SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
GEEWHIZ, INC.
(Name of Small Business Issuer in its Charter)
NEVADA 47-0881524
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12503 EXCHANGE BOULEVARD
SUITE 554
STAFFORD, TEXAS 77477
(Address of principal executive offices) (Zip Code)
ISSUER'S TELEPHONE NUMBER: (281) 242-4744
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE REGISTERED EACH CLASS IS TO BE REGISTERED
None None
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $0.001
(Title of class)
GEEWHIZ, INC.
TABLE OF CONTENTS
FORM 10-SB
PART I
Item 1. Description of Business 1
Item 2. Management Discussion and Analysis 3
Item 3. Description of Property 6
Item 4. Security Ownership of Certain Beneficial Owners
and Management 6
Item 5. Directors, Executive Officers, Promoters and Control Persons 6
Item 6. Executive Compensation 7
Item 7. Certain Relationships and Related Transactions 8
Item 8. Description of Securities 8
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters 10
Item 2. Legal Proceedings 10
Item 3. Changes in and Disagreements with Accountants 10
Item 4. Recent Sales of Unregistered Securities 10
Item 5. Indemnification of Directors and Officers 10
PART III
Item 1. Index to Exhibits 12
Item 2. Description of Exhibits 12
PART I
This Registration Statement on Form 10-SB includes forward-looking
statements within the meaning of the Securities Exchange Act of 1934 (the
"Exchange Act"). These statements are based on management's beliefs and
assumptions, and on information currently available to management.
Forward-looking statements include the information concerning possible or
assumed future results of operations of the Company set forth under the heading
"Management Discussion and Analysis." Forward-looking statements also include
statements in which words such as "expect," "anticipate," "intend," "plan,"
"believe," "estimate," "consider" or similar expressions are used.
Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions. The Company's future results and
shareholder values may differ materially from those expressed in these
forward-looking statements. Readers are cautioned not to put undue reliance on
any forward-looking statements.
ITEM 1. DESCRIPTION OF BUSINESS
We are a Nevada corporation, originally incorporated as IVG Product
Technologies, Inc., a Nevada corporation, on July 24, 2002 as a wholly-owned
subsidiary of Group Management Corp. On August 9, 2002, we merged with another
wholly-owned subsidiary of Group Management Corp., a Texas corporation also with
the name IVG Product Technologies, Inc. The purpose of the merger was to
reincorporate the Texas corporation in the State of Nevada. Following that
merger, our name was changed to GeeWhiz, Inc.
Group Management Corp. has been operating our business, either as one of
their divisions or as one of their subsidiaries, since 1999.
Our parent corporation, Group Management Corp., intends to spin-off our
corporation following the effectiveness of this Form 10-SB registration
statement and the completion of certain other corporate actions required to
effect the spin-off. Group Management Corp. shareholders of record as of June
30, 2002 will receive one share of our common stock for every two shares of
common stock of Group Management Corp. held by them as of the record date.
Principal Products and Markets
---------------------------------
We design, manufacture, and distribute a limited line of acrylic drinking
glasses and plaques with colored light transmitted through the acrylic that
illuminates an image in the product and creates a "halo" effect when the light
exists. Our products are marketed as gifts and promotional or give-away items
for companies, trade associations, clubs, sports teams, etc.
Our drinking glasses are marketed as Starglas(TM). We currently offer
three sizes, an 18 ounce mug, a 16 ounce tumbler, and a 9 ounce tumbler. The
glasses are each attached to a removable base, which contains the electronic
parts for the light, and we currently offer five different colors, black, red,
silver, blue, and green. The color of the light transmitted through the glass
corresponds with the color of the base. Customers may choose from a small
selection of existing graphics, or may submit artwork and we will put any logo
or graphic on the glasses for their promotional use.
Our illuminated plaques are marketed as LightArt. We currently offer four
different shapes and the same five color choices for the base. Customers may
choose from a small selection of existing graphics, or may submit artwork and we
will put any logo or graphic on the glasses for their promotional or personal
use.
1
Our products are sold to a diverse group of customers, and thus we don't
rely upon any single customer for a material amount of our business.
Distribution
------------
Our products are distributed primarily through our Internet web site at
www.geewhizusa.com and through distributors. Sales from our website constitute
approximately 20% of our total sales, with the balance sold through
distributors. We do not currently market our website through any media sources.
We are in the process of developing a distributorship program to recruit
and contract with third-parties to be distributors of our products. Currently,
we have eight distributors.
The majority of our orders are shipped via UPS or other third-party
delivery service from our facility in Texas directly to the customer.
Competition
-----------
There are no direct competitors who manufacture or distribute identical
lighted acrylic products. However, we compete with all manufacturers and
suppliers of promotional products, which includes not only drinking glasses and
plaques, but also writing pens, t-shirts, pins, hats, stationary, etc.
Competition in the area of promotional products is extremely intense, and we do
not have any measurable competitive position within the industry.
Sources and Availability of Raw Materials
----------------------------------------------
The electronic base for both our Starglas and LightArt are manufactured in
China and shipped to our facility in Texas. The raw materials used in
manufacturing the bases are readily available from numerous suppliers at uniform
prices, and we do not know of any events that would limit the sources or
availability of raw materials used in manufacturing the bases.
The acrylic used in manufacturing the Starglas and LightArt products is
also readily available from numerous suppliers at uniform prices, and again we
do not know of any events that would limit the sources or availability of raw
materials used in manufacturing the products. The acrylic is received in our
Texas facility in bulk, where we cut it into the desired shape and etch the
desired graphics using our own tools and machinery.
Intellectual Property
----------------------
Our parent company, Group Management Corp., holds a license from its
President and Director, Elorian Landers, for U.S. Patent Numbers 5,211,699 and
5,575,553 on proprietary fiber optic illuminated drinking containers, as well as
registered trademarks on Starglas (Reg. No. 2,216,216) and Fyrglas (Reg. No.
1,995,482). The license gives Group Management the right to use the patents
without cost. In addition, Fyrglas is also a registered trademark in Canada.
Mr. Landers also has, and Group Management Corp. has the rights to a patent
pending with the United States Patent and Trademark Office (Application No.
