As filed with the Securities and Exchange Commission on August 31, 1999
Registration No. 333-82277
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1
To
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GENTRY RESOURCES, INC.
(Exact name of registrant as specified in its charter)
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Nevada 4959 76-0594911
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
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1177 West Hastings, Suite 2110
Vancouver, British Columbia V6E 2K3, CANADA
(604) 687-2199
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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Agent for Service: With a Copy to:
Michael Kirsh, President James L. Vandeberg
Gentry Resources, Inc. Vandeberg Johnson & Gandara
1177 West Hastings, Suite 2110 600 University Street, Suite 2424
Vancouver, British Columbia V6E 2K3, CANADA Seattle, Washington 98101
(604) 687-2199 (206) 386-8080
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the 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,
check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of each class of Amount maximum maximum
securities to be to be offering price aggregate Amount of
registered registered per unit offering price registration fee
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Common stock........... 2,500,000 shares $0.05 per share(1) $125,000.00 $34.75(2)
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(1) No exchange or over-the-counter market exists for Gentry's common stock.
The most recent sale of Gentry's common stock from one investor to
another occurred on May 11, 1999, when a total of 700,000 shares of
Gentry common stock were sold at a price of $0.047 per share. Gentry
believes this transaction supports a bona fide estimate of $0.05 per
share as the maximum offering price solely for the purpose of calculating
the amount of the registration fee pursuant to Rule 457(a) under the
Securities Act of 1933.
(2) Previously paid
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 the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to such section 8(a), may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+We will amend and complete the information in this prospectus. Although we +
+are permitted by US federal securities law to offer these securities using +
+this prospectus, we may not sell them or accept your offer to buy them until +
+the documentation filed with the sec relating to these securities has been +
+declared effective by the SEC. This prospectus is not an offer to sell these +
+securities or our solicitation of your offer to buy these securities in any +
+jurisdiction where that would not be permitted or legal. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION August 31, 1999
Prospectus
, 1999
GENTRY RESOURCES, INC.
1177 West Hastings, Suite 2110
Vancouver, British Columbia V6E 2K3, CANADA
(604) 687-2199
2,500,000 Shares of Common Stock
to be sold by current shareholders
This is the initial public offering of common stock of Gentry Resources,
Inc., and no public market currently exists for shares of Gentry's common
stock. None of the proceeds from the sale of stock in this offering will be
available to Gentry. This prospectus is part of a registration statement that
permits selling shareholders to sell their shares on a continuous or delayed
basis in the future. Selling shareholders may sell their shares to the public
immediately upon the effectiveness of the registration statement, or they may
elect to sell some or all of their shares at a later date. As a result, it is
impracticable to state either the number of shares that will be available to
the public or their price. The most recent sale of Gentry's common stock from
one investor to another occurred on May 11, 1999, when a total of 700,000
shares of Gentry common stock were sold at a price of $0.047 per share. The
principal operations of Gentry have not yet commenced.
This is not an underwritten offering, and Gentry's stock is not listed on any
national securities exchange or the Nasdaq Stock Market. Gentry intends to
apply to have its shares traded on the OTC bulletin board under the symbol:
"GNTR"
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 1.
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Nor have they made, nor will they make, any determination as to
whether anyone should buy these securities. Any representation to the contrary
is a criminal offense.
TABLE OF CONTENTS
Risk Factors.............................................................. 1
Use of Proceeds........................................................... 8
Determination of Offering Price........................................... 8
Dilution.................................................................. 8
Selling Shareholders...................................................... 8
Plan of Distribution...................................................... 9
Description of Capital Stock.............................................. 9
Interests of Named Experts and Counsel.................................... 9
Description of Business................................................... 10
Description of Property................................................... 13
Legal Proceedings......................................................... 13
Market Price of and Dividends on Capital Stock and Related Stockholder
Matters.................................................................. 14
Selected Financial Data................................................... 15
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 16
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure............................................................... 17
Directors and Executive Officers.......................................... 17
Executive Compensation.................................................... 17
Security Ownership of Certain Beneficial Owners and Management............ 18
Certain Relationships and Related Transactions............................ 19
Disclosure of Commission Position on Indemnification for Securities Act
Liabilities.............................................................. 19
Index to Financial Statements............................................. F-1
RISK FACTORS
You should carefully consider the following risk factors and all other
information contained in this prospectus before purchasing the common stock of
Gentry Resources, Inc. Investing in Gentry's common stock involves a high
degree of risk. Any of the following risks could adversely affect Gentry's
business, financial condition and results of operations and could result in a
complete loss of your investment. You should rely only on the information
contained in this document. Gentry has not authorized anyone to provide you
with information that is different. This document may only be used where it is
legal to sell these securities.
You Should Not Rely on Forward-Looking Statements Because They Are Inherently
Uncertain
You should not rely on forward-looking statements in this prospectus. This
prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as "anticipates", "believes", "plans",
"expects", "future", "intends" and similar expressions to identify these
forward-looking statements. This prospectus also contains forward-looking
statements attributed to certain third parties relating to their estimates
regarding the potential uses of Biocatalyst and markets for it. Prospective
investors should not place undue reliance on these forward-looking statements,
which apply only as of the date of this prospectus. Gentry's actual results
could differ materially from those anticipated in these forward-looking
statements for many reasons, including the risks faced by Gentry described in
"Risk Factors" and elsewhere in this prospectus.
Risks Related to Gentry's Business
Gentry's success is dependent on a number of factors that should be
considered by prospective investors. Gentry has only recently acquired its
principal asset. It is a relatively young company and has no history of
earnings or profit and there is no assurance that it will operate profitably
in the future. As such, there is no assurance that Gentry will provide a
return on investment in the future.
Application of Biocatalyst Technology to Sewage and Waste Water Remediation
May Not Be Feasible
Gentry was formed in July of 1998 for the purpose of exploiting an unproven
new technology into a practical and viable business in the field of waste
treatment. In a license agreement with David R. Mortenson & Associates, Gentry
acquired the rights to distribute and produce Biocatalyst, an oxygen-enriched
water product, for remediation of sewage and waste water, whether in septic
tanks or waste water treatment facilities. Any failure to establish the
technical and economic feasibility of the Biocatalyst sewage and waste water
remediation application would prevent Gentry from implementing its business
plan, and could cause its stock to be worthless.
The scientific premise behind the Biocatalyst sewage and waste water
remediation application is that a constant supply of oxygen-enriched water to
a treatment system should supply enough oxygen to sustain aerobic
microbe/bacterial growth. The use of an aerobic process, as opposed to an
anaerobic process, should substantially reduce the noxious odor sometimes
associated with sewage processing. No Biocatalyst generator has been
successfully installed and operated at any waste treatment facility, even on a
test basis.
The initial step that Gentry plans to take, in conjunction with Mortenson &
Associates and other licensees, is to identify a waste treatment facility
interested in participating in a trial. No direct revenues will be generated
from installing test generators, and Gentry will not be in a position to earn
any revenues until it has completed all necessary testing and development of
Biocatalyst. Gentry may not be successful in locating a waste treatment
facility willing to test the technology. Gentry may be unable to reach an
agreement with other licensees regarding collaboration and sharing of
expenses. Even if a trial is conducted, the Biocatalyst sewage and waste water
remediation application may not prove to be either technically or economically
feasible. There is no guarantee that sewage and waste water treatment
facilities, Gentry's primary target market, will conclude that reduced noxious
odors are worth the price Gentry would have to charge to make money producing
and selling Biocatalyst.
1
Gentry May Lose Its Biocatalyst License If It Fails to Meet Its Minimum
Purchase Requirements
Gentry may be unable to meet the minimum purchase requirements under its
license with Mortenson & Associates. Loss of its license could prevent Gentry
from implementing its business plan, and could cause its stock to be worthless.
Gentry has the exclusive right to distribute and market Biocatalyst under a
private label in Alabama, Arkansas, Louisiana, and Mississippi for a period of
three years, expiring April 28, 2002. To retain this right, Gentry must
purchase a minimum amount of product based on pricing established in the
license agreement during each of the first two years of its license. Gentry is
required to purchase $125,000 of Biocatalyst by April 28, 2000, and a further
$175,000 by April 28, 2001, to retain its license. The current price for
Biocatalyst is $2.00 per gallon; Mortenson & Associates may change the price on
10 days' notice.
Gentry currently has no prospective purchasers lined up, and does not yet
know if the Biocatalyst sewage and waste water remediation application will
even be feasible. Gentry does not intend to meet its minimum purchase
requirement simply by stockpiling an inventory of Biocatalyst. If Gentry does
not meet its minimum purchase requirement and does not exercise its right to
become a producer of Biocatalyst, Gentry may be deemed to be in default under
its License Agreement with Mortenson & Associates. Mortenson & Associates would
then be able to terminate Gentry's license rights to Biocatalyst, which would
prevent Gentry from implementing its business plan, and could cause its stock
to be worthless.
