U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 000-31595
GTC HOLDINGS, INC.
(Exact name of small business issuer as specified in its
charter)
Nevada 87-0657165
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
5882 South 900 East, Suite 202, Salt Lake City, Utah 84121
(Address of principal executive offices)
801-269-9500
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity: As of June 30, 2001 there were
100,000 shares of common stock issued and outstanding.
Transitional Small Business Format: Yes [ ] No [ X ]
FORM 10-QSB
GTC HOLDINGS, INC
INDEX
Page
PART I. Financial Information 3
Unaudited Condensed Balance Sheets, 3
June 30, 2001 and December 31, 2000
Unaudited Condensed Statements of Operations 4
for the three months and six months ended June 30, 2001,
for the period from inception on June 27, 2000 through
June 30, 2000, and for the period from inception on
June 27, 2000 through June 30, 2001
Unaudited Condensed Statements of Cash Flows, 5
for the six months ended June 30, 2001, for the period
from inception on June 27, 2000 through June 30, 2000
and for the period from inception on June 27, 2000
through June 30, 2001
Notes to Unaudited Condensed Financial Statements 6
Management's Plan of Operation 9
PART II. Other Information 9
Signatures 10
2
PART I. FINANCIAL INFORMATION
GTC HOLDINGS, INC.
[A Development Stage Company]
UNAUDITED CONDENESED BALANCE SHEETS
ASSETS
June 30, December 31,
2001 2000
____________ ___________
CURRENT ASSETS
Cash $ 27 $ 67
____________ ___________
Total Current Assets $ 27 $ 67
____________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ - $ 500
Advance payable - related party 6,018 2,800
____________ ___________
Total Current Liabilities 6,018 3,300
____________ ___________
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
100,000 shares issued and outstanding 100 100
Capital in excess of par value - -
(Deficit) accumulated during the
development stage (6,091) (3,333)
____________ ___________
Total Stockholders' Equity (Deficit) (5,991) (3,233)
____________ ___________
$ 27 $ 67
____________ ___________
Note: The balance sheet at December 31, 2000 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
financial statements.
3
GTC HOLDINGS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
From Inception
on June 27,
For the Three For the Six 2000 Through
Months Ended Months Ended June 30,
June 30, June 30, ______________
2001 2001 2000 2001
________________________________________
REVENUE $ $ - $ - $ -
EXPENSES:
General and Administrative 1,966 2,758 - 6,091
________________________________________
LOSS FROM OPERATIONS
BEFORE INCOME TAXES (1,966) (2,758) - (6,091)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
________________________________________
NET LOSS $ (1,966) $ (2,759) $ - $(6,091)
________________________________________
LOSS PER COMMON SHARE $ (.01) $ (.03) $ - $ (.06)
________________________________________
The accompanying notes are an integral part of these unaudited
financial statements.
4
GTC HOLDINGS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
From Inception
on June 27,
For the Six 2000 Through
Months Ended June 30,
June 30, _______________________
2001 2000 2001
Cash Flows From Operating Activities:
Net loss $ (2,758) $ - $ (6,091)
Adjustments to reconcile net loss to
net cash used by operating activities:
Noncash expense - expenses paid by related party 3,218 - 6,018
Changes in assets and liabilities:
Increase (decrease) in accounts payable-related party (500) - -
Net Cash Provided (Used) by Operating Activities (40) - (73)
Cash Flows From Investing Activities - - -
Net Cash Provided by Investing Activities - - -
Cash Flows From Financing Activities:
Proceeds from issuance of common stock - 100 100
Net Cash Provided by Financing Activities - 100 100
Net Increase (Decrease) in Cash (40) 100 27
Cash at Beginning of Period 67 - -
Cash at End of Period $ 27 $ 100 $ 27
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the period ended June 30, 2001:
An entity related to the Company through common ownership
paid expenses totaling $3,218 on behalf of the Company.
For the period from inception through June 30, 2000:
None
The accompanying notes are an integral part of these unaudited
financial statements.
5
GTC HOLDINGS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - GTC Holdings, Inc. (the Company) was organized
under the laws of the State of Nevada on June 27, 2000. The
Company has not commenced planned principal operations and is
considered a development stage company as defined in Statement of
Financial Accounting Standards (SFAS) No. 7. The Company is
seeking potential business ventures. The Company has, at the
present time, not paid any dividends and any dividends that may
be paid in the future will depend upon the financial requirements
of the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June
30, 2001 and 2000 and for all the periods presented have been
made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's December 31, 2000 audited financial
statements. The results of operations for the period ended June
30, 2001 are not necessarily indicative of the operating results
for the full year.
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". [See Note 6]
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a
not for profit organization or charitable trust that raises or
holds contributions for others", SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133)", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No.
53 and Amendment to SFAS No. 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued. SFAS No.
136, 137, 138, 139 and 140 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
6
GTC HOLDINGS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Preferred Stock - The Company has authorized 10,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences
and designations and to be issued in such series as determined
by the Board of Directors. No shares are issued and outstanding
at June 30, 2001.
Common Stock - The Company has authorized 50,000,000 shares of
$.001 par value common stock. During June 2000, in connection
with its organization, the Company issued 100,000 shares of its
previously authorized, but unissued common stock. The shares
were issued for $100 cash (or $.001 per share).