09/842,701) for LightArt. All intellectual property related to Starglas and
LightArt for which Group Management Corp. has an interest is provided to us
through a verbal agreement for its use.
2
Government Approvals and Regulation
--------------------------------------
Other than customary labor laws and local ordinances regarding sales of
products in public, we are not subject to any government regulation. Further,
we are not subject to any environmental laws or regulations.
Research and Development
--------------------------
We spent approximately $300,000 from October 1996 through September 1997 to
develop the Starglas. We spent approximately $75,000 to develop LightArt, an
amount considerably less than our Starglas development costs because much of the
same technology was utilized. Other than as set forth herein, we have not spent
any material amount of time or money on research and development, and do not
anticipate doing so in the future.
Employees
---------
We currently employee three employees, other than our officers and
directors. Our officers and two of our directors are employed by our parent
company, Group Management Corp., and are not separately compensated by us. We
intend to add additional warehouse employees and full-time executives in
distribution as sales of our products begin to increase. We believe our
relationship with our employees is good. None of our employees are a party to a
collective bargaining agreement.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
QUALIFIED REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Our independent accountant has qualified his report. He states that the
audited financial statements of GeeWhiz.com, Inc. for the years ended December
31, 2001 and 2000 have been prepared assuming the company will continue as a
going concern. He notes that our lack of established sources of revenue raises
substantial doubt about our ability to continue in business.
CRITICAL ACCOUNTING ISSUES
Our financial statements and accompanying notes are prepared in accordance
with generally accepted accounting principles in the United States. Preparing
financial statements requires our management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue, and expenses.
These estimates and assumptions are affected by our management's applications of
accounting policies. The critical accounting policies for us are establishing
an allowance for doubtful receivables, valuation of inventory at the lower of
cost or market and determining the estimated useful lives of property and
equipment and intangible assets for depreciation and amortization calculations.
YEARS ENDED DECEMBER 31, 2001 AND 2000
Results of Operations
We had significant losses of $250,331 for the year ended December 31, 2001,
and $396,604 for the year ended December 31, 2000. We have funded losses
through loans from our parent company, Group Management Corp., and other
borrowing. We expect losses to continue. To the extent losses continue and we
are unable to fund them, we may have to sell common stock, curtail aspects of
our operations, or cease operations altogether.
3
We intend to pursue our business plan and meet our reporting requirements
utilizing cash made available from loans from our parent company, Group
Management Corp, the private sale of our securities, as well as income from the
distribution of our products. Our management is aggressively pursuing
relationships and markets for the distribution of our products and is of the
opinion that loans from our parent company and cash flow from the sales of our
securities will be sufficient to pay our expenses until our business operations
create positive cash flow. We do not currently have sufficient capital to
continue operations for the next twelve months and will have to raise additional
capital to meet our business objectives as well as our 1934 Act reporting
requirements.
On a long-term basis, our liquidity is dependent on revenue generation,
additional infusions of capital and potential debt financing. Our management
believes that additional capital and debt financing in the short term will allow
us to pursue our business plan and thereafter result in revenue and greater
liquidity in the long term. However, we currently have no arrangements for such
financing and there can be no assurance that we will be able to obtain the
needed additional equity or debt financing in the future.
Revenues
Our total revenue for the year ended December 31, 2001 was $574,826, all of
which was from the sale of our Starglas and LightArt products. Our cost of
goods sold was $356,071 (62% of revenue), resulting in a gross profit of
$218,755. Total revenue for the year ended December 31, 2000 was $396,300, all
of which was from the sale of our Starglas and LightArt products. Our cost of
goods sold for the year ended December 31, 2000 was $298,742 (75% of revenue),
resulting in a gross profit of $97,558.
Expenses
Our total expenses for the year ended December 31, 2001 was $469,086,
consisting of selling, general and administrative expenses of $412,788 (88% of
total expenses), depreciation and amortization expense of $53,310 (11% of total
expenses), and interest expense of $2,988 (less than 1% of total expenses). Of
the $412,788 of selling, general, and administrative expenses, $145,071 was
salaries and contract labor, $86,076 was rent, and $24,095 was utilities.
For the year ended December 31, 2000, total expenses were $502,162,
consisting of selling, general, and administrative expenses of $470,984 (94% of
total expenses), depreciation and amortization expense of $28,271 (6% of total
expenses), and interest expense of $2,907 (less than 1% of total expenses). Of
the $470,984 of selling, general, and administrative expenses, $144,055 was
salaries and contract labor, $55,427 was rent, $35,213 was trade show expenses,
$34,255 was travel, $28,631 was royalty fees, $27,856 was utilities, $25,288 was
consulting fees, and $18,553 was marketing.
The decrease in total expenses for the year ended December 31, 2001 as
compared to the year ended December 31, 2000 was a result of increased operating
efficiencies and slightly more advantageous economies of scale as we increased
revenues.
Net Losses
Net losses for the year ended December 31, 2001 were $250,331, as compared
to $396,604 for the previous year. As described in expenses above, the decrease
in the net loss is a result of an increase in revenues and a decrease in total
expenses.
4
Liquidity and Capital Resources
We had cash of $2,580, accounts receivable net of $6,545, and inventories
of $89,186, for total current assets of $98,311 as of December 31, 2001. This
compares to cash of $12,258, accounts receivable net of $27,034, and inventories
of $77,939, for total current assets of $117,231 as of December 31, 2000. The
cash was received primarily from loans from our parent corporation, and from
sales of our products, and the inventory is primarily pre-manufactured bases for
our Starglas and LightArt products. We had equipment of $109,069, office
furniture and fixtures of $31,301, automobiles of $41,857, and accumulated
depreciation of ($123,956) for total assets of $429,444 as of December 31, 2001.
We had equipment of $108,556, office furniture and fixtures of $31,431, and
accumulated depreciation of ($95,446) for total assets of $423,434 as of
December 31, 2000. Our total assets remained relatively unchanged from December
31, 2000 to December 31, 2001.
