FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] 15,ANNUAL REPORT UNDER SECTION 13 OR 15(D)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: 10/31/01
OR
[ ]15,TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number - 333-44882
Great Expectations, Inc.
(Exact name of Registrant as specified in its charter)
Colorado 84-1521955
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
501 South Cherry Street, Suite 610,
Denver, Colorado 80246
(Address of principal executive offices) (Zip Code)
(303) 320-0066
(Address and telephone number of registrant's principal
executive offices and principal place of business.)
Securities registered pursuant to
Section 12(b) of the Act: None
Securities registered pursuant to
Section 12(g) of the Act: Common Stock,
$.001 par value
Check whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act during the preceding 12
months (or such shorter period that the Company was
required to file such reports), and (2) has been
subject to such filing requirements for at least
the past 90 days.
Yes __x__ No _____
Check if there is no disclosure of delinquent
filers in response to Item 405 of Regulation S-B is
not contained in this form, and no disclosure will
be contained, to the best of Company's knowledge,
in definitive proxy or information statements
incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.
[ x ]
2
The Company's revenues for its most recent fiscal
year were $0.00. As of October 31, 2001 the market
value of the Company's voting $.00l par value
common stock held by non-affiliates of the Company
was $0.00.
The number of shares outstanding of Company's only
class of common stock, as of October 31, 2001 was
150,520,000 shares of its common stock. Check
whether the Issuer has filed all documents and
reports required to be filed by Section 12, 13 or
15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes __x__ No _____
No documents are incorporated into the text by
reference.
Transitional Small Business Disclosure Format
(check one)
Yes No x
-------- --------
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PART I
ITEM 1. BUSINESS
Great Expectations was incorporated under the laws
of the State of Colorado on June 5, 1987 as Great
Expectations, Inc. Great Expectations was
administratively dissolved on January 1, 1997 under
the Colorado Corporation Code for failure to file
two biannual reports. We filed for reinstatement
on June 18, 1998, filed the past due biannual
reports, paid all fees and penalties and were
reinstated on that date as a corporation in good
standing. Great Expectations was required to
change its name to Great Expectations and
Associates, Inc. based on the unavailability of its
prior name.
Since 1987, Great Expectations has performed only
those administrative functions necessary in further
pursuance of this offering. Great Expectations is
in the early developmental and promotional stages.
To date Great Expectation's only activities have
been organizational ones, directed at developing
its business plan and raising its initial capital.
We have not generated any revenues.
Great Expectations has not commenced any commercial
operations. Great Expectations has no employees and
owns no real estate. We do not intend to perform
any operations until a merger or acquisition
candidate is locates and a merger or acquisition
consummated. Great Expectations can be defined as
a "shell" company whose sole purpose at this time
is to locate and consummate a merger or acquisition
with a private entity.
Another aspect of our business plan that Great
Expectations intends to implement after this
registration statement becomes effective is to seek
to facilitate the eventual creation of a public
trading market in its outstanding securities.
Great Expectation's business plan is to seek,
investigate, and, if warranted, acquire one or more
properties or businesses, and to pursue other
related activities intended to enhance shareholder
value.
The acquisition of a business opportunity may be
made by purchase, merger, exchange of stock, or
otherwise, and may encompass assets or a business
entity, such as a corporation, joint venture, or
partnership. Great Expectations has very limited
capital, and it is unlikely that Great Expectations
will be able to take advantage of more than one
such business opportunity.
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Great Expectations intends to seek opportunities
demonstrating the potential of long-term growth as
opposed to short-term earnings. At the present time
Great Expectations has not identified any business
opportunity that it plans to pursue, nor has Great
Expectations reached any agreement or definitive
understanding with any person concerning an
acquisition.
Frederick Mahlke, one of Company's officers and
directors has previously been involved in
transactions involving a merger between an
established company and a shell entity, and has a
number of contacts within the field of corporate
finance. As a result, he has had preliminary
contacts with representatives of numerous companies
concerning the general possibility of a merger or
acquisition by a shell company. However, none of
these preliminary contacts or discussions involved
the possibility of a merger or acquisition
transaction with Great Expectations.
We anticipate that Mr. Mahlke will contact broker-
dealers and other persons with whom he is
acquainted who are involved in corporate finance
matters to advise them of Great Expectation's
existence and to determine if any companies or
businesses they represent have an interest in
considering a merger or acquisition with Great
Expectations. No assurance can be given that
Great Expectations will be successful in finding or
acquiring a desirable business opportunity, given
the limited funds that are expected to be available
for acquisitions, or that any acquisition that
occurs will be on terms that are favorable to Great
Expectations or its stockholders.
Great Expectation's search will be directed toward
small and medium-sized enterprises which have a
desire to become public corporations and which are
able to satisfy, or anticipate in the reasonably
near future being able to satisfy, the minimum
asset requirements in order to qualify shares for
trading on NASDAQ or on a stock exchange
Great Expectations anticipates that the business
opportunities presented to it will
- be recently organized with no operating
history, or a history of losses attributable to
under-capitalization or other factors;
- be in need of funds to develop a new
product or service or to expand into a new market;
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- be relying upon an untested product or
marketing any business, to the extent of its
limited resources. This includes industries such as
service, finance, natural resources, manufacturing,
high technology, product development, medical,
communications and others.
Great Expectation's discretion in the selection of
business opportunities is unrestricted, subject to
the availability of such opportunities, economic
conditions, and other factors. As a consequence of
this registration of its securities, any entity,
which has an interest in being acquired by, or
merging into Great Expectations, is expected to be
an entity that desires to become a public company
and establish a public trading market for its
securities.
In connection with such a merger or acquisition, it
is highly likely that an amount of stock
constituting control of Great Expectations would be
issued by Great Expectations or purchased from the
current principal shareholders of Great
Expectations by the acquiring entity or its
affiliates.
If stock is purchased from the current
shareholders, the transaction is very likely to
result in substantial gains to them relative to
their purchase price for such stock. In Great
Expectation's judgment, none of its officers and
directors would thereby become an "underwriter"
within the meaning of the Section 2(11) of the
Securities Act of 1933, as amended. The sale of
a controlling interest by certain principal
shareholders of Great Expectations could occur at a
time when the other shareholders of Great
Expectations remain subject to restrictions on the
transfer of their shares.
