United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE 3-MONTH PERIOD ENDED July 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD ___________.
COMMISSION FILE NO. 33-26616
--------
GUMP & COMPANY, INC.
(Exact Name of Small Business Issuer in its Charter)
Delaware 75-2256798
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
192 Searidge Court
Shell Beach, CA 93449
----------------------------------- --------
(Address of principal executive office) Zip Code
Issuer's telephone number: (805) 773-5350
---------------
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90 days. YES [X] NO [ ].
No active public market exists for the Company's common stock. The
Company's common stock has been listed on the OTC Electronic Bulletin Board
since February 1, 2001. There have been no trades. As of September 10, 2001,
nonaffiliates owned 16,729 shares which have a nominal market value.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,033,201 as of September 10, 2001.
Transitional Small Business Disclosure Format: YES [ ] NO [X]
Form 10-QSB
PART I
Item 1 - Financial Statements
FINANCIAL STATEMENTS
GUMP & COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2001 AND 2000
(UNAUDITED)
Financial Statements:
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Operation . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Stockholders' Equity . . . . . . . . . . . . . . . . . . 5
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . 7-9
GUMP & COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
------
JULY 31, 2001 OCTOBER 31, 2000
Current Assets:
Cash $ 17,692 $ 0
--------------- ------------------
Total Current Assets and Assets 17,692 0
=============== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities
Due to Stockholder 714 0
--------------- ------------------
Total Current Liabilities 714 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 20,332 3,300
Additional paid-in-capital 36,605 33,637
Accumulated deficit during
development stage (39,959) (36,937)
--------------- ------------------
Total Stockholders' Equity 16,978 0
--------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,692 $ 0
=============== ==================
The accompanying notes are an integral part of the financial statements.
3
GUMP & COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2001 AND 2000
(UNAUDITED)
-----------
THREE MONTHS NINE MONTHS
2001 2000 2001 2000
--------- -------- --------- --------
Revenues $ 0 $ 0 $ 0 $ 0
Expenses 2,859 0 3,022 0
--------- -------- --------- --------
NET INCOME (LOSS) $ (2,859) $ 0 $ (3,022) $ 0
========= ======== ========= ========
Net Income (loss) per share nil 0 0 0
--------- -------- --------- --------
Weighted average number of 447,201 330,000 447,201 330,000
outstanding shares ========= ======== ========= ========
The accompanying notes are an integral part of the financial statements.
4
GUMP & COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
JULY 31, 2001
(UNAUDITED)
TOTAL
ADDITIONAL STOCKHOLDERS'
COMMON STOCK PAID-IN- ACCUMULATED EQUITY
SHARES AMOUNT CAPITAL DEFICIT (DEFICIT)
---------- -------- ----------- ------------- ---------------
Balance October 31, 2000 330,000 $ 3,300 $ 33,637 $ (36,937) $ 0
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 (163) (163)
---------- -------- ----------- ------------- ---------------
Balance April 30, 2001 2,033,201 20,332 36,605 (37,100) 19,837
Net loss (2,859) (2,859)
---------- -------- ----------- ------------- ---------------
Balance July 31, 2001 2,033,201 $20,332 $ 36,605 ($39,959) $ 16,978
========== ======== =========== ============= ===============
The accompanying notes are an integral part of the financial statements.
5
GUMP & COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED JULY 31, 2001 AND 2000
(UNAUDITED)
THREE MONTHS NINE MONTHS
2001 2000 2001 2000
-------- ----- -------- -----
Cash Flows from operating activities:
Net income (loss) $(2,859) $ 0 $(3,022) $ 0
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
Increase in due to stockholder 714 0 714 0
-------- ----- -------- -----
Cash provided by (used in) operating activities (2,145) 0 (2,308) 0
-------- ----- -------- -----
Cash Flows from Investing Activities: 0 0 0 0
Cash Flows from Financing Activities:
Proceeds from capital contributions 0 0 0 0
Proceeds from issuance of common stock 0 0 20,000 0
-------- ----- -------- -----
Net Cash provided by Financing Activities 0 0 20,000 0
-------- ----- -------- -----
Net Increase (Decrease) in cash (2,145) 0 17,692 0
Cash at beginning of years and period 19,837 0 0 0
-------- ----- -------- -----
Cash at end of year $17,692 $ 0 $17,692 $ 0
======== ===== ======== =====
The accompanying notes are an integral part of the financial statements.
6
GUMP & COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2001
(UNAUDITED)
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.
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
shareholder 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 shareholder 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.
7
GUMP & COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS CONTINUED
JULY 31, 2001
(UNAUDITED)
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.
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 November 1, 2000 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.
8
GUMP & COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS CONTINUED
JULY 31, 2001
(UNAUDITED)
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.
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.
9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion should be read in conjunction with the Company's
Registration Statement on Form SB-2, Form 10-KSB and the consolidated financial
statements for the years ended October 31, 2000, 1999, 1998, 1997, 1996, 1995,
1994, and 1993; the consolidated financial statements and related notes for the
six month period ended April 30, 1999 and the financial statements and related
notes for the 3 month period ended July 31, 2000. The statements in this
Quarterly Report on Form 10-QSB relating to matters that are not historical
facts, including but not limited to statements found in this "Management's
Discussion and Analysis of Financial Condition and Results of Operations", are
forward-looking statements that involve a number of risks and uncertainties.
