AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON November 14, 2002
Registration No. 333-85072
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM SB-2
AMENDMENT NO. 5
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
RTG VENTURES, INC.
(Name of Small Business Issuer in Its Charter)
Florida 4812 59-3666743
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Number) Identification No.)
11800 28th Street North
St. Petersburg, FL 33716
(727) 592-0146
(Address and Telephone Number of Principal Executive Offices)
Copies of all communications to:
Eric P. Littman, Esquire
7695 SW 104th Street
Suite 210
Miami, FL 33156
Telephone: (305) 663-3333
Facsimile: (305) 668-0003
Approximate Date of Proposed Sale to the Public: As soon as practicable
after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If 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 number of the earlier effective registration statement for the
same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Class of Proposed Maximum Amount of
Securities to be Registered Aggregate Offering Price(1) Registration Fee
Common Stock,
$.001 par value $208,000 $100
Total Registration Fee $100
(1)Estimated solely for purposes of calculating the registration fee pursuant to
Rule 457.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
Subject to Completion November 14, 2002
PROSPECTUS
RTG Ventures, Inc.
208,000 Shares of Common Stock
The registration statement of which this Prospectus is a part relates
to the offer and sale by RTG Ventures, Inc., a Florida corporation (the
"Company," "We," or "Our"), of our securities by the holders (the "Selling
Security Holders") consisting of 208,000 shares of our common stock, $.001 value
per share, referred to as the "Securities." See "DESCRIPTION OF SECURITIES."
Our common stock offered is not listed on any national securities
exchange or the NASDAQ stock market. We may apply for listing on the Over the
Counter Bulletin Board maintained by the National Association of Securities
Dealers, Inc. (the "OTCBB") if this registration statement clears all comments
of the United States Securities and Exchange Commission (the "SEC"). There is no
assurance that we will obtain listing on the OTCBB.
This offering consists of securities offered exclusively by Selling
Security Holders. The Selling Security Holders will sell at a price of
approximately $1.00 per share until our shares are quoted on the OTC Bulletin
Board and thereafter, at prevailing market prices or privately negotiated
prices. By agreement with the Selling Security Holders, we will pay the entire
expenses incident to the registration of the Securities under the Securities
Act.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED
ONLY BY PERSONS WHO CAN AFFORD A COMPLETE LOSS OF THEIR INVESTMENT. SEE "RISK
FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is ____________, 2002
ITEM 3. SUMMARY INFORMATION AND RISK FACTORS
THE COMPANY
PROSPECTUS SUMMARY
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS, WHICH INVOLVE RISKS AND
UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED
IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS INCLUDING
THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS. THE
FOLLOWING INFORMATION IS SELECTIVE AND QUALIFIED IN ITS ENTIRETY BY THE DETAILED
INFORMATION (INCLUDING FINANCIAL INFORMATION AND NOTES THERETO) APPEARING
ELSEWHERE IN THIS PROSPECTUS. THIS SUMMARY OF CERTAIN PROVISIONS OF THE
PROSPECTUS IS INTENDED ONLY FOR CONVENIENT REFERENCE AND DOES NOT PURPORT TO BE
COMPLETE. THE ENTIRE PROSPECTUS SHOULD BE READ AND CAREFULLY CONSIDERED BY
PROSPECTIVE INVESTORS BEFORE MAKING A DECISION TO PURCHASE COMMON STOCK.
Our Company
We were organized under the laws of the State of Florida on September
29, 1998. We are in the business of importing crawfish which has been farmed and
harvested from Indonesia. Crawfish is a specialty seafood product which the
Company has resources to purchase and sell throughout the United States and
Canada. In 2002, we intend to add shrimp to our product line to attract new
distributers and wholesalers. Our plan is to purchase shrimp from Grandnova
International or Marine Trading Co. and have Thor Seafood secure purchase orders
for the shrimp. To date, we have not purchased any shrimp and is no assurance
that we will be able to expand our business.
The Offering.
As of December 31, 2001 we had 5,208,000 shares of our common stock
outstanding. This offering is comprised of securities offered by Selling
Security Holders only. Although we have agreed to pay all offering expenses, we
will not receive any proceeds from the sale of the securities registered
hereunder.
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FINANCIAL SUMMARY INFORMATION
The following Summary Financial Summary and Operating Data have been derived
from the financial statements of the Company for the periods indicated. The
following financial data should be read in conjunction with the Company's
financial statements and the notes thereto included elsewhere in this
Registration Statement.
Year Ending May 31,
2002 2001
----------- -----------
Statement of Operations
Income statement data:
Revenues $ 19,953 $ 134,293
Income (loss) from operations $ 3,071 $ 44,711
Net Interest Expense $ -- $ --
Income (loss) before income taxes $ 3,071 $ 44,711
Income tax $ 461 $ 5,957
Net income (loss) $ 2,610 $ 38,754
Per share data:
Primary
Weighted average shares outstanding 5,208,000 5,084,667
Balance sheet data:
Working capital (deficiency) $ 89,364 $ (1,047)
Total assets $ 90,614 $ 92,613
Long term debt $ -- $ --
Total liabilities and stockholders' equity $ 90,614 $ 92,613
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RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED IN THIS REGISTRATION
INVOLVES A HIGH DEGREE OF RISK. THERE CAN BE NO ASSURANCE THAT WE WILL EVER
GENERATE REVENUES, OR THAT WE WILL BE ABLE TO DEVELOP OPERATIONS WHICH MAY EVER
YIELD A PROFIT.
Because we have substantial Near-Term Capital needs and we may be unable to
obtain additional funding, the Company may never become profitable.
We will require funding over the next twenty-four (24) months to
continue to expand and develop our business. We estimate that we may need up to
an additional $500,000 to fund our future inventories. Our current directors,
Pamela Wilkinson and Joseph Camillo have committed to finance future contracts
for the purchase of future inventories. Our capital requirements will depend on
many factors including the level of our sales. The percentage ownership of our
current shareholders will be reduced if additional funds are raised through the
issuance of equity securities. Such equity securities may have rights,
preferences, and privileges senior to those of our common stock holders.
Further, there can be no assurance that additional capital will be available on
terms favorable to our company or its shareholders.
Our cash requirements may vary materially depending on our rate of
development and expansion, results, competitive and technological advances and
other factors. If adequate funds are not available, we may be required to
significantly curtail operations or obtain funds by entering into collaboration
agreements, which may contain unfavorable terms. Our inability to raise capital
would have a material adverse effect on our business, financial condition, and
operations.
Our Board of Directors has the authority to issue shares without shareholder
consent and therefore, they may issue shares which could cause your shares to be
worth less in the future.
Our Certificate of Incorporation authorizes the issuance of a maximum
of twenty million (20,000,000) shares of common stock with a par value of $.001
per share. As of December 31, 2001, there were 5,208,000 common shares issued
and outstanding and no shares of preferred stock outstanding. The authority of
our Board of Directors to issue stock without shareholder consent may have a
depressive effect on the market value of our stock even prior to any such
designation or issuance of the preferred stock.