Depending upon the nature of the transaction, the
current officers and directors of Great
Expectations may resign their management positions
with Great Expectations in connection with Great
Expectation's acquisition of a business
opportunity.
In the event of such a resignation, Great
Expectation's current management would not have any
control over the conduct of Great Expectation's
business following Great Expectation's combination
with a business opportunity. We anticipate that
business opportunities will come to Great
Expectation's attention from various sources,
including our officer and director, our other
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stockholders, professional advisors such as
attorneys and accountants, securities broker-
dealers, venture capitalists, members of the
financial community, and others who may present
unsolicited proposals.
Great Expectations has no plans, understandings,
agreements, or commitments with any individual for
such person to act as a finder of opportunities for
Great Expectations. Great Expectations does not
foresee that it would enter into a merger or
acquisition transaction with any business with
which its officers or directors are currently
affiliated. Should Great Expectations determine
in the future, contrary to the foregoing
expectations, that a transaction with an affiliate
would be in the best interests of Great
Expectations and its stockholders, Great
Expectations is permitted by Colorado law to enter
into such a transaction if:
- The material facts as to the relationship or
interest of the affiliate and as to the contract or
transaction are disclosed or are known to the Board
of Directors, and the Board in good faith
authorizes the contract or transaction by the
affirmative vote of a majority of the disinterested
directors, even though the disinterested directors
constitute less than a quorum; or
- The material facts as to the relationship or
interest of the affiliate and as to the contract or
transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in
good faith by vote of the stockholders; or
- - The contract or transaction is fair as to Great
Expectations as of the time it is authorized,
approved or ratified, by the Board of Directors or
the stockholders.
Investigation and Selection of Business
Opportunities
To a large extent, a decision to participate in a
specific business opportunity may be made upon:
- management's analysis of the quality of the
other company's management and personnel,
- the anticipated acceptability of new
products or marketing concepts,
7
- the merit of technological changes, the
perceived benefit Great Expectations will derive
from becoming a publicly held entity, and numerous
other factors which are difficult, if not
impossible, to analyze through the application of
any objective criteria.
In many instances, it is anticipated that the
historical operations of a specific business
opportunity may not necessarily be indicative of
the potential for the future because of the
possible need to shift marketing approaches
substantially, expand significantly, change product
emphasis, change or substantially augment
management, or make other changes. Great
Expectations will be dependent upon the owners of a
business opportunity to identify any such problems
which may exist and to implement, or be primarily
responsible for the implementation of, required
changes.
Because Great Expectations may participate in a
business opportunity with a newly organized firm or
with a firm which is entering a new phase of
growth, it should be emphasized that Great
Expectations will incur further risks, because
management in many instances will not have proved
its abilities or effectiveness, the eventual market
for such company's products or services will likely
not be established, and such company may not be
profitable when acquired.
We anticipate that we will not be able to
diversify, but will essentially be limited to one
such venture because of Great Expectation's limited
financing. This lack of diversification will not
permit Great Expectations to offset potential
losses from one business opportunity against
profits from another, and should be considered an
adverse factor affecting any decision to purchase
Great Expectation's securities.
Holders of Great Expectation's securities should
not anticipate that Great Expectations necessarily
will furnish such holders, prior to any merger or
acquisition, with financial statements, or any
other documentation, concerning a target company or
its business. In some instances, however, the
proposed participation in a business opportunity
may be submitted to the stockholders for their
consideration, either voluntarily by such directors
to seek the stockholders' advice and consent or
because state law so requires. The analysis of
8
business opportunities will be undertaken by or
under the supervision of Great Expectation's
President, who is not a professional business
analyst.
Although there are no current plans to do so,
Company management might hire an outside consultant
to assist in the investigation and selection of
business opportunities, and might pay a finder's
fee.
Since Company management has no current plans to
use any outside consultants or advisors to assist
in the investigation and selection of business
opportunities, no policies have been adopted
regarding use of such consultants or advisors, the
criteria to be used in selecting such consultants
or advisors, the services to be provided, the term
of service, or regarding the total amount of fees
that may be paid. However, because of the limited
resources of Great Expectations, it is likely that
any such fee Great Expectations agrees to pay would
be paid in stock and not in cash. Otherwise, Great
Expectations anticipates that it will consider,
among other things, the following factors:
- Potential for growth and profitability,
indicated by new technology, anticipated market
expansion, or new products;
- Great Expectation's perception of how any
particular business opportunity will be received by
the investment community and by Great Expectation's
stockholders;
- - Whether, following the business combination,
the financial condition of the business opportunity
would be, or would have a significant prospect in
the foreseeable future of becoming sufficient to
enable the securities of Great Expectations to
qualify for listing on an exchange or on a national
automated securities quotation system, such as
NASDAQ, so as to permit the trading of such
securities to be exempt from the requirements of a
Rule 15g-9 adopted by the Securities and Exchange
Commission.
- Capital requirements and anticipated
availability of required funds, to be provided by
Great Expectations or from operations, through the
sale of additional securities, through joint
ventures or similar arrangements, or from other
sources;
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- The extent to which the business opportunity
can be advanced;
- Competitive position as compared to other
companies of similar size and experience within the
industry segment as well as within the industry as
a whole;
- Strength and diversity of existing
management, or management prospects that are
scheduled for recruitment;
- The cost of participation by Great
Expectations as compared to the perceived tangible
and intangible values and potential; and
- The accessibility of required management
expertise, personnel, raw materials, services,
professional assistance, and other required items.
In regard to the possibility that the shares of
Great Expectations would qualify for listing on
NASDAQ, the current standards include the
requirements that the issuer of the securities that
are sought to be listed have total assets of at
least $4,000,000 and total capital and surplus of
at least $2,000,000, and proposals have recently
been made to increase these qualifying amounts.
Many, and perhaps most, of the business
opportunities that might be potential candidates
for a combination with Great Expectations would not
satisfy the NASDAQ listing criteria. No one of the
factors described above will be controlling in the
selection of a business opportunity, and management
will attempt to analyze all factors appropriate to
each opportunity and make a determination based
upon reasonable investigative measures and
available data.
Potentially available business opportunities may
occur in many different industries and at various
stages of development, all of which will make the
task of comparative investigation and analysis of
such business opportunities extremely difficult and
complex.