Gentry May Lose Its Biocatalyst License If It Does Not Exercise Its Right to
Become a Producer
If Gentry meets certain requirements, it has the right to become a producer
of Biocatalyst. However, it may not be feasible for Gentry to obtain a producer
license, and failure to obtain a producer license may limit Gentry's ability to
implement its business plan to distribute Biocatalyst, and could cause its
stock to be worthless. To become a producer, Gentry either would have to
purchase a minimum of 5,000 gallons of Biocatalyst per month for a minimum
period of six consecutive months (which is highly unlikely), or it would have
to demonstrate its financial capability, pay Mortenson & Associates a one-time
fee of $25,000, an additional one-time payment of $10,000 to reimburse
unspecified expenses, and pay minimum annual royalties of $20,000. Gentry's
business plan will likely require it to become a producer, because any waste-
treatment client would probably need a Biocatalyst generator installed on its
premises.
It May not Be Feasible for Gentry to Maintain, or Even to Obtain, a Producer
License
Any termination of a producer license or any failure to obtain a producer
license would severely limit Gentry's ability to implement its license in the
waste remediation business, and could cause its stock to be worthless. There is
no guarantee that sewage and waste water treatment facilities, the primary
target market, will conclude that reduced noxious odors are worth the price
Gentry would have to charge to make money producing and selling Biocatalyst.
Even if Gentry obtains a producer license, it may be unable to make the minimum
royalty payments. Although the final terms of the right to produce are subject
to future negotiation, presumably the failure to pay minimum royalties would be
a default that would allow Mortenson & Associates to terminate the production
license.
Gentry May Lose Its Biocatalyst License If Mortenson Defaults Under Its
Agreement with N.W. Technologies
Mortenson & Associates granted the Biocatalyst license to Gentry based on an
agreement Mortenson & Associates has with N.W. Technologies, Inc., the owner of
the Biocatalyst technology. If a Mortenson & Associates default under its
agreement with N.W. Technologies results in Mortenson & Associates losing its
Biocatalyst rights, the rights Mortenson & Associates has granted Gentry would
become meaningless. Similarly, any dispute between Mortenson & Associates and
N.W. Technologies (or their successors) could impair Gentry's ability to fully
exploit its license rights. Any termination or impairment of Gentry's license
rights due to circumstances under the control of Mortenson & Associates, N.W.
Technologies or others with an interest in the Biocatalyst technology could
prevent Gentry from implementing its business plan, thereby limiting its
profitability and decreasing the value of its stock.
2
Increases in Biocatalyst Prices Could Destroy Gentry's Profitability
There can be no guarantee that Gentry ever will be profitable. If Gentry does
become profitable, however, Mortenson & Associates has the right to increase
Biocatalyst prices on 10 days notice by revising its published pricing
schedule. If Gentry becomes a producer of Biocatalyst, the final terms
governing pricing of raw materials will be subject to future negotiation.
Assuming Mortenson & Associates retains the right to set prices for Biocatalyst
and the raw materials necessary to produce Biocatalyst, Mortenson & Associates
could raise prices to its licensees. Any material price increases could
decrease or eliminate Gentry's profitability.
Gentry May Undertake Investment Risks That Are Dilutive and That Shareholders
Might Not Otherwise Accept
Because Gentry has a limited time to develop a highly speculative and
unproven technology, Gentry's management will spend a significant portion of
the time it devotes to Gentry evaluating other business opportunities that may
be available to Gentry. These opportunities may be related to the Biocatalyst
product, or they may be in a completely unrelated field. Gentry has had
discussions with a number of third parties regarding business opportunities,
but none of these discussions have reached the stage where an agreement in
principle is imminent. In any business opportunity reviewed by Gentry thus far,
significant business and economic issues would have to be resolved in order to
reach an agreement. Any asset acquisition or business combination would likely
include the issuance of a significant amount of Gentry's common stock, which
would dilute the ownership interest of holders of existing shares of Gentry's
common stock. Irrespective of whether Gentry's cash assets prove to be
inadequate to meet its operational needs, Gentry might seek to compensate
providers of services by issuance of stock in lieu of cash, which again would
dilute ownership interests of shareholders.
Depending on the nature of the transaction, Gentry's stockholders may not
have an opportunity to vote on whether to approve it. As a result, Gentry's
management could enter into a transaction that an investor would not want to
invest in. In such a case, an investor could not only lose its entire
investment, but could lose its entire investment on a business decision it did
not get to evaluate at the time of investing in Gentry. For example, Gentry may
consider a future financing or business combination that, because of the size
of the related stock issuance, would result in a majority of the voting power
being transferred to the investor(s). The result could be that new
shareholder(s) would control Gentry and persons unknown could replace Gentry's
management. It is uncertain whether any such replacements would continue to
implement Gentry's current business plan. In addition, Gentry's significant
shareholders could sell their control block to an outside party, resulting in
the same type of situation.
Potential Business Combinations Could Be Difficult To Integrate, Disrupt
Business, Dilute Stockholder Value and Adversely Affect Operating Results.
Gentry may make investments in or acquire complementary products,
technologies and businesses, or businesses completely unrelated to Gentry's
current business plan. These acquisitions and investments could disrupt its
ongoing business, distract management and employees and increase its expenses.
If Gentry acquires a company, it could face difficulties in assimilating that
company's personnel and operations. In addition, the key personnel of the
acquired company may decide not to work for Gentry. Acquisitions also involve
the need for integration into existing administration, services, marketing, and
support efforts. If the acquisition is financed by issuing equity securities,
interests of existing stockholders could be diluted. Any amortization of
goodwill or other assets, or other charges resulting from the costs of these
acquisitions, could adversely affect Gentry's operating results.
Gentry cannot predict the extent to which its liquidity and capital resources
will be diminished prior to consummation of a business combination or whether
its capital will be further depleted by the operating losses (if any) of the
business entity which Gentry may eventually acquire.
3
Competitors Could Develop Alternative and More Cost-Effective Products to
Solve the Sewage and Waste Water Remediation Noxious Odor Problem
It is possible that an unknown competitor may have or develop a product that
could achieve results similar to or better than Biocatalyst. Any development of
a competing product could limit the marketability of Biocatalyst, thereby
limiting or eliminating the profitability of Gentry's business. Gentry is
currently unaware of any other product that holds the same potential as
Biocatalyst to mitigate the noxious odors associated with sewage and waste
water remediation. It is not unthinkable, however, that a genetic engineering
company could develop a microbe that could anaerobically process sewage and
waste water while at the same time minimizing noxious odors. In addition, it is
also possible that another company could develop a product similar to
Biocatalyst that would minimize noxious odor by injecting additional oxygen
into the sewage and waste water remediation process. Gentry may have to compete
with such companies in the future if it succeeds in establishing the
feasibility of the Biocatalyst sewage and waste water remediation application.
Government Regulation Could Adversely Affect Viability of Biocatalyst
Application
Waste treatment processes are subject to regulation by local, state and
federal environmental agencies. There can be no assurance that further
regulation and/or licensing will not emerge in the future. Any new regulations
or licensing could damage Gentry's business, affect the profitability and
perhaps the viability of Gentry's business plan, and cause the price of its
common stock to decline. Further regulation or licensing could prove to be
burdensome, and impose significant additional costs on Gentry's business or
subject Gentry to additional liabilities.
Heavy Dependence on One Individual Who Will Not Devote His Full Time and
Attention to Gentry's Affairs Could Result in Delays or Business Failure
Michael Kirsh is serving as Gentry's sole officer and director. Loss of Mr.
Kirsh's services may hamper Gentry's ability to implement its business plan,
and could cause its stock to be worthless. Gentry will be heavily dependent
upon his skills, talents and abilities to implement its business plan and may,
from time to time, find that Mr. Kirsh's inability to devote full time and
attention to Gentry's affairs will result in delay(s) in progress towards the
implementation of its business plan or in a failure to implement its business
plan. Moreover, Gentry does not have an employment agreement with Mr. Kirsh and
as a result, there is no assurance that he will continue to manage Gentry's
affairs in the future. Mr. Kirsh has registered all of his shares of Gentry
common stock for sale in this offering, and it is possible that he may sell all
of his shares. If he sells all of his shares, it is unlikely that he will
continue to manage Gentry's business affairs. Gentry has not obtained a key man
life insurance policy on Mr. Kirsh. If Gentry loses the services of Mr. Kirsh,
or if he should decide to join a competitor or otherwise compete directly or
indirectly with Gentry, this could have a significant adverse effect on
Gentry's business and could cause its stock to be worthless. The services of
Mr. Kirsh would be difficult to replace. Because investors will not necessarily
be able to evaluate the merits of Gentry's business decisions, they should
carefully and critically assess Mr. Kirsh's background. See "Directors and
Executive Officers".