Our Principal Stockholders, Joseph Camillo and Pamela Wilkinson own
approximately 96% of our common stock and therefore, control our Company.
Joseph Camillo and Pamela Wilkinson have the ability to significantly
control our company's affairs and management. They currently owns approximately
96% of our common stock, giving her significant influence over all matters
requiring approval by our stockholders, but not requiring approval of minority
stockholders. In addition, Joseph Camillo and Pamela Wilkinson have the voting
power to elect all members of our Board of Directors. Such control could
adversely affect the market value of our common stock or delay or prevent a
change in control of our company. In addition, Joseph Camillo and Pamela
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Wilkinson may control most corporate matters requiring stockholder approval by
written consent, without the need for a duly-notice and duly-held meeting of
stockholders.
Because we have never paid dividends, you may not earn income on your
investment.
As a newly formed corporation, we have never paid dividends and
therefore, you may never get income from your investment. We do not anticipate
declaring or paying any dividends in the foreseeable future. We intend to retain
earnings, if any, to finance the development and expansion of our business.
Future dividend policy will be subject to the discretion of the Board of
Directors and will be contingent upon future earnings, our financial condition,
capital requirements, general business conditions and other factors. Future
dividends may also be subject to covenants contained in loan or other financing
documents we may execute. Accordingly, there can be no assurance that cash
dividends of any kind will ever be declared or paid.
Because we have a limited operating history, you will be unable to determine
whether we will ever become profitable.
The Company was incorporated in September of 1998 and was not
operational until the fiscal year 2001. As such, our operating history is very
limited. While we did have revenues for fiscal year 2001 and while we did have
net income for that year, there is no assurance that the Company will be
profitable in the future.
Because we are in a highly competitive market, we are at a competitive
disadvantage which may hinder our ability to become profitable.
We are and will continue to be an insignificant participant in the
business of selling crawfish. A large number of established and well-financed
entities, including small public companies and venture capital firms, are
engaged in similar businesses out of the Company. In addition, these companies
are better financed and have a broader range of clients which makes it easier
for them to expand into the market which the Company is attempting to go into.
Nearly all these entities have significantly greater financial resources,
technical expertise and managerial capabilities than we do and, consequently, we
will be at a competitive disadvantage in our market.
Because management only devotes a limited amount of time to the Company, the
Company may not realize its growth potential.
Management anticipates devoting no more than five to ten hours per week
to the business of the Company. None of our officers have entered into written
employment agreements with us
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and none is expected to do so in the foreseeable future. This limited commitment
may adversely affect the Company's ability to grow and reach its goals.
Because our Management is involved in other businesses activities, there may be
a conflict with our interests and we have no policy for the resolution of these
possible conflicts.
In addition, Our management is involved in other business activities
and may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, our management may face a
conflict in selecting between the Company and their other business interests. We
have not formulated a policy for the resolution of such conflicts.
We may be subject to further government regulation which would adversely affect
our operations.
Although we will be subject to the reporting requirements under the
Exchange Act, management believes we will not be subject to regulation under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), since
we will not be engage in the business of investing or trading in securities. If
we engage in business combinations which result in our holding passive
investment interest in a number of entities, we could be subject to regulation
under the Investment Company Act. If so, we would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. We have obtained no formal determination from the Securities
and Exchange Act and, consequently, violation of the Act could subject us to
material adverse consequences.
There Is Presently No Public Market for Our Common Stock and a Market May Never
Develop.
We intend to apply for listing of the securities on the Over the
Counter Bulletin Board ("OTCBB"); however, we cannot assure that we will be able
to obtain such a listing. The over-the-counter market ("OTC") differs
substantially from national and regional stock exchanges because it (1) operates
through communication of bids, offers and confirmations between broker-dealers,
rather than one centralized market (exchange) and (2) securities admitted to
quotation are offered by one or more broker-dealers rather than "specialists"
which operate in stock exchanges. To qualify for listing on the OTCBB, an equity
security must have at least one registered broke-dealer, which acts as the
market maker listing bids or ask quotations and which sponsors an issuer
listing. A market maker sponsoring a company's securities is required in order
to obtain listing of securities on any of the public trading markets, including
the OTCBB. We currently do not have a market maker for our securities. If we are
able to obtain a market maker for our securities, we may obtain a listing on the
OTCBB or develop a trading market for our common stock. We may be unable to
locate a market maker that will agree to sponsor our securities. Even if we do
locate a market maker, there is no assurance that our securities will be able to
meet the OTCBB requirements or that the securities will be accepted for a OTCBB
listing.
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There can be no assurance that a market for our common stock will be
established or that, if established, such market will be sustained. Therefore,
purchasers of our shares registered hereunder may be unable to sell their
securities, because there may not be a public market for our securities. Any
purchaser of our securities should be in a financial position to bear the risks
of losing their entire investment.
We currently have no plans to issue any additional equity securities with
rights, preferences or privileges senior to those of our common stock.
Our Certificate of Incorporation authorizes the issuance of a maximum
of 20,000,000 shares of common stock with, $.001 par value. As of December 31,
2001, there were 5,208,000 shares of common stock issued and outstanding and no
shares of preferred stock outstanding. The authority of our Board of Directors
to issue stock without shareholder consent may have a depressive effect on the
market value of our stock even prior to any such designation or issuance of the
preferred stock.
We Are Dependent On Key Personnel
Our success is heavily dependent upon the continued active
participation of our current executive officers, Joseph Camillo and Pamela
Wilkinson. Loss of his services could have a material adverse effect upon the
development of our business. We do not maintain "key person" life insurance on
the life of Joseph Camillo and Pamela Wilkinson or their beneficiaries. We do
not have a written employment agreement with Joseph Camillo and Pamela
Wilkinson. There can be no assurance that we will be able to recruit or retain
other qualified personnel should that necessity arise.
"Penny Stock" Regulation
There will be "penny stock" regulation of broker-dealer sales of our
securities. For transactions covered by Rule 15g-9 under the Exchange Act, a
broker-dealer must furnish to all investors in penny stocks a risk disclosure
document required by the rule, make special suitability determination of the
purchaser and have received the purchaser's written agreement to the transaction
prior to the sale. In order to approve a person's accounts for transaction in
penny stock, the broker or dealer must (i) obtain information concerning the
person's financial situation, investment experience and investment objectives;
(ii) reasonably determine, based on the information required by paragraph (i)
that transactions in penny stock are suitable for the person and that the person
has sufficient knowledge and experience in financial matters that the person
reasonably may be expected to be capable of evaluating the risks of transactions
in penny stock; and (iii) deliver to the person a written statement setting
forth the basis on which the broker or dealer made the determination required by
paragraph (ii) of this section unless the broker or dealer has received, prior
to the transaction, a written agreement to the transaction from the person; and
stating in a highlighted format immediately preceding the customer signature
line that the broker or dealer is required to provide the person with the
written statement and the person should not sign and return the written
statement to the broker or dealer if it does not accurately reflect the person's
financial situation, investment experience and investment objectives and obtain
from the person a manually signed and date copy of the written statement.
