AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON OCTOBER 7, 2002
REGISTRATION NO.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
CAPITAL TECH, INC.
(Exact name of registrant as specified in its charter)
Colorado ###-##-####
(State of (Primary standard industrial (I.R.S. employer
Incorporation) classification code number) identification number)
8200 South Quebec Street, A-3 #125
Centennial, Colorado 80112
720-529-9293
(Address and telephone number of Registrant's
principal executive offices)
8200 South Quebec, A-3 #125
Centennial, Colorado 80112
720-529-9293
(Name, address, and telephone number of Agent for Service of Process)
Copies to:
Jody M. Walker, Esq.
7841 South Garfield Way
Littleton, CO 80122
(303) 850-7637
(303) 220-9902 - facsimile
Approximate Date of Commencement of Proposed Sale
to the Public: Effective date of this Registration
Statement
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
of 1993, check the following box [ ]
CALCULATION OF REGISTRATION FEE
Title of Each Class Amount of
Securities to be Shares to be Valuation Aggregate Registration
Registered Registered Per Share Valuation Fee
<s> <c> <c> <c> <c>
Common Shares 2,000,000 $.50 $1,000,000 $250.00
2
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 OR UNTIL
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(a), MAY DETERMINE.
3
CAPITAL TECH, INC.
$1,000,000
A minimum of 200,000 Common Shares
up to 2,000,000 Common Shares
at $.50 per Common Share
There is no minimum investment amount.
If we do not meet the minimum offering amount by
December 31, 2003, we will promptly return all of
the funds to investors.
The common shares are being offered on a self
underwritten basis by Gary Rothwell and Richard
Schreck, officers and directors of Capital Tech and
selected broker/dealers.
This is our initial public offering and no public
market current exists for our securities. We have
not applied to be listed on any trading market or
exchange.
An investment in our securities involves high risk.
Consider carefully the risk factors beginning on
page 8 in the prospectus.
Per
Common Share Total
<s> <c> <c>
Public Price $.50 $1,000,000
Proceeds to Capital Tech $ .50 $1,000,000
Our officers and directors will sell the
securities. Up to a 10% commissions will only be
paid if a registered broker-dealer sells our common
shares.
4
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.
5
TABLE OF CONTENTS
<s> <c>
Summary of the Offering 6
Risk Factors 7
Extremely minority interest by new investors
We have not conducted any significant operations
We do not currently have sufficient capital
Our officers will only work part time
Dependence on relationships with
We may not be able to establish and maintain
brand recognition
We may be liable for any failure to protect customer's
private information
You will experience immediate dilution
Forward Looking Statements 8
CapitalTech 9
Use of Proceeds 11
Dilution 13
Plan of Operation 13
Market for Common Equity and
Related Stockholder Matters 16
Determination of Offering Price 17
Plan of Distribution 17
Management 18
Principal Shareholders 21
Indemnification 22
Certain Transactions 23
Description of Securities 23
Legal Matters 24
Reports 24
Financial Statements 25
6
Summary Of The Offering
Corporate History Capital Tech was originally
incorporated under the name Capital Tech.com, Inc.
on March 28, 2000 under the laws of the State of
Colorado. On January 11, 2002, the name of the
corporation was changed to Capital Tech, Inc.
Capital Tech, Inc.'s principal executive and
administrative offices are located at 8200 S.
Quebec Street, A-3, #125, Centennial, Colorado
80112. These offices consist of 250 square feet
and are provided free of charge by Gary Rothwell,
an officer and director of Capital Tech.
Operations. Capital Tech provides consulting
services that advise and support Internet-related
enterprises. We assist in the reorganization of
Internet-related enterprises that have previously
allocated funds for development of technologies.
We will advise these companies on how to best
utilize the information and technology they have
already developed. We will assist them in
enhancing themselves through associating with other
like or similar companies to possibly salvage what
it has already expended and to optimize their
current financial structure.
Outstanding
Securities 2,090,000 common shares
The Offering A minimum of 200,000 common
shares up to a maximum of
2,000,000 common shares
Offering termination December 31, 2003
Arbitrary Offering Price. The aggregate offering
price and number of the common shares to be offered
were arbitrarily determined by Capital Tech.
Plan of Distribution. Richard Schreck and Gary
Rothwell, our officers and directors, are offering
the common shares on a self-underwritten basis.
If a selected broker/dealer sells any common
shares, standard commissions not to exceed 10% of
the offering price will be paid.
Public Market There is no public market for the
common shares.
7
Use of Proceeds The proceeds from this offering
will be used for:
- Identification of potential clients -
$350,000
- Marketing expenses - $100,000
- Salaries - $100,000
- Working capital - $311,222.
Capital Tech will use the net proceeds of the
offering over the next twelve months.
No Commitment to purchase Common Shares. No
commitment by anyone exists to purchase any of the
common shares we are offering.
Risk Factors
1. Our principal shareholder, Ashley Martinez will
own approximately 51% of the common shares after
the offering. You will have an extremely minority
interest in Capital Tech.
There are currently 2,130,000 common shares
outstanding. Ms. Martinez owns 2,090,000 of those
common shares or 98% of the total outstanding
common shares. Assuming we sell all of the
2,000,000 common shares, Ashley Martinez will still
own 50.61% of the common shares. You will have an
extreme minority interest in Capital Tech and will
not be able to influence the election of directors
or other corporate matters.
2. We have not conducted any significant
operations to date and have not generated any
revenues.
Since our incorporation, our activities have been
principally devoted to positioning ourselves to
achieve our business objectives. We have had
minimal operating revenue to date and expect to
incur losses and administrative expenses until we
raise at least $100,000, begin the sales of our
products or we receive revenues from any of our
proposed operations. We have an accumulated
deficit since inception of $(7,515).
3. We do not currently have sufficient capital to
meet our financial needs for the next twelve
months. We may never become profitable.
Although we will only need minimal of capital to
complete our business plan, we do not currently
have sufficient capital to meet our financial needs
for the next twelve months. If we do not raise
even minimal funds, our officers and directors have
8
orally agreed to provide the funds necessary to
maintain operations, not to exceed $20,000. If
operations require more than $20,000, we may not be
able to continue operations.
4. Our officers will only work part time for
Capital Tech. Operations may not increase due to
their limited involvement.
Mr. Rothwell and Mr. Schreck will only be required
to work 20 hours per week for Capital Tech. We
may not be able to increase operations due to the
limited time availability by our officers which
could reduce our profitability.
5. You will experience immediate dilution of at
least 60% of your investment if we raise the entire
offering amount.
Immediately after the offering, if we raise the
entire amount, the book value per common share will
be $.30 or 60% less than the offering price. If
we raise only the minimum amount, the book value
per common share will be $.48 or 96% less than the
offering price. Additionally, our need for
additional financing could further dilute your
interest.