Potential investors must recognize that, because of
Great Expectation's limited capital available for
investigation and management's limited experience
in business analysis, Great Expectations may not
discover or adequately evaluate adverse facts about
the opportunity to be acquired. Great Expectations
is unable to predict when it may participate in a
10
business opportunity. We expect, however, that the
analysis of specific proposals and the selection of
a business opportunity may take several months or
more.
Prior to making a decision to participate in a
business opportunity, Great Expectations will
generally request that we be provided with written
materials regarding the business opportunity
containing such items as
- a description of products
- services and company history
- management resumes
- financial information
- available projections, with related
assumptions upon which they are based
- an explanation of proprietary products and
services;
- evidence of existing patents, trademarks, or
services marks, or rights thereto
- present and proposed forms of compensation
to management
- a description of transactions between such
company and its affiliates during relevant
periods
- a description of present and required
facilities
- an analysis of risks and competitive
conditions
- a financial plan of operation and estimated
capital requirements
- audited financial statements, or if they are
not available, unaudited financial
statements, together with reasonable
assurances that audited financial
statements would be able to be produced
within a reasonable period of time not to
exceed 60 days following completion of a
merger transaction; and other information
deemed relevant.
As part of Great Expectation's investigation, Great
Expectation's executive officers and directors
- may meet personally with management and key
personnel,
- may visit and inspect material facilities,
- obtain independent analysis or verification
of certain information provided,
- check references of management and key
personnel, and
11
- take other reasonable investigative
measures, to the extent of
Great Expectation's limited financial
resources and management expertise.
Regulation of Penny Stocks
Our management believes that various types of
potential merger or acquisition candidates might
find a business combination with Great Expectations
to be attractive. These include
- acquisition candidates desiring to create a
public market for their shares in order to enhance
liquidity for current shareholders,
- acquisition candidates which have long-term
plans for raising capital through the public sale
of securities and believe that the possible prior
existence of a public market for their securities
would be beneficial, and
- acquisition candidates which plan to acquire
additional assets through issuance of securities
rather than for cash, and believe that the
possibility of development of a public market for
their securities will be of assistance in that
process.
Acquisition candidates that have a need for an
immediate cash infusion are not likely to find a
potential business combination with Great
Expectations to be an attractive alternative.
Form of Acquisition
It is impossible to predict the manner in which
Great Expectations may participate in a business
opportunity. Specific business opportunities will
be reviewed as well as the respective needs and
desires of Great Expectations and the promoters of
the opportunity and, upon the basis of that review
and the relative negotiating strength of Great
Expectations and such promoters, the legal
structure or method deemed by management to be
suitable will be selected. Such structure may
include, but is not limited to
- leases, purchase and sale agreements,
- licenses,
- joint ventures and
- other contractual arrangements.
Great Expectations may act directly or indirectly
through an interest in a partnership, corporation
or other form of organization.
12
Implementing such structure may require the merger,
consolidation or reorganization of Great
Expectations with other corporations or forms of
business organization, and although it is likely,
we cannot assure you that Great Expectations would
be the surviving entity. In addition, the present
management and stockholders of Great Expectations
most likely will not have control of a majority of
the voting shares of Great Expectations following a
reorganization transaction. As part of such a
transaction, Great Expectation's existing directors
may resign and new directors may be appointed
without any vote by stockholders. It is likely that
Great Expectations will acquire its participation
in a business opportunity through the issuance of
common stock or other securities of Great
Expectations.
Although the terms of any such transaction cannot
be predicted, in certain circumstances, the
criteria for determining whether or not an
acquisition is a so-called "tax free"
reorganization under the Internal Revenue Code of
1986, depends upon the issuance to the stockholders
of the acquired company of a controlling interest
equal to 80% or more of the common stock of the
combined entities immediately following the
reorganization.
If a transaction were structured to take advantage
of these provisions rather than other "tax free"
provisions provided under the Internal Revenue
Code, Great Expectation's current stockholders
would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could
result in substantial additional dilution in the
equity of those who were stockholders of Great
Expectations prior to such reorganization. Our
issuance of these additional shares might also be
done simultaneously with a sale or transfer of
shares representing a controlling interest in Great
Expectations by the current officers, directors and
principal shareholders.
We anticipate that any new securities issued in any
reorganization would be issued in reliance upon
exemptions, if any are available, from registration
under applicable federal and state securities laws.
In some circumstances, however, as a negotiated
element of the transaction, Great Expectations may
agree to register such securities either at the
time the transaction is consummated, or under
certain conditions or at specified times
thereafter.
13
The issuance of substantial additional securities
and their potential sale into any trading market
that might develop in Great Expectation's
securities may have a depressive effect upon such
market. Great Expectations will participate in a
business opportunity only after the negotiation and
execution of a written agreement.
Although the terms of such agreement cannot be
predicted, generally such an agreement would
require
- specific representations and warranties by
all of the parties thereto,
- specify certain events of default,
- detail the terms of closing and the
conditions which must be satisfied by each of the
parties thereto prior to such closing,
- outline the manner of bearing costs if the
transaction is not closed,
- set forth remedies upon default, and
- include miscellaneous other terms.
Great Expectations anticipates that we, and/or our
officers and principal shareholders will enter into
a letter of intent with the management, principals
or owners of a prospective business opportunity
prior to signing a binding agreement. This letter
of intent will set forth the terms of the proposed
acquisition but will not bind any of the parties to
consummate the transaction. Execution of a letter
of intent will by no means indicate that
consummation of an acquisition is probable. Neither
Great Expectations nor any of the other parties to
the letter of intent will be bound to consummate
the acquisition unless and until a definitive
agreement concerning the acquisition as described
in the preceding paragraph is executed.
Even after a definitive agreement is executed, it
is possible that the acquisition would not be
consummated should any party elect to exercise any
right provided in the agreement to terminate it on
specified grounds. We anticipate that the
investigation of specific business opportunities
and the negotiation, drafting and execution of
relevant agreements, disclosure documents and other
instruments will require substantial management
time and attention and substantial costs for
accountants, attorneys and others.
If we decide not to participate in a specific
business opportunity, the costs incurred in the
related investigation would not be recoverable.
Moreover, because many providers of goods and
services require compensation at the time or soon
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after the goods and services are provided, our
inability to pay until an indeterminate future time
may make it impossible to procure goods and
services.
