UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form for Registration of Securities of
Small Business Issuers
Under Section 12(b) or (g) of The Securities Exchange Act of 1934
GLOBAL BROADCAST GROUP, INC.
(Name of Small Business Issuer in its charter)
Delaware 02-0563302
(State or other jurisdiction of (IRS Employer ID Number)
incorporation or jurisdiction)
5770 Roosevelt Boulevard, Suite 510, Clearwater, Florida 33760
(Address of principal executive offices)
Issuer's telephone number: (727) 533-8300
Securities to be registered under Section 12(g) of the Act:
Title of each class: Common stock, $.001 par value
Name of each exchange on which registered: Not applicable
INTRODUCTORY STATEMENT
Global Broadcast Group, Inc. ("GBG") has elected to file this Form 10-SB
registration statement on a voluntary basis in order to become a reporting
company under the Securities Act of 1934. The primary purpose for this is that
GBG intends to be listed for trading on the OTC Electronic Bulletin Board. Under
the current NASD rules, in order to become listed on the OTC Electronic Bulletin
Board, a company now must be a reporting company under the Securities Act of
1934.
This registration statement, including the information that may be incorporated
by reference, contains forward-looking statements including, among other items,
statements regarding the Company's business and growth strategies and
anticipated trends in GBG's business and demographics. These forward-looking
statements are subject to a number of risks and uncertainties, some of which are
beyond GBG's control. Actual results could differ materially from these
forward-looking statements as a result of factors including, among others,
regulatory or economic influences. The Company's common stock is a penny stock
pursuant to Section 15g(2) of the Exchange Act. Prior to effecting a transaction
in a penny stock for or with the account of a customer, the broker must provide
the customer with a penny stock disclosure document and must receive written
acknowledgment of receipt of that disclosure document by the customer pursuant
to Exchange Act Rule 15g-2. The broker must also provide the customer with
various disclosures required under Exchange Act Rule 15g-3, 15g-4, 15g-5 and
15g-6. The transactional exemptions from these rules are listed in Exchange Act
Rule 15g-1.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
We have developed an innovative advertising and informational platform that
incorporates satellite and Internet-based technology. The platform enables
advertisers and businesses to promote their products and services on television
sets and electronic displays in retail stores, hotels, offices, high traffic
areas and other facilities. Programming will consist of short format full motion
video such as music videos, video ads and short infomercials. Animated graphics
will be used for headline news, sports and both national and local weather. All
programming and content is designed to entertain, inform and educate consumers,
employees, and students.
The use of our technology enables businesses to inexpensively install an in
house TV network with features similar to the recently inaugurated Wal-Mart TV
Network being used by Wal-Mart. In contrast to the Wal-Mart Network, our
platform is easily affordable to almost any business. Our platform incorporates
proprietary and state of the art Internet-based software allowing an advertiser
or business the ability to manage its content (either video or graphics) and to
deliver custom programs to specific television sets/electronic displays. This
feature also enables a business to run different programming on various
television sets /electronic displays within the same facility, simultaneously.
This technology can be used in many industries. In the business and corporate
world, our platform can be used for "one-way" video presentations and training.
In the educational field, our platform is suitable for the distant learning of
any subject.
Retail stores can use our technology to send custom programming or
advertisements to specific retail locations that in some cases will feature
point-of-sale (POS) television sets or electronic displays running infomercial
type videos to sell merchandise. These programs would also feature informative
advertisements for in store products or services. All programming can be managed
from the central headquarters location of our client company. No local employees
are needed to interact with the system, regardless of the number of TV sets or
displays.
We intend to produce infomercials and commercials and place them on
broadcast, cable, and dish TV. It is our intent to market products as a
traditional home shopping company. The distinction will be that GBG will
joint venture with inventors and owners of specific products in various
industries including, but not limited to, health and home medical products,
sports products, housewares and electronics. In the home medical products arena,
we will focus on bringing innovative home products that will allow us
to deliver virtually everything a patient needs to heal an injury, ease pain and
maximize quality of life.
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Industry Background
Retail Chains and Large Retail Stores. The retail industry can be divided into
segments, e.g.; department stores, food, health, electronics, auto dealers and
fast food. Sales in this industry are in the hundreds of billions of dollars in
the United States alone. Some segments, alone, exceed 100 billion dollars in
sales.
Direct Response Infomercials. While industry data for sales generated solely
from infomercials is difficult to obtain, the Direct Marketing Association
estimated that in year 2000, sales driven by direct-response television
including long-form, short-form, and home shopping reached $117.6 billion, up
from $68.5 billion five years earlier. They project that annual sales will reach
$178.9 billion by 2005.
Currently, the membership and club warehouse format retailers such as Sam's Club
and BJ's Wholesale Club are the biggest users of in-store infomercials. These
retailers feature several TVs per store running continuous loop video
programming promoting the benefits of a product or service. Local employees are
required to place videotapes into TV sets, initially and when changes are made.
Wal-Mart has also recently embraced a live satellite feed known as the Wal-Mart
TV Network.
GBG will work with patent attorneys and others in order to produce and
distribute products to market. GBG intends to own outright or joint venture with
inventors and other product owners in order to maximize revenues.
Cable TV Systems. This industry consists of different types of cable services
such as Cable TV to the home and private systems for the hospitality and health
care industries. Total revenue from subscriptions in home cable exceeds $1.5
billion annually. In the hospitality and healthcare industry, subscriptions for
bulk services exceeds $25 million annually. Television advertising exceeds $5
billion annually.
Educational and Corporate Business. This category encompasses schools, learning
centers and corporations. Distant learning and other off-site training and
education are a cost-effective use of our technology. Revenues are generated
through tuition, government grants, and corporate clients. Once the material to
be learned is sent to the "off-site location" computer by satellite, the
material resides in that computer and may be recalled at any time and for any
number of students or employees. The material may also be updated easily at any
time, thereby keeping all information current.
Demand for Affordable Advertising and Marketing Solutions
Consumers seeking relevant information, as well as local businesses interested
in advertising to targeted consumers currently lack effective and affordable
advertising solutions. Similarly, traditional advertising methods oftentimes do
not offer a cost-effective means for acquiring potential customers. Traditional
television and radio advertising is cost prohibitive for most small businesses.
Merchants need cost-effective strategies to reach local consumers and to convert
these people into purchasers. We believe that this advertising is often most
effective at the point of sale location.
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Businesses are seeking cost-effective means to target advertising and other
information based on demographic characteristics, specific interests and
geographic location. Our unique solution and remote management capabilities
mean that businesses can receive immediate feedback on their marketing efforts
and refine advertising campaigns on an almost real-time basis. Businesses are
also seeking ways to train and inform their employees that are located in remote
locations.
Retailers are seeking new and innovative ways to sell more merchandise. We
believe merchants will increase product sales by utilizing our innovative
electronic displays to showcase in store products via short format infomercials
POS locations. Products that are traditionally sold using
infomercials could utilize our in store television sets/electronic displays to
further their sales in retail stores. Other products, which don't typically use
infomercials to sell, could use our television sets/electronic displays in
retail stores to boost sales. For example, a health food store would promote the
use of certain vitamins to stay young and healthy using our short format
infomercial playing on an in store display. The manufacturer (or the store)
using the Internet with password security can update these infomercials from
their home office without using any local personnel.