6. If our securities have no active trading
market, you may not be able to sell your common
shares easily.
We have not applied for listing on any exchange.
We do not have a public market for our securities,
nor can we assure you that a public market will
ever develop. Consequently, you may not be able to
liquidate your investment in the event of an
emergency or for any other reason.
Forward-Looking Statements
The statements contained in this prospectus that
are not historical fact are forward-looking
statements which can be identified by the use of
forward-looking terminology such as "believes,"
"expects," "may," "will," "should," or
"anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by
discussions of strategy that involve risks and
uncertainties. We have made the forward-looking
statements with management's best estimates
prepared in good faith.
9
Because of the number and range of the assumptions
underlying our projections and forward-looking
statements, many of which are effected by
significant uncertainties and contingencies that
are beyond our reasonable control, some of the
assumptions inevitably will not materialize and
unanticipated events and circumstances may occur
subsequent to the date of this prospectus.
These forward-looking statements are based on
current expectations, and we will not update this
information other than required by law. Therefore,
the actual experience of Capital Tech, and results
achieved during the period covered by any
particular projections and other forward-looking
statements, should not be regarded as a
representation by Capital Tech, or any other
person, that we will realize these estimates and
projections, and actual results may vary
materially. We cannot assure you that any of these
expectations will be realized or that any of the
forward-looking statements contained herein will
prove to be accurate.
Capital Tech
Capital Tech's principal executive and
administrative offices are located at 8200 S.
Quebec Street, A-3, #125, Centennial, Colorado
80112. These offices consist of 250 square feet
and are provided free of charge by Gary Rothwell,
an officer and director of Capital Tech.
Business Activities. Capital Tech provides
consulting services that advise and support
Internet-related enterprises. We assist in the
reorganization of Internet-related enterprises that
have previously allocated funds for development of
technologies
We will advise these companies on how to best
utilize the information and technology they have
already developed. We will assist them in
enhancing themselves through associating with other
like or similar companies to possibly salvage what
it has already expended and to optimize their
current financial structure.
We offer the following business development support
and advisory services:
- strategic guidance
- branding and business positioning
- rapid product or service deployment support
- human resources services
- back-office support services, and
10
- access to other portfolio companies'
- ideas
- technologies
- products and services.
We will develop a monitoring system to track
financial transactions and systematically provide
the information to the companies for analysis of
problem areas such as cash flow and inventory as
they relate to the company.
We intend to offer a full line of on-line
consulting services, including, but not limited to:
- web sites to the Internet industry-design and
development
- on-line research and development
- available technologies
- assistance to place or sell internet related
knowledge
The services will be fee based for yet to be
determined amounts.
We will also generate revenues by fees to client
companies for specific services.
We will initially concentrate on the state of
Colorado and then expand according to additional
states as needed.
Richard Schreck will run the day to day operations
of Capital Tech and Gary Rothwell will assist Mr.
Schreck. Both individuals have significant
contacts within the industry.
They will only be required work part time (20 hours
per week) for Capital Tech.
Business Strategy. We will utilize the expertise
of our principal officers to develop consulting
opportunities. Each individual will use his
previous business contacts to develop potential
opportunities. Additionally, we shall sell our
services through our employees and authorized
representatives. Our management has extensive
experience in the Internet industry.
Marketing Strategy. We will use hotlinks with
different established websites to display Internet
banners on the their home web page.
11
We will also use other inexpensive advertising. We
will seek clients that have expended capital to
create proprietary knowledge and information but
lack the resources to properly market their product
or information We will commence negotiations with
the various established websites in the near future
so that the marketing can commence upon successful
completion of this offering.
Competition. We will compete by price and
service. The prices or price ranges for our
products and service will vary depending on
services provided.
The market for business strategy services is highly
competitive and competition is expected to continue
to increase significantly. There are no
substantial barriers to entry in these markets, and
we expect that competition will continue to
intensify. Although we currently believe that the
diverse segments of this business will provide
opportunities for more than one supplier of
products and services similar to ours, it is
possible that a single supplier may dominate one or
more market segments. We will compete with many
other providers of similar services.
Government Regulation. There are no applicable
regulations for our services.
Use of Proceeds
Assuming $100,000 or $1,000,000 of the common
shares are sold, the net proceeds of the offering
will be used as set forth in the following tables.
We may not raise sufficient capital to expand our
operations.
Assuming Assuming
$100,000 raised % $1,000,000 raised %
<s> <c> <c> <c> <c>
Gross proceeds $ 100,000 100.00% $1,000,000 100.00%
Commissions 10,000 10.00% 100,000 10.00%
Offering expenses 38,778 38.78% 38,778 3.88%
---------- ---------- ----------- ---------
Net proceeds $ 51,222 51.22% $ 861,222 86.12%
Identification of
Potential clients 25,000 25.00% 350,000 35.00
Marketing 15,000 15.00% 100,000 10.00%
Salaries 0 0.00% 100,000 10.00%
Working Capital 11,222 11.22% 311,222 31.12%
Total Expended $ 51,222 51.22% $ 861,222 86.12%
12
Working capital for the maximum offering amount
includes
- supplies $ 15,000
- telephone $ 5,000
- miscellaneous $ 5,000
- SEC reporting expenses $ 10,000
- cash reserve $276,222
The cash reserve will not be needed in the next
twelve months but will be used thereafter for
- advertising - $25,000; and
- expansion into immediate and
adjacent states - $250,222
Any additional amounts raised between the minimum
and the maximum will be utilized on a pro rata
basis on the areas listed above.
Although we will only need minimal of capital to
complete our business plan, we do not currently
have sufficient capital to meet our financial needs
for the next twelve months. If we do not raise
even minimal funds, our officers and directors have
orally agreed to provide the funds necessary to
maintain operations, not to exceed $20,000. These
amounts will be through a no interest loan with no
specific payback provisions.
Capital Tech anticipates that the proceeds from
this offering, together with projected cash flow
from operations, will be sufficient to meet
estimated capital expenditures for the next twelve
months. If cash flows do not develop as
anticipated, Capital Tech will be required to try
to obtain additional sources of capital, yet to be
identified.
The actual allocation of funds will depend on
Capital Tech's success and growth. If results do
not meet our requirements, we will reallocate the
proceeds among the other contemplated uses of
proceeds, as prudent business practices dictate.
Pending application by Capital Tech of the net
proceeds of this offering, such proceeds will be
invested in short-term, interest-bearing
instruments.
13
Dilution
Persons purchasing common shares in this offering
will suffer a substantial and immediate dilution to
the net tangible book value of their common shares
below the public offering price.
The following table illustrates the per common
share dilution as of the date of this prospectus,
which may be experienced by investors upon reaching
the levels as described below.