Investment Company Act and Other Regulation
Great Expectations may participate in a business
opportunity by purchasing, trading or selling the
securities of such business. Great Expectations
does not, however, intend to engage primarily in
such activities.
Specifically, Great Expectations intends to conduct
its activities so as to avoid being classified as
an investment company under the Investment Company
Act of 1940, and therefore to avoid application of
the costly and restrictive registration and other
provisions of the Investment Act, and the
regulations promulgated thereunder.
Section 3(a) of the Investment Act contains the
definition of an investment company, and it
excludes any entity that does not engage primarily
in the business of investing, reinvesting or
trading in securities, or that does not engage in
the business of investing, owning, holding or
trading investment securities defined as all
securities other than government securities or
securities of majority-owned subsidiaries the value
of which exceeds 40% of the value of its total
assets excluding government securities, cash or
cash items.
Great Expectations intends to implement its
business plan in a manner that will result in the
availability of this exception from the definition
of investment company. As a result, Great
Expectation's participation in a business or
opportunity through the purchase and sale of
investment securities will be limited.
Great Expectation's plan of business may involve
changes in our capital structure, management,
control and business, especially if we consummates
a reorganization as discussed above. Each of these
areas is regulated by the Investment Act, in order
to protect purchasers of investment company
securities. Since Great Expectations will not
register as an investment company, stockholders
will not be afforded these protections.
15
Any securities which Great Expectations might
acquire in exchange for our common stock will be
restricted securities within the meaning of the
Securities Act of 1933. If Great Expectations
elects to resell such securities, such sale cannot
proceed unless a registration statement has been
declared effective by the Securities and Exchange
Commission or an exemption from registration is
available. Section 4(1) of the Act, which exempts
sales of securities not involving a distribution,
would in all likelihood be available to permit a
private sale.
Although the plan of operation does not contemplate
resale of securities acquired, if such a sale were
to be necessary, Great Expectations would be
required to comply with the provisions of the Act
to effect such resale. An acquisition made by Great
Expectations may be in an industry that is
regulated or licensed by federal, state or local
authorities. Compliance with such regulations can
be expected to be a time-consuming and expensive
process.
Competition
Great Expectations expects to encounter substantial
competition in its efforts to locate attractive
opportunities, primarily from business development
companies, venture capital partnerships and
corporations, venture capital affiliates of large
industrial and financial companies, small
investment companies, and wealthy individuals. Many
of these entities will have significantly greater
experience, resources and managerial capabilities
than Great Expectations and will therefore be in a
better position than Great Expectations to obtain
access to attractive business opportunities. Great
Expectations also will experience competition from
other public blind pool companies, many of which
may have more funds available than does Great
Expectations.
Employees
Great Expectations is a development stage company
and currently has no employees. Management of Great
Expectations expects to use consultants, attorneys
and accountants as necessary, and does not
anticipate a need to engage any full-time employees
so long as it is seeking and evaluating business
opportunities. The need for employees and their
availability will be addressed in connection with
the decision whether or not to acquire or
participate in specific business opportunities.
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Although there is no current plan with respect to
its nature or amount, we may pay or accrue
remuneration for the benefit of, Great
Expectation's officers prior to, or at the same
time as the completion of a business acquisition
ITEM 2. PROPERTIES.
Great Expectations has a mailing address at 501
South Cherry St., Suite 610, Denver, Colorado
80246, phone number is (303) 320-0066. Other than
this mailing address, Great Expectations does not
currently have any other office facilities. We do
not anticipate the need for office facilities at
any time in the foreseeable future. Great
Expectations pays no rent or other fees for the use
of this mailing address.
ITEM 3. LEGAL PROCEEDINGS.
Great Expectations is not involved in any legal
proceedings at this date.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS.
During the fourth quarter of the fiscal year ended
October 31, 2001, no matters were submitted to a
vote of Great Expectations' security holders,
through the solicitation of proxies.
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PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Market Information. Great Expectation's common
stock is not listed in the pink sheets or in the
OTC Bulletin Board maintained by the NASD.
Holders. The approximate number of holders of
record of Great Expectation's no par value common
stock, as of January 10, 2001 was 10.
Dividends. Holders of Great Expectation's common
stock are entitled to receive such dividends as may
be declared by its board of directors.
Tradability. We do not meet the requirements for
our stock to be quoted on NASDAQ and the
tradability in our stock will be limited under the
penny stock regulation.
If the trading price of our common stock is less
than $5.00 per share, trading in the common stock
would also be subject to the requirements of Rule
15g-9 under the Exchange Act. Under this rule,
broker/dealers who recommend low-priced securities
to persons other than established customers and
accredited investors must satisfy special sales
practice requirements. The broker/dealer must make
an individualized written suitability determination
for the purchaser and receive the purchaser's
written consent prior to the transaction.
SEC regulations also require additional disclosure
in connection with any trades involving a "penny
stock", including the delivery, prior to any penny
stock transaction, of a disclosure schedule
explaining the penny stock market and its
associated risks. Such requirements severely limit
the liquidity of the common stock in the secondary
market because few broker or dealers are likely to
undertake such compliance activities. Generally,
the term penny stock refers to a stock with a
market price of less than $5.00 per share.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
Great Expectations remains in the development stage
and, since inception, has experienced no
significant change in liquidity or capital
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resources. Great Expectation's balance sheet as
of October 31, 2001, reflects a current asset value
of $0, and a total asset value of $22,099 in the
form of deferred offering costs. Great
Expectations will carry out its plan of business as
discussed above. Great Expectations cannot
predict to what extent its liquidity and capital
resources will be diminished prior to the
consummation of a business combination or whether
its capital will be further depleted by the
operating losses, if any of the business entity
which Great Expectations may eventually acquire.
Results of Operations
During the period from June 5, 1987 (inception)
through October 31, 2001, Great Expectations has
engaged in no significant operations other than
organizational activities, acquisition of capital
and preparation for registration of its securities
under the Securities Exchange Act of 1934, as
amended. No revenues were received by Great
Expectations during this period. The registration
statement was declared effective on September 10,
2001.