THREE AND SIX MONTHS ENDED JUNE 30, 2002
Revenues
Our total revenue for the six months ended June 30, 2002 was $120,763, as
compared to $427,595 for the six months ended June 30, 2001. This decrease in
revenues is a result of our decreased marketing of our Starglas and LightArt
products, and our management's focus on the operations of our parent company,
Group Management Corp. Revenue for the three months ended June 30, 2002 was
$76,421 as compared to $246,096 for the three months ended June 30, 2001,
decreasing for the same reasons as discussed above. Our cost of goods sold for
the six months ended June 30, 2002 was $81,587 (68% of revenue), as compared to
$336,706 for the six months ended June 30, 2001 (79% of revenue). Our cost of
goods sold for the three months ended June 30, 2002 was $34,398 (45% of revenue)
as compared to $215,793 for the three months ended June 30, 2001 (88% of
revenue). The changes in our cost of goods sold as a percentage of revenue are
due primarily to a different product mix being sold in the two quarters.
Expenses
Our total expenses for the six months ended June 30, 2002 were $259,988, as
compared to $570,631 for the six months ended June 30, 2001. This decrease is
due to the decrease in revenues discussed above. Total expenses for the three
months ended June 30, 2002 were $95,683 as compared to $324,338 for the three
months ended June 30, 2001.
Net Losses
Net losses were $139,225 for the six months ended June 30, 2002, as
compared to $143,036 for the six months ended June 30, 2001. This slight
decrease in net loss reflects the expenses associated with operating our
business net of our cost of goods sold.
Net losses were $19,262 for the three months ended June 30, 2002, as
compared to $78,242 for the three months ended June 30, 2001, a decrease
reflecting our decrease in selling, general and administrative expenses.
Liquidity and Capital Resources
We had cash and cash equivalents of $21,362, accounts receivable net of
$4,001, and inventories of $60,635, for total current assets of $85,998 as of
June 30, 2002. The cash was received primarily from loans from our parent
corporation, and from sales of our products, and the inventory is primarily
pre-manufactured bases for our Starglas and LightArt products. Our only
material commitments are operating leases and expenses.
5
ITEM 3. DESCRIPTION OF PROPERTY
We lease approximately 2,000 square feet of office space, and approximately
5,000 square feet of warehouse space, both at 12503 Exchange Boulevard, Suite
554, Stafford, Texas 77477. Our minimum monthly payment is $4,719 on a lease
that expires November 2005.
We believe that our existing office and warehouse space are sufficient to
meet our needs for the foreseeable future. In the event we need additional
office or warehouse space, we anticipate being able to obtain it at market rates
as necessary.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 15, 2002, certain
information with respect to the Company's equity securities owned of record or
beneficially by (i) the Officers and Directors of the Company; (ii) each person
who owns beneficially more than 5% of each class of the Company's outstanding
equity securities; and (iii) all Directors and Executive Officers as a group.
Name and Address of Amount and Nature of Percent of
---------------------- ----------------------- -----------
Title of Class Beneficial Owner Beneficial Ownership Class (1)
--------------- ---------------- -------------------- -----
Common Group Management Corp. 1,000 (2) 100%
Stock 12503 Exchange Boulevard
Suite 554
Stafford, TX 77477
All officers and directors
as a group (3 persons) -0- -0-%
--- ----
(1) Based on 1,000 shares outstanding as of September 15, 2002.
(2) Our parent corporation, Group Management Corp., intends to spin-off
our corporation following the effectiveness of this Form 10-SB
registration statement and the completion of certain other corporation
actions required to effect the spin-off. Group Management Corp.
shareholders of record as of June 30, 2002 will receive one share of
our common stock for every two shares of common stock of Group
Management Corp. held by them as of the record date. At the time of
the spin-off, the 1,000 shares of our common stock held by Group
Management Corp. will be cancelled.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the name and age of the current directors
and executive officers of the Company, the principal office and position with
the Company held by each and the date each became a director or executive
officer of the Company. The executive officers of the Company are elected
annually by the Board of Directors. The directors serve one-year terms until
their successors are elected. The executive officers serve terms of one year or
until their death, resignation or removal by the Board of Directors. Unless
described below, there are no family relationships among any of the directors
and officers.
6
Name . . . . . . . Age Position(s)
------------------ --- --------------------------------------------------
Elorian Landers. . 54 President and Director
Richard Twardowski 42 Secretary, Treasurer, VP Operations, and Director
John E. Weaver . . 56 Director
ELORIAN LANDERS has served as our President and a Director since 1998. He
has been the Chief Executive Officer and a Director of our parent corporation,
Group Management Corp., since December 1999. Mr. Landers holds a B.A. in
Advertising from Art Center College in Pasadena, California. He also attended
Texas A&M University, where he studied architecture.
RICHARD TWARDOWSKI has served as our Secretary, Treasurer, VP Operations,
and as a Director since 2002. He has served as a consultant to our parent
corporation, Group Management Corp., since 1999. Prior to joining Group
Management, Mr. Twardowski was a founder of a regional construction company.
JOHN E. WEAVER joined our Board of Directors in 2002. Mr. Weaver is
currently, and has served since 1992 as, the President of John Weaver Design,
Inc., a graphic communications firm in Houston, Texas.
ITEM 6. EXECUTIVE COMPENSATION
Executive Officers and Directors
-----------------------------------
Our executive officers and directors are employed by our parent company,
Group Management Corp. None of our executive officers or directors receives any
compensation from us.
Summary Compensation Table
----------------------------
The Summary Compensation Table shows certain compensation information for
services rendered in all capacities for the fiscal years ended December 31, 2000
and 2001. Other than as set forth herein, no executive officer's salary and
bonus exceeded $100,000 in any of the applicable years. The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.