Assuming $100,000 raised
<s> <c> <c>
Offering price $.50
Net tangible book value per common share before offering $0.00
Increase per Share attributable to investors $0.02
-----
Pro Forma net tangible book value per common
share after offering $.02
----
Dilution to investors $.48
Dilution as a percent of offering price 96%
Assuming $1,000,000 raised
<s> <c> <c>
Offering price $.50
Net tangible book value per common share before offering $0.00
Increase per Share attributable to investors $0.20
-----
Pro Forma net tangible book value per common
share after offering $.20
-----
Dilution to investors $.30
Dilution as a percent of offering price 60%
Further Dilution. We may issue additional
restricted common shares pursuant to private
business transactions. Any sales under Rule 144
after the applicable holding period may have a
depressive effect upon the market price of our
common shares and investors in this offering upon
conversion.
Plan of Operation
Capital and Source of Liquidity. All of the
initial working capital has been obtained from the
sale of common shares to the current officers,
directors and principal shareholder and loans from
a prior shareholder no longer affiliated with
14
Capital Tech. Capital Tech does not require
substantial capital to expand our current and
strategic business plans.
For the six months ended June 30, 2002 and 2001,
Capital Tech did not pursue any investing
activities.
For the years ended December 31, 2001 and for the
period from inception to December 31, 2000, Capital
Tech did not pursue any investing activities.
For the six months ended June 30, 2002, Capital
Tech repaid related party loans of $1,016 resulting
in net cash provided by financing activities.
For the six months ended June 30, 2001, Capital
Tech did not pursue any financing activities.
For the year ended December 31, 2001, Capital Tech
received loans from a related party of $22,000 and
repaid the related party $18,634 resulting in net
cash provided by financing activities. As a
result, net cash provided by financing activities
for the year ended December 31, 2001 was $3,366.
For the year ended December 31, 2000, Capital Tech
sold common stock for cash of $2,290, received
loans from a related party of $3,209 and repaid $25
of those related party loans. As a result, net
cash provided by financing activities of $5,474 for
the year ended December 31, 2000.
We currently have no working capital and will rely
on loans from our officers and directors to
continue operations until completion of the
offering. Capital Tech requires these additional
loans and proceeds from this offering to expand our
current and strategic business plans.
On a long-term basis, liquidity is dependent on
commencement of operation and receipt of revenues,
additional infusions of capital, and debt
financing. Capital Tech believes that related
party loans and proceeds from this offering in the
short term will allow Capital Tech to increase its
marketing and sales efforts and thereafter result
in revenue and greater liquidity in the long term.
However, there can be no assurance that Capital
Tech will be able to obtain additional equity or
debt financing in the future, if at all.
16
Results of Operations. For the six months ended
June 30, 2002 and 2001, Capital Tech did not
receive any revenues from operations.
For the six months ended June 30, 2002, Capital
Tech had expenses of $567 consisting of
professional fees of $550 and other expenses of
$17.
For the six months ended June 30, 2001, Capital
Tech incurred other expenses of $17.
For the year ended December 31, 2001, Capital Tech
did not receive any revenues from operations and
incurred expenses of $3,484 during that period.
Expenses for the year ended December 31, 2001,
Capital Tech had consulting expense - related party
of $3,366 and other expenses of $118.
For the year ended December 31, 2000, Capital Tech
did not receive any revenues from operations and
incurred expenses of $3,542 during that period.
Expenses for the year ended December 31, 2000,
Capital Tech had professional fees of $2,856, web
site design expense - related party of $667 and
other expenses of $19.
Plan of Operation. Capital Tech is in the
development stage and has not conducted any
significant operations to date or received
operating revenues. Capital Tech can satisfy our
cash requirements in the next 24-36 months if we
can successfully complete this offering or through
loans from our officers and directors. We will
not need to conduct any research and development
regarding our business plan.
The cash reserves of $276,222 if we obtain the
maximum offering amount will not be needed in the
next twelve months but will be used thereafter for
further expansion of the business.
Officers and directors have agreed to provide the
minimal funds we require to maintain operations
through no interest loans not to exceed $20,000.
There are no specific repayment terms.
Over the next twelve months, we will
- identify our potential clients
- market our services to these clients
- negotiate service contracts
- provide services
16
The failure to do any of the above will not cause
us to change our business plan or business focus.
Upon funding the minimum offering, the use of
proceeds shall be utilized on a pro rata basis for
the purposes described. On a local basis, we will
begin locating and marketing ($15,000) for the
services of Capital Tech. We will place ads with
local area newspapers and on the Internet.
Nominal expenses will be paid to obtain greater
exposure of our services.
As we begin to generate revenues, we shall review
advertising expansion options in other cities and
other states. As funding allows, we would conduct
similar advertising activities as we had on the
local level.
Other than described in the use of proceeds
section, we do not expect to purchase any plant or
significant equipment. If the offering is
successful, we do not expect significant changes in
the number of employees to conduct operations.
We will not have to raise additional funds before
June 2003.
Capital Tech may experience problems; delays,
expenses, and difficulties sometimes encountered by
an enterprise in Capital Tech's stage of
development, many of which are beyond Capital
Tech's control. These include, but are not limited
to, unanticipated problems relating to the
development of the system, manufacturing costs,
production and marketing problems, additional costs
and expenses that may exceed current estimates, and
competition.
Market for Common Equity and
Related Stockholder Matters
At the present time, there is no market for our
common shares.
We have three holders of record.
Since inception we have not paid any dividends. We
intend to use any profits for operations and do not
intend to pay dividends.
If the trading price of our common stock is less
than $5.00 per share, trading in the common stock
would also be subject to the requirements of Rule
15g-9 under the Exchange Act. Under this rule,
17
broker/dealers who recommend low-priced securities
to persons other than established customers and
accredited investors must satisfy special sales
practice requirements. The broker/dealer must make
an individualized written suitability determination
for the purchaser and receive the purchaser's
written consent prior to the transaction.
SEC regulations also require additional disclosure
in connection with any trades involving a "penny
stock", including the delivery, prior to any penny
stock transaction, of a disclosure schedule
explaining the penny stock market and its
associated risks. These requirements severely limit
the liquidity of the common stock in the secondary
market because few broker or dealers are likely to
undertake compliance activities. Generally, the
term penny stock refers to a stock with a market
price of less than $5.00 per share. A market in
our stock may never develop due to these
restrictions.
Determination of Offering Price
The offering price of the common shares were
arbitrarily determined by Capital Tech without any
consideration of the actual value of our company or
what the market might pay for our stock.