Wal-Mart has recently installed the Wal-Mart TV network in each of their
locations. This satellite-based network is used for employee training and also
in-store promotion and entertainment. Wal-Mart is recognized as an innovator and
early adopter of technology. We expect that other retail chains will want to
implement a similar solution. GBG presents a cost-effective, no personnel
solution for those chains as well as other businesses.
Competition
Retail and Corporate Network TV. The competitors serving these markets are
fragmented and diverse in their scope of business. In the case of the retail
chain store market, if a similar solution is being utilized, it typically
involves the use of a videocassette being run on a continuous loop basis,
whereas, our satellite and Internet controlled solution improves the quality,
effectiveness, and flexibility of the advertisement.
Hospitality. There are a number of companies that provide cable television
services and in- room video entertainment to the hospitality or lodging
industry. The two largest providers in the United States are On Command(R)and
LodgeNet(R)Entertainment Corporation. There are also a number of other companies
that are developing ways to use their existing infrastructure to provide in-room
entertainment or information services to the hospitality industry, including
cable companies (including wireless cable), telecommunications companies,
Internet and high speed connectivity companies, and direct broadcast satellite
companies. Some of these companies have been providing guest programming
services to hotels and are beginning to provide video on demand, Internet and
high speed connectivity to hotels.
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High Traffic Locations. GBG competes in these markets with other outdoor
advertising operations as well as other media, including broadcast and cable
television, radio, print and direct mail marketers. In addition, we also compete
with a wide variety of "out-of-home" media, including advertising in shopping
centers and malls, airports, stadiums, movie theaters and supermarkets, as well
as on taxis, trains, buses and subways. Advertisers compare the effectiveness of
relative costs of available media and cost-per-thousand impressions,
particularly when delivering a message to customers with distinct demographic
characteristics. In competing with other media, we will rely on our low cost
per-thousand impressions and our ability to reach a broad segment of the
population in a specific market or to target a particular geographic area or
population with a particular set of demographic characteristics within that
market.
Cable Television. There are a variety of closed circuit programs being aired
over cable systems. Generally these programs originate at the cable or hotel's
head end and use a VCR and tapes. This system is costly, labor intensive, and
allows no flexibility for advertisers. There are a few other companies using
video file servers being downloaded via a high speed Internet connection. Most,
if not all, of these programs are not customized on a per site basis. These
methods cannot deliver real-time information such as news, weather, and daily
advertisement changes. Some cable companies broadcast a streaming community
channel, but, again, they cannot be customized.
Governmental Regulation
We will use a FCC licensed facility to broadcast via satellite all programming
(content). By using a .9 meter (approx. 32") receiving antenna, in most cases,
we will not be required to file for a permit. This may vary due to local and
state regulations. All on-site installations will be done by licensed and
insured low-voltage wiring contractors.
The Global Broadcast Group Solution
Our technology will utilize IP Multicast Satellite Transmission to transmit
content in a "forward and store" format. Some significant features of this
technology are the management of content/ads via the Internet and satellite
transmission to all receiving sites. Forward and store enables us to send
multiple files consisting of full motion video and graphics using minimal
satellite space and time. The remote site-receiving computer then stores the
content and it is ready to broadcast at its scheduled time.
Our remote management software, Info Manage(TM)will enable an authorized user
access to the control system through an Internet connection where he is able to
update, change and schedule new content for one or more displays. Once his
changes are accepted by the system, the new programming will be up linked to a
communications satellite, and transmitted simultaneously to multiple display
locations whereby the programming will be displayed on television
sets/electronic displays only at locations specified by the user.
5
Our content (programming) will include information from The Weather Channel,
CNN, and ESPN, (or similar companies) and the Global Music Network. These
programmers, with the exception of Global Music, an affiliated company, are
national broadcasters. They do not deliver customized programming to each site.
Some cable companies do local ad-insertion on channels such as CNN and ESPN,
where they are allowed a few minutes per hour. This ad insertion is accomplished
with pre-produced ads/content and a beta tape or downloaded to a video file
server. The smaller franchise and private cable companies do not have the
equipment to do ad insertion, due to the prohibitive cost of the equipment. Our
system will provide the ad insertion capability, making the service even more
valuable to clients.
GBG believes that its strong emphasis on sales and customer service and its
position as a provider of innovative advertising services in each of its markets
will enable it to compete effectively with its competition.
Technology and Systems
Hardware installations will vary as a function of the desired services and
components. The basic equipment of most installations will consist of off the
shelf components including television sets/electronic displays, servers, a
satellite receiver card and a satellite dish.
Strategy
GBG will focus on strategic acquisitions of companies synergistic with its
business, as well as product sales on TV, and in retail chains and hotels.
Capitalize on First Mover Advantage. GBG will be the first to market new
products and will retain a financial interest in such products
Expand Merchandising Opportunities for Retailers. We plan to aggressively pursue
retail chains offering a cost-effective satellite-based in-house network TV
solution designed to drive merchandise sales through in-store point of sale
advertisements and enable better communications with employees. We will also
take advantage of co-op advertisement dollars offered to retailers to promote
certain merchandise.
Joint Ventures and Strategic Relationships. GBG will out source, joint
venture, co-brand, and form alliances with partners that drive further revenue,
compliment our services or reduce our expenses. We expect to enter into joint
ventures with advertising partners including traditional advertising agencies
and media buyers in order to take advantage of their existing sales force.
Revenue Sharing with High Traffic Facilities. In order to rapidly penetrate
markets and place as many television sets/electronic displays as possible in
high traffic locations, we will enter into revenue-sharing relationships with
strategic partners. These partners will own or manage facilities such as
airports, stadiums, and malls.
6
Our Profit Centers
We intend to focus selling efforts on TV, retail chains and the hospitality
industry. Retail stores can use our technology to send custom programming or
advertisements to specific retail locations that in some cases will feature POS
displays utilizing our technology to sell merchandise. These programs would
oftentimes be informative advertisements for in store products or services. For
example, a chain of health food stores could have an in store television or
display monitor that would broadcast a short format infomercial regarding
certain vitamins, that are sold within the store, that would help one stay
younger looking. This would drive additional sales of such products beyond what
normally could be sold without our system installed.
We will charge clients a monthly fee for satellite transmission services and
will either lease or sell the satellite receiving equipment to the client. The
client may hire our production team to produce their programming/content. The
client may choose to pay a monthly subscription fee for the use of our produced
content/programming (music videos, news, weather, sports, etc.)
Retail and Corporate Network TV. We have targeted medium to large corporations
and retail chains as likely users of our Network TV system. Our technology will
allow a business to inexpensively install an in house TV network with features
similar to the recently installed Wal-Mart TV Network being used by Wal-Mart.
Unlike their network, our platform incorporates proprietary and state of the art
Internet-based software allowing an advertiser or business the ability to manage
its content (either video or graphics) and to deliver custom programs to
specific display monitors or televisions. This feature also enables a business
to run different programming on various display monitors within the same
facility simultaneously.
Hospitality. The hospitality industry will use our technology to deliver
customized advertising regarding local and national products or services to
hotel guests. Our technology will allow advertisers to manage the content
broadcast to the monitors on a near real time basis. The hotel will also be able
to use the same system to offer video teleconferencing services to its
customers. Revenue will be generated from an advertised based program produced
by us called CityView TV. An advertising agent or media buyer will purchase the
rights to place advertising spots on CityView TV that will be broadcast 24x7 to
the hotel guest's "in-room television." There will be a monthly fee paid by the
hotel for the use of the network and receiving equipment.