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". SFAS No. 109 requires the Company to provide
a net deferred tax asset/liability equal to the expected future
tax benefit/expense of temporary reporting differences between
book and tax accounting methods and any available operating loss
or tax credit carryforwards. At June 30, 2001 the Company has
available unused operating loss carryforwards of approximately
$6,000, which may be applied against future taxable income and
which expire in various years through 2021.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss caryforwards and, therefore, no deferred tax asset has
been recognized for the loss caryforwards. The net deferred tax
assets are approximately $2,000 and $1,100 as of June 30, 2001
and December 31, 2000, respectively, with an offsetting valuation
allowance at each period end of the same amount resulting in a
change in the valuation allowance of approximately $900 for the
six months ended June 30, 2001.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of June 30, 2001, the Company has
not paid any compensation to any officer/director of the Company.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his/her home as a mailing address, as needed, at
no expense to the Company.
Advance Payable - As of June 30, 2001, Capital Holdings, LLC, an
entity related to the Company through common ownership, paid
expenses totaling $6,018 on behalf of the Company.
NOTE 5 - GOING CONCERN
The accompanying unaudited condensed financial statements have
been prepared in conformity with generally accepted accounting
principles, which contemplate continuation of the Company as a
going concern. However, the Company was only recently formed and
has not yet been successful in establishing profitable
operations. Further, the Company has current liabilities in
excess of current assets. These factors raise substantial doubt
about the ability of the Company to continue as a going concern.
In this regard, management is proposing to raise any necessary
additional funds not provided by operations through loans or
through additional sales of its common stock. There is no
assurance that the Company will be successful in raising this
additional capital or achieving profitable operations. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
7
GTC HOLDINGS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - LOSS PER COMMON SHARE
The following data shows the amounts used in computing loss per
share:
From Inception
on June 27,
For the Three For the Six 2000 Through
Months Ended Months Ended June 30,
June 30, June 30, __________________
2001 2001 2000 2001
Loss from continuing operations
available to common shareholders
(numerator) $ (1,966) $ (2,758) $ - $ (6,091)
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 100,000 100,000 100,000 99,728
Dilutive loss per share was not presented, as the Company had no
common stock equivalent shares for all periods presented that would
affect the computation of diluted loss per share.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND PLAN OF OPERATION
Forward-Looking Statements
This Form 10-QSB includes, without limitation, certain statements
containing the words "believes", "anticipates", "estimates",
"intends", and words of a similar nature, constitute "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. This Act provides a "safe harbor"
for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify
these statements as forward looking and provide meaningful,
cautionary statements identifying important factors that could
cause actual results to differ from the projected results. All
statements other than statements of historical fact made in this
Form 10-QSB are forward-looking. In particular, the statements
herein regarding industry prospects and future results of
operations or financial position are forward-looking statements.
Forward-looking statements reflect management's current
expectations and are inherently uncertain. The Company's actual
results may differ significantly from management's expectations.
Six Months Ended June 30, 2001
The Company had no revenue from continuing operations for the six-
month period ended June 30, 2001, and the period from inception
on June 27, 2000 through June 30, 2000.
The Company had general and administrative expenses of $1,966 for
the six-month period ended June 30, 2001, and $0 for the period
from inception on June 27, 2000 through June 30, 2000, which
consisted of general corporate administration, legal and
professional expenses, and accounting and auditing costs.
As a result of the foregoing factors, the Company realized a net
loss of $1,966 for the six months ended June 30, 2001, as
compared to a net loss of $0 for the period from inception on
June 27, 2000 through June 30, 2000.
Liquidity and Capital Resources
At June 30, 2001, the Company had $27 in cash, $0 in accounts
payable and $6,018 in accounts payable to a related party giving
the Company a working capital deficit of $5,991. The $6,018 in
accounts payable to a related party is owed to Capital Holdings,
Inc., which during the six months ended June 30, 2001 paid
expenses on behalf of the Company. Kip Eardley, the officer and
director of the Company, owns 50% of Capital Holdings, Inc.
Management believes that its current cash needs can be met with
the limited cash on hand and from loans from its officer and
director for at least the next twelve months. However, there can
be no assurances to that effect, as the Company has no
significant revenues and the Company's need for capital may
change dramatically if, during that period, it acquires an
interest in a business opportunity. Should the Company obtain a
business opportunity, it may be necessary to raise additional
capital. This may be accomplished by selling common stock of the
Company or debt financing.
The Company's current operating plan is to (i) handle the
administrative and reporting requirements of a public company,
and (ii) search for potential businesses, products, technologies
and companies for acquisition. At present, the Company has no
understandings, commitments or agreements with respect to the
acquisition of any business venture, and there can be no
assurance that the Company will identify a business venture
suitable for acquisition in the future. Further, there can be no
assurance that the Company would be successful in consummating
any acquisition on favorable terms or that it will be able to
profitably manage any business venture it acquires.
PART II. OTHER INFORMATION
Exhibits and Reports on Form 8-K: None
9
SIGNATURES
In accordance with the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
GTC HOLDINGS, INC.
Date: August 6, 2001 By:/s/ Kip Eardley
Kip Eardley, President,
Secretary & Treasurer
10