7
A penny stock means any equity security other than a security (i)
registered, or approved for registration, upon notice of issuance on a national
securities exchange that makes transaction reports available pursuant to 17 CFR
11Aa3-1; (ii) authorized or approved for authorization upon notice issuance, for
quotation on the Nasdaq NMS; (iii) that has a price of five dollars or more; or
(iv) whose issuer has net tangible assets in excess of $2,000,000 demonstrated
by financial statements dated less than fifteen months previously that the
broker or dealer has reviewed and has a reasonable basis to believe are true and
complete in relation to the date of the transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell our
securities.
ITEM 4. USE OF PROCEEDS.
Not Applicable. We will not receive any proceeds from the sale of the
Securities by the Selling Security Holders.
ITEM 5. DETERMINATION OF OFFERING PRICE
Not Applicable. The Selling Security Holders will be able to determine
the price at which they sell their Securities.
ITEM 6. DILUTION
Not applicable. We are not registering any unissued shares in this
registration statement.
ITEM 7. SELLING SECURITY HOLDERS
The Securities are being sold by the Selling Security Holders who total
40 people. These 40 people were issued a total of 208,000 shares in our Private
Placement pursuant to Rule 506. The Company issued these shares pursuant to the
exemption afforded by Rule 506 and issued as restricted securities to the
shareholders who are listed below. None of the Selling Security Holders own in
excess of 5% of our issued and outstanding stock and none of them are affiliates
of the Company. However, any or all of these Securities may be retained by any
of the Selling Security Holders; therefore, no accurate forecast can be made
regarding the number of Securities that will be held by the Selling Security
Holders after the effective date. We believe that the Selling Security Holders
have sole voting and investment powers regarding the Securities indicated. Each
owns less than 2% of our issued and outstanding stock. We will not receive any
proceeds from the sale of the Securities.
1. Phylis Morano C/F 2,000 shares
Anthony Belan UTMA/FL
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2. Phylis Morano C/F 2,000 shares
Kristian Belan UTMA/FL
3. Phylis Morano C/F 2,000 shares
Sean Belan UTMA/FL
4. William Morano 2,000 shares
5. Bridgid M. O'Brien 2,000 shares
6. Rosewood Int'l Investment Corp. 2,000 shares
7. Douglas Ward 3,000 shares
8. Cindy Ward 3,000 shares
9. Greig Rank 2,000 shares
10. Angela McDougal 2,000 shares
11. Ralph Camillo 2,000 shares
12. Lucille Camillo 8,000 shares
13. Don A. Camillo 8,000 shares
14. Don A. Camillo CF 8,000 shares
Don A. Camillo Jr.
15. Mary B. Hemish 6,000 shares
16. Glenn W. Heim 8,000 shares
17. William Heim 8,000 shares
18. Myrtle M. Heim 8,000 shares
19. Blanche E. Bailey 8,000 shares
20. Janis K. Bailey 8,000 shares
21. Joan Bailey 8,000 shares
22. Ezequiel Lopez 4,000 shares
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23. Thomas F. Bailey 8,000 shares
24. Paul J. Bailey 8,000 shares
25. Chelverton Fund Ltd 8,000 shares
26. James Morton 8,000 shares
27. Ada J. Liebskind 2,000 shares
28. Terra R. Wilkinson 2,000 shares
29. Grace Investments Limited 8,000 shares
30. David S. Disner 8,000 shares
31. Karen Leff 8,000 shares
32. Steven Leff 8,000 shares
33. Gloria Bailey 8,000 shares
34. James Bailey 8,000 shares
35. Joseph Polanski 8,000 shares
36. Patricia Cohen C/F 2,000 shares
Jessica Cohen UGMA/FL
37. Stephanie Cohen 2,000 shares
38. Patricia Cohen 2,000 shares
39. Louise E. Cunningham 2,000 shares
40. Pamela Cohen C/F 2,000 shares
Taylor Cohen
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ITEM 8. PLAN OF DISTRIBUTION
The Selling Security Holders or their transferees may sell the
Securities offered by this Prospectus from time to time. To our best knowledge,
no underwriting arrangements have been entered into by the Selling Security
Holders. The distribution of the Securities by the Selling Security Holders may
be effected in one or more transactions that may take place in the
over-the-counter market, including ordinary broker's transactions, privately
negotiated transactions or through sales to one or more dealers for resale of
such Securities as principals at prevailing market prices at the time of sale
and prices related to prevailing market prices or negotiated prices.
The Selling Security Holders may pledge all or a portion of the
Securities owned as collateral for margin accounts or in loan transactions. Such
Securities may be resold pursuant to the terms of such pledges, accounts or loan
transactions. Upon default by such Selling Security Holders, the pledgee in such
loan transactions would have the same rights of sale as the Selling Security
Holders under this prospectus. The Selling Security Holders also may enter into
exchange traded listed option transactions which require the delivery of the
Securities listed hereunder. The Selling Security Holders may also transfer
Securities owned in other ways not involving market makers or established
trading markets, including directly by gift, distribution, or other transfer
without payment of consideration. Upon any such transfer the transferee would
have the same rights of sale as such Selling Security Holders under this
Prospectus.
Finally, the Selling Security Holders and any brokers and dealers
through whom sales of the Securities are made may be deemed to be "underwriters"
within the meaning of the Securities Act. The commissions or discounts and other
compensation paid to such persons may be regarded as underwriters' compensation.
There can be no assurances that the Selling Security Holders will sell
any or all of the Securities. In order to comply with certain state securities
laws the Securities will be sold in such jurisdictions only through registered
or licensed brokers or dealers. In certain states the Securities may not be sold
unless such Securities have been registered or qualified for sale in such state
or an exemption from registration or qualification is available and is complied
with. Under applicable rules and regulations of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), any person engaged in a distribution of
the Securities may not simultaneously engage in market-making activities with
respect to such Securities for a period of one or five business days prior to
the commencement of such distribution.
In addition to, and without limiting the foregoing, each of the Selling
Security Holders and any other person participating in a distribution will be
subject to the applicable provisions of the Exchange Act and the rules and
regulations there under, including, without limitation, Regulation M, which
provisions may limit the timing of purchases and sales of any of the Securities
by the Selling Security Holders or any such other person.
All of the foregoing may affect the marketability of the Securities.
Pursuant to an understanding we have with the Selling Securities Holders, we
will pay all the fees and expenses incident to the registration of the
Securities (other than the Selling Security Holders' pro rata share of
underwriting discounts and commissions, if any, which is to be paid by the
Selling Security Holders).
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ITEM 9. LEGAL PROCEEDINGS
To the best of our knowledge, we are not a party to any pending legal
proceeding. We are not aware of any contemplated legal proceeding by a
governmental authority involving the Company.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
Directors and Officers.
Our Bylaws provide that we shall have a minimum of one (1) director on
the board at any one time. Vacancies are filled by a majority vote of the
remaining directors then in office. The directors and executive officers of the
Company are as follows:
NAME AGE POSITIONS HELD
Joseph Camillo 55 Secretary
Pamela Wilkinson 43 President
The director named above will serve until the next annual meeting of
our shareholders to be held within six (6) months of the close of our fiscal
year or until a successor shall have been elected and accepted the position.
