SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For Quarter Ended: March 31, 2001
OR
[] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No.000-31355
GALAXY SPECIALTIES, INC.
(Exact name of registrant as specified in its charter)
Nevada 81-0438093
(State of incorporation) (I.R.S. Employer Identification No.)
369 East 900 South, Suite 149
Salt Lake City, Utah 84111
(801) 323-2395
(Address and telephone number of principal executive
offices and principal place of business)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
As of April 18, 2001, the Registrant had a total of 17,000,000 shares
of common stock issued and outstanding.
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PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
2
GALAXY SPECIALTIES, INC.
(A Development Stage Company)
BALANCE SHEETS
March 31, June 30,
2001 2000
------------------ -----------------
ASSETS (Unaudited) (Audited)
------
CURRENT ASSETS
Cash in bank $ 0 $ 0
------------------ -----------------
$ 0 $ 0
================== =================
LIABILITIES & EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable - related party (Note 4) $ 28,000 $ 28,000
------------------ -----------------
TOTAL CURRENT LIABILITIES 28,000 28,000
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock $.001 par value:
Authorized - 20,000,000 shares
Issued and outstanding 17,000,000 shares 17,000 17,000
Deficit accumulated during the development stage (45,000) (45,000)
------------------ -----------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (28,000) (28,000)
------------------ -----------------
$ 0 $ 0
================== =================
See Notes to Financial Statements.
3
GALAXY SPECIALTIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
3/7/86
Three Months Ended Nine Months Ended (Date of
March 31, March 31, inception) to
2001 2000 2001 2000 3/31/2001
------------------ ------------------ ----------------- ----------------- ------------------
Net sales $ 0 $ 0 $ 0 $ 0 $ 0
Cost of sales 0 0 0 0 0
------------------ ------------------ ----------------- ----------------- ------------------
GROSS PROFIT 0 0 0 0 0
General & administrative
expenses 0 0 0 0 45,000
------------------ ------------------ ----------------- ----------------- ------------------
NET LOSS $ 0 $ 0 $ 0 $ 0 $ (45,000)
================== ================== ================= ================= ==================
BASIC AND DILUTED
(LOSS) PER COMMON
SHARE
Net income (loss) per
weighted average share $ .000 $ (.000) $ .000 $ (.000)
================== ================== ================= =================
Weighted average number of
common shares used to
compute net income (loss)
per weighted average share 17,000,000 17,000,000 17,000,000 17,000,000
================== ================== ================= =================
See Notes to Financial Statements.
4
GALAXY SPECIALTIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
3/7/86
Three Months Ended Nine Months Ended (Date of
March 31, March 31, inception) to
2001 2000 2001 2000 3/31/2001
------------------ ------------------ ----------------- ----------------- ------------------
OPERATING ACTIVITIES
Net income (loss) $ 0 $ 0 $ 0 $ 0 $ (45,000)
Adjustments to reconcile net
income (loss) to cash used
by operating activities:
Amortization 0 0 0 0 17,000
Accounts payable
related party 0 0 0 0 28,000
------------------ ------------------ ----------------- ----------------- ------------------
NET CASH USED BY
OPERATING ACTIVITIES 0 0 0 0 0
INVESTING ACTIVITIES
Organization costs 0 0 0 0 (17,000)
------------------ ------------------ ----------------- ----------------- ------------------
NET CASH REQUIRED BY
INVESTING ACTIVITIES 0 0 0 0 (17,000)
FINANCING ACTIVITIES
Proceeds from sale of
common stock 0 0 0 0 17,000
------------------ ------------------ ----------------- ----------------- ------------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 0 0 17,000
------------------ ------------------ ----------------- ----------------- ------------------
INCREASE IN CASH AND
CASH EQUIVALENTS 0 0 0 0 0
Cash and cash equivalents
at beginning of period 0 0 0 0 0
------------------ ------------------ ----------------- ----------------- ------------------
CASH & CASH
EQUIVALENTS AT
END OF PERIOD $ 0 $ 0 $ 0 $ 0 $ 0
================== ================== ================= ================= ==================
See Notes to Financial Statements.
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GALAXY SPECIALTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2001
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
a. Basis of Presentation
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP")
for interim financial information. Accordingly, they do not
include all of the information and footnotes required by generally
accepted auditing principles for complete financial statements.
The unaudited financial statements should, therefore, be read in
conjunction with the financial statements and notes thereto in the
Report on Form 10-SB12G for the year ended June 30, 2000. In the
opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary for a fair
presentation, have been included. The results of operations for
the nine month period ended March 31, 2001 are not necessarily
indicative of the results that may be expected for the entire
fiscal year.
b. Organization & Consolidation Policy
Galaxy Specialties, Inc. (the Company), a Nevada corporation, was
incorporated on May 22, 2000. On June 5, 2000, the Company merged
with Hystar Aerospace Marketing Corporation of Montana Inc.
(Hystar). The Company is the surviving corporation.
Hystar Aerospace Marketing Corporation of Montana was incorporated
March 7, 1986 to lease, sell, and market airships and the Burkett
Mill, a waste milling device, which rights were acquired from VIP
Worldnet, Inc., initially the only shareholder. The technology to
further develop the airship and the mill by the parent company
proved to be prohibitive, and shortly after the acquisition of the
marketing rights further activity ceased. Hystar has been inactive
since that date.
The merger was recorded under the pooling of interests method of
accounting. Each share of the Company remained outstanding as one
fully paid and non-assessable share of capital stock of the
surviving corporation.