There May Be A Complete Change in Control of Gentry As A Result of this
Offering
All of Gentry's outstanding shares are being registered for sale pursuant to
this offering. It is possible that all of the voting power will be transferred
to new investors. Such new investors may replace Gentry's management. New
management may decide not to continue to implement Gentry's current business
plan, and may decide to enter into a business completely unrelated to Gentry's
current business plan which an investor did not anticipate and in which that
investor may not want to participate. In such case, an investor could lose its
entire investment on a business decision the investor did not get to evaluate
at the time of investing in Gentry.
4
Year 2000 Issues Could Result in Sales or Inventory Difficulties
There is also risk due to Year 2000 issues. These issues arise because many
computerized systems use two digits rather than four digits to identify a year.
Date-sensitive systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when information using the year 2000 date is processed. In
addition, similar problems may arise in some systems which use certain dates in
1999 to represent something other than a date. The effects of the Year 2000
issue may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure which could affect an entity's
ability to conduct normal business operations. It is not possible to be certain
that all aspects of the Year 2000 Issue affecting Gentry, including those
related to the efforts of customers, suppliers, or other third parties, will be
fully resolved. It is possible that one of Gentry's suppliers, such as a
utility or the producer of Biocatalyst or Biomas, or one of Gentry's clients
may become inoperative, and cause Gentry to incur heavy expenses or losses. At
present, due to Gentry's developmental stage, it has no critical systems that
it must test for Year 2000 compliance. However, Gentry cannot be certain that
it will not experience unanticipated negative consequences from Year 2000
problems, or that it will be able to make any such modifications as may become
necessary in a timely, cost-effective and successful manner, and the failure to
do so could interfere with Gentry's ability to do business.
Financial Risks
Gentry Has No Operating History and Financial Results Are Uncertain
Gentry has no operating history or revenues from operations. Gentry's only
resources have come from the private sale of Gentry's stock. Gentry faces all
the risks of a new business. It must be regarded as a new or "start-up" venture
with all of the unforeseen costs, expenses, problems and difficulties to which
such ventures are subject.
Because it has not yet begun operations, it is difficult to evaluate Gentry's
business and its prospects. Its revenue and income potential is unproven and
its business model is still emerging. An investor in Gentry's common stock must
consider the risks and difficulties frequently encountered by early stage
companies in new and rapidly evolving markets. Gentry's ability to achieve and
then sustain favorable operating results will depend on a number of factors,
including costs related to:
1) identifying a waste treatment facility to test the Biocatalyst
application;
2) testing the Biocatalyst application;
3) identifying and marketing to prospective purchasers;
4) purchasing the amounts of Biocatalyst or Biomas necessary for
operation and required by the license agreement, and increases in the cost
of product;
5) licensing and royalty fees;
6) loss of licensing rights;
7) evaluation and expense of entering into a new business opportunity;
8) the expense of delays in introducing or making any necessary
improvements to the Biocatalyst application; and
9) general economic conditions, as well as those specific to the related
industries.
As a result of Gentry's limited operating history, it is difficult to
accurately forecast its potential revenue, and there is no meaningful
historical financial data upon which to base planned operating expenses. Gentry
expects to significantly increase its operating expenses to test, market,
distribute and produce Biocatalyst. Gentry has not achieved profitability, and
expects to incur net losses for the foreseeable future and may never become
profitable. Gentry's limited operating history makes it difficult to forecast
its future operating results.
5
Gentry expects to continue to incur increasing marketing, sales, product
development and general and administrative expenses. As a result it will need
to generate significant revenue and/or raise additional funds to achieve
profitability. If Gentry does not become profitable, it may be unable to
maintain its Biocatalyst License, which would adversely affect its financial
condition and prospects. If Gentry does achieve profitability, it cannot be
certain that it will sustain or increase it.
Because of its limited financial resources, Gentry will likely be unable to
diversify its activities to provide a hedge should its business plan prove to
be impractical.
Gentry May Need Additional Financing Which May Not Be Available, or Which May
Dilute the Ownership Interests of Investors
Gentry has very limited funds, and its funds are inadequate to implement its
business plan. Gentry will require substantial working capital to fund its
business. If Gentry raises additional funds through the issuance of equity,
equity-related or convertible debt securities, these securities may have
rights, preferences or privileges senior to those of the rights of its common
stock and its stockholders may experience additional dilution.
Gentry's ultimate success will depend on its ability to raise additional
capital. No commitments to provide additional funds have been made by
management or other shareholders. Gentry has not investigated the availability,
source or terms that might govern the acquisition of additional financing. When
additional capital is needed, there is no assurance that funds will be
available from any source or, if available, that they can be obtained on terms
acceptable to Gentry. If not available, Gentry's operations would be severely
limited, and it would be unable to implement its business plan.
Gentry May Be Unable to Continue As A Going Concern
In its Independent Auditor's Report, Gentry's accountants state that Gentry's
failure to generate revenues and conduct operations since its inception raise
substantial doubt about Gentry's ability to continue as a going concern. Gentry
has inadequate funds to implement its business plan. Gentry must raise
additional capital in order to continue as a going concern. Gentry may be
unable to raise funds, which would severely limit its operations and prevent
Gentry from implementing its business plan. One source of funds would be
through the issuance of securities which may have rights senior to those of its
common stock. Issuance of additional securities may dilute existing
shareholders.
Risks Related to the Securities Market
Gentry Common Stock Has No Prior Market, And Prices May Decline After The
Offering
There is no public market for Gentry's common stock and no assurance can be
given that a market will develop or that any shareholder will be able to
liquidate his investment without considerable delay, if at all. The trading
market price of Gentry's common stock may decline below the offering price. If
a market should develop, the price may be highly volatile. In addition, an
active public market for Gentry's common stock may not develop or be sustained.
All of Gentry's outstanding shares are being registered for sale pursuant to
this offering. If Gentry's selling stockholders sell substantial amounts of
common stock in the public market, the market price of Gentry's common stock
could fall. Factors such as those discussed in this "Risk Factors" section may
have a significant impact on the market price of Gentry's securities. Owing to
the low price of the securities many brokerage firms may not be willing to
effect transactions in the securities. Even if a purchaser finds a broker
willing to effect a transaction in Gentry's common stock, the combination of
brokerage commissions, state transfer taxes, if any, and other selling costs
may exceed the selling price. Further, many lending institutions will not
permit the use of such securities as collateral for loans. Thus, a purchaser
may be unable to sell or otherwise realize the value invested in Gentry stock.
6
Investors May Face Significant Restrictions on the Resale of Gentry Stock Due
to State and Federal Laws and Regulations
Because Gentry's securities have not been registered for resale under the
blue sky laws of any state, the holders of such shares and those persons
desiring to purchase them in any trading market that may develop in the future
should be aware that there may be significant state blue sky law restrictions
on the ability of investors to sell and on purchasers to buy Gentry's
securities. Investors may be unable to sell their stock in Gentry.
Accordingly, investors should consider the secondary market for Gentry's
securities to be a limited one. Investors may be unable to resell their stock
without the significant expense of state registration or qualification.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-
2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act
of 1934. Because Gentry's securities may constitute "penny stock" within the
meaning of the rules, the rules would apply to Gentry and its securities. The
rules may further affect the ability of owners of Gentry's shares to sell
their securities in any market that may develop for them. There may be a
limited market for penny stocks, due to the regulatory burdens on broker-
dealers. The market among dealers may not be active. Investors in penny stock
often are unable to sell stock back to the dealer that sold them the stock.
The mark ups or commissions charged by the broker-dealers may be greater than
any profit a seller may make. Because of large dealer spreads, investors may
be unable to sell the stock immediately back to the dealer at the same price
the dealer sold the stock to the investor. In some cases, the stock may fall
quickly in value. Investors may be unable to reap any profit from any sale of
the stock, if they can sell it at all.
Shareholders should be aware that, according to the Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include:
. control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer;
. manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases;
. "boiler room" practices involving high pressure sales tactics and
unrealistic price projections by inexperienced sales persons;
. excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
. the wholesale dumping of the same securities by promoters and broker-
dealers after prices have been manipulated to a desired level, along
with the inevitable collapse of those prices with consequent investor
losses.
7
USE OF PROCEEDS
This prospectus is part of a registration statement that permits selling
shareholders to sell their shares on a continuous or delayed basis in the
future. Because this prospectus is solely for the purpose of selling
shareholders, Gentry will not receive any proceeds from the sale of stock being
offered.