Gump & Company, Inc. (the "Company"), a development stage company, was
incorporated on September 28, 1988 under the laws of the State of Delaware. The
Company had been delinquent in its filings to the Securities and Exchange
Commission since it failed to file Form 10-KSB for the fiscal year ended October
31, 1993. As a result of a change in control on June 7, 2000, management of the
Company filed Form 10-QSB to cover the six months ended April 30, 2000. The
Company also filed Form 10-KSB to cover the fiscal periods ended October 31,
1993 through October 31, 1999.
To date the Company's primary activities have been organizational ones,
directed at developing its business plan and raising its initial capital. The
Company has no commercial operations. The Company has no employees and owns no
real estate. The Company has no operating income.
The Company's 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 shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture, or partnership. The Company has very limited capital, and it is
unlikely that the Company will be able to take advantage of more than one such
business opportunity. The Company intends to seek opportunities demonstrating
the potential of long-term growth as opposed to short-term earnings.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - NINE MONTHS ENDED
JULY 31, 2001, COMPARED TO THE NINE MONTHS ENDED JULY 31, 2000
REVENUE
In the fiscal year ended October 31, 1993 the Company had revenues of $4,384 and
expenses of $2,870 net income of $1,514. Since 1993, the Company has had no
revenue. The Company does not anticipate a significant change in the revenue
until such time as a business combination is consummated, if ever.
EXPENSES
For the nine months ended July 31, 2001, Expenses were $3,022, up from $0 during
the nine months ended July 31, 2000. This increase was caused primarily by
increased general and administrative expenses associated with the resumption of
reporting to the Securities and Exchange Commission and the investigation of
business opportunities.
NET LOSS
For the nine months ended July 31, 2001, the Net Loss was ($3,022), up from $0
for the nine months ended July 31, 2000. This increase is a result of increased
10
general and administrative expenses associated with the resumption of reporting
to the Securities and Exchange Commission and the investigation of business
opportunities, combined with the absence of revenues.
CASH
On July 31, 2001, Cash was $17,692, up from $0 on July 31, 2000. This increase
resulted primarily from the receipt of $20,000 from the sale of 2,000,000 shares
of common stock to the Company's sole officer and director, less amounts spent
for general and administrative expenses for the Company.
COMMON SHARES
On July 31, 2001, Common Shares were 2,033,201, up 1,703,201 (511.5%) from
330,000 on July 31, 2000. This increase resulted primarily from a one-for-ten
reverse split of the common stock and associated rounding, and the issuance of
2,000,000 shares of common stock to the Company's sole officer and director in
return for cash invested in the Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - THREE MONTHS ENDED
JULY 31, 2001, COMPARED TO THE THREE MONTHS ENDED JULY 31, 2000
EXPENSES
For the three months ended July 31, 2001, Expenses were $2,859, up from $0
during the three months ended July 31, 2000. This increase was caused primarily
by increased general and administrative expenses associated with the resumption
of reporting to the Securities and Exchange Commission and the investigation of
business opportunities.
NET LOSS
For the three months ended July 31, 2001, the Net Loss was ($2,859), up from $0
for the three months ended July 31, 2000. This increase is a result of increased
general and administrative expenses associated with the resumption of reporting
to the Securities and Exchange Commission and the investigation of business
opportunities, combined with the absence of revenues.
Liquidity and Capital Resources
The Company's plan of operations for the next twelve months is to continue
to carry out its plan of business discussed above. This includes seeking to
complete a merger or acquisition transaction with a small or medium-sized
enterprise which desires to become a public corporation. In selecting a
potential merger or acquisition candidate, the Company 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 Company to qualify its shares for trading on NASDAQ or on an exchange.
The types of business enterprises which it is believed might find a
business combination with the Company to be attractive include acquisition
candidates desiring to create a public market for their shares in order to
enhance liquidity for current shareholders, 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, foreign companies desiring to obtain access to
U.S. customers and U.S. capital markets, and acquisition candidates which plan
to acquire additional assets through issuance of securities rather than for
cash, and believe that the possibility of development of a public market for
11
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 the Company to be an attractive alternative.
Although it has had preliminary discussions with several potential merger
or acquisition candidates, the Company is unable to predict when it may
participate in a business opportunity. It has not established any deadline for
completion of a transaction, and anticipates that the process could continue
throughout the next twelve months.
The Company's balance sheet on July 31, 2001, reflects current assets of
$17,692 and current liabilities in the amount of $714. Accordingly, the Company
may be required to raise additional funds, or its shareholders may be required
to advance funds in order to pay its current liabilities and to satisfy the
Company's cash requirements for the next twelve months.
PART II - OTHER INFORMATION
None.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GUMP & COMPANY, INC.
Date: September 10, 2001
By: /s/ Mark A. DiSalvo
- --------------------------------------------------
Mark A. DiSalvo
President, Chief Executive Officer and Chief Financial Officer
12