by reason of the fact that such person is or
was our employee or agent or at our request was serving as an employee or agent
of any other corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan, in the case of (i) and (ii) against reasonable expenses
(including attorneys' fees), judgments, fines, penalties, amounts paid in
settlement and other liabilities actually and reasonably incurred by such person
in connection with such action or suit if such person acted in good faith and in
a manner he reasonably believed to be in or not opposed to our best interests,
II-2
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe that his conduct was unlawful. However, in an action or suit by or in
the right of Gump & Company to procure a judgment in our favor, no
indemnification shall be made in respect of any claim as to which such person
shall have been adjudged to be liable to us unless and only to the extent that a
court of appropriate jurisdiction shall determine that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity of such expenses which the court
shall deem proper. Any indemnification shall be made by us upon a determination
that indemnification of such person is proper in the circumstances because he
has met the applicable standard of conduct set forth above. Expenses incurred by
a person who is or was our director or officer in defending such actions or
suits shall be paid by us at reasonable intervals in advance of the final
disposition of such action or suit upon receipt of an undertaking by or on
behalf of the director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by us. In addition, we
shall pay or reimburse expenses incurred by any person who is or was our
director or officer in connection with such person's appearance as a witness or
other participant in a proceeding in which such person or we are not a named
party to such proceeding, provided that such appearance or participation is on
behalf of us or by reason of his past or present capacity as our director or
officer. We intend these provisions to provide indemnification for appropriate
persons to the fullest extent permitted by law.
Insurance
We do not have liability insurance for the benefit of our directors and
officers. We currently do not intend to obtain such insurance coverage for our
officers and directors.
Item 25. Other Expenses of Issuance and Distribution.
The expenses incurred in connection with the registration of the common
stock offered hereby are set forth below. All expenses will be paid by the
Selling Stockholder.
SEC registration fee................................... $ 25.00
Printer expenses....................................... 2,500.00*
Legal fees and expenses................................ 15,000.00*
Accounting fees and expenses........................... 3,000.00*
Miscellaneous.......................................... 2,500.00*
----------
Total......................................... $23,025.00*
==========
--------------------
* Estimated.
Item 26. Recent Sales of Unregistered Securities.
On April 25, 2001, we issued 2,000,000 shares of our common stock to our
principal stockholder, sole officer and director, Mark A. DiSalvo, in exchange
for $20,000 or $.01 per share. The price paid for the purchase of shares by Mr.
DiSalvo was based upon the per share par value of $0.01 of our common stock. No
commissions were paid in connection with this sale. The proceeds from the sale
of the shares of common stock will be used for general corporate purposes. The
shares were sold in reliance upon the exemption from registration afforded by
Section 4(2) of the Securities Act.
Item 27. Exhibits.
Exhibit
Number Description of Exhibit
------------ ----------------------------------------------------------------
3.1 Articles of Incorporation of the Registrant(1).
3.2 Bylaws of the Registrant(2).
3.3 Certificate of Amendment of Certificate of Incorporation filed
August 18, 1997(3).
3.4 Certificate of Amendment of Certificate of Incorporation filed
September 27, 1993(3).
4.1 Specimen Stock Certificate(3).
5.1 Opinion and Consent of Robert M. Kern regarding the legality of
the securities being registered.
II-3
Exhibit
Number Description of Exhibit
------------ ----------------------------------------------------------------
10.1 Stock Purchase Agreement dated June 7, 2000(3).
10.2 Selling Stockholders Agreement dated September 5, 2001.
23.1 Consent of Gerald R. Perlstein, CPA.
23.2 Consent of Robert M. Kern, Esq. (included in Exhibit 5.1).
---------------------------
(1) Incorporated by reference to Exhibit No. 3(a) to Form S-1 filed with the
Commission on behalf of the Registrant on January 24, 1989.
(2) Incorporated by reference to Exhibit No. 3(b) to Form S-1 filed with the
Commission on behalf of the Registrant on January 24, 1989.
(3) Incorporated by reference to Form 10-KSB for the fiscal year ended October
31, 2000 as filed with the Commission.
Item 28. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table
in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement, or any material change
to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by
those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
II-4
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant, pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 as is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful
defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that:
(1) For the purposes of determining any liability under the
Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933
shall be deemed to be part of this registration statement
as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such new securities at that
time shall be deemed to be the initial bona fide offering
thereof.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing a Registration Statement on Form SB-2 and has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Shell
Beach, State of California, on September 17, 2001.
GUMP & COMPANY, INC.
By: /s/ Mark A. DiSalvo
--------------------------------
Mark A. DiSalvo, President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated below.
Name Title Date
---- ----- ----
President, Chief Executive
/s/ Mark A. DiSalvo Officer, Chief Financial
------------------------ Officer, Secretary-Treasurer September 17, 2001
Mark A. DiSalvo and Director
II-6
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
------- ------------------------------------------------------------------
3.1 Articles of Incorporation of the Registrant(1).
3.2 Bylaws of the Registrant(2).
3.3 Certificate of Amendment of Certificate of Incorporation filed
August 18, 1997(3).
3.4 Certificate of Amendment of Certificate of Incorporation filed
September 27, 1993(3).
4.1 Specimen Stock Certificate(3).
5.1 Opinion and Consent of Robert M. Kern regarding the legality of
the securities being registered.
10.1 Stock Purchase Agreement dated June 7, 2000(3).
10.2 Selling Stockholders Agreement dated September 5, 2001.
23.1 Consent of Gerald R. Perlstein, CPA.
23.2 Consent of Robert M. Kern, Esq. (included in Exhibit 5.1).
---------------------------
(1) Incorporated by reference to Exhibit No. 3(a) to Form S-1 filed with the
Commission on behalf of the Registrant on January 24, 1989.
(2) Incorporated by reference to Exhibit No. 3(b) to Form S-1 filed with the
Commission on behalf of the Registrant on January 24, 1989.
(3) Incorporated by reference to Form 10-KSB for the fiscal year ended October
31, 2000 as filed with the Commission.
IOE-1