Plan of Distribution
Plan of Distribution. The common shares are being
offered on a self underwritten basis by Gary
Rothwell and Richard Schreck, officers and
directors of Capital Tech and selected
broker/dealers. Consequently, there may be less
due diligence performed in conjunction with this
offering than would be performed in an underwritten
offering. Although they are associated persons of
us as that term is defined in Rule 3a4-1 under the
Exchange Act, they are deemed not to be a broker
for the following reasons:
- They are not subject to a statutory
disqualification under the Exchange Act at the time
of their participation in the sale of our
securities.
- They will not be compensation for their
participation in the sale of our securities by the
payment of commission or other remuneration based
either directly or indirectly on transactions in
securities.
18
- They are not an associated person of a
broker or dealer at the time of their participation
in the sale of our securities.
As of the date of this prospectus, no broker has
been retained by us for the sale of securities
being offered. In the event a broker who may be
deemed an underwriter is retained by us, an
amendment to our registration statement will be
filed.
Management, principal shareholders or their
affiliates may not acquire common shares in the
offering.
The common shares may be offered by selected
broker/dealers. Selected broker/dealers, if any,
will receive the standard industry commission not
to exceed 10% of the offering price.
Offering Period. The offering period will commence
on the date of this prospectus and will terminate
on December 31, 2003.
Management
Executive Officers and Directors
Our executive officers and directors and their
business experience follows:
Name Position Period Served
<s> <c> <c>
Richard Schreck, age 47 President/Treasurer/Director Inception to
present
Gary Rothwell, age 63 Vice President/Secretary June 2002
Director present
Resumes:
Richard Schreck. Mr. Schreck has been president,
secretary-treasurer and a director of Capital Tech
since its inception. He is a real estate broker
with a wide variety of contacts and financial
knowledge in the real estate business. For the
past two years, he has been a vice president,
brokerage, for Fuller and Company, a real estate
brokerage firm in Denver, Colorado. Prior to
that, he was associated with Grubb & Ellis from
1992 until he joined Fuller and Company. Since
1999, he has also been a director of Centennial
Banc Share Corp., a public mortgage company. From
19
1996 to 1999, he was also a director of Centennial
Banc Share Corp., a public mortgage company. Mr.
Schreck obtained a bachelor's degree in
organizational behavior from Miami University in
1973.
Gary Rothwell. Mr. Rothwell has been vice
president, secretary and director of Capital Tech
since June 2002. Mr. Rothwell has been secretary,
treasurer and a director of Email Mortgage, are a
direct facilitator to wholesale banks since its
inception since March 2000. From 1997 to present,
Mr. Rothwell has been involved in various aspects
of the home mortgage business for over 20 years.
In 1977, he was the president and founder of G & E
builders, Inc., an enterprise focused on the
building, marketing and sale of custom homes. In
1983 he was issued a Series 7; general securities,
and a Series 24; general securities principals
license.
In 1990, he became the sales manager for Yorkshire
Real Estate. His duties included the hiring and
training of real estate agents, advertising, public
relations and real estate loan applications, with
follow through from origination to closing.
Mr. Rothwell has been the owner of Tiffany Real
Estate since 1993. Tiffany Real Estate is a full
service real estate company dedicated to providing
customers with a complete program to fit their
needs when buying a home.
In 1997, Mr. Rothwell began working in the
residential mortgage lending business. He has
worked with lenders such as:
? Service Mortgage Corp
? Total Mortgage Professionals
? Mortgage Processing Services, and
? Mortgage 2000
He has been president of Merit Mortgage Corp. since
1997.
Mr. Schreck and Mr. Rothwell will only be required
work part time (20 hours per week) for Capital
Tech.
Remuneration. To date, no compensation has been
paid to the officers of Capital Tech. Upon
successful completion of the offering, we will
enter into written employment agreements with our
current officers and key employees yet to be named.
20
None of our officers and/or directors has received
any compensation for their respective services
rendered unto us. They all have agreed to act
without compensation. As of the date of this
registration statement, we have no funds available
to pay directors. Further, none of the directors
are accruing or will accrue any compensation
pursuant to any agreement with us.
Employee Incentive Stock Option Plan. The
shareholders and the directors, at their
organizational meeting, adopted an employee
incentive stock option plan pursuant to the
regulations of the Internal Revenue Service. The
plan provides for a pool of authorized, but
unissued common shares to be reserved for issuing
to key executives, employees and consultants
pursuant to the plan. Up to 1,000,000 options may
be granted. The board of directors plans to elect
a compensation committee to award the options from
time to time. Committee members may not be
grantees while serving.
Principal Shareholders
The following sets forth the beneficial ownership
of the common stock of Capital Tech by each of
Capital Tech's directors and executive officers,
and as a group. The beneficial owner has sole
voting and investment power with respect to the
Securities indicated.
There are currently 2,130,000 common shares
outstanding.
The following tabulates holdings of common shares
of Capital Tech (on a fully diluted basis) by each
person who, at the date of this prospectus, holds
of record or is known by management to own
beneficially more than 5.0% of the common shares
and, in addition, by all directors and officers of
Capital Tech individually and as a group.
Percentage of
Number & Class Common Shares
Name and Address of Shares Prior to offering After offering
<s> <c> <c> <c>
Richard Schreck 20,000 .94% .48%
8200 S. Quebec Street
A-3, #125
Centennial CO 80112
21
Gary Rothwell 20,000 .94% .48%
8200 South Quebec Street,
A-3 #125
Centennial, Colorado 80112
All Directors & Officers
as a group (2 persons)
Ashley Martinez 2,090,000 98.12% 50.61%
115 East Main
Lawrence, Colorado 84632
Pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, beneficial
ownership of a security consists of sole or shared
voting power (including the power to vote or direct
the voting) and/or sole or shared investment power
(including the power to dispose or direct the
disposition) with respect to a security, whether
through a contract, arrangement, understanding,
relationship, or otherwise. Unless otherwise
indicated, each person indicated above has sole
power to vote, or dispose or direct the disposition
of all shares beneficially owned.
Mr. Schreck and Mr. Rothwell would be deemed to be
a promoters of Capital Tech.
We do not know of any arrangements, including any
pledge by any personnel, which would result in a
change of control of Capital Tech.
Indemnification
Our bylaws do not contain a provision entitling any
director or executive officer to indemnification
against liability under the Securities Act of 1933.
The Colorado Corporation Code allow a company to
indemnify its officers, directors, employees, and
agents from any threatened, pending, or completed
action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, except
under certain circumstances.
Indemnification may only occur if a determination
has been made that the officer, director, employee,
or agent acted in good faith and in a manner, which
such person believed to be in the best interests of
the company. A determination may be made by the
shareholders; by a majority of the directors who
were not parties to the action, suit, or proceeding
confirmed by opinion of independent legal counsel;
22
or by opinion of independent legal counsel in the
event a quorum of directors who were not a party to
such action, suit, or proceeding does not exist.