DETERMINATION OF OFFERING PRICE
This offering is solely for the purpose of allowing Gentry's shareholders to
sell their stock. The selling shareholders may sell their shares when the
registration statement becomes effective, or they may elect to sell some or all
of their shares at a later date. As the market develops, the selling
shareholders will determine the price for the stock. Gentry has 2,500,000
shares of common stock issued and outstanding, of which 500,000 shares were
issued on July 30, 1998, and 2,000,000 shares were issued on April 28, 1999.
All stock was issued based on a valuation by the Board of Directors of $0.001
per share. The most recent sale of Gentry's common stock from one investor to
another occurred on May 11, 1999, when a total of 700,000 shares of Gentry
common stock were sold at a price of $0.047 per share.
DILUTION
This offering is for sales of stock by existing Gentry shareholders on a
continuous or delayed basis in the future. Sales of common stock by
shareholders will not result in any substantial change to the net tangible book
value per share before and after the distribution of shares by the selling
shareholders. There will be no change in net tangible book value per share
attributable to cash payments made by purchasers of the shares being offered.
Prospective investors should be aware, however, that the price of Gentry's
shares may not bear any rational relationship to net tangible book value per
share.
SELLING SHAREHOLDERS
The following are the shareholders for whose accounts the shares are being
offered: the amount of securities owned by such shareholder prior to this
offering; the amount to be offered for such shareholder's account; and the
amount to be owned by such shareholder following completion of the offering.
Other than as disclosed below, no selling shareholder holds or has held during
the past three years any position, office, or other material relationship with
Gentry.
Number
of Number of Number of
Position with Shares Shares Shares After
Name Company Owned Offered Sale(1)
---- --------------------- ------- --------- ------------
Michael Kirsh........... President, Secretary,
Treasurer, Director 700,000 700,000 0
David Goldman........... None 200,000 200,000 0
Peter Finck............. None 200,000 200,000 0
Michael Robinson........ None 200,000 200,000 0
Brian Grussan........... None 200,000 200,000 0
Brent Lokash............ None 200,000 200,000 0
Mark R. Epstein Law
Corp................... None 200,000 200,000 0
Terry Kirshenbaum....... None 200,000 200,000 0
Randi Kirshenbaum....... None 200,000 200,000 0
Plantation Capital...... None 200,000 200,000 0
- --------
(1) This table assumes that each shareholder will sell all of its shares
available for sale during the effectiveness of the registration statement
that includes this prospectus. Shareholders are not required to sell their
shares. See "Plan of Distribution."
8
PLAN OF DISTRIBUTION
This is not an underwritten offering. This prospectus is part of a
registration statement that permits selling shareholders to sell their shares
on a continuous or delayed basis in the future. Selling shareholders may sell
their shares to the public when the registration statement becomes effective,
or they may elect to sell some or all of their shares at a later date. Gentry
has not committed to keep the registration statement effective for any set
period of time.
While the registration statement is effective, selling shareholders may sell
their shares directly to the public, without the aid of a broker or dealer, or
they may sell their shares through a broker or dealer if Gentry's stock is
authorized for inclusion on the OTC bulletin board. Any commission, fee or
other compensation of a broker or dealer would depend on the brokers or dealers
involved in the transaction.
No public market currently exists for shares of Gentry's common stock. Gentry
intends to apply to have its shares traded on the OTC bulletin board under the
symbol "GNTR".
DESCRIPTION OF CAPITAL STOCK
The following description of Gentry's capital stock is a summary of the
material terms of Gentry's capital stock and does not purport to be complete.
This summary is subject to and qualified in its entirety by Gentry's articles
of incorporation and bylaws, which are included as exhibits to the registration
statement of which this prospectus forms a part, and by the applicable
provisions of Nevada law.
Gentry's authorized capital consists of 10,000,000 shares of common stock,
par value $.001 per share. Immediately prior to this offering, 2,500,000 shares
were issued and outstanding. Each record holder of common stock is entitled to
one vote for each share held on all matters properly submitted to the
shareholders for their vote. The articles of incorporation do not permit
cumulative voting for the election of directors, and shareholders do not have
any preemptive rights to purchase shares in any future issuance of Gentry's
common stock.
Because the holders of shares of Gentry's common stock do not have cumulative
voting rights, the holders of more than 50% of Gentry's outstanding shares,
voting for the election of directors, can elect all of the directors to be
elected, if they so choose. In such event, the holders of the remaining shares
will not be able to elect any of Gentry's directors.
The holders of shares of common stock are entitled to dividends, out of funds
legally available therefor, when and as declared by the Board of Directors. The
Board of Directors has never declared a dividend and does not anticipate
declaring a dividend in the future. In the event of liquidation, dissolution or
winding up of the affairs of Gentry, holders are entitled to receive, ratably,
the net assets of Gentry available to shareholders after payment of all
creditors.
All of the issued and outstanding shares of common stock are duly authorized,
validly issued, fully paid, and non-assessable. To the extent that additional
shares of Gentry's common stock are issued, the relative interests of existing
shareholders may be diluted.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Neither Elliott Tulk Pryce Anderson nor Vandeberg Johnson & Gandara was
employed on a contingent basis in connection with the registration or offering
of Gentry's common stock.
9
DESCRIPTION OF BUSINESS
General
Gentry was incorporated under the laws of the State of Nevada on July 17,
1998, and is in its early developmental and promotional stages. To date,
Gentry's only activities have been organizational, directed at acquiring its
principal asset, raising its initial capital and developing its business plan.
Gentry has not commenced commercial operations. Gentry has no full time
employees and owns no real estate.
The License
On April 28, 1999, Gentry acquired from David R. Mortenson & Associates the
rights to distribute and produce the oxygen-enriched water product
"Biocatalyst" for the purpose of remediating sewage and waste water, whether in
septic tanks or waste water treatment facilities. Under its license with
Mortenson & Associates, Gentry has the exclusive right to distribute and market
Biocatalyst under a private label in Alabama, Arkansas, Louisiana, and
Mississippi for a period of three years, expiring April 28, 2002. To retain
this right, Gentry must purchase a minimum amount of product based on pricing
established in the license agreement during each of the first two years of its
license. Gentry is required to purchase $125,000 of Biocatalyst by April 28,
2000, and a further $175,000 by April 28, 2001, to retain its license. The
current price for Biocatalyst is $2.00 per gallon; Mortenson & Associates may
change the price on 10 days' notice.
If Gentry meets certain requirements, it has the right to become a producer
of Biocatalyst. To become a producer, Gentry either would have to purchase a
minimum of 5,000 gallons of Biocatalyst per month for a minimum period of six
consecutive months (which is highly unlikely), or it would have to demonstrate
its financial capability, pay Mortenson a one-time fee of $25,000, an
additional one-time payment of $10,000 to reimburse unspecified expenses, and
pay minimum annual royalties of $20,000. Once it becomes a producer, Gentry
will no longer be subject to minimum purchase requirements. Gentry believes
that it will need to become a producer of Biocatalyst to successfully implement
its business plan.
The license agreement is for a term of three years, and may be renewed by
Gentry for an additional three year period so long as Gentry is not in default.
The agreement may be terminated by Gentry at any time upon notice to Mortenson
& Associates, and by Mortenson & Associates for cause, which includes breach of
the agreement; the bankruptcy or insolvency of Gentry; or the conviction of
Gentry, its officers or directors, of any crime involving moral turpitude. Upon
termination of the agreement for any reason, Gentry, its officers and employees
may not, for a period of 12 months, engage or hold any interest in any
enterprise engaged in the sale, manufacture, or distribution of any products
manufactured, sold or distributed by Mortenson & Associates at the time of
termination.
Background to Development of Biocatalyst
Mortenson & Associates acquired its rights to the marketing and distribution
of Biocatalyst from the inventor of the product, a Houston, Texas based company
named N.W. Technologies, Inc., under a distribution agreement. The Biocatalyst
technology's purpose is to improve the effectiveness of existing processes that
include an oxygenation process that takes place in a liquid or solid
environment. N.W. Technologies' Biocatalyst technology is proprietary and not
patented. The technology behind Biocatalyst was developed by N.W. Technologies
for the bioremediation of oil spills. N.W. Technologies discovered that by
breaking the oil into colloidal (microscopic) particles using a contact
emulsifier, which also acts as a host for oil-eating microbes, it could speed
up the process of bioremediating spilled oil. By breaking the oil into
colloidal (microscopic) particles, the microbes have access to an increased
surface area of spilled oil (better access to the food source). This increased
access to the food source allows the microbes to consume spilled oil more
quickly.