Directors are elected for one year terms.
Mr. Joseph Camillo has been an officer and director of the company
since September 29, 1998. From 1991 to 1996, Mr. Camillo was employed as a
registered representative with Cohig & Associates, Inc., a securities
broker-dealer. From 1996 to the present, Mr. Camillo has been a consultant to
private and public corporations. From July 14, 1998 to January 24, 2002, he was
secretary of Asphalt Paving International, Inc., and from August 21, 1997 to
February 10, 2001, he was secretary and a director of Power Fluids Inc., both of
which are companies which publicly trade on the OTCBB.
Pamela Wilkinson Cohen has been an officer and director of the company
since September 29, 1998. Ms. Cohen is also presently the president and director
of Ramsy Holdings Corp., and its wholly owned subsidiary, GPI Marketing, Inc.,
both of which are private companies. GPI is in the business of marketing
paintballs for International Paintball Manufcturing Corp. Ms. Wilkinson is also
president and a director of another private company, Progressive Media Group,
Inc., which is a consulting company.
Significant Employees.
Other than Mr. Camillo and Ms. Wilkinson, there are no employees who
are expected to make a significant contribution to the Company.
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Family Relationships.
There are no family relationships among our officers, directors, or
persons nominated for such positions.
Legal Proceedings.
No officer, director, or persons nominated for such positions and no
promoter or significant employee of our Company has been involved in legal
proceedings that would be material to an evaluation of our management.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 2001, there were 5,208,000 shares of our common
stock, no par value. outstanding. The following tabulates holdings of our common
shares by each person who, as of December 31, 2001, (a) holds of record or is
known by us to own beneficially more than 5.0% of our common shares and, in
addition, (b) by all of our directors and officers individually and as a group.
To the best of our knowledge, each named beneficial owner has sole voting and
investment power with respect to the shares set forth opposite his name.
Security Ownership of Beneficial Owners(1)(2):
Title of
Class Name & Address Amount Nature Percent
- ---------------------------------------------------------------------------
Common Joseph Camillo 3,000,000 Direct 57.6%
Common Pamela Wilkinson 2,000,000 Direct 38.4%
Security Ownership of Management(2):
Title of Name & Address of
Class Officers & Directors as a Group Amount Nature Percent
- ---------------------------------------------------------------------------
Common Joseph Camillo 3,000,000 Direct 57.6%
Common Pamela Wilkinson 2,000,000 Direct 38.4%
TOTAL OFFICERS &
DIRECTORS IN A GROUP 5,000,000 Direct 96%
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(1) Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934,
beneficial ownership of a security consists of sole or shared voting power
(including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise. Unless otherwise indicated, each person indicated
above has sole power to vote, or dispose or direct the disposition of all shares
beneficially owned, to the best of our knowledge.
(2) This table is based upon information obtained from our stock
records.
Unless otherwise indicated in the footnotes to the above table and
subject to community property laws where applicable, we believe that each
shareholder named in the above table has sole or shared voting and investment
power with respect to the shares indicated as beneficially owned.
Change of Control.
There are currently no arrangements, which would result in a change of
control of the Company.
ITEM 12. DESCRIPTION OF SECURITIES
The following description is a summary and is qualified in its entirety
by the provisions of our Articles of Incorporation and Bylaws, copies of which
have been filed as exhibits to the Registration Statement of which this
Prospectus is a part.
Qualification.
The following statements constitute brief summaries of the material
provisions of our Articles of Incorporation and Bylaws, as amended. Such
summaries do not purport to be complete; therefore, the full text of the
Articles of Incorporation and Bylaws provided in the exhibits hereto should be
referred to.
Common Stock.
Our Articles of Incorporation authorize us to issue up to 20,000,000
common shares, $.001 per common share. As of December 31, 2000, we had 5,208,000
shares of common stock outstanding held by 42 shareholders. All outstanding
common shares are fully paid and non-assessable.
14
Liquidation Rights.
Upon liquidation or dissolution, each outstanding common share will be
entitled to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
There are no limitations or restrictions upon the rights of our Board
of Directors to declare dividends, and we may pay dividends on our shares in
cash, property, or our own shares, except when we are insolvent or when the
payment thereof would render us insolvent subject to the provisions of the
Florida Statutes. We have not paid dividends to date, and it is not anticipated
that any dividends will be paid in the foreseeable future.
Voting Rights.
Holders of our common shares are entitled to cast one vote for each
share held at all shareholders meetings for all purposes.
Other Rights.
Our common shares are not redeemable, have no conversion rights and
carry no preemptive or other rights to subscribe to or purchase additional
common shares in the event of a subsequent offering.
There are no other material rights of the common shareholders not
included herein. There is no provision in our charter or by-laws that would
delay, defer or prevent a change in control of the Company. We have not issued
preferred or debt securities.
Shares Eligible for Future Rights.
The 208,000 shares of common stock sold in this offering will be freely
tradable without restrictions under the Securities Act, except for any shares
held by our "affiliates", which will be subject to the resale limitations of
Rule 144 under the Securities Act.
In general, under Rule 144 as currently in effect, any of our
affiliates and any person (or persons whose sales are aggregated) who has
beneficially owned his or her restricted shares for at least one year, may be
entitled to sell in the open market within any three month period a number of
shares of common stock that does not exceed the greater of (i) 1% of the then
outstanding shares of our common stock, or (ii) the average weekly trading
volume in the common stock during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain limitations on manner of sale,
notice requirements, and availability of current public information about us.
Non-affiliates who have held their restricted shares for one year may be
entitled to sell their shares under Rule 144 without regard to any of the above
limitations, provided they have not been affiliates for the three months
preceding such sale.
15
Further, Rule 144A as currently in effect, in general, permits
unlimited resales of certain restricted securities of any issuer provided that
the purchaser is an institution that owns and invests on a discretionary basis
at least $100 million in securities or is a registered broker-dealer that owns
and invests $10 million in securities. Rule 144A allows our existing
stockholders to sell their shares of common stock to such institutions and
registered broker-dealers without regard to any volume or other restrictions.
Unlike under Rule 144, restricted securities sold under Rule 144A to
non-affiliates do not lose their status as restricted securities.
As a result of the provisions of Rule 144, all of the restricted
securities could be available for sale in a public market, if developed,
beginning 90 days after the date of this Prospectus. The availability for sale
of substantial amounts of common stock under Rule 144 could adversely affect
prevailing market prices for our securities.
ITEM 13. EXPERTS
Our financial statements for the period from inception to December 31,
2001 have been included in this Prospectus in reliance upon the report appearing
in Item 22, of James Scheifley and Associates, Independent Certified Public
Accountants, as experts in accounting and auditing.
ITEM 14. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons, we have
been advised that in the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by us of expenses incurred or paid by our
directors, officers or controlling persons in the successful defense of any
action, suit or proceedings) is asserted by such director, officer, or
controlling person in connection with any securities being registered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issues.