For the current fiscal year, Great Expectations
anticipates incurring a loss as a result of
expenses associated with registration under the
Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition
candidates. Great Expectations anticipates that
until a business combination is completed with an
acquisition candidate, we will not generate
revenues other than interest income, and may
continue to operate at a loss after completing a
business combination, depending upon the
performance of the acquired business.
Great Expectations believes that our existing
capital will not be sufficient to meet Great
Expectation's cash needs, including the costs of
compliance with the continuing reporting
requirements of the Securities Exchange Act of
1934, as amended, for a period of approximately one
year. Accordingly, in the event Great Expectations
is able to complete a business combination during
this period, it anticipates that our existing
capital will not be sufficient to allow us to
accomplish the goal of completing a business
combination. Great Expectations will depend on
additional advances from stockholders.
We cannot assure you that the available funds will
ultimately prove to be adequate to allow it to
complete a business combination, and once a
19
business combination is completed, Great
Expectation's needs for additional financing are
likely to increase substantially. Management and
other stockholders have not made any commitments to
provide additional. We cannot assure you that any
additional funds will be available to Great
Expectations to allow us to cover our expenses.
Even if Great Expectation's cash assets prove to be
inadequate to meet Great Expectation's operational
needs, Great Expectations might seek to compensate
providers of services by issuances of stock in lieu
of cash.
We do not expect to purchase or sell any
significant equipment, engage in product research
or development and do not expect any significant
changes in the number of employees.
20
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Great Expectations and Associates Inc.
Englewood, Colorado
We have audited the accompanying balance sheet of
Great Expectations and Associates Inc. (a
development stage enterprise) as of October 31,
2001, and the related statements of stockholders'
equity, loss and accumulated deficit, and cash
flows for the period from the date of inception
(June 5, 1987) to October 31, 2001. These
financial statements are the responsibility of the
Company's management. Our responsibility is to
express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about whether
the financial statements are free of material
misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit
also includes assessing the accounting principles
used and significant estimates made by management,
as well as evaluating the overall financial
statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects,
the financial position of Great Expectations and
Associates Inc., as of October 31, 2001, the
changes in its stockholders' equity, the results
of its operations and its cash flows for the
period then ended in conformity with generally
accepted accounting principles.
The accompanying financial statements have been
prepared assuming that the Company will continue
as a going concern. As discussed in Note 6 to the
financial statements, the Company has suffered
recurring losses from operations and has a net
capital deficiency that raise substantial doubt
about its ability to continue as a going concern.
21
The financial statements do not include any
adjustments that might result from the outcome of
this uncertainty.
Denver, Colorado
November 15, 2001
Tannenbaum & Company P.C.
22
Great Expectations And Associates, Inc.
(A Development Stage Enterprise)
BALANCE SHEET
October 31, 2001
October
31, 2001
ASSETS
CURRENT ASSETS
Cash $ -
Total current assets -
Other Assets
Deferred offering costs (Note 1) 22,099
------
Total other assets 22,099
------
Total assets 22,099
======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Due to stockholders (Note 4) $33,754
------
Total current liabilities 33,754
STOCKHOLDERS' EQUITY
Common stock, no par value, 500,000,000
shares authorized;150,520,000 shares
issued and outstanding (Note 1) 20,432
-
Deficit accumulated during the development
Stage (32,087)
-------
Total stockholders' equity -11,655
-------
Total liabilities and stockholders' equity $22,099
=======
The accompanying notes are an integral part of
the financial statements.
23
Great Expectations And Associates, Inc.
(A Development Stage Enterprise)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
For the period form inception (June 5, 1987)
to October 31, 2001
Inception
to October October
31, 2001 31, 2001
Revenue
Interest Income $ 166 -
---------- ---------
Total revenue 166 -
Other expense
Amortization 700 -
Rent 4,512 -
Salaries (Note 3) 6,129 -
Office supplies and expense 4,547 297
Legal 4,000 2,500
Travel 1,435 -
Escrow fees 1,500 1,500
Transfer fees 1,500 1,500
Filing fees 4,575 3,545
Accounting 3,355 2,400
---------- --------
Total expense 32,253 11,742
---------- --------
NET LOSS (32,087) (11,742)
Accumulated deficit
Balance, beginning of period - (20,345)
---------- --------
Balance, end of period $ (32,087) (32,087)
========== ========
Loss per share $ (Nil) $ (Nil)
========== ========
Shares outstanding 150,520,000 150,520,000
The accompanying notes are an integral part of the
financial statements.
24
Great Expectations And Associates, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY
For the period form inception (June 5, 1987) to
October 31, 2001
Total
Common stock Accumu- stock-
Number lated holders'
of shares Amount deficit equity
--------- ------ ------- --------
Balance, June 5, 1987 - $ - $ - $ -
Issuance of stock for cash
July 1987 ($.00005 per share) 67,000,000 3,000 - 3,000
Issuance of stock for cash
July 1987 ($.0017 per share) 7,200,000 12,000 - 12,000
Issuance of stock for services (Note 3)
July 1987 ($.0017 per share) 1,000,000 1,666 - 1,666
Issuance of stock for services (Note 3)
March 1998 ($.00005 per share) 75,320,000 3,766 - 3,766
Net loss for the period inception
to October 31, 1998 - - (10,833) (10,833)
---------- -------- -------- -------
Balance, October 31, 1998 150,520,000 20,432 (10,833) 9,599
Issuance of stock for services (Note 3)
October 1999 ($.00005 per share) 7,300,000 326 326
Issuance of stock for services (Note 3)
October 1999 ($.00005 per share) 7,300,000 326 326
Issuance of stock for services (Note 3)
October 1999($.00005 per share) 1,000,000 45 45
Net loss for the period October
31, 1999 - - (697) (697)
---------- -------- -------- -------
Balance, October 31, 1999 166,120,000 $ 21,129 $ (11,530) $ 9,599
Net loss for the period October
31, 2000 (8,815) (8,815)
Treasury stock (15,600,000) (697) (697)
----------- -------- --------- -------
Balance, October 31, 2000 150,520,000 $ 20,432 $ (20,345) $ 87
Net loss for the period October
31, 2001 (11,742) (11,742)
Net loss for the period October
31, 2001 150,520,000 20,432 (32,087) (11,655)
The accompanying notes are an integral part of
the financial statements.