The microbes need a ready supply of oxygen in order to consume the spilled
oil. Below six to twelve inches of soil depth, depending on soil type, oxygen
exchange is virtually non-existent, yet many oil spills
10
reach far below that level. Remediation companies have historically used a
process called sparging to oxygenate soils where bioremediation is being used.
Sparging utilizes perforated pipes placed in the affected area. Air is then
pumped into them and released through the perforations. Sparging is an
expensive process to implement and may result in the release of some of the
volatile compounds to be remediated, thus causing secondary air pollution.
To counter the problems with sparging, N.W. Technologies created Biocatalyst.
This is a water product with oxygen organically bonded to the water molecule.
When the microbe's extra-cellular enzymes come in contact with the water/oxygen
molecule structure, they release this oxygen, making it available to the
microbes. This process provides a means to deliver oxygen to the microbes at
depths below six to twelve inches of soil. N.W. Technologies and their
distributors/applicators have found that the use of Biocatalyst substantially
speeds up oil spill bioremediation times. N.W. Technologies has ceased using
ordinary water in the formulation of its products. Instead it uses Biocatalyst
because N.W. Technologies feels that Biocatalyst does everything that the water
does, while also providing extra oxygen needed by the oil-eating microbes.
Production of Biocatalyst
Biocatalyst is produced through an organic process that uses any water
source. The organic process takes place in a generator, which may be built
using standard off-the-shelf tankage, pumps and plumbing supplies. The
generator uses a six-foot by ten-foot print, and the total cost of an
industrial grade generator is approximately $5,000 per unit. With proper care
and maintenance, generators should last for years. The generators are composed
of tanks, pipes and pumps, and are not exposed to corrosive or caustic
materials which might cause deterioration. An initial culture, which is part of
N.W. Technologies' proprietary process, is introduced into the generator to
create oxygen-enriched water. To keep producing Biocatalyst, the generator then
requires a regular supply of "biomas", a proprietary product of N.W.
Technologies. Biomas organically attaches oxygen to water molecules, thereby
creating a new molecule. When water passes through biomas, it becomes
Biocatalyst, an oxygen-enriched water substance.
Once a generator is set up and producing, production continues for the life
of the generator, provided that water is available (minimum of 15 gallons per
hour, maximum 30 gallons per hour), that the generator is protected from
freezing, and that biomas is added at least 5 days per week. Mortenson &
Associates has told Gentry's officer and director that he is willing to furnish
end-users a production package consisting of the generator, the initial culture
to create the oxygen enriched water, and a regular supply of "biomas" for the
generator. The client will supply a source of usable water, electrical power
and staff to operate the generator(s). The process requires approximately 700
gallons of water per day, which is supplied by the client through its standard
water source. In addition, the client must supply a minimal amount of
electrical power. A biomas capsule must be dropped in 5 times per week, either
by an employee of the client or through an automatic feeding device. As
currently configured, each generator can produce 720 gallons of raw undiluted
product per day. Where more than this volume is needed, multiple generators can
be supplied.
Although environmental regulations do not pose any material operational
constraints on Gentry's business as it is proposed to be conducted, waste
treatment processes are subject to regulation by local, state and federal
environmental agencies. There can be no assurance that further regulation
and/or licensing will not emerge in the future which may prove to be obstacles
to the sale of Biocatalyst, or diminish Gentry's competitive position. No
expenditures for environmental control facilities are anticipated during the
current or upcoming fiscal year.
Application of Biocatalyst to Sewage and Waste Water Remediation
Gentry believes that Biocatalyst can be used in the remediation of sewage and
waste water. As a general scientific principle, an aerobic process, as opposed
to an anaerobic process, produces less noxious odor. A constant supply of
oxygen-enriched water to a treatment system can theoretically supply enough
oxygen to sustain aerobic microbe/bacterial growth. By using an aerobic
process, as opposed to an anaerobic process,
11
Gentry believes the noxious odor sometimes associated with sewage processing
should be substantially reduced. As Biocatalyst is pumped into the treatment
system, select microbes that target the waste as a food source can be added to
assure optimal microbe population. Once a good colony of microbes is
established, no additional microbes should be needed unless the colony is
somehow killed.
Short-Term Plan of Operation For the Period Ending April 30, 2000
The license agreement with Mortenson & Associates that provides the rights to
distribute and produce Biocatalyst includes a minimum purchase requirement that
must be met by April 28, 2000. Because the offering under this prospectus is
solely for selling shareholders, Gentry will need to raise funds to develop its
license rights. By raising additional funds through the sale of common stock or
securities convertible into common stock, the ownership interest of holders of
existing shares of Gentry's common stock will be diluted.
Gentry plans to cooperate with Mortenson & Associates and licensees that have
Biocatalyst sewage and waste water remediation license rights in other
territories to economize on the costs of product research and development. No
generator has been successfully installed and operated at any waste treatment
facility, even on a test basis. The initial step that Gentry plans to take in
conjunction with Mortenson & Associates and other licensees is to identify a
waste treatment facility interested in participating in a trial. Once the
facility is identified, Gentry, Mortenson & Associates and the other licensees
will develop a budget for installing the test generator and agree on an
allocation of its costs. Each participant would then raise its required
contribution, and in exchange it would have access to the trial run results to
be used in its marketing and for business planning purposes. Gentry anticipates
that it would raise its share by one or more private offerings of its common
stock. There is no written agreement to ensure this cooperation. Gentry's
expectations concerning this cooperation are based on informal communications
with the parties and their own economic interest in sharing the expense of
testing. To date, Gentry, through its president, Michael Kirsh, has been
discussing the location of a test facility with Mortenson & Associates and
other licensees.
If the trial is successful from a technical standpoint, Gentry would have to
assess the economic feasibility of proceeding further. Although Gentry's
production rights are subject to negotiation of a definitive agreement, prices
for the biomas used to produce Biocatalyst will likely be subject to change
following notice from Mortenson & Associates. There is no guarantee that sewage
and waste water treatment facilities, the primary target market, will conclude
that reduced noxious odors are worth the price Gentry would have to charge to
make money producing and selling Biocatalyst.
Gentry recognizes that the Biocatalyst sewage and waste water remediation
application may turn out not to be feasible. To address this possibility,
Gentry continually evaluates other business opportunities that may be available
to it, whether in the form of asset acquisitions or business combinations.
Currently, Gentry's sole officer and director, Micahel Kirsh, devotes
approximately 25 hours per week to Gentry's business. He will spend a
significant portion of the time he devotes to Gentry evaluating other business
opportunities that may be available to Gentry. These opportunities may be
related to the Biocatalyst product, or they may be in a completely unrelated
field. Gentry has had discussions with a number of third parties regarding
business opportunities, but none of these discussions have reached the stage
where an agreement in principle is imminent. In any business opportunity
reviewed by Gentry thus far, significant business and economic issues would
have to be resolved in order to reach an agreement. Any asset acquisition or
business combination would likely include the issuance of a significant amount
of Gentry's common stock, which would dilute the ownership interest of holders
of existing shares of Gentry's common stock.
Industry Conditions and Competition
Gentry does not yet know whether the Biocatalyst sewage and waste water
remediation application will be a feasible money-making venture. It does know,
however, that if the application turns out to be successful, it will hold an
exclusive license in Alabama, Arkansas, Louisiana and Mississippi until April
28, 2002, as long as it meets its minimum purchase requirements or becomes a
producer. Gentry is currently unaware of any other
12
product that holds the potential to mitigate the noxious odors associated with
sewage and waste water remediation. It is not unthinkable, however, that a
genetic engineering company could develop a microbe that could anaerobically
process sewage and waste water while at the same time minimizing noxious odors.
In addition, it is also possible that another company could develop a product
similar to Biocatalyst that would minimize noxious odor by injecting additional
oxygen into the sewage and waste water remediation process. Gentry may have to
compete with such companies in the future if it succeeds in establishing the
feasibility of the Biocatalyst sewage and waste water remediation application.
Employees
Gentry is a development stage company and currently has no employees.
Management plans to use consultants, attorneys and accountants as necessary and
does not plan to engage any full-time employees in the near future. Once Gentry
establishes the feasibility of the Biocatalyst sewage and waste water
remediation application, its priority will shift to developing and implementing
a plan for marketing. The marketing plan would focus on two major goals:
identifying the most likely prospects for installing generators and retaining
one or more qualified individuals to market the Biocatalyst sewage and waste
water remediation application to those prospects. Gentry would hire marketing
employees based on the projected size of the market and the compensation
necessary to retain qualified sales employees. A portion of any employee
compensation likely would include the right to acquire stock in Gentry, which
would dilute the ownership interest of holders of existing shares of Gentry's
common stock.