16
ITEM 15 AND 16. DESCRIPTION OF BUSINESS
History and Organization
- -------------------------
We were organized under the laws of the State of Florida on September
29, 1998. We did not become operational until fiscal year 2001. Currently our
principal product if the sale of crawfish. We imported our first containers of
crawfish in August 2000 and in fact purchased two containers of crawfish in that
month. Thereafter, the crawfish is distributed by Thor Seafood and International
Food Service Consulting Group which confirms the purchase orders for all our
crawfish to various Popeye's restaurant distributors. Some of these distributors
Caro Products Co., Roger's Poultry (Los Angeles), Performance Food Group, Thomas
and Howard, R & E Seafood Co. and Thor Seafood. All of these are unrelated
companies to us. The crawfish which we purchase is from Indonesia and is
primarily purchased from Grand Nova International and Marine Training Group.
However, there are many other sources available for crawfish. Therefore, if we
were to loose our relationship with either Grand Nova International or Marine
Trading Group, we believe we would still be able to buy crawfish from other
vendors.
In general, we conduct our business as follows: Maritime Trading
purchases crawfish in either China or Indonesia and has it shipped by boat in
containers to Maritime's cold storage facility in Los Angeles. A container is
the shipping vessel that the crawfish is shipped from over seas and it holds
approximatley. 1833 cases (24-1-lb bags of crawfish per case) per container. We
then purchase the crawfish from Maritime Trading and keep it in its cold storage
facility until we have arranged for buyers for the crawfish. Thor Seafood
secures a purchase order form various venders who will either pick up the
product at the facility in Los Angles or we truck the product to where the
customer wants it. Sometimes we have to pay for the cold storage , trucking (if
needed) and a brokerage fee. The brokerage fees are paid to International Food
Service Consulting Group which is owned by the same people who own Thor Seafood.
Our purchases and sales are not conducted pursuant to any long term
contracts or agreements and we do not have any long term contracts or agreements
All sales are done on a current purchase order to purchase order.
Approximately 90% of our sales of crawfish are to Purveyors who then
supply Popeye's. We are currently dependent upon Popeye's for our sales and the
loss of Popeye's as a customer would have a material adverse affect upon our
business.
The Company has no patent trademarks, licenses, franchises,
concessions, royalty agreements or labor contracts. In addition, the Company
does not require any government approval for the sale of its product. There are
no current government regulations and none are anticipated which should affect
the business of the Company. The Company did not spend any money in the last two
fiscal years on any research and development. The Company did not spend any
money to comply with environmental laws.
Other than our officers and directors we have no other employees.
17
Competition
We are and will continue to be an insignificant participant in the
business of selling crawfish. A large number of established and well-financed
entities, including small public companies and venture capital firms, are
engaged in similar businesses out of the Company. In addition, these companies
are better financed and have a broader range of clients which makes it easier
for them to expand into the market which the Company is attempting to go into.
Nearly all these entities have significantly greater financial resources,
technical expertise and managerial capabilities than we do and, consequently, we
will be at a competitive disadvantage in identifying possible business
opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating of a successful business combination.
Item 17. Managements Discussion and Analysis
RESULTS OF OPERATIONS
YEAR ENDED MAY 31, 2002 COMPARED TO YEAR ENDED MAY 31, 2001.
Gross income for the year ended May 31, 2002 was $19,953, as compared
to $134,293 for the year ended May 31, 2001, a decrease of $14,340 (85%). We
believe the decline in our income was due to the tragedy surrounding September
11, 2001. The broker the we were using to secure our purchases of crawfish in
Indonesia and China, did not want to travel to these regions due to his
perception of the dangers of international travel into these regions. However,
our broker will be traveling back to the region in fiscal year 2003 and at such
time, we expect to resume our purchases.
Total operating expenses for the year ended May 31, 2002 was $16,882 as
compared to $89,964 for the year ended May 31, 2001 a decrease of $73,082 (81%).
The decrease in expenses was primarily due to decreases in outside brokerage
fees and additional trade costs as well as administrative and professional fees.
As of May 31, 2002, all previously held vendor deposits had been
applied to items shipped and purchased. As of May 31, 2002, we did not have any
orders pending that would require additional deposits.
Net income for the year ending May 31, 2002 was $2,610 as compared to
$38,754 for the year ending May 31, 2001 or a decrease of $36,144 (93%). This
dramatic decrease was attributable to the factors outlined above.
LIQUIDITY AND CAPITAL RESOURCES
As of May 31, 2002, the Company had working capital of $89,364.
The Company believes that it has sufficient liquidity to meet all of
its cash requirements for the next 12 months and that subsequent store and
distribution sales will provide sufficient cash flows to meet their operating
needs. The Company believes, however, that additional funding will be necessary
to expand its markets.
Item 18. Description of Property
We currently have no material assets, lease or any real or personal
property. We currently occupy office space owned by our current Secretary,
without charge, at 11800 28th St. N., St. Petersburg, FL 33716.
18
ITEM 19. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than the issuance of shares to our current officers and
directors, Joseph Camillo and Pamela Wilkinson, and the transaction described
below, we have not entered into any transactions with our officers, directors,
persons nominated for such positions, beneficial owners of 5% or more of our
common stock, or family members of such persons. The shares issued to Mr.
Camillo and Ms. Wilkinson were issued in consideration of their capital
contribution to us in the amount of $5,000. We are not a subsidiary of any other
company. Since the original issuance of our common shares (as described in Item
26), we have not and do not intend to enter into any transactions with our
promoter.
During fiscal year 2001, we received cash advances from Progressive
Media Holdings, Inc., in the amount of $969,236 and made $700,000 of repayments
against these advances. The net balance due Progressive Media Holdings, Inc. on
May 31, 2001 was to $249,229. During fiscal year 2002, we repaid the full amount
due Progressive Media Holdings, Inc. and made additional advances to it totaling
$94,275. Progressive Media repaid us a total of $6,097 and thus as of May 31,
2002, it owed us $88,178. On May 31, 2002, this amount was converted into a
promissory note which bares interest at 8% per annum and is due March 15, 2003.
One of our directors, Pamela Wilkinson, was an officer of Progressive Media
Holdings, Inc., and as such, these transactions may be deemed as a related party
transaction. On January 1, 2002, Ms. Wilkinson resigned as an officer of
Progressive Media Holdings, Inc. and therefore, Progressive Media Holdings,
Inc., is no longer considered a related party.
Our management is involved in other business activities and may, in the
future, become involved in other business opportunities. If a specific business
opportunity becomes available, our management may face a conflict in selecting
between the Company and their other business interests. We have not formulated a
policy for the resolution of such conflicts.
ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
There is no established public trading market for our securities. None
of our common stock is subject to outstanding options or warrants to purchase
our shares.
19
There are 5,208,000 shares of our common stock outstanding, all of
which are restricted securities. Of these outstanding shares, there are
5,000,000 shares held by affiliates. The remaining 208,000 shares of common
stock are held by non-affiliates. The restricted securities as defined under
Rule 144 of the Securities Act may only be sold under Rule 144 or otherwise
under an effective registration statement or an exemption from registration, if
available. Rule 144 generally provides that an affiliate, including directors,
officers and control shareholders, who has satisfied a one year holding period
for the restricted securities may sell, within any three month period subject to
certain manner of resale provisions, an amount of restricted securities which
does not exceed the greater of 1% of a company's outstanding common stock or the
average weekly trading volume in such securities during the four calendar weeks
prior to such sale. Sales under Rule 144 must also be made without violating the
manner-of-sale provisions, notice requirements, and the availability of public
information about us. A sale of shares by such security holders, whether under
Rule 144 or otherwise, may have a depressing effect upon the price of our common
stock in any market that might develop.
