UNITED STATES
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 the quarterly period ended March 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-31355
GALAXY SPECIALTIES, INC.
(Exact name of registrant as specified in its charter)
Nevada 81-0438093
(State of incorporation) (I.R.S. Employer Identification No.)
#149, 369 East 900 South
Salt Lake City, Utah 84111
(801) 323-2395
(Address and telephone number of principal executive offices)
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 17, 2003, the Registrant had a total of 18,050,000 shares of
common stock issued and outstanding.
Transitional small business disclosure format: Yes [ ] No [X]
TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements...............................................3
Item 2: Plan of Operations.................................................8
Item 3: Controls and Procedures............................................9
PART II: OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K ..................................9
Signatures and Certifications..............................................10
_____________________________
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
The financial information set forth below with respect to our statements
of operations for the three and nine month periods ended March 31, 2003 and
2002 are unaudited. This financial information, in the opinion of management,
includes all adjustments consisting of normal recurring entries necessary for
the fair presentation of such data. The results of operations for the nine
month period ended March 31, 2003, are not necessarily indicative of results
to be expected for any subsequent period.
2
Galaxy Specialties, Inc.
Financial Statements
March 31, 2003
3
Galaxy Specialties, Inc.
(A Development Stage Company)
Balance Sheets
ASSETS
March 31, June 30,
2003 2002
------------- ------------
(Unaudited)
CURRENT ASSETS $ - $ -
------------- ------------
TOTAL ASSETS $ - $ -
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable - Related party $ 28,000 $ 28,000
------------- ------------
Total Liabilities 28,000 28,000
------------- ------------
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; 20,000,000 shares
authorized; 18,050,000 and 17,000,000 shares
issued and outstanding, respectively 18,050 17,000
Additional Paid-in Capital 19,950 -
Deficit Accumulated During the Development Stage (66,000) (45,000)
------------- ------------
Total Stockholders' Equity (deficit) (28,000) (28,000)
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ -
============= ============
4
Galaxy Specialties, Inc.
(A Development Stage Company)
Statement of Operations
(Unaudited)
For the For the For the For the From
three three nine nine inception
months months months months on March 7,
ended ended ended ended 1986 to
March 31, March 31, March 31, March 31, March 31,
2003 2002 2003 2002 2003
------------ ------------- ------------ ------------ ------------
REVENUES $ - $ - $ - $ - $ -
------------ ------------- ------------ ------------ ------------
EXPENSES
Depreciation & Amortization - - - - 17,000
General & Administrative - - 21,000 - 49,000
------------ ------------- ------------ ------------ ------------
TOTAL EXPENSES - - 21,000 - 66,000
------------ ------------- ------------ ------------ ------------
NET INCOME (LOSS) $ - $ - $ (21,000) $ - $ (66,000)
============ ============= ============ ============ ============
NET LOSS PER SHARE $ - $ - $ - $ - $ -
============ ============= ============ ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 18,050,000 17,000,000 18,050,000 17,000,000 17,058,474
============ ============= ============ ============ ============
5
Galaxy Specialties, Inc.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
From
Inception on
For the nine months ended March 7, 1986
March 31, Through
2003 2002 March 31, 2003
------------- ------------- --------------
Cash Flows from Operating Activities
Net Loss $ (21,000) $ - $ (66,000)
Less Non-cash Items:
Stock issued for services 21,000 - 21,000
Depreciation & Amortization - - 17,000
Increase in Accounts Payable - - 28,000
------------- ------------- --------------
Net Cash Provided (Used) by
Operating Activities - - -
------------- ------------- --------------
Cash Flows from Investing Activities - - -
------------- ------------- --------------
Net Cash Provided (Used) by
Investing Activities - - -
------------- ------------- --------------
Cash Flows from Financing Activities - - -
------------- ------------- --------------
Net Cash Provided (Used) by
Financing Activities - - -
------------- ------------- --------------
Increase (Decrease) in Cash - - -
Cash and Cash Equivalents at
Beginning of Period - - -
------------- ------------- --------------
Cash and Cash Equivalents at
End of Period $ - $ - $ -
============= ============= ==============
Supplemental Cash Flow Information:
Stock issued for marketing rights $ - $ - $ 17,000
Stock issued for services $ 21,000 $ - $ 21,000
Cash Paid For:
Interest $ - $ - $ -
Income Taxes $ - $ - $ -
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Galaxy Specialties, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2003
GENERAL
Galaxy Specialties, Inc. (the Company) has elected to omit substantially all
footnotes to the financial statements for the nine months ended March 31, 2003
since there have been no material changes (other than indicated in other
footnotes) to the information previously reported by the Company in their
Annual Report filed on the Form 10-KSB for the twelve months ended June 30,
2002.