Provided the terms and conditions of these
provisions under Colorado law are met, officers,
directors, employees, and agents of Capital Tech
may be indemnified against any cost, loss, or
expense arising out of any liability under the '33
Act. Insofar as indemnification for liabilities
arising under the '33 Act may be permitted to
directors, officers and controlling persons of
Capital Tech. Capital Tech has been advised that
in the opinion of the Securities and Exchange
Commission, such indemnification is against public
policy and is, therefore, unenforceable.
Certain Transactions
Current officers, directors and promoters paid cash
of $.001 per common share
Richard Schreck 20,000 common shares
Gary Rothwell 20,000 common shares
Description of Securities
Capital Tech is authorized to issue 100,000,000
common shares, $.001 par value per share and
10,000,000 preferred shares, $.001 par value per
share. As of the date hereof, there are 2,130,000
common shares outstanding and no preferred shares
outstanding.
Holders of common shares of Capital Tech are
entitled to cast one vote for each share held at
all shareholders meetings for all purposes. There
are no cumulative voting rights. Upon liquidation
or dissolution, each outstanding common share will
be entitled to share equally in the assets of
Capital Tech legally available for distribution to
shareholders after the payment of all debts and
other liabilities. Common shares are not
redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or
purchase additional common shares in the event of a
subsequent offering. All outstanding common shares
are, and the shares offered hereby will be when
issued, fully paid and non-assessable.
There are no limitations or restrictions upon the
rights of the board of directors to declare
dividends out of any funds legally available
23
therefore. Capital Tech has not paid dividends to
date and it is not anticipated that any dividends
will be paid in the foreseeable future. The board
of directors initially may follow a policy of
retaining earnings, if any, to finance the future
growth of Capital Tech. Accordingly, future
dividends, if any, will depend upon our need for
working capital and its financial conditions at the
time.
Preferred Stock. Capital Tech is authorized to
issue 10,000,000 shares of preferred stock, par
value of $.001.
Authorized stock may be issued from time to time
without action by the stockholders for such
consideration as may be fixed from time to time by
the Board of Directors, and shares so issued, the
consideration for which have been paid or
delivered, shall be deemed fully paid stock and the
holder of such shares shall not be liable for any
further payment thereon.
The capital stock of Capital Tech, after the amount
of the subscription price or par value has been
paid in full shall be non-assessible.
There are not anti-takeover provisions that may
have the affect of delaying or preventing a change
in control.
Transfer Agent. Corporate Stock Transfer located in
Denver, Colorado acts as the transfer agent for
Capital Tech.
Legal Matters
All legal matters with respect to the issuance of
the securities offered hereby will be passed upon
by the law firm of Jody M. Walker, Littleton,
Colorado.
There is no litigation pending or, to our
knowledge, threatened to which the property of
Capital Tech is subject or to which Capital Tech
may be a party. No such proceedings are known to
be contemplated by governmental authorities or any
other parties.
24
Reports
Pursuant to the Rules and Regulations of the
Securities and Exchange Commission, we will provide
our Investors with Annual Reports containing
audited financial statements, together with
Quarterly Reports containing unaudited financial
statements and Interim Reports containing
information regarding relevant information about
the operations of Capital Tech.
25
Capital Tech, Inc.
(A Development Stage Company)
Balance Sheet
June 30, 2002
(Unaudited)
ASSETS
Current assets: 2002
<s> <c>
Cash $ 1,309
-----------
Total current assets 1,309
-----------
$ 1,309
===========
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 550
---------
Total current liabilities 550
Loans from related parties 5,984
Stockholders' equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized, no shares
issued and outstanding -
Common stock, $.001 par value,
100,000,000 shares authorized, 2,110,000
shares issued and outstanding 2,110
Additional paid in capital 180
(Deficit) accumulated during
development stage (7,515)
---------
(5,225)
---------
$ 1,309
=========
See accompanying notes to financial statements.
26
Capital Tech, Inc.
(A Development Stage Company)
Statement of Operations
Six Months Ended June 30, 2002 and 2001 and
For the Period From Inception (March 28, 2000) to June 30, 2002
(Unaudited)
Period From
Six Months Ended Inception To
June 30, June 30,
2002 2001 2002
-------------------- ------------
<s> <c> <c> <c>
Operating expenses:
Professional fees $ 550 $ - $ 3,406
Consulting expense - related party - - 3,366
Web site design expense - related party - - 667
Other expenses 17 40 154
--------- --------- ---------
567 40 7,593
Other income and expense:
Interest income 6 23 77
--------- --------- ---------
(Loss from operations) and net (loss) $ (561) $ (17) $ (7,515)
========= ========= =========
Per share information:
Basic and diluted (loss) per common share $ (0.00) $ (0.00) $ (0.00)
========= ========= =========
Weighted average shares outstanding 2,110,000 2,110,000 2,110,000
========= ========= =========
See accompanying notes to financial statements.
27
Capital Tech, Inc.
(A Development Stage Company)
Statement of Cash Flows
Six Months Ended June 30, 2002 and 2001 and
For the Period From Inception (March 28, 2000)
to June 30, 2002
(Unaudited)
Period From
Six Months Ended Inception To
June 30, June 30,
2002 2001 2002
----------------------- ------------
<s> <c> <c> <c>
Net income (loss) $ (561) $ (17) $ (7,515)
Adjustments to reconcile net income to net
cash provided by operating activities:
Expenses paid by related party - - 450
Changes in assets and liabilities:
Increase in accounts payable 550 - 550
-------- -------- --------
Total adjustments 550 - 1,000
-------- -------- --------
Net cash provided by (used in)
operating activities (11) (17) (6,515)
Cash flows from financing activities:
Common stock sold for cash - - 2,290
Loans from related party - - 25,209
Repayment of related party loans (1,016) - (19,675)
-------- -------- --------
Net cash provided by (used in)
financing activities (1,016) - 7,824
-------- -------- --------
Increase (decrease) in cash (1,027) (17) 1,309
Cash and cash equivalents,
beginning of period 2,336 2,390 -
-------- -------- --------
Cash and cash equivalents,
end of period $ 1,309 $ 2,373 $ 1,309
See accompanying notes to financial statements.
28
Capital Tech, Inc.
Notes to Unaudited Financial Statements
June 30, 2002
Basis of presentation
The accompanying unaudited financial
statements have been prepared in accordance
with generally accepted accounting
principles for interim financial
information and with the instructions
incorporated in Regulation SB of the
Securities and Exchange Commission.
Accordingly, they do not include all of the
information and footnotes required by
generally accepted accounting principles
for complete financial statements. In the
opinion of management, all adjustments
(consisting of normal recurring adjustments
and accruals) considered necessary for a
fair presentation have been included.
The results of operations for the periods
presented are not necessarily indicative of
the results to be expected for the full
year. The accompanying financial statements
should be read in conjunction with the
Company's financial statements for the year
ended December 31, 2001 included elsewhere
herein.