Penny Stock Considerations.
Broker-dealer practices in connection with transactions in penny stocks
are regulated by certain penny stock rules adopted by the Securities and
Exchange Commission. Penny stocks generally are equity securities with a price
of less than $5.00. Penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level
of trading activity in the secondary market for a stock that becomes subject to
the penny stock rules. Our shares may someday be subject to such penny stock
rules and our shareholders will, in all likelihood, find it difficult to sell
their securities.
No market exists for our securities and there is no assurance that a
regular trading market will develop, or if developed will be sustained. A
shareholder in all likelihood, therefore, will not be able to resell the
securities referred to herein should he or she desire to do so. Furthermore, it
is unlikely that a lending institution will accept our securities as pledged
collateral for loans unless a regular trading market develops. There are no
plans, proposals, arrangements or understandings with any person with regard to
the development of a trading market in any of our securities.
As of the date of this registration, we had thirty (30) holders of record of our
common stock. We currently have one class of common stock outstanding and no
preferred shares outstanding.
We have not paid any dividends since our inception. We have no restrictions that
limit our ability to pay dividends, but we do not anticipate paying dividends in
the near future.
20
ITEM 21. EXECUTIVE COMPENSATION
No executive compensation has been paid since our inception.
ITEM 22. FINANCIAL STATEMENTS
Statements included in this report that do not relate to present or
historical conditions are "forward-looking statements" within the meaning of the
Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995
(the "1995 Reform Act"). Additional oral or written forward-looking statements
may be made by the Company from time to time and such statements may be included
in documents other than this Report that are filed with the Commission. Such
forward-looking statements involve risks and uncertainties that could cause
results or outcomes to differ materially from those expressed in such
forward-looking statements. Forward-looking statements in this report and
elsewhere may include, without limitation, statements relating to our plans,
strategies, objectives, expectations, intentions and adequacy of resources and
are intended to be made pursuant to the Safe Harbor provisions of the 1995
Reform Act Introduction.
ITEM 23. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The accounting firm of James Scheilfley and Associates audited our
financial statements. Since inception, we have had no changes in or
disagreements with our accountants.
21
RTG VENTURES, INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
-----------------
PAGE
----
Balance Sheet (unaudited) as of August 31, 2002 F-2
Income Statements for the Three Months Ended
August 31, 2002 and 2001 (Unaudited) F-3
Statements of Cash Flows for the Three Months Ended
August 31, 2002 and 2001 F-4
Notes to Consolidated Financial Statements F-5
Independent Auditor's Report F-6
Balance Sheet as of May 31, 2002 F-7
Income Statements for the Years Ended May 31, 2002 and 2001 F-8
Statement of Changes in Stockholders' Equity
For the Years Ended May 31, 2002 and 2001 F-9
Statements of Cash Flows for the Years Ended May 31, 2002 and 2001 F-10
Notes to Financial Statements F-12
F-1
RTG VENTURES, INC.
Balance Sheet
(Unaudited)
ASSETS
------
August 31,
2002
----------
Current assets:
Cash $ 65
Notes receivableble 86,928
Refundable income taxes 2,257
--------
Total current assets 89,250
--------
Total assets $ 89,250
========
STOCKHOLDERS' EQUITY
--------------------
Current liabilities:
Accounts payable - trade $ 2,000
--------
Total current liabilities 2,000
Stockholders' equity:
Common stock, $.001 par value,
20,000,000 shares authorized, 5,208,000
shares issued and outstanding 5,208
Additional paid in capital 51,792
Unpaid stock subscriptions (4,000)
Retained earnings 34,250
--------
87,250
$ 89,250
See accompanying notes to financial statements.
F-2
RTG VENTURES, INC.
Income Statements
Three Months Ended August 31, 2002 and 2001
(Unaudited)
Three Months Ended
August 31, August 31,
2002 2001
----------- -----------
Commission income $ -- $ 31,848
OPERATING EXPENSES:
Brokerage and outside services -- 11,798
Freight -- 9,049
Professional fees 2,000 2,500
Payroll expenses -- --
Administrative expenses 114 4,082
----------- -----------
2,114 27,429
----------- -----------
Other income and (expense)
Interest income -- --
----------- -----------
Net income before income taxes (2,114) 4,419
Provision for income taxes -- 660
----------- -----------
Net income $ (2,114) $ 3,759
=========== ===========
PER SHARE INFORMATION:
BASIC AND DILUTED (LOSS) PER COMMON SHARE $ (0.00) $ 0.00
=========== ===========
Weighted average shares outstanding 5,208,000 5,208,000
=========== ===========
See accompanying notes to financial statements.
F-3
RTG VENTURES, INC.
Statements of Cash Flows
Three Months Ended August 31, 2002 and 2001
Three Months Ended
August 31, August 31,
2002 2001
--------- ---------
NET INCOME $ (2,114) $ 3,759
Adjustments to reconcile net income to net
cash provided by operating activities:
Expenses paid to reduce note balance 1,250 --
Change in assets and liabilities:
(Increase) in accounts receivable -- 4,368
(Increase) in vendor deposits and prepaid expenses -- 109,584
Increase in accounts payable 750 (11,897)
Increase in customer deposits -- (40,398)
Increase in accrued income taxes -- 660
--------- ---------
Total adjustments 2,000 62,317
--------- ---------
Net cash provided by (used in)
operating activities (114) 66,076
Cash provided by financing activities
Repayment of advances including related parties -- (342,773)
--------- ---------
Net cash provided by financing activities -- (342,773)
Increase (decrease) in cash (114) (276,697)
Cash and cash equivalents,
beginning of period 179 282,783
--------- ---------
Cash and cash equivalents,
end of period $ 65 $ 6,086
========= =========
See accompanying notes to financial statements.
F-4
RTG Ventures, Inc.
Notes to Consolidated Financial Statements
August 31, 2002
Basis of presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions incorporated in Regulation 10-SB of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments and accruals) considered necessary for a fair
presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's financial
statements for the year ended May 31, 2002, included elsewhere herein.
Basic loss per share was computed using the weighted average number of common
shares outstanding.
During the three months ended August 31, 2002, the Company's note receivable
balance was reduced by $1,250 resulting from payment of Company related
professional fees by a maker of the note.
F-5
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
RTG Ventures, Inc.
We have audited the balance sheet RTG Ventures, Inc. as of May 31, 2002 and the
related statements of income, changes in stockholders' equity, and cash flows
for each of the two years then. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position RTG Ventures, Inc. as of May 31,
2002 and the results of its operations and cash flows for each of the two years
then ended, in conformity with generally accepted accounting principles.