Annual Compensation Long Term Compensation
-------------------------------- ------------------------------------
Awards Payouts
--------------------------------------
OTHER ANNUAL RESTRICTED SECURITIES LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION STOCK UNDERLYING Payouts COMPENSATION
POSITION YEAR ($) ($) ($) AWARDS($) OPTIONS SARS(#) ($) ($)
Elorian Landers 2000 -0- -0- -0- -0- -0- -0- -0-
2001 -0- -0- -0- -0- -0- -0- -0-
Richard Twardowski 2000 -0- -0- -0- -0- -0- -0- -0-
2001 -0- -0- -0- -0- -0- -0- -0-
John E. Weaver 2000 -0- -0- -0- -0- -0- -0- -0-
2001 -0- -0- -0- -0- -0- -0- -0-
7
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
NUMBER OF SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/SARS GRANTED EXERCISE OR
OPTIONS/SARS GRANTED TO EMPLOYEES IN FISCAL BASE PRICE
NAME (#) YEAR ($/SH) EXPIRATION DATE
Elorian Landers -0- N/A N/A N/A
Richard Twardowski -0- N/A N/A N/A
John E. Weaver -0- N/A N/A N/A
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SECURITIES UNDERLYING MONEY OPTION/SARs
SHARES ACQUIRED ON OPTIONS/SARS AT FY-END(#) AT FY-END ($)
NAME EXERCISE(#) VALUE REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
Elorian Landers -0- N/A N/A N/A
Richard Twardowski -0- N/A N/A N/A
John E. Weaver -0- N/A N/A N/A
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 25, 2002, we issued 1,000 shares of our common stock to our parent
corporation, Group Management Corp., for cash consideration equal to $1,500.
Our parent corporation, Group Management Corp., intends to spin-off our
corporation following the effectiveness of this Form 10-SB registration
statement and the completion of certain other corporate actions required to
effect the spin-off. Group Management Corp. shareholders of record as of June
30, 2002 will receive one share of our common stock for every two shares of
common stock of Group Management Corp. held by them as of the record date.
ITEM 8. DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 100,000,000 shares of common
stock, par value $0.001, and 5,000,000 shares of preferred stock, par value
$0.001. As of September 15, 2002, there are 1,000 shares of our common stock
issued and outstanding, and no shares of preferred stock issued or outstanding.
COMMON STOCK. Each shareholder of our common stock is entitled to a pro
rata share of cash distributions made to shareholders, including dividend
payments. The holders of our common stock are entitled to one vote for each
share of record on all matters to be voted on by shareholders. There is no
cumulative voting with respect to the election of our directors or any other
matter. Therefore, the holders of more than 50% of the shares voted for the
election of those directors can elect all of the directors. The holders of our
common stock are entitled to receive dividends when and if declared by our Board
of Directors from funds legally available therefore. Cash dividends are at the
sole discretion of our Board of Directors. In the event of our liquidation,
dissolution or winding up, the holders of common stock are entitled to share
ratably in all assets remaining available for distribution to them after payment
of our liabilities and after provision has been made for each class of stock, if
any, having any preference in relation to our common stock. Holders of shares
of our common stock have no conversion, preemptive or other subscription rights,
and there are no redemption provisions applicable to our common stock.
8
DIVIDEND POLICY. We have never declared or paid a cash dividend on our
capital stock. We do not expect to pay cash dividends on our common stock in
the foreseeable future. We currently intend to retain our earnings, if any, for
use in our business. Any dividends declared in the future will be at the
discretion of our Board of Directors and subject to any restrictions that may be
imposed by our lenders.
PREFERRED STOCK. We are authorized to issue 5,000,000 shares of preferred
stock, par value $0.001, of which no such shares are issued and outstanding. We
have not designated the rights and preferences of our preferred stock. The
availability or issuance of these shares could delay, defer, discourage or
prevent a change in control.
TRANSFER AGENT. The transfer agent for our common stock is Computershare
Trust, 12039 W. Alameda Pkwy., Suite Z-2, Denver, CO 80228, telephone number
(303) 986-5400.
9
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
Our securities are not listed for trading on any exchange or quotation
service. We are not required to comply with the timely disclosure policies of
any exchange or quotation service. The requirements to which we would be
subject if our securities were so listed typically included the timely
disclosure of a material change or fact with respect to our affairs and the
making of required filings. Although we are not required to deliver an annual
report to security holders, we intend to provide an annual report to our
security holders, which will include audited financial statements.
There are no outstanding options or warrants to purchase, or securities
convertible into, shares of our common stock. None of our outstanding common
stock can be sold pursuant to Rule 144 under the Securities Act. The number of
holders of record of shares of our common stock is one (1).
There have been no cash dividends declared on our common stock. Dividends
are declared at the sole discretion of our Board of Directors.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. The Commission has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to a few exceptions
which we do not meet. Unless an exception is available, the regulations require
the delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated therewith.
ITEM 2. LEGAL PROCEEDINGS
We are not a party to or otherwise involved in any legal proceedings. Our
parent corporation, Group Management Corp., is a party to several lawsuits that
may have a material adverse effect on their operations and ability to continue
as a going concern. A full description of those lawsuits can be found in the
Group Management Corp. Annual Report on Form 10-KSB filed with the Securities
and Exchange Commission on May 2, 2002.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no disagreements with our accountants required to be
disclosed pursuant to Item 304 of Regulation S-B.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On July 25, 2002, we issued 1,000 shares of our common stock to our parent
corporation, Group Management Corp., for cash consideration equal to $1,500.
The issuance was exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, and the investor was accredited. The shares were
restricted in accordance with Rule 144.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Seven of our Articles of Incorporation provides that officers and
directors shall have no personal liability to the corporation or its
stockholders for damages for breach of fiduciary duty as an officer or director.
This provision does not eliminate or limit the liability of an officer or
director for acts or omissions that involve intentional misconduct, fraud, or a
knowing violation of law or the payment of distributions in violation of Nevada
Revised Statute section 78.300.
10
Our bylaws do not further address indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
PART F/S
The following financial statements are provided herein:
INDEX TO FINANCIAL STATEMENTS
GEEWHIZ, INC.