Basic loss per share was computed using the
weighted average number of common shares
outstanding.
During the six months ended June 30, 2002,
the Company repaid part of an advance from
a related party amounting to $1,016 and the
Company had an outstanding advance balance
due the related party of $5,984 at June 30,
2002.
25
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Capital Tech, Inc.
(A Development Stage Company)
We have audited the balance sheet of
Capital Tech, Inc. as of December 31, 2001,
and the related statements of operations,
changes in stockholders' equity, and cash
flows for the two years then ended and for
the period from inception (March 28, 2000)
to December 31, 2001. These financial
statements are the responsibility of the
Company's management. Our responsibility
is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with
auditing standards generally accepted in
the United States of America. Those
standards require that we plan and perform
the audit to obtain reasonable assurance
about whether the financial statements are
free of material misstatement. An audit
includes examining on a test basis,
evidence supporting the amounts and
disclosures in the financial statements.
An audit also includes assessing the
accounting principles used and significant
estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements
referred to above, present fairly, in all
material respects, the financial position
of Capital Tech, Inc. as of December 31,
2001, and the results of its operations and
cash flows for the two years then ended and
for the period from inception (March 28,
2000) to December 31, 2001, in conformity
with generally accepted accounting
principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Dillon, Colorado
April 15, 2002
30
Capital Tech, Inc.
(A Development Stage Company)
Balance Sheet
December 31, 2001
ASSETS
Current assets: 2001
<s> <c>
Cash $ 2,336
----------
Total current assets 2,336
----------
$ 2,336
===========
STOCKHOLDERS' EQUITY
Current liabilities:
Total current liabilities $ -
Loans from related parties 7,000
Commitments and contingencies (Note 3)
Stockholders' equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized, no shares
issued and outstanding -
Common stock, $.001 par value,
100,000,000 shares authorized, 2,110,000
shares issued and outstanding 2,110
Additional paid in capital 180
(Deficit) accumulated during
development stage (6,954)
-----------
(4,664)
-----------
$ 2,336
===========
See accompanying notes to financial statements.
31
Capital Tech, Inc.
(A Development Stage Company)
Statement of Operations
Years Ended December 31, 2001 and 2000 and
For the Period From Inception (March 28, 2000)
to December 31, 2001
Period From
Year Ended Inception To
December 31, December 31,
2001 2000 2001
-------------------- ------------
<s> <c> <c> <c>
Operating expenses:
Professional fees $ - $ 2,856 $ 2,856
Consulting expense - related party 3,366 - 3,366
Web site design expense - related party - 667 667
Other expenses 118 19 137
-------- -------- --------
3,484 3,542 7,026
Other income and expense:
Interest income 63 8 71
-------- -------- --------
(Loss from operations) and net (loss) $ (3,420) $ (3,534) $ (6,954)
======== ======== ========
Per share information:
Basic and diluted (loss) per common share $ (0.00) $ (0.00) $ (0.00)
======== ======== ========
Weighted average shares outstanding 2,110,000 2,110,000 2,110,000
========= ========= =========
See accompanying notes to financial statements.
32
Capital Tech, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (March 28, 2000)
to December 31, 2001
Deficit
Additional Accumulated
Common Stock Paid-in During Develop-
ACTIVITY Shares Amount Capital ment Stage Total
------ ------ ------- -------------- -----
<s> <c> <c> <c> <c> <c>
Shares issued for cash
March 2000 @ $.001 2,090,000 $ 2,090 $ - $ - $ 2,090
March 2000 @ $.01 20,000 20 180 - 200
Capital contribution by
shareholder - - - - -
Net (loss) for the period
ended December 31, 2000 - - - (3,534) (3,534)
--------- -------- ------- -------- -------
Balance, December 31, 2000 2,110,000 2,110 180 (3,534) (1,244)
Net (loss) for the period
ended December 31, 2001 - - - (3,420) (3,420)
--------- -------- ------- -------- -------
Balance, December 31,
2001 2,110,000 $ 2,110 $ 180 $ (6,954) $(4,664)
See accompanying notes to financial statements.
33
Capital Tech.com, Inc.
(A Development Stage Company)
Statement of Cash Flows
Years Ended December 31, 2001 and 2000 and
For the Period From Inception (March 28, 2000)
to December 31, 2001
Period From
Year Ended Inception To
December 31, December 31,
2001 2000 2001
-------------------- ------------
<s> <c> <c> <c>
Net income (loss) $(3,420) $(3,534) $(6,954)
Adjustments to reconcile net income to net
cash provided by operating activities:
Expenses paid by related party - 450 450
------- ------- -------
Total adjustments - 450 450
------- ------- -------
Net cash provided by (used in)
operating activities (3,420) (3,084) (6,504)
Cash flows from financing activities:
Common stock sold for cash - 2,290 2,290
Loans from related party 22,000 3,209 25,209
Repayment of related party loans (18,634) (25) (18,659)
------- ------- -------
Net cash provided by (used in)
financing activities 3,366 5,474 8,840
------- ------- -------
Increase (decrease) in cash (54) 2,390 2,336
Cash and cash equivalents,
beginning of period 2,390 - -
------- ------- -------
Cash and cash equivalents,
end of period $ 2,336 $ 2,390 $ 2,336
See accompanying notes to financial statements.
34
Capital Tech, Inc.
(A Development Stage Company)
Statement of Cash Flows
Years Ended December 31, 2001 and 2000 and
For the Period From Inception (March 28, 2000)
to December 31, 2001
Period From
Year Ended Inception To
December 31, December 31,
2001 2000 2001
-------------------- ------------
<s> <c> <c> <c>
Supplemental cash flow information:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
See accompanying notes to financial statements.
35
Capital Tech, Inc.
Notes to Financial Statements
December 31, 2001
Note 1. Organization and Summary of
Significant Accounting Policies.
The Company was incorporated in Colorado on
March 28, 2000 and began operations on May
11, 2000. The Company's activities to date
have been limited to organization and
capital formation. The Company plans to
engage in the residential mortgage business
via the use of an internet website. The
Company has chosen December 31st as the end
of its fiscal year.
Revenue Recognition:
Revenue is recognized at the time the
service is performed.
Loss per share:
Basic Earnings per Share ("EPS") is
computed by dividing net income available
to common stockholders by the weighted
average number of common stock shares
outstanding during the year. Diluted EPS is
computed by dividing net income available
to common stockholders by the weighted-
average number of common stock shares
outstanding during the year plus potential
dilutive instruments such as stock options
and warrants. The effect of stock options
on diluted EPS is determined through the
application of the treasury stock method,
whereby proceeds received by the Company
based on assumed exercises are
hypothetically used to repurchase the
Company's common stock at the average
market price during the period. Loss per
share is unchanged on a diluted basis since
the assumed exercise of common stock
equivalents would have an anti-dilutive
effect.