25
Great Expectations And Associates, Inc.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the periods ended October 31, 2001
Inception
to October October
31, 2001 31, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (32,087) $ (11,742)
Add non-cash items:
Salaries paid with stock (Note 3) 5,432
Organizational cost amortization 700 -
Increase in organizational cost (700) -
----------- -----------
Cash used in operations (26,655) (11,742)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans-stockholders (Note 4) 33,754 11,742
Proceeds from issuance of common stock 15,000
Offering costs (Note 1) (22,099)
Treasury stock
--------- ---------
Cash provided by financing activities 26,655 11,742
--------- ---------
Net increase (decrease) in cash - -
Cash, beginning of periods - -
Cash, end of periods $ - -
The accompanying notes are an integral part of the
financial statements.
26
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
October 31, 2001
Summary of significant accounting policies
Organization
Great Expectations and Associates Inc. (the
"Company", formerly Great Expectations, Inc.) was
organized under the laws of the State of Colorado
on June 5, 1987, for the purpose of evaluating and
seeking merger candidates. The Company is
currently considered to be in the development
stage as more fully defined in the Financial
Accounting Standards Board Statement No. 7. The
Company has engaged in limited activities, but has
not generated significant revenues to date. The
Company is currently seeking business
opportunities.
Accounting methods
The Company records income and expenses on
the accrual method.
Fiscal year
The Company has selected October 31 as its
fiscal year.
Deferred offering cost
Costs associated with any public offering were
charged to proceeds of the offering.
Loss per share
All stock outstanding prior to the public offering
had been issued at prices substantially less than
that which was paid for the stock in the public
offering. Accordingly, for the purpose of the
loss per share calculation, shares outstanding at
the end of the period were considered to be
outstanding during the entire period.
Income taxes
Since its inception, the Company has incurred a
net operating loss. Accordingly, no provision has
been made for income taxes.
Stock issued for services
The value of the stock issued for services is
based on management's estimate of the fair market
value of the services rendered
27
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
October 31, 2001
Due to stockholders
During the fiscal year advances totaling $33,754
were made to the Company by stockholders. There
are no specific repayment terms and no interest is
charged.
Management representation
For the period ended October 31, 2001 management
represents that all adjustments necessary to a
fair statement of the results for the period have
been included and such adjustments are of a normal
and recurring nature.
Going concern
The company has suffered recurring losses from
operations and has a net capital deficiency that
raise substantial doubt about its ability to
continue as a going concern.
28
INDEPENDENT AUDITORS'REPORT
The Board of Directors
Great Expectations and Associates Inc.
Englewood, Colorado
We have audited the accompanying balance sheet of
Great Expectations and Associates Inc. (a
development stage enterprise) as of October 31,
2000, and the related statements of stockholders'
equity, loss and accumulated deficit, and cash
flows for the period from the date of inception
(June 5, 1987) to October 31, 2000. These
financial statements are the responsibility of the
Company's management. Our responsibility is to
express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally
accepted auditing standards. Those standards
require that we plan and perform the audit to
obtain reasonable assurance about whether the
financial statements are free of material
misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit
also includes assessing the accounting principles
used and significant estimates made by management,
as well as evaluating the overall financial
statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects,
the financial position of Great Expectations and
Associates Inc., as of October 31, 2000, the
changes in its stockholders' equity, the results of
its operations and its cash flows for the period
then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been
prepared assuming that the Company will continue as
a going concern. As discussed in Note 6 to the
financial statements, the Company has suffered
recurring losses from operations and has a net
capital deficiency that 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.
Denver, Colorado
November 3, 2000
Tannenbaum & Company P.C.
29
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
BALANCE SHEET
October 31, 2000
October
31,2000
ASSETS
CURRENT ASSETS
Cash $ -
----------
Total current assets -
Other Assets
Deferred offering costs (Note 1) 22,099
--------
Total other assets 22,099
--------
Total assets 22,099
-------
LIABILITIES AND STOCKHOLDERS'EQUITY
CURRENT LIABILITIES
Due to stockholders (Note 4) $ 22,012
------
Total current liabilities 22,012
STOCKHOLDERS'EQUITY
Common stock, no par value, 500,000,000
shares authorized; 150,520,000 shares
issued and outstanding (Note 1) 20,432
------
Deficit accumulated during the development stage (20,345)
--------
Total stockholders' equity 87
Total liabilities and stockholders' equity $22,099
--------
The accompanying notes are an integral part of the
financial statements.
30
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
For the period from inception (June 5, 1987)
to October 31, 2000
Inception
to October October
31, 2000 31, 2000
Revenue
Interest Income $ 166 -
--------- --------
Total revenue 166 -
Other expense
Amortization 700 -
Rent 4,512 -
Salaries (Note 3) 6,129 -
Office supplies and expense (Note7) 4,250 4,250
Legal 1,500 1,500
Travel 1,435 1,435
Filing fees 1,030 1,030
Accounting 955 600
-------- ---------
Total expense 20,511 8,815
-------- ---------
NET LOSS (20,345) (8,815)
Accumulated deficit
Balance, beginning of period - (11,530)
-------- ---------
Balance, end of period $(20,345) (20,345)
-------- ---------
Loss per share $ (Nil) (Nil)
-------- ---------
Shares outstanding 150,520,000 150,520,000
The accompanying notes are an integral part of the
financial statements.
31
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS'EQUITY
For the period from inception (June 5, 1987)
to October 31, 2000
Common stock Total
------------ Accumu- stock-
Number lated holders'
Of shares Amount deficit equity
---------- ------- -------- ----------
Balance, June 5, 1987 - $ - $ - $ -
Issuance of stock for cash
July 1987 ($.00005 per share) 67,000,000 3,000 - 3,000
Issuance of stock for cash
July 1987 ($.0017 per share) 7,200,000 12,000 - 12,000
Issuance of stock for services (Note 3)
July 1987 ($.0017 per share) 1,000,000 1,666 - 1,666
Issuance of stock for services (Note 3)
March 1998 ($.00005 per share) 75,320,000 3,766 - 3,766
Net loss for the period inception
to October 31, 1998 - - (10,833) (10,833)
------------ -------- --------- ---------
Balance, October 31, 1998 150,520,000 20,432 (10,833) 9,599
Issuance of stock for services (Note 3)
October 1999 ($.00005 per share) 7,300,000 326 326
Issuance of stock for services (Note 3)
October 1999 ($.00005 per share) 7,300,000 326 326
Issuance of stock for services (Note 3)
October 1999($.00005 per share) 1,000,000 45 45
Net loss for the period
October 31, 1999 - - (697) (697)
---------- ------- -------- -------
Balance, October 31, 1999 166,120,000 $ 21,129 $(11,530) $9,599
Net loss for the period
October 31, 2000 (8,815) (8,815)
Treasury stock (15,600,000) (697) (697)
Balance, October 31, 2000 150,520,000 $ 20,432 $(20,345) $697
----------- -------- --------- -------
The accompanying notes are an integral part of the financial statements.