Annual Audited Financial Statements
--------------------------------------
Report of Wrinkle , Gardner & Company, P.C. F-3
Balance Sheets as of December 31, 2001 and 2000 F-4
Statement of Operations for the years ended
December 31, 2001 and 2000 F-5
Statement of Changes in Shareholders' Equity for the
period from December 31, 1999 to December 31, 2001 F-6
Statement of Cash Flows for the years ended
December 31, 2001 and 2000 F-7
Notes to Financial Statements F-8 to F-14
Interim Unaudited Financial Statements
-----------------------------------------
Balance Sheet as of June 30, 2002 F-15
Statement of Operations for the three
and six months ended June 30, 2002 and 2001 F-16
Statement of Changes in Shareholders' Equity for the
period from December 31, 2001 to June 30, 2002 F-17
Statement of Cash Flows for the three and
six months ended June 30, 2002 and 2001 F-18
Notes to Financial Statements F-19
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PART III
ITEM 1. INDEX TO EXHIBITS
ITEM NO DESCRIPTION
------- ------------
3.1 Articles of Incorporation of IVG Product Technologies, Inc., a Nevada corporation
3.2 Articles of Incorporation of IVG Product Technologies, Inc., a Texas corporation
3.3 Articles of Merger of IVG Product Technologies, Inc., a Texas corporation into
IVG Product Technologies, Inc. a Nevada Corporation
3.4 Certificate of Amendment of Articles of Incorporation of IVG Product Technologies, Inc.,
a Nevada corporation
3.5 Bylaws of IVG Product Technologies, Inc., a Nevada corporation
99.1 Certification as Adopted Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002
99.2 Certification as Adopted Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002
ITEM 2. DESCRIPTION OF EXHIBITS
Not Applicable.
12
GEEWHIZ.COM
AUDITED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER, 2001 AND 2000
WITH REPORT OF INDEPENDENT AUDITORS
13
TABLE OF CONTENTS
PAGE
NUMBER
------
REPORT OF INDEPENDENT AUDITORS 1
AUDITED FINANCIAL STATEMENTS:
BALANCE SHEETS 2
STATEMENTS OF OPERATIONS 3
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY 4
STATEMENTS OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6
14
WRINKLE, GARDNER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
211 E. Parkwood, Suite 100
Friendswood, Texas 77546
(281) 992-2200
Report of Independent Auditors
------------------------------
Board of Directors
Gee Whiz, Inc.
We have audited the accompanying balance sheets of Gee Whiz, Inc. (a Nevada
corporation) as of December 31, 2001 and 2000, and the related statements of
operations, changes in shareholders' equity and cash flows for the two years
then ended. 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 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gee Whiz, Inc. as of December
31, 2001 and 2000, and the results of its operations and its cash flows for the
two years then ended in conformity with U. S. generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 7 to the
financial statements, conditions exist which raise substantial doubt about the
Company's ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations. Those
conditions raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Wrinkle, Gardner & Company, P.C.
_____________________________________
Wrinkle, Gardner & Company, P.C.
Friendswood, Texas
August 6, 2002
15
GEEWHIZ.COM
BALANCE SHEET
DECEMBER 31
2001 2000
------------ ------------
ASSETS
CURRENT ASSETS
Cash . . . . . . . . . . . . . .. . . . $ 2,580 $ 12,258
Accounts receivable, net . . . .. . . . 6,545 27,034
Inventories. . . . . . . . . . .. . . . 89,186 77,939
------------ ------------
Total current assets . . .. . . . . 98,311 117,231
PROPERTY AND EQUPMENT, at cost
Equipment. . . . . . . . . . ... . . . . 109,069 108,556
Office furniture and fixtures... . . . . 31,301 31,431
Automobiles. . . . . . . . . ... . . . . 41,857 0
Less: Accumulated depreciation.. . . . . (123,956) (95,446)
------------ ------------
58,271 44,541
OTHER ASSETS 272,862 261,662
------------
Total assets . . . . . . . .. . . . $ 429,444 $ 423,434
============ ============
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITES
Accounts payable and accrued expenses. $ 229,301 $ 137,192
Due to related party . . . . . . . . . . . 720,793 595,329
Notes payable. . . . . . . . . . . . . . . 88,553 49,785
------------ ------------
Total current liabilities. . . . . . 1,038,647 782,306
SHAREHOLDERS EQUITY
Additional paid in capital . . . . . . . . 2,132,297 2,132,297
Accumulated deficit. . . . . . . . . . . . (2,741,500) (2,491,169)
------------
Total shareholders' equity . . . . . (609,203) (358,872)
------------ ------------
Total liabilities and
shareholders' equity $ 429,444 $ 423,434
============ ============
See accompanying summary of accounting policies and notes financial statements.
16
GEEWHIZ.COM
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31
2001 2000
---------- ----------
Revenue
Product sales. . . . . . . . . . . . $ 574,826 $ 396,300
Cost of good sold 356,071 298,742
Operating Expenses
Selling, general and administrative. 412,788 470,984
Depreciation and amortization expense. 53,310 28,271
Interest expense . . . . . . . . . . . 2,988 2,907
----------
Total operating expenses. . . . 469,086 502,162
---------- ----------
Other income (expense): 0 8,000
Net income (loss). . . . . . . $(250,331) $(396,604)
========== ==========
See accompanying summary of accounting policies and notes financial statements.
17
GEEWHIZ.COM
STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
Additional
Paid-in Accumulated
Capital Deficit Total
------------- ----------------- -------------
Balance, December 31, 1999 $1,972,089 $ (2,094,565) $ (122,476)
Additional paid in capital contributions 160,208 160,208
Net loss for 2000 (396,604) (396,604)
------------- ----------------- -------------
Balance, December 31, 2000 2,132,297 (2,491,169) (358,872)
Net loss for 2001 (250,331) (250,331)
------------- ----------------- -------------
Balance, December 31, 2001 $ 2,132,297 $ (2,741,500) $ (609,203)
============= ================= =============
See accompanying summary of accounting policies and notes financial statements.
18
Year Ended December 31
2001 2000
--------------- ----------------
OPERATING ACTIVITIES:
Net income (loss) . . . . . . . . . . . . . . . . . $ (250,331) $ (396,604)
Adjustments to reconcile net (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization . . . . . . . . . 53,310 28,271
Changes in operating assets & liabilities:
Accounts receivable. . . . . . . . . . . . . . . . 20,489 (12,889)
Inventory. . . . . . . . . . . . . . . . . . . . . (11,247) 1,649
Other assets . . . . . . . . . . . . . . . . . . . 0 27,660
Accounts payable and accrued expenses. . . . . . . 92,109 (104,235)
--------------- ----------------
Net cash (used in) operating activities . . . . . . . (95,670) (456,148)
INVESTING ACTIVITIES:
Capital expenditures (42,240) (13,266)
Note receivable . . . . . . . . . . . . . . . . . . (36,000) 0
--------------- ----------------
Net cash (used in ) investing activities. (78,240) (13,266)
FINANCING ACTIVITIES:
Related party . . . . . . . . . . . . 125,464 595,329
Notes payable. . . . . . . . . . . . . 38,768 (279,871)
Additional paid in capital 0 160,208
--------------- ----------------
Net cash provided by financing activities . 164,232 475,666
--------------- ----------------
(DECREASE) INCREASE IN CASH (9,678) 6,252
CASH AT BEGINNING OF YEAR 12,258 6,006
--------------- ----------------
CASH AT END OF YEAR $ 2,580 $ 12,258
=============== ================
Supplemental cash flow information:
Cash paid for interest . . . . . . . . . . . . . . . $ 2,988 $ 2,907
=============== ================
See accompanying summary of accounting policies and notes financial statements.