James E. Scheifley
Certified Public Accountant
Dillon, Colorado
August 30, 2002
F-6
Rtg Ventures, Inc.
Balance Sheet
ASSETS
------
May 31,
2002
--------
Current assets:
Cash $ 179
Notes receivableble 88,178
Refundable income taxes 2,257
--------
Total current assets 90,614
--------
Total assets $ 90,614
========
STOCKHOLDERS' EQUITY
--------------------
Current liabilities:
Accounts payable - trade $ 1,250
--------
Total current liabilities 1,250
Stockholders' equity:
Common stock, $.001 par value,
20,000,000 shares authorized, 5,208,000
shares issued and outstanding 5,208
Additional paid in capital 51,792
Unpaid stock subscriptions (4,000)
Retained earnings 36,364
--------
89,364
--------
$ 90,614
========
See accompanying notes to financial statements.
F-7
Rtg Ventures, Inc.
Income Statements
Years Ended May 31, 2002 and 2001
Years Ended
May 31, May 31,
2002 2001
---------- ----------
Commission income $ 19,953 $ 134,293
Operating expenses:
Brokerage and outside services 377 37,719
Freight 10,707 9,049
Professional fees 3,750 18,753
Payroll expenses -- 6,137
Administrative expenses 2,048 18,306
---------- ----------
16,882 89,964
---------- ----------
Other income and (expense)
Interest income -- 382
---------- ----------
Net income before income taxes 3,071 44,711
Provision for income taxes 461 5,957
---------- ----------
Net income $ 2,610 $ 38,754
========== ==========
Per share information:
Basic and diluted (loss) per common share $ 0.00 $ 0.01
========== ==========
Weighted average shares outstanding 5,208,000 5,084,667
========== ==========
See accompanying notes to financial statements.
F-8
Rtg Ventures, Inc.
Statement of Changes in Stockholders' Equity
for the Years Ended May 31, 2002 and 2001
Additional Unpaid
Common Stock Paid-in Stock Retained
Activity Shares Amount Capital Subscriptions Earnings Total
-------- ------ ------ ------- ------------- -------- -----
Balance May 31, 2000 5,000,000 $ 5,000 $ -- $ -- $ (5,000) $ --
Shares sold for cash 208,000 208 51,792 (4,000) 48,000
Net income for the year
ended May 31, 2001 -- -- -- -- 38,754 38,754
--------- ---------- ---------- ---------- ---------- ---------
Balance, May 31, 2001 5,208,000 5,208 51,792 (4,000) 33,754 86,754
Net income for the year
ended May 31, 2002 -- -- -- -- 2,610 2,610
--------- ---------- ---------- ---------- ---------- ---------
Balance, May 31, 2002 5,208,000 $ 5,208 $ 51,792 $ (4,000) $ 36,364 $ 89,364
========= ========== ========== =========== ========== ==========
See accompanying notes to financial statements.
F-9
RTG VENTURES, INC.
Statements of Cash Flows
Years Ended May 31, 2002 and 2001 and
Years Ended
May 31, May 31,
2002 2001
--------- ---------
NET INCOME $ 2,610 $ 38,754
Adjustments to reconcile net income to net
cash provided by operating activities:
Expenses paid by related party -- (20,007)
Change in assets and liabilities:
(Increase) in accounts receivable 4,368 (4,368)
(Increase) in vendor deposits and prepaid expenses 107,327 (109,584)
Increase in accounts payable (13,147) 14,397
Increase in customer deposits (40,398) 40,398
Increase in accrued income taxes (5,957) 5,957
--------- ---------
Total adjustments 52,193 (73,207)
--------- ---------
Net cash provided by (used in)
operating activities 54,803 (34,453)
Cash provided by financing activities
Advances from related parties 6,097 969,236
Repayment of advances including related parties (343,504) (700,000)
Sale of common stock for cash -- 48,000
--------- ---------
Net cash provided by financing activities (337,407) 317,236
Increase (decrease) in cash (282,604) 282,783
Cash and cash equivalents,
beginning of period 282,783 --
--------- ---------
Cash and cash equivalents,
end of period $ 179 $ 282,783
========= =========
See accompanying notes to financial statements.
F-10
RTG VENTURES, INC.
Statements of Cash Flows
Years Ended May 31, 2002 and 2001 and
Years Ended
May 31, May 31,
2002 2001
------- -------
Supplemental cash flow information:
Cash paid for interest $ -- $ --
Cash paid for income taxes $ 8,675 $ --
See accompanying notes to financial statements.
F-11
RTG Ventures, Inc.
Notes to Financial Statements
May 31, 2002
Note 1. Organization and Summary of Significant Accounting Policies.
------------------------------------------------------------
The Company was incorporated in Florida on September 29, 1998. During the year
ended May 31, 2002 and 2001, the Company was engaged in the food brokerage
business. The Company has acted as an intermediary in the procurement and
financing of imported seafood items distributed in the United States. The
Company has chosen May 31st as the end of its fiscal year.
Revenue recognition:
The Company records revenue when goods are shipped. Although the Company
participates in the procurement, financing and administrative functions
(including collection of accounts receivable) associated with product
distribution, it does not believe that it is a primary participant in sale
transactions since it does not take delivery of nor title to the products and
does not provide insurance for the products at any time during the delivery
cycle. Therefore, revenues reported in the accompanying income statement are
presented net of related product costs.
Earnings per share:
Basic Earnings per Share ("EPS") is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common stock
shares outstanding during the year plus potential dilutive instruments such as
stock options and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company's common stock at the average market price during
the period. Income per share is unchanged on a diluted basis since the Company
has no potentially dilutive securities outstanding.
Vendor Deposits:
Vendor deposits consist of advance payments to seafood vendors for the purchase
of seafood items. The deposits are charged to cost of sales when the items are
shipped to purchasers. As of May 31, 2002, all vendor deposits had been applied
and the Company's did not have orders pending that would require additional
deposits.
F-11
Estimates:
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates
The Company does not hold or issue financial instruments for trading purposes
nor does it hold or issue interest rate or leveraged derivative financial
instruments
Stock-based Compensation
The Company adopted Statement of Financial Accounting Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning at its inception. Upon
adoption of FAS 123, the Company continued to measure compensation expense for
its stock-based employee compensation plans using the intrinsic value method
prescribed by APB No. 25, Accounting for Stock Issued to Employees. The Company
did not pay any stock based compensation during any period presented.
Effect of Acounting Pronouncements
In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business Combinations ("SFAS 141), which is required to be adopted for business
combinations initiated after June 30, 2001. SFAS 141 prohibits the use of the
pooling of interest method of accounting.
Management believes that the adoption of SFAS No. 141 has had no impact on the
Company for the year ended May 31, 2002.
In June 2001, the Financial Accounting Standards Board issued SFAS No. 142,
Goodwill and Other Intangible Assets ("SFAS 142), which is required to be
adopted for fiscal years beginning after December 15, 2001. The Company plans to
adopt SFAS 142 during the first quarter of its 2002 fiscal year. SFAS 142
establishes accounting rules for recording goodwill and other intangible assets.