The accompanying financial statements present the financial
condition and results of operations of Hystar from its inception
through the merger date and of the surviving entity, the Company,
as of the merger date.
c. Recognition of Revenue
The Company recognizes income and expense on the accrual basis of
accounting.
d. Net Loss Per Common Share
Basic and diluted loss per common share is computed by dividing
net loss available to common shareholders by the weighted average
number of common shares outstanding during the periods presented.
e. Cash and Cash Equivalents
The Company considers all highly liquid investments with
maturities of three months or less to be cash equivalents.
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GALAXY SPECIALTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (continued)
March 31, 2001
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued)
f. Provision for Income Taxes
The Company records the income tax effect of transactions in the
same year that the transactions enter into the determination of
income, regardless of when the transactions are recognized for tax
purposes. Tax credits are recorded in the year realized. Since the
Company has not yet realized income as of the date of this report,
no provision for income taxes has been made.
In February, 1992, the Financial Accounting Standards Board
adopted Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, which supersedes substantially all
existing authoritative literature for accounting for income taxes
and requires deferred tax balances to be adjusted to reflect the
tax rates in effect when those amounts are expected to become
payable or refundable. The Statement was applied in the Company's
financial statements for the fiscal year commencing July 1, 1992.
No provision for income taxes have been recorded due to net
operating loss carryforwards totaling approximately $45,000 that
will be offset against future taxable income. These NOL
carryforwards begin to expire in the year 2001. No tax benefit has
been reported in the financial statements because the Company
believes there is a 50% or greater chance the carryforwards will
expire unused.
g. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statement and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
h. Dividend Policy
The Company has not yet adopted any policy regarding payment of
dividends.
i. Organization Costs
The Company amortized its organization costs over a five year
period.
NOTE 2: GOING CONCERN
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has no assets
and has had recurring operating losses for the past several years and
is dependent upon financing to continue operations. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty. It is management's plan to find an
operating company to merge with, thus creating necessary operating
revenue.
NOTE 3: CAPITALIZATION
In 1986, the Company issued 17,000,000 shares of common stock for the
marketing rights to a waste milling device. The value of this issuance
was $17,000.
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GALAXY SPECIALTIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (continued)
March 31, 2001
NOTE 4: RELATED PARTY TRANSACTIONS
During the year ended June 30, 2000, the Company incurred $28,000 of
professional fees payable to Mutual Ventures Corp. An officer of the
Company is also an employee of Mutual Ventures Corp.
NOTE 5: DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating
substantially all of its efforts in raising capital and searching for a
business operation with which to merge, or assets to acquire, in order
to generate significant operations.
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In this report references to "Galaxy Specialities," "we," "us," and
"our" refer to Galaxy Specialities, Inc.
Forward Looking Statements
This form 10-QSB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-QSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"estimate" or "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of factors, many of which are not within our control. These factors
include but are not limited to economic conditions generally and in the
industries which we may participate; competition within our chosen market and
failure by Galaxy Specialities to successfully develop business relationships.
ITEM 2: PLAN OF OPERATIONS
We are a development stage company with no assets and recurring losses
from inception and are dependent upon financing to continue operations. For the
year ended June 30, 2000 and the nine months ended March 31, 2001, we had no
cash on hand and total current liabilities of $28,000. The $28,000 note payable
is for accounting and legal fees incurred during the 2000 fiscal year and paid
on our behalf by a related party.
We have no material commitments for the next twelve months. We believe
that our current cash needs for at least the next twelve months can be met by
loans from our directors, officers and shareholders based on understandings we
have with these persons. However, these understandings are not formal agreements
and therefore these persons are not obligated to provide funds. We may repay any
loans, costs of services and advancements with cash, if available, or we may
convert them into common stock.
Our management intends to actively pursue business opportunities during
the next twelve months. All risks inherent in new and inexperienced enterprises
are inherent in our business. We have not made a formal study of the economic
potential of any business. At the present, we have not identified any assets or
business opportunities for acquisition. If we obtain a business opportunity, it
may be necessary to raise additional capital, which may be accomplished by
selling our common stock.
Based on current economic and regulatory conditions, management
believes that it is possible, if not probable, for a company like ours, without
many assets or liabilities, to negotiate a merger or acquisition with a viable
private company. The opportunity arises principally because of the high legal
and accounting fees and the length of time associated with the registration
process of "going public." However, should any of these conditions change, it is
very possible that there would be little or no economic value for anyone taking
over control of Galaxy Specialities.
Potential investors must recognize that because of our limited capital
available for investigation and management's limited experience in business
analysis we may not discover or adequately evaluate adverse facts about the
business opportunity to be acquired. Also, we intend to concentrate our
acquisition efforts on properties or businesses that we believe to be
undervalued or that we believe may realize a substantial benefit from being
publicly owned. Investors should expect that any acquisition candidate may have
little or no operating history, or a history of losses or low profitability.
It is emphasized that our management may effect transactions having a
potentially adverse impact upon our shareholders pursuant to the authority and
discretion of our management to complete acquisitions without submitting any
proposal to the stockholders for their consideration.
Should a merger or acquisition prove unsuccessful, it is possible that
we may decide not to pursue further acquisition activities and management may
abandon its activities and our shares would become worthless.
PART II: OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
--------
None
(b) Reports on Form 8-K.
-------------------
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned who is duly authorized.
Galaxy Specialties, Inc.
Date April 18, 2001
By: /s/ Jeanne Ball
Jeanne Ball, President and Director
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