19
GEEWHIZ.COM
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
NOTE 1 - ORGANIZATION AND PRESENTATION
On March 9, 2001, IVG Corp changed its name from Internet Venture Group, Inc. to
IVG Corp. and its state of incorporation from Florida to Delaware. The name
change and reincorporation were accomplished by merging Internet Venture Group,
Inc., a Florida corporation, into IVG Corp., a Delaware corporation formed for
the purpose of these transactions. Each issued and outstanding share of common
stock of Internet Venture Group, Inc. was automatically converted in the merger
into one share of common stock of IVG Corp. The Company was incorporated in the
state of Florida on March 19, 1987 under the name Sci Tech Ventures, Inc. and
changed its name to Strategic Ventures, Inc. in May 1991. On October 18, 1999,
Strategic Ventures, Inc. changed its name to Internet Venture Group, Inc.
(IVG). Effective December 31, 1999, acquired all issued and outstanding
shares of GeeWhiz.com, Inc. (the "Company") (a Texas Corporation) for 1,326,870
shares of the Company's stock by the purchase method. For accounting purposes,
the acquisition was treated as a reverse acquisition (a recapitalization of
GeeWhiz.com), with GeeWhiz.com, Inc. as the acquirer and Strategic Ventures,
Inc. as the acquiree. The acquisition qualified as a reverse acquisition
because the officers and directors of GeeWhiz.com assumed management control of
the resulting entity and the value and ownership interest received by
current GeeWhiz.com, Inc. stockholders exceeded that received by Strategic
Ventures, Inc. In December 2001, the company changed its name to Group
Management Corp. (GPMT). The Company currently operates as a division of GPMT,
which is traded on the OTCBB under the symbol "GPMT". There is currently no
common stock, preferred stock, options or warrants of the Company outstanding.
As discussed in Note 8 below, GPMT is involved in litigation which could have a
material adverse affect on the Company should it be held liable.
The primary business of the Company is the development, acquisition, marketing
and distribution of proprietary products as specialty products and items for the
worldwide gift, novelty and souvenir industries.
The Company's fiscal year-end is December 31.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are presented on the accrual method of accounting in
accordance with U. S. generally accepted accounting principles.
Significant principles followed by the Company and the methods of applying those
principles, which materially affect the determination of financial position and
cash flows, are summarized below:
Cash and Cash Equivalents
----------------------------
The Company considers all highly-liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.
20
Inventories
-----------
Inventories are stated at cost, determined using the first-in, first-out (FIFO)
method, which is not in excess of market. Finished products comprise all of the
Company's inventories.
Property and Equipment
------------------------
Property and equipment is stated at cost. The cost of ordinary maintenance and
repairs is charged to operations while renewals and replacements are
capitalized. Depreciation is computed on the straight-line method over the
following estimated useful lives:
Automobiles - 4 years
Equipment - 2 to 5 years
Office furniture and fixtures - 5 years
Patents, Trademarks and Licenses
-----------------------------------
The Company capitalizes certain legal costs and acquisition costs related to
patents, trademarks, and licenses. Accumulated costs are amortized over the
lesser of the legal lives or the estimated economic lives of the proprietary
rights, generally seven to ten years, using the straight-line method and
commencing at the time the patents are issued, trademarks are registered or the
license is acquired.
Revenue Recognition
--------------------
Product sales are sales of on-line products and specialty items. Revenue is
recognized at the time products are shipped, as this is the point at which
customers are liable to the Company for products ordered. The customer may
return items if they are found to be defective. Returns are usually minimal.
Other revenue and commission income is recognized when the earnings process has
been completed.
Income Taxes
-------------
The Company accounts for income taxes under SFAS No. 109, which requires the
asset and liability approach to accounting for income taxes. Under this method,
deferred tax assets and liabilities are measured based on differences between
financial reporting and tax bases of assets and liabilities using enacted tax
rates and laws that are expected to be in effect when the differences are
expected to reverse.
Fair Value of Financial Instruments
---------------------------------------
The carrying amount of cash, accounts receivable, accounts payable and accrued
expenses are considered to be representative of their respective fair values
because of the short-term nature of these financial instruments. The carrying
amount of the notes payable are reasonable estimates of fair value as the loans
bear interest based on market rates currently available for debt with similar
terms.
21
Use of Estimates
------------------
The preparation of financial statements in conformity with U. S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from these estimates.
Recent Accounting Pronouncements
----------------------------------
In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets." Under these new standards, all acquisitions subsequent to June 30,
2001 must be accounted for under the purchase method of accounting, and
purchased goodwill is no longer amortized over its useful life. Rather,
goodwill will be subject to a periodic impairment test based on its fair value.
SFAS 142 is effective for fiscal years beginning after December 15, 2001,
although earlier adoption is permitted. The company does not expect that the
adoption of these standards will have a material impact on its financial
statements.
In October 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS 144
supersedes SFAS 121. SFAS 144 primarily addresses significant issues relating
to the implementation of SFAS 121 and develops a single model for long-lived
assets to be disposed of, whether primarily held, used or newly acquired. The
provisions of SFAS 144 will be effective for fiscal years beginning after
December 15, 2001. The Company will apply this standard beginning in 2002.
The Company does not expect that the adoption of this standard will have a
material impact on its financial statements.