Broadcast Production
We intend to utilize internal production facilities and staff to perform the
full range of activities required to develop, create and broadcast commercials
and electronic display advertising consisting of full motion video and graphics.
In some situations, we may hire subcontractors to perform varying degrees of our
production. This production work includes creating the advertising copy, design
and layouts, filming the required footage, and recording any needed voice-over.
7
International Operations
GBG presently does not have any international operations. However, due to the
nature of our business and the possibility that our customers may have
international operations, it is possible that we will have international
operations in the future.
Employees
We have two full-time employees as of the date of this Registration Statement,
but we have identified additional employees who will be added on an as-needed basis
on completion of funding. We believe the relationship with our employees is
good. We expect to hire sub-contractors to install hardware nationwide when
applicable.
Facilities
Our facilities are located at 5770 Roosevelt Blvd. Suite 510, Clearwater, FL,
33760 in approximately 1,000 square feet of office space with an annual lease of
$12,000 including utilities. Our phone number is (727) 533-8300 and our
facsimile number is (727) 531-1303. We may also be reached via e-mail
at info@globalbroadcastgroup.com. Our Corporate web site is located at
http://www.GlobalBroadcastGroup.com.
Web Site
Our current web site URL is http://www.globalbroadcastgroup.com. The site is
hosted at a Florida-based Internet service provider on a Cobalt model Raq 3
server running the Red Hat Linux operating system. A major telephone company
supplies the Internet connection and backup is done automatically once per day.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of GBG's financial condition and results
of its operations for the nine months ended September 30, 2002 and year ended
December 31, 2001 should be read in conjunction with our financial statements
included elsewhere herein.
When used in the following discussions, the words "believes," "anticipates,"
"intends," "expects," and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause results to differ materially from those
projected.
Company Activities
GBG (formerly known as Galli Process, Inc.) was incorporated on October 31, 2000
under the laws of the state of Delaware. Galli Process, Inc. changed to the
current name on February 7, 2002.
8
We are in the development stage and have developed an innovative advertising
and informational platform that incorporates satellite and Internet-based
technology. The platform enables advertisers and businesses to promote their
products and services on television sets and electronic displays in retail
stores, hotels, offices, high traffic areas and other facilities. Programming
will consist of short format, full motion video such as music videos, video ads
and short infomercials designed to entertain, inform and educate consumers. To
date, GBG the Company has received only limited revenues from operations.
Liquidity and Capital Resources
Due to the lack of any significant revenues, GBG has relied upon proceeds
realized from the private sale of its common stock, cash contributions from
shareholders and the issuance of a note payable to meet its funding
requirements. Funds raised by GBG have been expended primarily in connection
with the costs to acquire Galli Process, Inc. and administrative costs.
During the next 12 months, GBG expects that it will spend between $200,000 and
$225,000 on operating expenses. As of September 30, 2002, GBG had cash on hand
of $9,000. Since September 30, 2002, GBG has sold additional common stock
through a private sale. GBG plans to use its existing financial resources, the
proceeds from the sale of additional common stock, as needed, and shareholder
infusion of cash, as needed, to fund its operating expenses during this period.
In addition, GBG is currently preparing a Private Placement Memorandum seeking
$2,000,000 in capital to fund operations and initial acquisitions. As of January
15, 2003, there have been no units sold.
A note payable in the amount of $150,000 is due in full, together with accrued
interest in September 2003. It is anticipated that if GBG does not have the cash
to pay the note in full, that the common stock which serves as collateral for
the note will be given to the holder of the note in full payment.
Other than funding its operating expenses, GBG does not have any material
capital commitments.
Plan of Operation
During the next 12 months GBG:
• Continue to build market awareness for our product and generate sales
• Continue to develop new uses for our product
• Continue to explore opportunities to acquire companies that would be
synergistic with our business and that would provide a positive cash
flow to GBG
During this 12 month period, GBG does not anticipate hiring more than two
employees.
Recent Developments
-------------------
GBG intends to grow through acquisitions and is currently in negotiations with
companies in the medical diagnostics and treatment fields. No definitive
agreements have been entered as of the date of this filing.
Additional Information
----------------------
GBG intends to provide an annual report to its security holders and to make
quarterly reports available for inspection by its security holders. The annual
report will include audited financial statements.
GBG will, as a result of this filing, become subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Act") and, in
accordance with the Securities and Exchange Commission (the "Commission"), such
reports, proxy statements and other information may be inspected at public
reference facilities of the Commission at Judiciary Plaza, 450 Fifth Street NW,
Washington, D.C. 20549; Northwest Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661; and 5670 Wilshire Boulevard, Los Angeles,
California 90036. Copies of such material can be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street NW,
Washington, D.C. 20549, at prescribed rates. For further information, the
Commission maintains a website that contains reports, proxy and information
statements, and other information regarding reporting companies at
www.sec.gov.
9
ITEM 3. DESCRIPTION OF PROPERTY
We maintain our principal business operations at 5770 Roosevelt Boulevard, Suite
501, Clearwater, Florida 33760. Our telephone number is (727) 533-8300. We lease
approximately 1,000 square feet with an annual lease of $12,000 including
utilities.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 30, 2002,
with respect to the beneficial ownership of common stock by each person who, to
the knowledge of GBG, beneficially owned or had the right to acquire more than
5% of the outstanding common stock; each director of GBG; and all executive
officers and directors of GBG as a group:
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------------------ --------------------------------------------- ------------------------ --------------------
Title of Name and Address of Number of Percent of Class
Class Beneficial Owner (1) Shares (2)
------------------ --------------------------------------------- ------------------------ --------------------
Common Sam Winer
5770 Roosevelt Blvd., Suite 510
Clearwater, FL 33760 3,781,501 35%
------------------ --------------------------------------------- ------------------------ --------------------
Common James Goodman
1851 Juanita Ct.
Clearwater, FL 33764 50,000 *
------------------ --------------------------------------------- ------------------------ --------------------
Common Michael D. Rocha
5770 Roosevelt Blvd., Suite 510
Clearwater, FL 33760 50,000 *
------------------ --------------------------------------------- ------------------------ --------------------
Common All officers and directors as a group 3,881,501 36%
------------------ --------------------------------------------- ------------------------ --------------------
* Less than 1% of the shares deemed outstanding.
(1) As used in this table, "beneficial ownership" means the sole or shared power
to vote or to direct the voting of a security or the sole or shared investment
power with respect to a security (i.e., the power to dispose of or to direct the
disposition of a security)
(2) Figures are rounded to the nearest percentage.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, CONTROL PERSONS
The following table sets forth the names and positions with GBG and ages of the
executive officers and directors of GBG. Directors will be elected at our annual
meeting of shareholders and serve for one year or until their successors are
elected and qualify. Officers are elected by the Board and their terms of office
are at the discretion of the Board, except to the extent governed by employment
contract.
----------------- --------- ------------------------------------------------- ---------------
Name Age Title Director Since
----------------- --------- ------------------------------------------------- ---------------
Sam Winer 64 Chief Executive Officer, Chairman and Secretary 2002
----------------- --------- ------------------------------------------------- ---------------
James Goodman 57 Vice President, Director 2002
----------------- --------- ------------------------------------------------- ---------------
Michael D. Rocha 31 Vice President, Director 2002
----------------- --------- ------------------------------------------------- ---------------
Duties, Responsibilities and Experience
Sam Winer - Chief Executive Officer, Secretary and Chairman of the Board
Mr. Winer has been Chief Executive Officer, Secretary and Chairman of the Board
of GBG since January of 2002. From 1985-1996 he was President of American
Capital Group, Inc., a financial consulting and investment banking firm
specializing in raising capital for start-up companies and real estate projects.