Cash:
For purposes of the statement of cash
flows, the Company considers all highly
liquid debt instruments purchased with
maturity of three months or less to be cash
equivalents.
36
Estimates:
The preparation of the Company's financial
statements requires management to make
estimates and assumptions that affect the
amounts reported in the financial
statements and accompanying notes. Actual
results could differ from these estimates
Fair Value of Financial Instruments
The Company's short-term financial
instruments consist of cash and cash
equivalents and accounts payable. The
carrying amounts of these financial
instruments approximate fair value because
of their short-term maturities. Financial
instruments that potentially subject the
Company to a concentration of credit risk
consist principally of cash. During the
year the Company did not maintain cash
deposits at financial institutions in
excess of the $100,000 limit covered by the
Federal Deposit Insurance
Corporation. The Company does not hold or
issue financial instruments for trading
purposes nor does it hold or issue interest
rate or leveraged derivative financial
instruments
Intangible Assets and Long Lived
Assets:
The Company makes reviews for the
impairment of long-lived assets and certain
identifiable intangibles whenever events or
changes in circumstances indicate that the
carrying amount of an asset may not be
recoverable. Under SFAS No. 121, an
impairment loss would be recognized when
estimated future cash flows expected to
result from the use of the asset and its
eventual disposition is less than its
carrying amount. No such impairment losses
have been identified by the Company for the
period ended December 31, 2001.
Stock-based Compensation
The Company adopted Statement of Financial
Accounting Standard No. 123 (FAS 123),
Accounting for Stock-Based Compensation
beginning with the Company's first quarter
of 1996. Upon adoption of FAS 123, the
Company continued to measure compensation
expense for its stock-based employee
compensation plans using the intrinsic
value method prescribed by APB No. 25,
Accounting for Stock Issued to Employees.
37
Stock based compensation paid by the
Company during the period ended December
31, 2001is disclosed in Note 3.
New Accounting Pronouncements
In June 2001, the Financial Accounting
Standards Board issued SFAS No. 141,
Business Combinations ("SFAS 141), which is
required to be adopted for business
combinations initiated after June 30, 2001.
SFAS 141 prohibits the use of the pooling
of interest method of accounting.
Management believes that the adoption of
SFAS No. 141 has had no impact on the
Company for the year ended December 31,
2001.
In June 2001, the Financial Accounting
Standards Board issued SFAS No. 142,
Goodwill and Other Intangible Assets ("SFAS
142), which is required to be adopted for
fiscal years beginning after December 15,
2001. The Company plans to adopt SFAS 142
during the first quarter of its 2002 fiscal
year. SFAS 142 establishes accounting
rules for recording goodwill and other
intangible assets. It prohibits the
amortization of goodwill and intangible
assets that have an indefinite useful life.
Such assets are required to be tested for
impairment on an annual basis. Company
plans to follow the requirements of SFAS
142 to account for any merger that it may
enter into.
Management believes that the adoption of
SFAS No. 142 has had no impact on the
Company for the year ended December 31,
2001.
In August 2001, the Financial Accounting
Standards Board issued SFAS No. 144,
Accounting for the Impairment or Disposal
of Long-Lived Assets (SFAS 144), which is
required to be adopted for fiscal years
beginning after December 15, 2001. SFAS
144 establishes accounting rules for
recognition and measurement of impairment
losses of certain long-lived assets.
38
Management believes that the adoption of
SFAS No. 144 has had no impact on the
Company for the year ended In August 2001,
the Financial Accounting Standards Board
issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets
(SFAS 144), which is required to be adopted
for fiscal years beginning after December
15, 2001. SFAS 144 establishes accounting
rules for recognition and measurement of
impairment losses of certain long-lived
assets.
Management believes that the adoption of
SFAS No. 144 has had no impact on the
Company for the year ended December 31,
2001.
Note 2. Stockholders' Equity.
During May 2000, the Company issued
2,090,000 shares of it's restricted common
stock for cash to an entity controlled by
an individual who also controls an entity
that has made cash and other advances to
the Company. The shares were valued at
$.001 per share for an aggregate of $2,090.
During May 2000, the Company issued 20,000
shares of common stock to an officer of the
Company for cash aggregating $200.
Note 3. Commitments and contingencies
The officers and directors of the Company
are involved in other business activities
and may become involved in other business
activities in the future. Such business
activities may conflict with the activities
of the Company. The Company has not
formulated a policy for the resolution of
any such conflicts that may arise.
Note 4. Income Taxes
Deferred income taxes may arise from
temporary differences resulting from income
and expense items reported for financial
accounting and tax purposes in different
periods. Deferred taxes are classified as
current or non-current, depending on the
classifications of the assets and
liabilities to which they relate. Deferred
taxes arising from temporary differences
that are not related to an asset or
39
liability are classified as current or non-
current depending on the periods in which
the temporary differences are expected to
reverse.
The Company had no significant deferred tax
items arise during any of the periods
presented.
The Company has not provided for income
taxes during the years ended December 31,
2001 and 2000 as a result of operating
losses. The Company has a net operating
loss carryforward at December 31, 2001 of
approximately $7,000 which will expire if
unused in 2021. The Company has fully
reserved the deferred tax asset
(approximately $1,050) that would arise
from the loss carryforward since the
Company cannot predict a level of
operations that would assure the
utilization of the loss in future periods.
Note 5. Related Party Transactions
An individual who controls the entity that
owns the majority of the Company's
outstanding common stock also controls an
entity that has advanced funds to the
Company and has paid expenses in behalf of
the Company.
During the year ended December 31, 2000,
the entity advanced $3,209 in cash to the
Company and paid expenses in behalf of the
Company aggregating $450. The balance was
repaid in full during the year ended
December 31, 2001.
During October 2001 the Company received a
$22,000 cash advance from an affiliated
Company and paid expenses if favor of the
affiliate amounting to $15,000. The net
balance due to the affiliate at December
31, 2001 amounted to $7,000.
40
Part II
Information Not Required in Prospectus
Item 24. Indemnification of Directors and Officers
The Colorado Corporation Code grants to Capital
Tech the power to indemnify the officers and
directors of Capital Tech, under certain
circumstances and under certain conditions and
limitations as stated therein, against all expenses
and liabilities incurred by or imposed upon them as
a result of suits brought against them as such
officers and directors if they act in good faith
and in a manner they reasonably believe to be in or
not opposed to the best interests of Capital Tech
and, with respect to any criminal action or
proceeding, have no reasonable cause to believe
their conduct was unlawful.