UNAUDITED INFORMATION
The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments
which are, in the opinion of management, necessary to properly reflect the
results of the interim period presented. The information presented is not
necessarily indicative of the results from operations expected for the full
fiscal year.
In this report references to "Galaxy Specialties," "we," "us," and "our"
refer to Galaxy Specialties, Inc.
FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements and 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, failure by management to successfully develop business
relationships, and competition within the merger and acquisitions market.
ITEM 2: PLAN OF OPERATION
We are a development stage company with no assets and recurring losses
from inception and we are dependent upon financing to continue operations.
For the three and nine month periods ended March 31, 2003 and the year ended
June 30, 2002, we had no cash on hand and total current liabilities of
$28,000. The $28,000 note payable is related to accounting and legal fees
incurred during the 2000 fiscal year which were 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. In the event we acquire
a business opportunity, then it may be necessary to raise additional capital,
which may be accomplished by selling our common stock.
Our management intends to actively pursue business opportunities during
the next twelve months. 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 Specialties.
We have not made a formal study of the economic potential of any
business and as of the date of this filing, we have not identified any assets
or business opportunities for acquisition. 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. All risks inherent in new and inexperienced enterprises are
inherent in our business. 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.
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ITEM 3: CONTROLS AND PROCEDURES
We rely on controls and procedures to ensure that material information
regarding our company and its operations is provided to the public in a timely
manner. On May 6, 2003, our Principal Executive and Financial Officer
evaluated the effectiveness of these disclosure controls and procedures and
determined that there were no significant deficiencies in these procedures.
The officer did not identify any deficiencies or material weaknesses in
our internal controls, nor did she identify fraud that involved our management
who had a significant role in our internal controls. Also, she did not find
any deficiencies or weaknesses which would require changes to be made or
corrective actions to be taken related to our internal controls.
PART II: OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
Part II Exhibits
3.1 Articles of Incorporation (Incorporated by reference to exhibit 3.1
of Form 10-SB, filed August 21, 2000)
3.2 Bylaws of Galaxy Specialties (Incorporated by reference to exhibit
3.3 of Form 10-SB, filed August 21, 2000)
99.1 Section 1350 certification
Reports on Form 8-K
None
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned who is duly
authorized.
Galaxy Specialties, Inc.
Date: May 6, 2003
/S/ M. Jeanne Ball
By: _______________________________
M. Jeanne Ball
President, Principal Executive and
Financial Officer, Director
PRINCIPAL EXECUTIVE OFFICER CERTIFICATION
I, M. Jeanne Ball, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Galaxy
Specialties, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statement made, in light of the circumstances under which statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
10
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ M. Jeanne Ball
Date: May 6, 2003 ____________________________________________
M. Jeanne Ball, Principal Executive Officer
PRINCIPAL FINANCIAL OFFICER CERTIFICATION
I, M. Jeanne Ball, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Galaxy
Specialties, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statement made, in light of the circumstances under which statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
11
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ M. Jeanne Ball
Date: May 6, 2003 ___________________________________________
M. Jeanne Ball, Principal Financial Officer
12