It prohibits the amortization of goodwill and intangible assets that have an
indefinite useful life. Such assets are required to be tested for impairment on
an annual basis. Company plans to follow the requirements of SFAS 142 to account
for any merger that it may enter into.
Management believes that the adoption of SFAS No. 142 has had no impact on the
Company for the year ended May 31, 2002.
F-12
Note 2. Stockholders' Equity.
On September 29, 1998 the Company issued 5,000,000 shares of its common stock to
its founders in exchange for services valued at $5,000. During September 2000
through March 2001, the Company sold an aggregate of 208,000 shares of its
common stock for cash at $.25 per share. At May 31, 2002, payment for 16,000 of
the issued shares had not been received.
Note 3. Related Party Transactions.
The Company neither owns nor leases any real or personal property. An affiliated
company provides office services, including rent. The fair value of such
services has been estimated to be $39,338 for the year ended May 31, 2001.
During the year ended May 31, 2001, the Company made cash payments to or in
behalf of the related party amounting to $59,346. Additionally, the Company
received cash advances from related parties aggregating $969,236 and made
$700,000 of repayments against the advances. The net balance due by the Company
to related parties at May 31, 2001, including the estimated amount for
administrative services, amounted to $249,229. During the year ended May 31,
2002, the Company repaid the full amount of the advances due to related parties
and made additional advances to a then related party amounting to $94,275. The
Company received repayment of $6,097 of the additional advances and had a
balance due from the entity of $88,178 at May 31, 2002. Subsequent to May 31,
2002 the advance balance was converted to a note receivable and the relationship
between the entity and the Company, aside from the note, has ceased to exist as
of January 1, 2002. The note bears interest at 8% per year and is due on March
15, 2003.
The officers and directors of the Company are involved in other business
activities and may become involved in other business activities in the future.
Such business activities may conflict with the activities of the Company. The
Company has not formulated a policy for the resolution of any such conflicts
that may arise.
Note 4. Income Taxes
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or non-current,
depending on the classifications of the assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that are not related
to an asset or liability are classified as current or non-current depending on
the periods in which the temporary differences are expected to reverse. The
Company had no significant deferred tax items arise during the period presented.
F-13
The amount shown for income taxes in the income statement differs from the
amount computed at federal statutory rates. The following is a reconciliation of
the difference. At May 31, 2000, the Company has an operating loss carryforward
of $5,000 which was fully utilized in 2001.
2002 2001
Tax at federal statutory rates 34% 34%
Surtax exemption (19) (17)
Use of NOL carryforward - ( 4)
---- ----
15% 13%
==== ====
The Company filed its federal and state income tax returns on a calendar year
basis as December 31, 2001 and 2000. The returns reported aggregate taxes due of
$8,675 for the two-year period and the Company made payments totaling this
amount during the year ended May 31, 2002.
The Company's income taxes accrued for the years ended May 31, 2002 and 2001
aggregate $6,418 for financial statement purposes. The difference between the
tax payments and the taxes accrued through May 31, 2002 amounted to $2,257,
which is characterized as refundable income taxes in the accompanying balance
sheet.
Note 5. Concentration of Credit Risk/Major Customers
During the year ended May 31, 2001 the Company made sales to major customers and
had open trade receivables from them as follows:
Percent of Account
Gross Sales Receivable
Caro Produce, Inc. 23% $ --
Performance Food Group 40% $ --
Rogers Poultry 13% $ --
Thomas Howard & Newberry 16% $ --
During the year ended May 31, 2002 the Company made sales to major customers and
had open trade receivables from them as follows:
Percent of Account
Gross Sales Receivable
Caro Produce, Inc. 65% $ --
R&E, Inc. 32% $ --
Approximately 90% of the sales of crawfish are to purveyors who then supply
various Popeye's seafood restaurants. The loss of Popeye's as a customer would
have a material negative affect upon our business.
F-14
PART II
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation provide that, to the fullest extent
permitted by law, none of our directors or officers shall be personally liable
to us or our shareholders for damages for breach of any duty owed to our
shareholders or us. Florida law provides that a director shall have no personal
liability for any statement, vote, decision or failure to act, regarding
corporate management or policy by a director, unless the director breached or
failed to perform the duties of a director. A company may also protect its
officers and directors from expenses associated with litigation arising from or
related to their duties, except for violations of criminal law, transactions
involving improper benefit or willful misconduct. In addition, we shall have the
power, by our by-laws or in any resolution of our stockholders or directors, to
undertake to indemnify the officers and directors of ours against any
contingency or peril as may be determined to be in our best interest and in
conjunction therewith, to procure, at our expense, policies of insurance. At
this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of any of our controlling
persons, directors or officers that would affect his or her liability in that
capacity.
II-1
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table is an itemization of all expenses (subject to
future contingencies) which we have incurred or we expect to incur in connection
with the issuance and distribution of the securities being offered hereby. Items
marked with an asterisk (*) represent estimated expenses. We have agreed to pay
all the costs and expenses of this offering. The Selling Security Holders will
pay no offering expenses.
ITEM EXPENSE
SEC Registration Fee $ 100
Legal Fees and Expenses $10,000
Accounting Fees and Expenses $ 2,500
-------
Total* $12,600
=======
* Estimated Figure
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
From our inception through December 31, 2001, we issued 5,208,000
shares of our common stock pursuant to an exemption from registration provided
in Rule 506 of Regulation D of the Securities and Exchange Act of 1933, as
amended. We believed that Rule 506 of Regulation D was available because we only
sold to accredited investors, no general solicitation or advertising was used to
offer our securities, and all securities were issued with restrictive legend. In
addition, we filed a Form D with the Securities and Exchange Commission. Of
these shares, we issued 5,000,000 share of our common stock to our founders.
Joseph Camillo and Pamela Wilkinson. We then issued 208,000 shares of our common
stock at a price of $.25 per share or aggregate cash proceeds of $52,000.
ITEM 27. EXHIBITS
Exhibit Number Exhibit Description
3.1 Articles of Incorporation*
3.2 Bylaws*
4 Instrument Defining the Right of Holders
Share Certificate*
5 Legal Opinion*
23 Consents of Experts
*Previously filed.
II-1
ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
a. Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
b. Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement;
c. Include any additional or changed material information on
the plan of distribution.
2. That, for determining liability under the Securities Act, to treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
3. To file a post-effective amendment to remove from registration any
of the securities that Remain unsold at the end of the offering.
4. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
5. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred and
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereby, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-2
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing of Form SB-2 and authorized this registration
statement to be singed on its behalf by the undersigned, in the City of St.
Petersburg, State of Florida on October 21, 2002.
/s/ Joseph Camillo
-----------------------------
By: Joseph Camillo, President
Date: October 21, 2002
In accordance with the requirements of the Securities act of 1933, this
registration statement was signed by the following persons in the capacities and
on the date stated.
SIGNATURE TITLE DATE
- --------- ----- ----
/S/ JOSEPH CAMILLO
- ------------------ President/Director 10/21/02
Joseph Camillo
/S/ PAMELA WILKINSON
- -------------------- Secretary/ Director 10/21/02
Pamela Wilkinson
II-3