NOTE 3 - OTHER ASSETS
At December 31, 2001, other assets consisted of the following:
Historical Cost Accum. Amort. Book Value
Licensing, patents, trademarks. $ 364,846 $ 127,984 $ 236,862
Other assets (note receivable) 36,000 - 36,000
---------------------------------------------------------
$ 400,846 $ 127,984 $ 272,862
=========================================================
At December 31, 2000, other assets consisted of the following:
Historical Cost Accum. Amort. Book Value
Licensing, patents, trademarks. $ 364,846 $ 103,184 $ 261,662
=========================================================
22
NOTE 4 - NOTES PAYABLE
Notes payable consisted of the following:
December 31
2001 2000
---- ----
Borrowings against a $50,000 line-of-credit agreement
with a financial institution, secured by a general
security agreement covering substantially all assets
of the Company, bearing an interest rate of 6.75%,
due on demand or May 2002 if no demand is made $49,158 $49,785
Note payable to financing company, secured by
2001 GMC Yukon, bearing an interest rate of 3.9%,
monthly principal and interest payments of $895, due
December 2005 39,395 0
----------------------
$ 88,553 $49,785
======================
NOTE 5 - INCOME TAXES
There has been no provision for U.S. federal, state, or foreign income taxes for
any period because the Company has incurred losses in all periods and for all
jurisdictions.
Deferred income taxes reflect the net tax affects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
deferred tax assets are as follows:
December 31
2001 2000
---- ----
Deferred tax assets:
Net operating loss carryforwards $2,741,500 $2,491,169
Valuation allowance for deferred tax assets (2,741,500) (2,491,169)
--------------------------
Net deferred tax assets $ 0 $ 0
==========================
Realization of deferred tax assets is dependent upon future earnings, if any,
the timing and amount of which are uncertain. Accordingly, the net deferred tax
assets have been fully offset by a valuation allowance. The Company had net
operating loss carryforwards for federal income tax purposes of approximately
$2,741,500 and $2,491,169 as of December 31, 2001 and 2000, respectively. These
carryforwards, if not utilized to offset taxable income begin to expire in 2003.
Utilization of the net operating loss may be subject to substantial annual
limitation due to the ownership change limitations provided by the Internal
Revenue Code and similar state provisions. The annual limitation could result in
the expiration of the net operating loss before utilization.
23
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Operating Leases
-----------------
The Company is involved in several operating leases including leases for office
and warehouse space, telecommunication services, and screen printers. The lease
commitments are as follows:
o Office and warehouse facilities are leased for a minimum monthly payment
of $6,719. The lease expires November 2005.
o The Company leases two screen printers. One lease requires a minimum
monthly payment of $130 and expires August 2002 and the other requires a
minimum monthly payment of $600 and expires August 2004.
Rent expense for the years ended December 31, 2001 and 2000, was $96,481 and
$63,331, respectively.
Future minimum lease payments for each of the years ended December 31 are as
follows:
2002 $ 88,868
2003 87,828
2004 85,428
2005 73,909
------
$ 336,033
=========
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
U.S. generally accepted accounting principles, which contemplates continuation
of the Company as a going concern. The Company has incurred substantial
operating losses. As shown in the financial statements, the Company incurred net
losses of $250,331 on gross sales of $574,826 for the year ended December 31,
2001. These factors indicate there is substantial doubt about the Company's
ability to continue as a going concern. The future success of the
Company is likely dependent on its ability to obtain additional capital to
develop its proposed products and ultimately, upon its ability to attain
future profitable operations. There can be no assurance that the Company
will be successful in obtaining such financing, or that it will attain
positive cash flow from
operations.
24
NOTE 8 - RELATED PARTY LEGAL PROCEEDINGS
Group Management Corp. is currently involved in the legal proceedings described
below. While the Company has not been named in these actions, substantially all
tangible assets of GPMT are on the Company's books since it is a division of
GPMT. The plaintiffs may pursue the Company in legal proceedings should the
actions against GPMT fail.
CONVERTIBLE NOTE HOLDERS. On February 2, 2001, GPMT issued $1.1 million of
convertible notes to four investors in a private placement. The convertible
notes mature on January 1, 2003 and bear interest at the rate of 6% per year.
The events of default under the notes are described in this report under the
section captioned "Convertible Notes".
As part of the financing transactions involving the convertible notes,
GPMT agreed to file a registration statement for the resale by the note
holders of the common stock underlying the convertible notes and to have the
registration statement declared effective by June 17, 2001. The registration
statement was not declared effective by June 17, 2001 and has not been declared
effective as of the time of the filing of this report.
On September 10, 2001, GPMT entered into a Security Agreement with the
noteholders and certain of its shareholders, including Elorian Landers, the
chief Executive Officer and a director, and Thomas L. McCrimmon, a director.
Under the Security Agreement, Mr. Landers and his wife pledged 150,000 shares of
common stock, Mr. McCrimmon pledged 10,900 shares of common stock and other
shareholders pledged 89,250 shares of common stock, all as security for
obligations under the financing agreements with the noteholders. As part of this
agreement, the note holders waived the default and penalties under the
convertible notes for failure to make the registration statement effective by
June 17, 2001, provided that GPMT file an amendment to the registration
statement by October 20, 2001 and cause the registration statement to be
declared effective by December 10, 2001. The note holders also lent GPMT an
additional $55,000 and GPMT signed a promissory note agreeing to repay this
amount by the earlier of December, 2001 or the occurrence of an event of
default under the Security Agreement.
On February 7, 2002, the convertible note holders declared a default on the
notes for failure to have the registration statement declared effective and made
demand for payment of the convertible notes and promissory notes. In addition,
the collateral agent under the Security Agreement released 239,400 shares of
stock to the convertible note holders. The note holders further requested that
GPMT deliver an opinion to the transfer agent so that they would be able
to sell in the public markets under SEC Rule 144 the shares released by the
collateral agent and have the shares reissued in the note holders' names. One of
the note holders has also submitted a notice to convert a portion of its notes
into common stock. Because of certain disputes with the note holders,
GPMT has not complied with these requests.
On or about March 21, 2002, Alpha Capital Aktiengesellschaft, Amro
International, S. A., Markham Holdings, LTD, and Stonestreet Limited
Partnership, the holders of the convertible notes, filed a complaint in United
States District Court for the Southern District of New York naming GPMT ,
Elorian Landers and his wife as defendants. In their complaint, the note holders
allege, among other things, the following:
25
o fraud in connection with the sale of the convertible notes resulting from
alleged misrepresentations as to GPMT's cash position;
o breach of contract on the notes for failure to have an effective
registration statement covering the resale of the common stock underlying the
notes;
o failure to honor conversion requests;
o failure to repay the convertible notes and promissory notes and ;
o anticipatory breach of contract on the notes.