From 1996 until the present he has been the President of Global Music Network
LLC, a company that he founded. Global Music produces TV programming featuring
music videos and has been seen in over 70 million homes. Mr. Winer was also one
of the Founders of eView Technologies, a company in the outdoor billboard
industry that replaces static billboards with LED displays that are transmitted
by satellite. He is a member of the National Association of Television
Programming Executives and holds a Bachelors Degree from the Pennsylvania State
University.
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James Goodman - Vice President and Director
Mr. Goodman has been Vice President and Director of GBG since September of 2002.
Mr. Goodman is a television management executive having most recently developed
TV station KWBM-TV (WB31) in Springfield, MO from start-up to on-air status.
From 1989 to 1996, Mr. Goodman directed construction of Home Shopping Network's
first full power TV station and also managed all production and financial
aspects for the launch of Home Shopping Network's 24 hour infomercial channel.
In 1998, he managed all aspects of a talk show pilot for PAX TV network and
created a cable sales interconnect for the Miami area. In addition, he developed
and introduced a Spanish language cable channel which won multiple national
Cable ACE awards. From 1967 until 1980 he directed the production of the Sally
Jessy Raphael Show. Prior TV experience includes managing all aspects of the
construction of a state of the art broadcast facilities at the University of
Miami and served on the Board of the Florida Chapter of the National Academy of
Television Arts and Sciences.
Michael D. Rocha - Vice President and Director
Mr. Rocha has been a Vice President and Director of GBG since September of 2002.
From 1990 to present, Mr. Rocha successfully built and operated Keyframe, Inc., a
television production company specializing in content for large video screens.
Keyframe has five offices across the US which employ over 70 talented artists,
engineers and programmers. In 2001, Keyframe became a division of Daktronics,
Inc., where Mr. Rocha has continued to run the Keyframe division. From 1994 to
1999, Mr. Rocha served as the Electronic Information Specialist for Tampa Bay
Lightning, maintaining a network of over 60 computers. In 2001, Mr. Rocha was
selected to direct the large screen video for the Super Bowl in Tampa Florida.
In 2002, Mr. Rocha served as the Director of Video at the Soldier Hollow venue
for the 2002 Olympic Games in Salt Lake City, Utah.
ITEM 6. EXECUTIVE COMPENSATION
Annual Compensation
The following table sets forth certain information regarding the annual and
long-term compensation for services in all capacities to GBG for the prior
fiscal years ended December 31, 2001 and 2000 of those persons who were either
the chief executive officer during the last completed fiscal year or one of the
other four most highly compensated executive officers as of the end of the last
completed fiscal year whose annual salary and bonuses exceeded $100,000.
Annual Compensation
---------------------
Name and Principal Position Year Salary
---------------------------------- ---- -------
Sam Winer, Chief Executive Officer 2001 $60,000
2000 0
Compensation of Directors
All directors will be reimbursed for expenses incurred in attending Board or
committee meetings. Directors do not receive any other compensation from GBG.
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Stock Option Plan
No stock option plan has been instituted at this time. GBG may decide, at a
later date, and reserves the right to, initiate such a plan as deemed necessary
by the Board.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's management is not involved either directly or indirectly
in any related party transactions and to the best of management's knowledge
would be involved only in arms length transactions with unaffiliated third
parties in connection with any GBG transactions or agreements.
ITEM 8. DESCRIPTION OF SECURITIES
GBG's Articles of Incorporation authorize the issuance of 50,000,000 shares of
common stock, $.001 par value per share, of which 10,757,871 shares are
outstanding as of September 30, 2002.
Holders of shares of common stock are entitled to one vote for each share on all
matters to be voted on by the stockholders. Holders of common stock have no
cumulative voting rights. Holders of shares of common stock are entitled to
share ratably in dividends, if any, as may be declared, from time to time by the
Board of Directors in its discretion, from funds legally available therefor. In
the event of liquidation, dissolution or winding up of GBG, the holders of
shares of common stock are entitled to share, pro rata, all assets remaining
after payment in full of all liabilities.
Holders of common stock have no preemptive rights to purchase our common stock.
There are no conversion rights or redemption or sinking fund provisions with
respect to the common stock. All of the outstanding shares of common stock are
validly issued, fully paid and non-assessable.
GBG is authorized to issue up to 1,000,000 shares of Preferred Stock, par value
$.001. The Preferred shares may be issued in one or more series, the terms and
preferences of which may be determined by the Board of Directors without further
action by shareholders.
Transfer Agent
The transfer agent for the common stock is Florida Atlantic Stock Transfer,
Inc., 7130 Nob Hill Road, Tamarac, Florida 33321.
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PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
Since our inception, we have not paid cash dividends on our common stock. It is
the present policy of GBG not to pay cash dividends and to retain future
earnings to support our growth. Any payments of cash dividends in the
future will be dependent upon, among other things, the amount of funds available
therefor, our earnings, financial condition, capital requirements, and
other factors which the Board of Directors deems relevant.
As of January 15, 2003, there were approximately 1,341 shareholders of common
stock of record.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any material litigation.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There are no changes in or disagreements with accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Private Placement
-----------------
We have prepared a private placement memorandum and intend to seek capital
funding of $2,000,000. As of the date of this filing, no investment
subscriptions have been received and accepted.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Each director and officer of this corporation shall be indemnified by the
corporation against all costs and expenses actually and necessarily incurred by
him or her in connection with the defense of any action, suit or proceeding in
which he or she may be involved or to which he or she may be made a party by
reason of his or her being or having been such director or officer, except in
relation to mattes as to which he or she shall be finally adjudged in such
action, suit or proceeding to be liable for negligence or misconduct in the
performance of duty.
14
PART F/S
FINANCIAL STATEMENTS
The audited financial statements of the Company are prepared by and are the
responsibility of management. Rotenberg & Co., LLP, Certified Public
Accountants, has provided and is responsible for their audit report on these
financial statements and are located at 1870 Winton Road S, Suite 200,
Rochester, New York 14618. The financial statements required by Regulation S-X
commence on page F/S 1 hereof in response to this Item of this Registration
Statement on Form 10-SB and are incorporated herein by this reference.
15
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
------------------------------------------------------------------
FINANCIAL REPORTS
AT
DECEMBER 31, 2001
------------------------------------------------------------------
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Independent Auditors' Report.................................................F-1
Consolidated Balance Sheets at December 31, 2001 and December 31, 2000.......F-2
Consolidated Statements of Changes in Stockholders' Equity for the
Period From the Date of Inception (October 31, 2000) through
December 31, 2001 and 2000.................................................F-3
Consolidated Statements of Operations for the Two Years Ending
December 31, 2001 and for the Period from the Date of Inception
(October 31, 2000) through December 31, 2001...............................F-4
Consolidated Statements of Cash Flows for the Two Years Ending
December 31, 2001 and for the Period from the Date of Inception
(October 31, 2000) through December 31, 2001...............................F-5
Notes to Consolidated Financial Statements...............................F-6-F-9
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
and Stockholders
Global Broadcast Group, Inc.