Available Information
Gentry has filed with the Securities and Exchange Commission a registration
statement on Form S-1 with respect to the common stock offered by this
prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the
registration statement or the exhibits and schedules which are part of the
registration statement. For further information with respect to Gentry and its
common stock, see the registration statement and the exhibits and schedules
thereto. Any document Gentry files may be read and copied at the Commission's
Public Reference Room located at 450 Fifth Street N.W., Washington, D.C. 20549,
and the public reference rooms in New York, New York, and Chicago, Illinois.
Please call the Commission at 1-800-SEC-0330 for further information about the
public reference rooms. Gentry's filings with the Commission are also available
to the public from the Commission's website at http://www.sec.gov.
Upon completion of this offering, Gentry will become subject to the
information and periodic reporting requirements of the Securities Exchange Act
and, accordingly, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the
Commission's public reference rooms, and the website of the Commission referred
to above.
DESCRIPTION OF PROPERTY
Gentry currently maintains limited office space, occupied by Mr. Kirsh, for
which it pays no rent. Its address is 1177 West Hastings, Suite 2110,
Vancouver, British Columbia V6E 2K3, CANADA, and its phone number is (604) 687-
2199. Gentry does not believe that it will need to obtain additional office
space at any time in the foreseeable future until its business plan is more
fully implemented.
LEGAL PROCEEDINGS
Gentry is not a party to any material pending legal proceedings, and none of
its property is the subject of a pending legal proceeding. Further, the officer
and director knows of no legal proceedings against Gentry or its property
contemplated by any governmental authority.
13
MARKET PRICE OF AND DIVIDENDS ON CAPITAL
STOCK AND OTHER SHAREHOLDER MATTERS
No established public trading market exists for Gentry's securities. Gentry
has no common equity subject to outstanding purchase options or warrants.
Gentry has no securities convertible into its common equity. There is no common
equity that could be sold pursuant to Rule 144 under the Securities Act or that
Gentry has agreed to register under the Securities Act for sale by
shareholders. Except for this offering, there is no common equity that is
being, or has been publicly proposed to be, publicly offered by Gentry. The
principal operations of Gentry have not yet commenced.
Gentry has 2,500,000 shares of common stock issued and outstanding, of which
500,000 shares were issued on July 30, 1998, and 2,000,000 shares were issued
on April 29, 1999. All stock was issued based on a valuation by the Board of
Directors of $0.001 per share. The most recent sale of Gentry's common stock
from one investor to another occurred on May 11, 1999, when a total of 700,000
shares of Gentry common stock were sold at a price of $0.047 per share.
Upon effectiveness of the registration statement that includes this
prospectus, all of Gentry's outstanding shares will be eligible for sale.
To date Gentry has not paid any dividends on its common stock and does not
expect to declare or pay any dividends on its common stock in the foreseeable
future. Payment of any dividends will depend upon Gentry's future earnings, if
any, its financial condition, and other factors as deemed relevant by the Board
of Directors.
14
SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements appearing elsewhere in this
prospectus. The statement of operations data set forth below for the period
from July 17, 1998, (inception) to April 30, 1999, and the balance sheet data
at April 30, 1999, are derived from Gentry's audited financial statements
included elsewhere in this prospectus. The historical results are not
necessarily indicative of results to be expected for any future period.
Inception to
April 30, 1999
--------------
STATEMENT OF OPERATIONS DATA:
Net sales...................................................... $ --
======
Loss from continuing operations................................ $ (587)
======
Loss per share from continuing operations...................... $ --
======
As of
April 30, 1999
--------------
BALANCE SHEET DATA:
Total assets................................................... $2,000
======
Gentry is in its early developmental and promotional stages. To date,
Gentry's only activities have been organizational, directed at acquiring its
principal asset, raising its initial capital and developing its business plan.
Gentry has not commenced commercial operations. As a result, the selected
financial data presented above bear no resemblance to the results that Gentry
expects when it begins operations. See "Risk Factors," "Description of
Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
15
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This prospectus contains forward-looking statements, the accuracy of which
involve risks and uncertainties. We use words such as "anticipates,"
"believes," "plans," "expects," "future," "intends" and similar expressions to
identify forward-looking statements. This prospectus also contains forward-
looking statements attributed to certain third parties relating to their
estimates regarding the potential uses of Biocatalyst and markets for it.
Prospective investors should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus. Gentry's actual
results could differ materially from those anticipated in these forward-looking
statements for many reasons, including the risks faced by Gentry described in
"Risk Factors" and elsewhere in this prospectus. The following discussion and
analysis should be read in conjunction with Gentry's Financial Statements and
Notes thereto and other financial information included elsewhere in this
prospectus.
Results of Operations
During the period from July 17, 1998, (inception) through April 30, 1999,
Gentry has engaged in no significant operations other than organizational
activities, acquisition of the rights to market Biocatalyst and preparation for
registration of its securities under the Securities Act of 1933. No revenues
were received by Gentry during this period.
For the current fiscal year, Gentry anticipates incurring a loss as a result
of organizational expenses, expenses associated with registration under the
Securities Act of 1933, and expenses associated with setting up a company
structure to begin implementing its business plan. Gentry expects that expenses
such as state annual report fees, qualifications to do business and the like,
including related attorney fees, will not exceed $10,000. Because the selling
shareholders are bearing the costs associated with filing this registration
statement, Gentry's expenses associated with registration will arise primarily
in the context of applying for Gentry's shares to trade on the OTC bulletin
board. The extent of these costs will depend primarily on the states in which a
market maker would want Gentry's shares to be qualified. With respect to costs
of implementing its business plan, it is difficult to estimate Gentry's share
of testing costs without knowing the identity or location of the waste
remediation test facility. Presumably, however, the total cost of installing a
test generator, assuming difficulty in engineering its installation and other
unforeseen difficulties, would not exceed $50,000 (ten times the estimated
$5,000 per unit cost). Gentry's share of these costs would depend on the
arrangement agreed upon with Mortenson & Associates and other licensees. Gentry
anticipates that until these procedures are completed, it will not generate
revenues, and may continue to operate at a loss thereafter, depending upon the
performance of the business.
Liquidity and Capital Resources
Gentry remains in the development stage and, since inception, has experienced
no significant change in liquidity or capital resources or shareholders'
equity. Consequently, Gentry's balance sheet as of April 30, 1999, reflects
total assets of $2,587, in the form of a license and capitalized organizational
costs.
Gentry expects to carry out its plan of business as discussed above. In
addition, Gentry may engage in a combination with another business. Gentry
cannot predict the extent to which its liquidity and capital resources will be
diminished prior to the consummation of a business combination or whether its
capital will be further depleted by the operating losses (if any) of the
business entity with which Gentry may eventually combine. Gentry has engaged in
discussions concerning potential business combinations, but has not entered
into any agreement for such a combination.
Gentry will need additional capital to carry out its business plan or to
engage in a business combination. No commitments to provide additional funds
have been made by management or other shareholders. Accordingly, there can be
no assurance that any additional funds will be available on terms acceptable to
16
Gentry or at all. Gentry has no commitments for capital expenditures. Gentry's
auditors' report expresses substantial doubt regarding Gentry's ability to
continue as a going concern.
Although Gentry itself has no critical systems that must be tested for Year
2000 compliance, it is imperative that it assess the compliance of third
parties with whom it has material relationships. Gentry's business plan and
profitability could be jeopardized by an inability to obtain the necessary
supply of biomas and Biocatalyst. Gentry has obtained oral assurances and is
obtaining written certifications of Year 2000 readiness from its primary
suppliers, Mortenson & Associates and N.W. Technologies ensuring that there
will be no interruption to Gentry's supply of biomas and Biocatalyst. In
addition, Gentry will require certification of Year 2000 readiness from any
waste treatment facility with whom Gentry is doing business, including the Year
2000 readiness of the utilities upon which such facilities depend for the
necessary water and power to operate the generators. Because Gentry has no
systems vulnerable to Year 2000 problems and has no current customers, it has
no Year 2000 contingency plan.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Elliott Tulk Pryce Anderson has served as Gentry's independent auditor since
inception, and Gentry has not had any dispute with Elliott Tulk Pryce Anderson
over accounting or financial disclosure.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name, age and position of each director
and executive officer of Gentry:
Name Age Position
---- --- --------
Michael Kirsh.................. 46 President, Secretary, Treasurer, Director
Mr. Kirsh became Gentry's sole director and officer in May 1999. During the
past five years, Mr. Kirsh has worked with a group of independent investors
that acquires private companies and conducts reverse takeovers. In a reverse
takeover, the shareholder of an acquired company generally ends up owning all
or most of the resulting combined company. Mr. Kirsh devotes approximately 20%
of his time to his position in the group, overseeing acquisitions, operations,
and financing. The group has acquired a private company, Neptune Society, Inc.,
which now trades on the OTC bulletin board under the symbol "NPTN". The
principal business focus of Neptune Society is cremations. Before forming his
investment group, Mr. Kirsh had invested in both real estate and the stock
market. From approximately 1986 to 1992 Mr. Kirsh developed two dental
practices in Vancouver, British Columbia, CANADA, which he sold in 1992 before
forming his investment group.