16
Great Expectations and Associates, Inc.
A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
For the periods ended October 31, 2000
Inception
to October October
31, 2000 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(20,345) (8,815)
Add non-cash items:
Salaries paid with stock (Note 3) 5,432 (697)
Organizational cost amortization 700 -
Increase in organizational cost (700) -
-------- --------
Cash used in operations (14,913) (9,512)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans-stockholders
(Note 4) 22,012 18,012
Proceeds from issuance of
common stock 15,000 -
Offering costs (Note 1) (22,099) (8,500)
--------- --------
Cash provided by
financing activities 14,913 9,512
--------- --------
Net increase (decrease) in cash - -
Cash, beginning of periods - -
--------- --------
Cash, end of periods $ - -
========= ========
The accompanying notes are an integral part of the
financial statements.
33
Great Expectations and Associates, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
1. Summary of significant accounting policies
Organization
Great Expectations and Associates Inc. (the
"Company", formerly Great Expectations, Inc.) was
organized under the laws of the State of Colorado
on June 5, 1987, for the purpose of evaluating and
seeking merger candidates. The Company is
currently considered to be in the development stage
as more fully defined in the Financial Accounting
Standards Board Statement No. 7. The Company has
engaged in limited activities, but has not
generated significant revenues to date. The
Company is currently seeking business
opportunities.
Accounting methods
The Company records income and expenses on the
accrual method.
Fiscal year
The Company has selected October 31 as its fiscal
year.
Deferred offering cost
Costs associated with any public offering were
charged to proceeds of the offering.
Loss per share
All stock outstanding prior to the public offering
had been issued at prices substantially less than
that which was paid for the stock in the public
offering. Accordingly, for the purpose of the loss
per share calculation, shares outstanding at the
end of the period were considered to be outstanding
during the entire period.
2. Income taxes
Since its inception, the Company has incurred a net
operating loss. Accordingly, no provision has been
made for income taxes.
3. Stock issued for services
The value of the stock issued for services is based
on management's estimate of the fair market value
of the services rendered.
4. Due to stockholders
During the fiscal year advances totaling $22,012
were made to the Company by stockholders.
34
5. Management representation
For the period ended October 31, 2000 management
represents that all adjustments necessary to a fair
statement of the results for the period have been
included and such adjustments are of a normal and
recurring nature.
6. Going concern
The company has suffered recurring losses from
operations and has a net capital deficiency that
raise substantial doubt about its ability to
continue as a going concern.
35
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have not been any changes in or disagreements
with accountants on accounting and financial
disclosure.
36
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE
COMPANY
The principal executive officers and directors of
Great Expectations are
Name Position Term of office
Raphael M. Solot President/Treasurer November 1999
Director to present
Frederick W. Mahlke Vice President/Secretary July 1987
Director to present
Only Mr. Mahlke has been involved with prior blank
check companies.
The directors named above will serve until the next
annual meeting of Great Expectation's stockholders.
Officers will hold their positions at the pleasure
of the board of directors, absent any employment
agreement, of which none currently exists or is
contemplated.
There is no arrangement or understanding between
the directors and officers of Great Expectations
and any other person under which any director or
officer was or is to be selected as a director or
officer. The directors and officer of Great
Expectations will devote their time to Great
Expectation's affairs on an "as needed" basis. As a
result, the actual amount of time which they will
devote to Great Expectation's affairs is unknown
and is likely to vary substantially from month to
month.
Biographical Information
Raphael M. Solot. Mr. Solot has been an attorney
in private practice in Colorado since 1964 with an
emphasis on complex civil litigation, corporate and
franchise law. From 1994 until March 1996, Mr.
Solot served on the Board of Directors of Jones
Global, Ltd., a corporation engaged in the
international cable business. From March 1996
until the sale of Jones Intercable, M. Solot served
on the Board of Directors of Jones Intercable,
Inc., the eighth largest cable television company
in the United States. Mr. Solot was elected Vice
Chairman of the Board of Jones Intercable, Inc. at
the annual meeting of shareholders in 1997 and
served in that capacity until April 1998.
37
Mr. Solot received a Bachelor of Science degree
from the University of Colorado in 1958 and a Juris
Doctor degree from the University of Denver in
1963.
Frederick W. Mahlke. Mr. Malhke has served as a
Director of Great Expectations since July 1987.
From November 1979 to present, Mr. Mahlke has been
President of Cumberland Sales and management of
Denver, Colorado, a commercial and residential
management company. For the past ten years, Mr.
Mahlke has also worked as a Colorado court-
appointed receiver on over forty properties and has
also been appointed receiver for two California
properties.
Mr. Mahlke's prior experience with blank check
companies. Mr. Mahlke was a director of
Deversified Management Acquisitions II, Inc.
Deversified Management Acquisitions II, Inc.
completed an offering on From S-18 dated June 19,
1988. Deversified Management Acquisitions II,
Inc. merged with Constellation Development, Inc.
(33-16885-1) in March 1989. Mr. Mahlke resigned
from Deversified Management Acquisitions II, Inc.
simultaneously with its merger with Constellation
Development, Inc. Thereafter, Constellation
Development, Inc. merged with Carpet Holdings, Inc.
Constellation Development, Inc. was an English real
estate development and acquisition company with
real estate holdings in Liverpool, England
consisting of a shopping center. Carpet Holdings,
Inc. was a carpet wholesaler located in Dalton,
Georgia.
Great Expectation's officers and directors may
elect, in the future, to form one or more
additional shell companies with a business plan
similar or identical to that of Great Expectations.
Any such additional shell companies would also be
in direct competition with Great Expectations for
available business opportunities.