(A Development Stage Company)
(A Delaware Corporation)
Clearwater, Florida
We have audited the accompanying consolidated balance sheets of Global
Broadcast Group, Inc. (A Development Stage Company) (A Delaware Corporation) as
of December 31, 2001 and 2000, and the related consolidated statements of
operations, consolidated changes in stockholders' equity and cash flows for each
of the two years in the period ended December 31, 2001 and for the period from
the date of inception (October 31, 2000) through December 31, 2001. These
consolidated 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 audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Global
Broadcast Group, Inc. (A Development Stage Company) (A Delaware Corporation) as
of December 31, 2001 and 2000, and the results of its operations and its cash
flows for each of the two years in the period ended December 31, 2001 and for
the period from the date of inception (October 31, 2000) through December 31,
2001, in conformity with accounting principles generally accepted in the United
States of America.
/s/ Rotenberg & Company, LLP
----------------------------
Rotenberg & Company, LLP
Rochester, New York
March 22, 2002
F-1
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
CONSOLIDATED BALANCE SHEETS
December 31, 2001 2000
------------------------------------------- ------------- --------------
ASSETS
Current Assets
Cash and Cash Equivalents $ 240,614 $ --
------------- --------------
------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 135,000 $ --
Accrued Franchise Taxes 50 --
------------- --------------
Total Current Liabilities 135,050 --
------------- --------------
Stockholders' Equity
Common Stock - $.001 Par Value;
50,000,000 Shares Authorized,
15,906,600 Shares Issued and Outstanding 15,841 --
Additional Paid in Capital 386,839 --
Deficit Accumulated During Development Stage (296,882) --
------------- --------------
Total Stockholders' Equity 105,798 --
------------- --------------
Total Liabilities and Stockholders' Equity $ 240,848 $ --
------------- --------------
------------- --------------
The accompanying notes are an integral part of these financial statements.
F-2
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Common Accumulated
Stock Additional During Total
Period from Date of Inception Number of $.001 Paid-In Development Stockholders'
(October 31, 2000) Shares Par Value Capital Stage Equity
to December 31, 2001
---------------------------------- --------------- -------------- ------------ ----------------- ------------
Balance - October 31, 2000 -- $ -- $ -- $ -- $ --
--------------- -------------- ------------ ----------------- ------------
Balance - December 31, 2001 -- -- -- -- --
--------------- -------------- ------------ ----------------- ------------
--------------- -------------- ------------ ----------------- ------------
Common Stock Issued in Exchange for
Services and Expenses Paid by
Shareholders (Galli) 11,553,100 11,553 202 -- 11,755
Common Stock Issued in Exchange for
Services and Expenses Paid by
Shareholders (City View) 3,425,000 (1) 3,425 -- -- 3,425
Common Shares Issued for Cash -
Private Placement (City View) 862,500 (1) 863 286,637 -- 287,500
Capital Contribution - Shareholder -- -- 100,000 -- 100,000
Net Loss for the Period -- -- -- (296,882) (296,882)
--------------- -------------- ------------ ----------------- ------------
Balance - December 31, 2001 15,840,600 $ 15,841 $ 386,839 $(296,882) $ 105,798
--------------- -------------- ------------ ----------------- ------------
--------------- -------------- ------------ ----------------- ------------
(1) Shares issued and outstanding have been adjusted to reflect the Plan of
Merger effected on March 1, 2002
The accompanying notes are an integral part of these financial statements.
F-3
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
CONSOLIDATED STATEMENTS OF OPERATIONS
Period From
Date of Inception
(October 31, 2000) Years Ended December 31,
Through
December 31, 2001 2001 2000
------------------------- -------------------- -------------------
Operating Expenses
Commissions $ 2,250 $ 2,250 $ --
Filing Fees 202 202 --
General and Administrative 6,443 6,443 --
Insurance 7,979 7,979 --
Management Fees 58,000 58,000 --
Organizational Costs 164,744 164,744 --
Production Equipment 4,490 4,490 --
Professional Fees 13,149 13,149 --
Rent 1,914 1,914 --
Salaries 28,738 28,738 --
Telephone 2,308 2,308 --
Travel 6,615 6,615 --
------------------------- -------------------- ------------------
Total Operating Expenses 296,832 296,832 --
------------------------- -------------------- ------------------
Operating Loss for the Period (296,832) (296,832) --
Provision for Taxes 50 50 --
------------------------- -------------------- -------------------
Net Loss for the Period $ (296,882) $ (296,882) $ --
------------------------- -------------------- -------------------
------------------------- -------------------- -------------------
Net Loss per Common Share - Basic and Diluted $ (0.02) $ (0.02) N/A
------------------------- -------------------- -------------------
------------------------- -------------------- -------------------
Weighted Average Common Shares Outstanding -
Basic and Diluted 11,981,307 13,434,710 --
------------------------- -------------------- -------------------
The accompanying notes are an integral part of these financial statements.
F-4
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period From
Date of Inception
(October 31, 2000) Years Ended December 31,
Through
December 31, 2001 2001 2000
------------------------- -------------------- --------------------
Cash Flows from Operating Activities
Net Loss for the Period $ (296,882) $ (296,882) $ --
Non-Cash Adjustments
Organizational Costs 14,744 14,744 --
Franchise Taxes and Filing Fees 202 202 --
Changes in Assets and Liabilities:
Accounts Payable 135,000 135,000 --
Accrued Franchise Taxes 50 50 --
------------------------- -------------------- --------------------
Net Cash Flows from Operating Activities (146,886) (146,886) --
------------------------- -------------------- --------------------
Cash Flows from Financing Activities
Proceeds from the Issuance of Common Stock 387,500 387,500 --
------------------------- -------------------- --------------------
Net Cash Flow from Financing Activities 387,500 387,500 --
------------------------- -------------------- --------------------
Net Increase in Cash and Cash Equivalents 240,614 240,614 --
Cash and Cash Equivalents - Beginning of Period -- -- --
------------------------- -------------------- --------------------
Cash and Cash Equivalents - End of Period $ 240,614 $ 240,614 $ --
------------------------- -------------------- --------------------
------------------------- -------------------- --------------------
NON-CASH FINANCING ACTIVITIES
Organizational Costs Paid by Stockholders
in Exchange for Common Stock Issued $ 14,744 $ 14,744 $ --
Franchise Taxes Paid by Stockholder -
Additional Paid in Capital $ 202 $ 202 $ --
------------------------- -------------------- --------------------
The accompanying notes are an integral part of these financial statements.
F-5
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note A - The Company
The Company was incorporated under the laws of the State of Delaware
on October 31, 2000 as Galli Process, Inc. Galli Process, Inc did not
have operating activities prior to the merger with City View TV, Inc.
Effective February 7, 2002, Galli Process, Inc. changed its name to
Global Broadcast Group, Inc.
Effective December 31, 2001, Galli Process, Inc. became a majority
owned subsidiary of City View TV, Inc. (A Florida Corporation). On
March 1, 2002, pursuant to a plan of merger, City View TV, Inc. (a
Florida Corporation) merged into Global Broadcast Group, Inc.
(formerly Galli Process, Inc.). The shareholders of City View TV, Inc.
converted 3 shares of City View TV, Inc. stock into 1 share of the
surviving corporation (Global Broadcast Group, Inc.). There was no
change to the business, management, location, policies or the
consolidated assets and liabilities of City View TV, Inc. Global
Broadcast Group, Inc. (a Delaware Corporation) is the surviving
corporation effective on the date of the merger.