In their complaint, the noteholders assert monetary damages and seek relief (i)
in the amount of $1,155,000 plus interest, liquidated damages and attorneys fees
and other costs of enforcement for the breach of contract on the notes, (ii)
unspecified monetary damages for failure to cause the registration statement to
be effective and failure to take the steps necessary for the noteholders to sell
the shares under the Security Agreement pursuant to Rule 144, and (iii)
unspecified damages for failure to honor conversion notices. In addition, the
noteholders are seeking an order directing GPMT to (i) cause the
registration statement to be effective, (ii) to enforce conversion of the notes
into common stock, and (iii) to have GPMT and the Landers' take
necessary actions to permit plaintiffs to sell the common stock received from
the collateral agent under Rule 144.
SWAN
In March 2002, GPMT was served with a lawsuit brought by Swan Magnetics, Inc.
in the Superior Court of the state of California, County of Santa Clara. The
only defendant in the action is GPMT.
The Complaint alleges, among other things, that GPMT breached its
obligations under a promissory note in the principal amount of $2,843,017, that
GPMT has breached its obligations under a series of settlement documents entered
into between Swan and GPMT, and that GPMT has interfered with contractual
relationships between Swan and certain third parties. The
total relief sought by Swan is $3,040,000, plus interests, costs and punitive
damages.
In separate correspondence, Mr. Eden Kim has alleged that GPMT never owned
a majority interest in Swan Magnetics, Inc.
GPMT is vigorously defending this lawsuit although GPMT believes that the
action lacks merit. The case is at a stage where no discovery has been taken
and no prediction can be made as to the outcome of this case.
26
GEEWHIZ.COM
BALANCE SHEET (UNAUDITED)
JUNE 30, 2002
ASSETS
CURRENT ASSETS
Cash and Cash equivalents $ 21,362
Accounts receivable - net of $15,000
allowance for bad debts 4,001
Inventories 60,635
------------
Total current assets 85,998
PROPERTY AND EQUIPMENT, at cost
Equipment 109,169
Office furniture and fixtures 31,301
Automobiles 41,857
Less: Accumulated depreciation (148,956)
------------
33,371
OTHER ASSETS, net 236,862
------------
Total assets $ 356,231
============
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 216,248
Due to related party 700,282
Notes payable 188,129
------------
Total current liabilities 1,104,659
SHAREHOLDERS EQUITY
Additional paid in capital 2,132,297
Accumulated deficit (2,880,725)
------------
Total shareholders' equity (748,428)
------------
Total liabilities and
shareholders' equity $ 356,231
============
See accompanying note.
27
GEEWHIZ.COM
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED FOR THE THREE MONTHS ENDED
JUNE 30 JUNE 30
2002 2001 2002 2001
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
------------------------------- -------------------------------
REVENUES:
Sales $ 120,763 $ 427,595 $ 76,421 $ 246,096
------- ------- -------- ---------
Total revenues 120,763 427,595 76,421 246,096
COSTS AND EXPENSES:
Cost of goods sold 81,587 336,706 34,398 215,793
Selling, general and administrative 151,341 204,980 48,116 94,728
Depreciation and amortization expense 25,000 27,028 12,500 13,199
Interest expense 2,060 1,917 669 618
------- ------- -------- ---------
Total costs and expenses 259,988 570,631 95,683 324,338
------- ------- -------- ---------
NET INCOME (LOSS) $ (139,225) $ (143,036) $ (19,262) $ (78,242)
======= ======= ======== =========
See accompanying note.
28
GEEWHIZ.COM
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE PERIOD FROM DECEMBER 31, 2001 TO JUNE 30, 2002
Additional
Paid in Accumulated
Capital Deficit Total
------- ------- -----
Balance, December 31, 2001 $ 2,132,297 $ (2,741,500) $ (609,203)
Net loss for six months
ended June 30, 2002 (139,225) (139,225)
--------- ----------- ---------
Balance, June 30, 2002 $ 2,132,297 $ (2,880,725) $ (748,428)
========= =========== =========
See accompanying note.
29
GEEWHIZ.COM
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED FOR THE THREE MONTHS ENDED
JUNE 30 JUNE 30
2002 2001 2002 2001
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
--------------------------------- -------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (139,225) $ (143,036) $ (19,262) $ (78,242)
Adjustments to reconcile net (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 25,000 27,028 12,500 13,199
Changes on operating assets and liabilities:
Accounts receivable 2,544 (110,590) (2,723) (77,464)
Inventory 28,551 16,097 28,167 18,880
Other assets 36,000 0 0 0
Accounts payable and accrued expenses (13,053) 29,320 (19,048) 20,208
--------- --------- --------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (60,183) (181,181) (366) (103,419)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (100) (1,113) 0 0
Note receivable 0 (36,000) 0 47,184
--------- --------- --------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (100) (37,113) 0 47,184
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft 0 0 0 (2,231)
Related party (20,511) 240,350 16,918 62,980
Notes payable 99,576 (32,300) (1,790) (2,500)
--------- --------- --------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 79,065 208,050 15,128 58,249
--------- --------- --------- --------
Increase (decrease) in cash 18,782 (10,244) 14,762 2,014
Cash at beginning of period 2,580 12,258 6,600 0
--------- --------- --------- --------
Cash at end of period $ 21,362 $ 2,014 $ 21,362 $ 2,014
========= ========= ========= ========
See accompanying note.
30
GEEWHIZ.COM
NOTE TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10 and Item 310 of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
for generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisiting of normal recurring
accruals) considered necessary fo ra fiar presentation have been included.
Operating results for the six-and three-month periods ended June 30, 2002 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2002. These financial statements should be read in
conjunction with the Companys audited financial statements for the year ended
December 31, 2001.
31
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: September 26, 2002 GEEWHIZ, INC.
/s/ Elorian Landers
________________________________
By: Elorian Landers
Its: President
32