We do not have a procedure in place that would
allow these individuals to resolve potential
conflicts in an arms-length fashion. They will be
required to use their discretion to resolve them in
a manner that they consider appropriate. Great
Expectation's officers and directors may actively
negotiate or otherwise consent to the purchase of a
portion of his common stock as a condition to, or
in connection with, a proposed merger or
acquisition transaction.
38
We anticipate that a substantial premium over the
initial cost of such shares may be paid by the
purchaser at the same time as any sale of shares by
Great Expectation's officers and directors which is
made as a condition to, or in connection with, a
proposed merger or acquisition transaction. The
fact that a substantial premium may be paid to
Great Expectation's officers and directors to
acquire their shares creates a potential conflict
of interest for them in satisfying their fiduciary
duties to Great Expectations and its other
shareholders. Even though such a sale could result
in a substantial profit to them, they would be
legally required to make the decision based upon
the best interests of Great Expectations and Great
Expectation's other shareholders, rather than their
own personal pecuniary benefit.
ITEM 10. EXECUTIVE COMPENSATION
Other than described below, no compensation was
awarded to, earned by, or paid in the last three
years. Mr. Solot received 1,000,000 Common Shares
at $.00005 per share in October 1999 as partial
payment of services.
Although there is no current plan in existence, it
is possible that Great Expectations will adopt a
plan to pay or accrue compensation to its officers
and directors for services related to seeking
business opportunities and completing a merger or
acquisition transaction. Great Expectations has
no stock option, retirement, pension, or profit-
sharing programs for the benefit of directors,
officers or other employees, but the board of
directors may recommend adoption of one or more
such programs in the future.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the number of shares
of common stock owned of record and beneficially by
executive officers, directors and persons who hold
5.0% or more of the outstanding common stock of
Great Expectations. Also included are the shares
held by all executive officers and directors as a
group.
Name and Address Number of Percentage Percentage
Shares Outstanding of Shares of Shares
Outstanding After
Offering
Frederick W. Mahlke(1) 500,000 .30% .30%
4105 S. Florida Avenue
Suite 100
Denver, Colorado 80222
Raphael M. Solot 1,000,000 .60% .60%
501 South Cherry Street
Suite 610
Denver, Colorado 80222
Miles Wynn 139,340,000 83.88% 83.38%
3679 South Dawson Street
Aurora, Colorado 80014
Officers and Directors as a group
(2 persons) 1,500,000 .90% .90%
(1)Mr. Mahlke and Mr. Solot are officers and
directors of Great Expectations
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
In February 1988 and December 31, 1998, advances
totaling $4,000 were made to Great Expectations by
stockholders. No written repayment terms were
entered into.
In 1998, Capital Holding Company, an Oklahoma
corporation purchased 67,680,000 shares of the
treasury stock of Great Expectations, who in turn
issued the stock to Capital Holding Company and
James Porter for the sum of $.00005 per share.
The shares were issued in lieu of compensation for
salaries and other administrative expenses valued
at $3,384 relating to bringing Great Expectations
up to date with the Colorado Secretary of State,
providing updated accounting for Great Expectations
and paying all expenses relating to S.E.C. filings.
In addition, Great Expectations was provided office
space by Capital Holding Company.
In June 1998, Miles Wynn received 7,520,000 shares
of Great Expectations for the sum of $.00005 per
share in lieu of salary and other compensation due
to Mr. Wynn valued at $376. This compensation
included repayment of expenses relating to S.E.C.
filings and corporate state filings. Wynn also
provided Great Expectations with office space at no
cost to the company from 1987 to June 16, 1999 and
thereafter, from March 10, 1999 to November 12,
1999.
On March 10, 1999, Mr. Wynn purchased the
67,680,000 shares of Great Expectations owned
jointly by Capital Holding Company and James Porter
for the sum of $25,000.
40
No officer, director, promoter, or affiliate of
Great Expectations has or proposes to have any
direct or indirect material interest in any asset
proposed to be acquired by Great Expectations
through security holdings, contracts, options, or
otherwise. Great Expectations has adopted a policy
under which any consulting or finder's fee that may
be paid to a third party for consulting services to
assist management in evaluating a prospective
business opportunity would be paid in stock or in
cash. Any such issuance of stock would be made on
an ad hoc basis. Accordingly, Great Expectations is
unable to predict whether or in what amount such a
stock issuance might be made.
Although there is no current plan in existence, it
is possible that Great Expectations will adopt a
plan to pay or accrue compensation to its sole
officer and director for services related to
seeking business opportunities and completing a
merger or acquisition transaction. Great
Expectations maintains a mailing address at the
office of its legal counsel, but otherwise does not
maintain an office. As a result, it pays no rent
and incurs no expenses for maintenance of an office
and does not anticipate paying rent or incurring
office expenses in the future. It is likely that
Great Expectations will establish and maintain an
office after completion of a business combination.
Although management has no current plans to cause
Great Expectations to do so, it is possible that
Great Expectations may enter into an agreement with
an acquisition candidate requiring the sale of all
or a portion of the common stock held by Great
Expectation's current stockholders to the
acquisition candidate or principals thereof, or to
other individuals or business entities, or
requiring some other form of payment to Great
Expectation's current stockholders, or requiring
the future employment of specified officers and
payment of salaries to them.
It is more likely than not that any sale of
securities by Great Expectation's current
stockholders to an acquisition candidate would be
at a price substantially higher than that
originally paid by such stockholders. Any payment
to current stockholders in the context of an
acquisition involving Great Expectations would be
determined entirely by the largely unforeseeable
terms of a future agreement with an unidentified
business entity.
41
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
List of Exhibits
The following exhibits are filed with this report:
None
Reports on Form 8-K
None
42
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended,
the Company has duly caused this Report to be
signed on its behalf by the undersigned duly
authorized person.
Date: January 10, 2002
GREAT EXPECTATIONS, INC.
/s/ Raphael Solot
- --------------------
By: Raphael Solot, President
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this report has
been signed below by the following persons on
behalf of the Company and in the capacities and on
the dates indicated.
/s/Raphael Solot, Principal Executive Officer January 10, 2002
- -------------------- Principal Financial Officer
Controller Director
/s/Fredrick Mahlke Secretary/Vice President January 10, 2002
- -------------------- Director