The transaction was accounted for as a recapitalization, resulting in
the historical operations of City View TV, Inc. being the historical
operations of Global Broadcast Group, Inc. Accordingly, the
accompanying financial statements have been restated to reflect the
financial position, results of operations, and cash flows for all
periods presented as if the recapitalization had occurred at the
beginning of the earliest period presented.
Scope of Business
The Company's principal business activity is television programming
and is currently in the development stage.
Note B - Nature of Operations and Summary of Significant Accounting Policies
Method of Accounting
The Company maintains its books and prepares its financial statements
on the accrual basis of accounting.
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 statements and the reported amounts of revenues
and expense during the reporting period. Actual results can differ
from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include time deposits, certificates of
deposit, and all highly liquid debt instruments with original
maturities of three months or less. The company maintains cash and
cash equivalents at financial institutions which periodically may
exceed federally insured amounts.
- continued -
F-6
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note B - Nature of Operations and Summary of Significant Accounting Policies - continued
Development Stage
The Company has operated as a development stage enterprise since its
inception by devoting substantially all of its efforts to financial
planning, raising capital, research and development, and developing
markets for its products. Accordingly, the financial statements of the
Company have been prepared in accordance with the accounting and
reporting principles prescribed by Statement of Financial Accounting
Standards No. 7, "Accounting and Reporting by Development Stage
Enterprises," issued by the Financial Accounting Standards Board.
The Company was inactive from October 31, 2000 through March 31, 2001.
Activities began on or about April 1, 2001.
Concentrations of Credit Risk
Financial instruments which potentially expose the Company to
significant concentrations of credit risk consist principally of bank
deposits. Cash is placed primarily in high quality short-term interest
bearing financial instruments.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed in accordance with SFAS
No. 128, "Earnings Per Share". Basic earnings per common share is
calculated by dividing income available to common shareholders by the
weighted-average number of common shares outstanding for each period.
Diluted earnings per common share is calculated by adjusting the
weighted-average shares outstanding assuming conversion of all
potentially dilutive stock options, warrants and convertible
securities. Diluted earnings per share is the same as basic earnings
per share for all of the periods presented since the effect of the
conversion of the debentures and the stock options and awards granted
would have an anti-dilutive effect on earnings per share.
Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes," using the asset and liability approach,
which requires recognition of deferred tax liabilities and assets for
the expected future tax consequences of temporary differences between
the carrying amounts and the tax basis of such assets and liabilities.
This method utilizes enacted statutory tax rates in effect for the
year in which the temporary differences are expected to reverse and
gives immediate effect to changes in income tax rates upon enactment.
Deferred tax assets are recognized, net of any valuation allowance,
for temporary differences and net operating loss and tax credit
carryforwards. Deferred income tax expense represents the change in
net deferred assets and liability balances. The Company had no
material deferred tax assets or liabilities for the periods presented.
Deferred tax assets arising from the net operating losses incurred
during the development stage have been fully reserved against due to
the uncertainty as to when or whether the tax benefit will be
realized.
Financial Instruments
The Company's financial instruments consist of cash and accounts
payable. Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or credit
risks arising from these financial instruments. The fair value of
these financial instruments approximates their carrying value, unless
otherwise noted.
F-7
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note C - Related Party Transactions
Beginning September 1, 2001, the Company paid monthly management fees
to Global Music Network, LLC in the amount of $8,000. Fees paid in
accordance with this management agreement for the year ended December
31, 2001 were $32,000.
Global Music Network, LLC also paid monthly operating expenses for the
Company from August 2001 through November 2001 that were reimbursed by
the Company on a monthly basis. These expenses and reimbursements
amounted to $46,330 in 2001.
The Company paid consulting fees to Ed Berkhof Management Inc. that
amounted to $20,000 in 2001. Ed Berkhof is the current President of
Global Broadcast Group, Inc. No such fees were paid in 2000.
The Company paid management fees to Sam Winer, Chairman, Chief
Executive Officer and Secretary of the Corporation, for services
provided in the amount of $6,000 during 2001. No such fees were paid
in 2000.
Note D - Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
using the asset and liability approach, which requires recognition of
deferred tax liabilities and assets for the expected future tax
consequences of temporary differences between the carrying amounts and
the tax basis of such assets and liabilities. This method utilizes
enacted statutory tax rates in effect for the year in which the
temporary differences are expected to reverse and gives immediate
effect to changes in the income tax rates upon enactment. The Company
has operating loss carryforwards for tax purposes of approximately
$152,000 available for future years.
Note E - Common Stock
On February 25, 2001 Galli Process, Inc. issued 11,553,100 shares of
its common stock to Galli Holding Co. for the benefit of the
shareholders of Hydrox Sales Corp. in exchange for certain securities
of closely held companies and the funding of certain legal, accounting
and organization costs. The securities received had no readily
determinable market value and the Company valued these securities and
the organization costs at the par value ($.001) of the 11,553,100
shares exchanges in the amount of $11,553.
Effective December 31, 2001 City View TV, Inc. acquired 5,897,790
shares of the common stock of Galli Process, Inc. (the controlling
interest) from the controlling shareholders for a total purchase price
of $150,000. City View TV, Inc. had deposited $15,000 on the
acquisition prior to December 31, 2001 and the balance of the purchase
was paid in cash on January 10, 2002. The Company has expensed the
acquisition as part of the corporate reorganization as of December 31,
2001. The acquisition agreement did not require Galli to include its
holdings of shares of various closely held companies. Galli issued to
each of its shareholders of record dated December 16, 2001, an
undivided interest equal to the number of shares held in Galli into a
company to be known as Grove Holding Co.
- continued -
F-8
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note E - Common Stock - continued
City View TV, Inc. issued 3,191,000 shares of its common stock at par
value in exchange for services rendered and funding of certain
organization costs paid by its shareholders during 2001. The Company
also raised capital through the issuance of 1,162,500 shares of its
common stock to individuals at $1.00 per unit (3 shares per unit)
through private placements during 2001. The share and per share
amounts reflect the 1 for 3 share reverse stock split that was
effected on March 1, 2002 as part of the Plan of Merger with Global
Broadcast Group, Inc.
The Company's Securities are not registered under the Securities Act
of 1933 and, therefore, no offering may be made which would constitute
a "Public Offering" within the meaning of the United States Securities
Act of 1933, unless the shares are registered pursuant to an effective
registration statement under the Act.
The stockholders may not sell, transfer, pledge or otherwise dispose
of the common shares of the company in the absence of either an
effective registration statement covering said shares under the 1933
Act and relevant state securities laws, or an opinion of counsel that
registration is not required under the Act or under the securities
laws of any such state.
F-9
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
------------------------------------------------------------------
FINANCIAL REPORTS
AT
SEPTEMBER 30, 2002
------------------------------------------------------------------
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Independent Accountants' Report..........................................F-1-F-2
Balance Sheets at September 30, 2002 (Unaudited)
and December 31, 2001......................................................F-3
Statements of Changes in Stockholders' Equity for the
Nine Months Ended September 30, 2002 and 2001 and for
the Period From the Date of Inception (October 31, 2000)
through September 30, 2002 (Unaudited).................................F-4-F-5
Statements of Operations for the Nine Months Ended
September 30, 2002 and 2001 and for the Period From
the Date of Inception (October 31, 2000) through
September 30, 2002 (Unaudited).............................................F-6
Statements of Cash Flows for the Nine Months Ended
September 30, 2002 and 2001 and for the Period From
the Date of Inception (October 31, 2000) through
September 30, 2002 (Unaudited).............................................F-7
Notes to Consolidated Financial Statements..............................F-8-F-12
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders
Global Broadcast Group, Inc.