The director named above will serve until the first annual meeting of
Gentry's shareholders. Thereafter, directors will be elected for one-year terms
at the annual shareholders' meeting. Officers will hold their positions at the
pleasure of the board of directors, absent any employment agreement. No
employment agreements currently exist or are contemplated. There is no
arrangement or understanding between the director and officer of Gentry and any
other person pursuant to which any director or officer was or is to be selected
as a director or officer.
The director and officer of Gentry will devote his time to Gentry's affairs
on an "as needed" basis. As a result, the actual amount of time which he will
devote to Gentry's affairs is unknown and is likely to vary substantially from
month to month.
EXECUTIVE COMPENSATION
No officer or director has received any remuneration from Gentry. Although
there is no current plan in existence, it is possible that Gentry will adopt a
plan to pay or accrue compensation to its officers and directors
17
for services related to the implementation of Gentry's business plan. Gentry
has no stock option, retirement, incentive, defined benefit, actuarial, pension
or profit-sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of one or more
such programs in the future. Gentry has no employment contract or compensatory
plan or arrangement with any executive officer of Gentry. The director
currently does not receive any cash compensation from Gentry for his service as
a member of the board of directors. There is no compensation committee, and no
compensation policies have been adopted. See "Certain Relationships and Related
Transactions."
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 31, 1999, Gentry's outstanding
common stock owned of record or beneficially by each executive officer and
director and by each person who owned of record, or was known by Gentry to own
beneficially, more than 5% of Gentry's common stock, and the shareholdings of
all executive officers and directors as a group.
Shares Percentage of
Name Owned Shares Owned
- ---- ------- -------------
Michael Kirsh, President, Secretary, Treasurer, and
Director
5076 Angus Drive
Vancouver, B.C. Canada V6M 3M5.......................... 700,000 28%
David Goldman
910 Richards Street
Vancouver, B.C. Canada V6B 3C1.......................... 200,000 8%
Peter Finck
124-3989 Henning Drive
Burnaby, B.C. Canada V5C 6N5............................ 200,000 8%
Michael Robinson
3147 West 8th Avenue
Vancouver, B.C. Canada V6K 2C4.......................... 200,000 8%
Brian Grussan
bce Place
181 Bay Street, Suite 3100
Toronto, Ontario, Canada M5J 2T3........................ 200,000 8%
Brent Lokash
1708-808 Nelson Street
Vancouver, B.C. Canada V6Z 2H2.......................... 200,000 8%
Mark R. Epstein Law Corp.(1)
650-1500 West Georgia Street
Vancouver, B.C. Canada V6G 3A9.......................... 200,000 8%
Terry Kirshenbaum
350 Acletarde Street West
Toronto, Ontario, Canada M5V 1R7........................ 200,000 8%
Randi Kirshenbaum
3-59a Admiral Road
Toronto, Ontario M5R 2L4................................ 200,000 8%
Plantation Capital Corp.(2)
302-1132 Hamilton Street
Vancouver, B.C. Canada V6B 2S2.......................... 200,000 8%
ALL EXECUTIVE OFFICERS & DIRECTORS AS A GROUP
(1 Individual)........................................ 700,000 28%
- --------
(1) Mark R. Epstein is the sole beneficial owner of shares held by the Mark R.
Epstein Law Corp.
(2) Tim Gamble is the sole beneficial owner of shares held by Plantation
Capital Corp.
18
All shares are held of record and each record shareholder has sole voting and
investment power. Gentry knows of no one who has the right to acquire
beneficial ownership in Gentry common stock. Other than the sale of Gentry
stock contemplated by this prospectus, there are no arrangements known to
Gentry the operation of which may at a subsequent date result in a change of
control of Gentry.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No director, executive officer or nominee for election as a director of
Gentry, and no owner of five percent or more of Gentry's outstanding shares or
any member of their immediate family has entered into or proposed any
transaction in which the amount involved exceeds $60,000. The initial
shareholders, J.P. Beehner and Dorothy A. Mortenson, are investor-participants
in David R. Mortenson & Associates, the licensor of Gentry's right to
distribute and produce the Biocatalyst oxygen-enriched water product. Mr.
Beehner and Ms. Mortenson were previously directors of Gentry, and the
president and secretary-treasurer, respectively. They are no longer directors,
officers or shareholders of Gentry. If Gentry succeeds in implementing its
business plan, Gentry will make payments to David R. Mortenson & Associates in
the future that will exceed $60,000, although the resulting benefits to Mr.
Beehner and Ms. Mortenson may not individually exceed $60,000.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Gentry's bylaws provide that Gentry will indemnify its officers and directors
for costs and expenses incurred in connection with the defense of actions,
suits, or proceedings against them on account of their being or having been
directors or officers of Gentry, absent a finding of negligence or misconduct
in the performance of duty.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling Gentry
pursuant to the forgoing provisions, Gentry has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in that Act and is, therefore,
unenforceable.
19
INDEX TO FINANCIAL STATEMENTS
Gentry Resources, Inc.
(A Development Stage Company)
Independent Auditor's Report....................................... F-2
Balance Sheet as of April 30, 1999................................. F-3
Statement of Operations from July 17, 1998 (Date of Inception) to
April 30, 1999.................................................... F-4
Statement of Cash Flows from July 17, 1998 (Date of Inception) to
April 30, 1999.................................................... F-5
Statement of Stockholders' Equity from July 17, 1998 (Date of
Inception) to April 30, 1999...................................... F-6
Notes to the Financial Statements.................................. F-7 to F-8
F-1
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Gentry Resources, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Gentry Resources, Inc. (A
Development Stage Company) as of April 30, 1999 and the related statements of
operations, stockholders' equity and cash flows for the period from July 17,
1998 (Date of Inception) to April 30, 1999. 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 audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of Gentry Resources, Inc. (A
Development Stage Company), as of April 30, 1999, and the results of its
operations and its cash flows for the period from July 17, 1998 (Date of
Inception) to April 30, 1999, in conformity with U.S. generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has not generated any revenues or conducted any
operations since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Elliott, Tulk, Pryce, Anderson
Chartered Accountants
Vancouver, Canada
June 9, 1999
F-2
GENTRY RESOURCES, INC.
(A Development Stage Company)
BALANCE SHEET
(expressed in U.S. dollars)
April 30,
1999
$
---------
ASSET
-----
License (Note 3)..................................................... 2,000
=====
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities.................................................. --
-----
Contingent Liability (Note 1)
Stockholders' Equity
Common Stock, 10,000,000 shares authorized with a par value of
$.001; 2,500,000 shares issued and outstanding.................... 2,587
Deficit Accumulated During the Development Stage................... (587)
-----
2,000
-----
2,000
=====
(The accompanying notes are an integral part of the financial statements)
F-3
GENTRY RESOURCES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(expressed in U.S. dollars)
From July 17, 1998
(Date of Inception)
to April 30, 1999
-------------------
Revenues.................................................... $
-----
Organization Expenses....................................... 587
-----
Net Loss ................................................... (587)
=====
(The accompanying notes are an integral part of the financial statements)
F-4
GENTRY RESOURCES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(expressed in U.S. dollars)
From July 17, 1998
(Date of Inception)
to April 30, 1999
$
-------------------
Cash Flows to Operating Activities
Net loss................................................. (587)
Non-Cash Item............................................ 87
-----
Net Cash Used by Operating Activities...................... (500)
-----
Cash Flows from Financing Activities
Increase in shares issued................................ 500
-----
Net Cash Provided by Financing Activities.................. 500
-----
Cash Flows to Investing Activities......................... --
-----
Net Cash Used in Investing Activities...................... --
-----
Change in cash............................................. --
Cash--beginning of period.................................. --
-----
Cash--end of period........................................ --
=====
Non-Cash Financing Activities
A total of 2,000,000 shares were issued at a fair market
value of $0.001 per share for the acquisition of a
License (Note 3)........................................ 2,000
Organization costs paid for by a director for no
consideration treated as additional paid in capital..... 87
-----
2,087
=====
Supplemental Disclosures
Interest paid............................................ --
Income tax paid.......................................... --
(The accompanying notes are an integral part of the financial statements)
F-5
GENTRY RESOURCES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
From July 17, 1998 (Date of Inception) to April 30, 1999
(expressed in U.S. dollars)
Deficit
Accumulated
Common Stock During the
---------------- Development
Shares Amount Stage
# $ $
--------- ------ -----------
Balance--July 17, 1998 (Date of Inception)........ -- --
Stock issued for $500 of organizational
expenses....................................... 500,000 500
Additional paid in capital for organizational
expenses incurred by a director on behalf of
the Company.................................... -- 87
Stock issued for "The Biocatalyst License" at a
fair market value of $0.001 per share.......... 2,000,000 2,000
Net loss for the period......................... (587)
--------- ----- -----
Balance--April 30, 1999........................... 2,500,000 2,587 (587)
========= ===== =====
(The accompanying notes are an integral part of the financial statements)
F-6
GENTRY RESOURCES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(expressed in U.S. dollars)
1. Development Stage Company
Gentry Resources, Inc. herein (the "Company") was incorporated in the State
of Nevada, U.S.A. on July 17, 1998. The Company has acquired a license to
market and distribute a product as discussed in Note 3.