Our bylaws provide as follows:
Capital Tech 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, suit,
or proceeding, whether civil, criminal,
administrative, or investigative (other than an
action by or in the right of Capital Tech, by
reason of the fact that he is or was a director,
officer, employee, fiduciary or agent of Capital
Tech or is or was serving at the request of Capital
Tech as a director, officer, employee, fiduciary or
agent of another corporation, partnership, joint
venture, trust, or other enterprise, against
expenses (including attorney 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 the best interest of Capital Tech 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, or
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 the
best interest of Capital Tech and, with respect to
any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
41
Capital Tech 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 or in the right of Capital Tech to procure
a judgment in its favor by reason of the fact that
he is or was a director, officer, employee, or
agent of Capital Tech or is or was serving at the
request of Capital Tech as a director, officer,
employee, or agent of another corporation,
partnership, joint venture, trust, or other
enterprise against expenses (including attorney
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 the best
interest of Capital Tech; but no indemnification
shall be made in respect of any claim, issue, or
matter as to which such person has been adjudged to
be liable for negligence or misconduct in the
performance of his duty to Capital Tech unless and
only to the extent that the court in which such
action or suit was brought determines upon
application that, despite the adjudication of
liability, but in view of all circumstances of the
case, such person is fairly and reasonably entitled
to indemnification for such expenses which such
court deems proper.
To the extent that a director, officer, employee,
fiduciary or agent of Capital Tech has been
successful on the merits in defense of any action,
suit, or proceeding referred to in the first two
paragraphs of this Article VII or in defense of any
claim, issue, or matter therein, he shall be
indemnified against expenses (including attorney
fees) actually and reasonably incurred by him in
connection therewith.
Any indemnification under the first two paragraphs
of this Article VII (unless ordered by a court)
shall be made by Capital Tech only as authorized in
the specific case upon a determination that
indemnification of the director, officer, employee,
fiduciary or agent is proper in the circumstances
because he has met the applicable standard of
conduct set forth in said first two paragraphs.
Such determination shall be made by the Board of
Directors by a majority vote of a quorum consisting
of directors who were not parties to such
42
action, suit, or proceeding, or, if such quorum is
not obtainable or even if obtainable a quorum of
disinterested directors so directs, by independent
legal counsel in a written opinion or by the
shareholders.
Expenses (including attorney fees) incurred in
defending a civil or criminal action, suit, or
proceeding may be paid by Capital Tech in advance
of the final disposition of such action, suit, or
proceeding as authorized in this Article VII upon
receipt of an undertaking by or on behalf of the
director, officer, employee, fiduciary or agent to
repay such amount unless it is ultimately
determined that he is entitled to be indemnified by
Capital Tech as authorized in this Article VII.
The indemnification provided by this Article VII
shall not be deemed exclusive of any other rights
to which those indemnified may be entitled under
the Articles of Incorporation, any bylaw,
agreement, vote of shareholders or disinterested
directors, or otherwise, and any procedure provided
for by any of the foregoing, both as to action in
his official capacity and as to action in another
capacity while holding such office, and shall
continue as to a person who has ceased to be a
director, officer, employee, fiduciary or agent and
shall inure to the benefit of heirs, executors, and
administrators of such a person.
A corporation may purchase and maintain insurance
on behalf of any person who is or was a director,
officer, employee, fiduciary or agent of Capital
Tech or who is or was serving at the request of
Capital Tech as a director, officer, employee,
fiduciary or agent of another corporation,
partnership, joint venture, trust, or other
enterprise against any liability asserted against
him and incurred by him in any such capacity or
arising out of his status as such, whether or not
Capital Tech would have the power to indemnify him
against such liability under the provisions of this
Article VII.
Item 25. Other Expenses of Issuance and
Distribution
Expenses in connection with the issuance and
distribution of the common stock being registered
hereunder other than underwriting commissions and
expenses are estimated below.
43
Registration fee $ 250.00
Printing expenses 5,000.00
Accounting fees and expenses 5,000.00
Legal fees and expenses 20,000.00
State securities law fees
and expenses 5,000.00
Stock Transfer Escrow Agent Fees 1,500.00
Miscellaneous expenses 2,000.00
---------
Total $38,750.00
==========
Item 26. Recent Sales of Unregistered Securities
Since inception, Capital Tech issued 2,090,000
common shares for consideration of $.001 per common
share to:
Advanced Funding 2,090,000 common shares
In January 2002, Advanced Funding sold its common
shares to Ashley Martinez for $.001 per common
share.
In May 2000, Richard Schreck, an officer paid cash
of $.001 per common share.
Richard Schreck 20,000 common shares
In the second quarter of 2002, Capital Tech issued
20,000 common shares for consideration of $.001 per
common share to Gary Rothwell.
All of the above issuances of common shares were
made to sophisticated individuals pursuant to an
exemption from registration under Sec. 4(2) of the
Securities Act of 1933.
Item 27. Exhibit Index.
(3) Articles of Incorporation dated
March 28, 2000 incorporated
by reference to Form SB-2
(3.1) Bylaws incorporated by
reference to Form SB-2
(4) Specimen certificate for common
stock
(5) Consent and Opinion of Jody M.
Walker regarding legality of
securities registered under
this Registration Statement
and to the references to
such attorney in the
prospectus filed as part of
this Registration Statement
40
(23) Consent of James E. Scheifley &
Associates, Inc.
Item 28. Undertaking.
The undersigned registrant hereby undertakes:
(a)(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 which, individually or together, represent a
fundamental change in the information 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 form 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% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any additional or changed material
information on the plan of distribution.
(2) That, for the purpose of determining any
liability under the Securities Act, we shall treat
each such post-effective amendment as a new
registration statement of the securities offered,
and the offering of the securities at that time
shall be deemed to be the initial bona fide
offering.
(3) To file a post-effective amendment to remove
from registration any of the securities that remain
unsold at the end of the offering.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer
has been advised that in the opinion of the
Securities and Exchange Commission such
45
indemnification is against public policy as
expressed in the Act and is, therefore,
unenforceable.
Signatures
Pursuant to the requirements of the Securities Act
of 1933, as amended, the Registrant has duly caused
this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly
authorized in Denver, Colorado, as of the 7th of
October, 2002.
Capital Tech, Inc.
By /s/ Richard Schreck
------------------------
Richard Schreck
President and Director
Pursuant to the requirements of the Securities Act
of 1933, as amended, this Registration Statement
has been signed below by the following persons in
the capacities and on the dates indicated and each
of the undersigned persons, in any capacity, hereby
severally constitutes a majority of the Board of
Directors.
Signature Title Date
- --------- ------ -----
<s> <c> <c>
/s/ Richard Schreck
- ---------------------- CEO, CFO, Controller October 7, 2002
Richard Schreck and Director
/s/ Gary Rothwell
- ---------------------- Secretary/Vice President October 7, 2002
Gary Rothwell and Director