(A Development Stage Company)
(A Delaware Corporation)
Clearwater, Florida
We have reviewed the accompanying balance sheet of Global Broadcast Group,
Inc. as of September 30, 2002, and the related statements of changes in
stockholder's equity, operations, and cash flows for the nine months ended
September 30, 2002 and for the period from date of inception (October 31, 2000)
through September 30, 2002. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to such financial statements for them to be in conformity with
accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the balance sheet of Global Broadcast
Group, Inc. as of December 31, 2001 (presented herein), and the related
statements of changes in stockholders' equity (deficit) (presented herein),
operations, and cash flows (not presented herein) for the year then ended and
for the period from date of inception (October 31, 2000) through December 31,
2001; and in our report dated March 22, 2002 we expressed an unqualified opinion
on those financial statements. In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 2001 and the related statement of
stockholders' equity for the year then ended and for the period from date of
inception (October 31, 2000) through December 31, 2001 is fairly stated, in all
material respects. No auditing procedures have been performed subsequent to the
date of our report.
F-1
The accompanying financial statements have been prepared assuming Global
Broadcast Group, Inc. (A Delaware Corporation) will continue as a going concern.
As discussed in Note H to the financial statements, the Company has incurred
losses that have resulted in a retained deficit. This condition raises
substantial doubt about the Company's ability to continue as a going concern.
Management's plans regarding this matter are described in Note H. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Rotenberg & Co., LLP
----------------------------
Rotenberg & Co., LLP
Rochester, New York
October 11, 2002
F-2
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
BALANCE SHEETS
(Unaudited)
September 30, December 31,
2002 2001
------------------- -------------------
ASSETS
Current Assets
Cash and Cash Equivalents $ 9,201 $ 240,614
------------------- -------------------
------------------- -------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ -- $ 135,000
Accrued Franchise Taxes -- 50
Accrued Interest Payable 1,000 --
Notes Payable 150,000 --
------------------- -------------------
Total Current Liabilities 151,000 135,050
------------------- -------------------
Stockholders' Equity
Common Stock - $.001 Par Value; 50,000,000
Shares Authorized, 10,757,871 and
15,840,600 Shares Issued 10,758 15,841
Additional Paid in Capital 378,865 386,839
Deficit Accumulated During Development Stage (531,422) (297,116)
------------------- -------------------
Total Stockholders' (Deficit) Equity (141,799) 105,564
------------------- -------------------
Total Liabilities and Stockholders'
(Deficit) Equity $ 9,201 $ 240,614
------------------- -------------------
------------------- -------------------
The accompanying notes are an integral part of these financial statements.
F-3
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Common Accumulated
Stock Additional During Total
Period from Date of Inception Number of $.001 Paid-In Development Stockholders'
(October 31, 2000) Shares Par Value Capital Stage Equity
through September 30, 2002
------------- --------------- -------------- ----------------- --------------
Balance - October 31, 2000 -- $ -- $ -- $ -- $ --
Common Stock Issued in Exchange for
Services and Expenses Paid by
Shareholders (Galli) 11,553,100 11,553 202 -- 11,755
Common Stock Issued in Exchange for
Services and Expenses Paid by
Shareholders (City View) 3,425,000 3,425 -- -- 3,425
Common Shares Issued for Cash -
Private Placement (City View) 82,500 83 27,417 -- 27,500
Capital Contribution - Shareholder -- -- 100,000 -- 100,000
Net Loss for the Period (Unaudited) -- -- -- (33,874) (33,874)
------------- --------------- -------------- ----------------- --------------
Balance - September 30, 2001
(Unaudited) 15,060,600 15,061 127,619 (33,874) 108,806
Common Shares Issued for Cash -
Private Placement (City View) 780,000 780 259,220 -- 260,000
Net Loss for the Period (Unaudited) -- -- -- (263,242) (263,242)
------------- --------------- -------------- ----------------- --------------
Balance - December 31, 2001 15,840,600 $ 15,841 $ 386,839 $ (297,116) $ 105,564
------------- --------------- -------------- ----------------- --------------
------------- --------------- -------------- ----------------- --------------
The accompanying notes are an integral part of these financial statements.
F-4
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - continued
Deficit
Common Accumulated
Number Stock Additional During Total
Period from Date of Inception of $.001 Paid-In Development Stockholders'
(October 31, 2000) Shares Par Value Capital Stage Equity
through September 30, 2002
-------------- --------------- -------------- ----------------- -------------
Balance - December 31, 2001 15,840,600 $ 15,841 $ 386,839 $(297,116) $ 105,564
Common Shares Issued for Cash -
Private Placement (City View) 66,000 66 21,916 -- 21,982
Common Shares Issued for Cash -
Private Placement
(Global Broadcast) 267,500 268 64,693 -- 64,961
Shares Purchased (5,416,229) (5,417) (144,583) -- (150,000)
Capital Contribution - Shareholder -- -- 50,000 -- 50,000
Net Loss for the Period (Unaudited) -- -- -- (234,306) (234,306)
-------------- --------------- -------------- ----------------- -------------
Balance - September 30, 2002
(Unaudited) 10,757,871 $ 10,758 $ 378,865 $(531,422) $(141,799)
-------------- --------------- -------------- ----------------- -------------
-------------- --------------- -------------- ----------------- -------------
The accompanying notes are an integral part of these financial statements.
F-5
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF OPERATIONS (UNAUDITED)
Period From
Date of Inception
(October 31, 2000) Nine Months Nine Months
Through Ended Ended
September 30, September 30, September 30,
2002 2002 2001
-------------------- --------------------- -------------------
Revenues
Advertising Revenue $ 500 $ 500 $ --
-------------------- --------------------- -------------------
Operating Expenses
Commissions 11,250 9,000 --
General and Administrative 14,342 7,572 5,196
Insurance 25,272 17,293 2,420
Interest 1,000 1,000 --
Investment Banker 25,000 25,000 --
Management Fees 134,392 76,392 14,000
Marketing 16,000 16,000 --
Organizational Costs 164,853 -- 109
Payroll Taxes 7,386 7,386 --
Production Fees 23,257 18,767 --
Professional Fees 27,132 13,983 12,149
Rent 6,027 4,113 --
Salaries 53,041 24,303 --
Telephone 8,320 6,012 --
Transfer Agent Fees 1,885 1,885 --
Travel 12,715 6,100 --
------------------- --------------------- -------------------
Total Operating Expenses 531,872 234,806 33,874
------------------- --------------------- -------------------
Operating Loss for the Period (531,372) (234,306) (33,874)
Provision for Taxes 50 -- --
------------------- --------------------- -------------------
Net Loss for the Period $ (531,422) $ (234,306) $ (33,874)
------------------- --------------------- -------------------
------------------- --------------------- -------------------
Net Loss per Common Share - Basic and Diluted $ (0.04) $ (0.02) $ (0.00)
------------------- --------------------- -------------------
------------------- --------------------- -------------------
Weighted Average Common Shares Outstanding -
Basic and Diluted 13,287,972 15,331,735 10,325,308
------------------- --------------------- -------------------
------------------- --------------------- -------------------
The accompanying notes are an integral part of these financial statements.