In a development stage company, management devotes most of its activities to
establishing these new businesses. Planned principal activities have not yet
begun nor produced any revenues. The ability of the Company to emerge from the
development stage with respect to any planned principal business activity is
dependent upon its successful efforts to raise additional equity financing and
develop a market for its products. There is no guarantee that Gentry will be
able to raise any equity financing or develop a market for its products. There
is substantial doubt regarding Gentry's ability to continue as a going concern.
2. Summary of Significant Accounting Policies
(a) Year end
The Company's fiscal year end is April 30.
(b) Licenses
Costs to acquire licenses are capitalized as incurred. These costs will be
amortized on a straight-line basis over their remaining estimated useful lives.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents.
(d) Use of 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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the periods. Actual
results could differ from those estimates.
3. License
On April 28, 1999 the Company acquired a license for a product called
Biocatalyst. The Company has the exclusive right to distribute and market the
product under a private label in the States of Alabama, Arkansas, Louisiana and
Mississippi for a period of three years expiring April 28, 2002. Biocatalyst is
an oxygen enriched water product used to enhance the growth of microbes in
soils located underground. The Company issued 2,000,000 shares at a fair market
value of $.001 or $2,000. The shares were issued to the licensor who are
members of a partnership and whose general partner is also a spouse of a
director and officer of the Company. Once the Company purchases a minimum of
5,000 gallons of product for a minimum period of six consecutive months, then a
license will be granted to the Company to produce the product in a location to
be mutually agreed upon. A producer license will also be granted if the Company
can demonstrate its financial capability, pay the licensor a one time fee of
$25,000, an additional one-time payment of $10,000 to reimburse unspecified
expenses, and pay minimum annual royalties of $20,000. If no producing license
is granted then the Company is committed to purchase $125,000 of Biocatalyst by
April 28, 2000, and a further $175,000 by April 28, 2001, to retain its
distribution license. The current price for Biocatalyst is $2.00 per gallon;
Mortenson & Associates may change the price on 10 days' notice. The license
will be amortized to operations over one year starting May 1, 1999.
F-7
4. Related Party Transaction
The License referred to in Note 3 was sold to the Company by a partnership
whose general manager is the spouse of the Secretary/Treasurer of the Company
and a director for consideration of 2,000,000 shares for total fair market
consideration of $2,000. These shares were paid evenly to the ten partners.
5. Uncertainty Due to the Year 2000 Issue
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using the year 2000 dates is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent something other
than a date. The effects of the Year 2000 Issue may be experienced before, on,
or after January 1, 2000, and, if not addressed, the impact on operations and
financial reporting may range from minor errors to significant systems failure
which could affect an entity's ability to conduct normal business operations.
It is not possible to be certain that all aspects of the Year 2000 Issue
affecting the Company, including those related to the efforts of customers,
suppliers, or other third parties, will be fully resolved.
F-8
Prospectus
, 1999
GENTRY RESOURCES, INC.
1177 West Hastings, Suite 2110
Vancouver, British Columbia V6E 2K3, CANADA
(604) 687-2199
2,500,000 Shares of Common Stock
to be sold by current shareholders
Gentry has not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or a
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor
any sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of Gentry have
not changed since the date hereof.
Until , 1999 (90 days after the date of this prospectus), all
dealers that effect transactions in these shares of common stock may be
required to deliver a prospectus. This is in addition to the dealer's
obligation to deliver a prospectus when acting as an underwriter and with
respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The securities are being registered for the account of selling shareholders,
and all of the following expenses will be borne by such shareholders. The
amounts set forth are estimates except for the SEC registration fee:
SEC registration fee................................................ $ 35
Printing and engraving expenses..................................... 5,000
Attorneys' fees and expenses........................................ 9,000
Accountants' fees and expenses...................................... 1,500
Transfer agent's and registrar's fees and expenses.................. 500
Miscellaneous....................................................... 965
-------
Total............................................................. $17,000
=======
Item 14. Indemnification of Directors and Officers.
Pursuant to Nevada law, a corporation may indemnify a person who is a party
or threatened to be made a party to an action, suit or proceeding by reason of
the fact that he or she is an officer, director, employee or agent of the
corporation, against such person's costs and expenses incurred in connection
with such action so long as he or she has acted in good faith and in a manner
which he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, in the case of criminal actions, had no
reasonable cause to believe his or her conduct was unlawful. Nevada law
requires a corporation to indemnify any such person who is successful on the
merits or defense of such action against costs and expenses actually and
reasonably incurred in connection with the action.
The bylaws of Gentry, filed as Exhibit 3.2, provide that Gentry will
indemnify its officers and directors for costs and expenses incurred in
connection with the defense of actions, suits, or proceedings against them on
account of their being or having been directors or officers of Gentry, absent a
finding of negligence or misconduct in office. Gentry's Bylaws also permit
Gentry to maintain insurance on behalf of its officers, directors, employees
and agents against any liability asserted against and incurred by that person
whether or not Gentry has the power to indemnify such person against liability
for any of those acts.
Item 15. Recent Sales of Unregistered Securities.
Set forth below is information regarding the issuance and sales of Gentry's
securities without registration since its formation. No such sales involved the
use of an underwriter and no commissions were paid in connection with the sale
of any securities.
(a) On July 30, 1998, Gentry issued 500,000 shares of common stock to two
shareholders in satisfaction of certain organizational costs (approximately
$500) and activities performed by the shareholders. The issuance of the
shares was exempt from registration under Rule 506 of Regulation D, and
sections 3(b) and 4(2) of the Securities Act of 1933, due to the
shareholders being Gentry's founders and serving as its initial management,
and the limited number of investors (two).
(b) On April 28, 1999, Gentry issued a total of 2,000,000 shares of
common stock to ten shareholders, one of whom is the general partner of,
and nine of whom are investor participants in, the licensor of Gentry's
Biocatalyst rights. The issuance was compensation for the license of the
Biocatalyst rights. The issuance of the common stock was exempt from
registration under Rule 504 of Regulation D and section 3(b) of the
Securities Act of 1933. Gentry's shares were valued at $0.001 per share,
and they were issued to accredited investors according to an exemption from
registration under Texas law that
II-1
permits general solicitation and general advertising so long as sales are
made only to accredited investors. If the exemption under Rule 504 of
Regulation D is not available, Gentry believes that the issuance was also
exempt under Rule 506 of Regulation D and Sections 3(b) and 4(2) under the
Securities Act of 1933, due to limiting the manner of the offering,
promptly filing notices of sales, and limiting the issuance of shares to a
small number of accredited investors (ten).
Item 16(a). Exhibits.
Exhibit
Number Name
------- ----
3.1* Articles of Incorporation
3.2* Bylaws
5.1 Opinion re: Legality
10.1 License Agreement
10.2 Amendment No. 1 to License Agreement
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (see Exhibit 5.1)
27.1* Financial Data Schedule
- --------
* Previously filed
Item 16(b). Financial Statement Schedules.
As of April 30, 1999, Gentry:
. has no valuation or qualifying accounts
. does not have a substantial portion of its business devoted to acquiring
and holding for investment real estate or interests therein
. has no subsidiaries
. has no investments in mortgage loans on real estate.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
II-2
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Vancouver, Province of
British Columbia, CANADA, on August 31, 1999.
GENTRY RESOURCES, INC.
/s/ Michael Kirsh
By: ___________________________
Michael Kirsh
Its President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Michael Kirsh President, Secretary, August 31, 1999
____________________________________ Treasurer, and Director
Michael Kirsh
II-4
EXHIBIT INDEX
Exhibit
Number Name
------- ----
3.1* Articles of Incorporation
3.2* Bylaws
5.1 Opinion re: Legality
10.1 License Agreement
10.2 Amendment No. 1 to License Agreement
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (see Exhibit 5.1)
27.1* Financial Data Schedule
- --------
* Previously filed