F-6
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF CASH FLOWS (UNAUDITED)
Period From
Date of Inception
(October 31, 2000) Nine Months Nine Months
Through Ended Ended
September 30, September 30, September 30,
2002 2002 2001
----------------------- ---------------------- ---------------------
Cash Flows from Operating Activities
Net Loss for the Period $(531,422) $(234,306) $ (33,874)
Non-Cash Adjustments
Organizational Costs 14,853 -- 109
Franchise Taxes and Filing Fees 202 -- --
Contributed Services 125 -- 125
Changes in Assets and Liabilities:
Accounts Payable -- (135,000) --
Accrued Franchise Taxes -- (50) --
Accrued Interest Payable 1,000 1,000 --
---------------------- ---------------------- ---------------------
Net Cash Flows from Operating Activities (515,242) (368,356) (33,640)
---------------------- ---------------------- ---------------------
Cash Flows from Financing Activities
Cash Capital Contributions 150,000 50,000 100,000
Proceeds from Issuance of Note Payable 150,000 150,000 --
Proceeds from the Issuance of Common Stock 374,443 86,943 27,500
Purchase of Common Stock (150,000) (150,000) --
------------------------- -------------------- ---------------------
Net Cash Flow from Financing Activities 524,443 136,943 127,500
------------------------- -------------------- ---------------------
Net Increase (Decrease) in Cash and Cash
Equivalents 9,201 (231,413) 93,860
Cash and Cash Equivalents - Beginning of Period -- 240,614 --
------------------------- --------------------- ---------------------
Cash and Cash Equivalents - End of Period $ 9,201 $ 9,201 $ 93,860
------------------------- --------------------- ---------------------
------------------------- --------------------- ---------------------
SUPPLEMENTAL DISCLOSURES
Income Taxes Paid $ 31 $ 31 $ --
------------------------ ---------------------- ---------------------
------------------------ ---------------------- ---------------------
NON-CASH FINANCING ACTIVITIES
Organizational Costs Paid by Stockholders
in Exchange for Common Stock Issued $ 14,853 $ -- $ 109
Franchise Taxes Paid by Stockholder -
Additional Paid in Capital $ 202 $ -- $ --
------------------------ ---------------------- ---------------------
The accompanying notes are an integral part of these financial statements.
F-7
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note A - Basis of Presentation
The financial statements of Global Broadcast Group, Inc. (the
"Company") included herein have been prepared by the Company, without
audit. These financial statements should be read in conjunction with
the annual audited financial statements and the notes thereto.
The accompanying unaudited interim financial statements reflect all
adjustments of a normal and recurring nature, which are, in the
opinion of management, necessary to present fairly the financial
position, results of operations and cash flows of the Company for the
interim periods presented. The results of operations for these periods
are not necessarily comparable to, or indicative of, results of any
other interim period or for the fiscal year as a whole. Factors that
affect the comparability of financial data from year to year and for
comparable interim periods include non-recurring expenses associated
with the start up of the Company.
Note B - The Company
The Company was incorporated under the laws of the State of Delaware
on October 31, 2000 as Galli Process, Inc. Galli Process, Inc. did not
have operating activities prior to the merger with City View TV, Inc.
Effective February 7, 2002, Galli Process, Inc. changed its name to
Global Broadcast Group, Inc.
Effective December 31, 2001, Galli Process, Inc. became a majority
owned subsidiary of City View TV, Inc. (A Florida Corporation). On
March 1, 2002, pursuant to a plan of merger, City View TV, Inc. (a
Florida Corporation) merged into Global Broadcast Group, Inc.
(formerly Galli Process, Inc.). The shareholders of City View TV, Inc.
converted 3 shares of City View TV, Inc. stock into 1 share of the
surviving corporation (Global Broadcast Group, Inc.). There was no
change to the business, management, location, policies or the
consolidated assets and liabilities of City View TV, Inc. Global
Broadcast Group, Inc. (a Delaware Corporation) is the surviving
corporation effective on the date of the merger.
The transaction was accounted for as a recapitalization, resulting in
the historical operations of City View TV, Inc. being the historical
operations of Global Broadcast Group, Inc. Accordingly, the
accompanying financial statements have been restated to reflect the
financial position, results of operations, and cash flows for all
periods presented as if the recapitalization had occurred at the
beginning of the earliest period presented.
Scope of Business
The Company's principal business activity is television programming
and is currently in the development stage.
F-8
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note C - Nature of Operations and Summary of Significant Accounting Policies
Method of Accounting
The Company maintains its books and prepares its financial statements
on the accrual basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America
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
statements and the reported amounts of revenues and expense during the
reporting period. Actual results can differ from those estimates.
Reclassifications
Certain amounts in the prior year financial statements have been
reclassified to conform with the current year presentation.
Cash and Cash Equivalents
Cash and cash equivalents include time deposits, certificates of
deposit, and all highly liquid debt instruments with original
maturities of three months or less. The Company maintains cash and
cash equivalents at financial institutions which periodically may
exceed federally insured amounts.
Revenue Recognition
Advertising revenue recognized for the nine months ended September 30,
2002 represented a commercial production and was recorded upon
completion of services.
Development Stage
The Company has operated as a development stage enterprise since its
inception by devoting substantially all of its efforts to financial
planning, raising capital, research and development, and developing
markets for its products. Accordingly, the financial statements of the
Company have been prepared in accordance with the accounting and
reporting principles prescribed by Statement of Financial Accounting
Standards No. 7, "Accounting and Reporting by Development Stage
Enterprises".
The Company was inactive from October 31, 2000 through March 31, 2001.
Activities began on or about April 1, 2001.
Concentrations of Credit Risk
Financial instruments which potentially expose the Company to
significant concentrations of credit risk consist principally of bank
deposits. Cash is placed primarily in high quality short-term interest
bearing financial instruments.
- continued -
F-9
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note C - Nature of Operations and Summary of Significant Accounting Policies - continued
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share". Basic earnings per common share is calculated by dividing
income (loss) available to common shareholders by the weighted average
number of common shares outstanding for each period. Diluted earnings
per common share is the same as basic earnings per share for all of
the periods presented since no common stock equivalents were
outstanding for the periods presented.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
using the asset and liability approach, which requires recognition of
deferred tax liabilities and assets for the expected future tax
consequences of temporary differences between the carrying amounts and
the tax basis of such assets and liabilities. This method utilizes
enacted statutory tax rates in effect for the year in which the
temporary differences are expected to reverse and gives immediate
effect to changes in income tax rates upon enactment. Deferred tax
assets are recognized, net of any valuation allowance, for temporary
differences and net operating loss and tax credit carryforwards.
Deferred income tax expense represents the change in net deferred
assets and liability balances. The Company has a deferred tax
liability of $136,000 related to organization costs. Deferred tax
assets arising from the net operating losses incurred during the
development stage have been fully reserved against due to the
uncertainty as to when or whether the tax benefit will be realized.
Financial Instruments
The Company's financial instruments consist of cash, accounts payable
and notes payable. Unless otherwise noted, it is management's opinion
that the Company is not exposed to significant interest, currency or
credit risks arising from these financial instruments. The fair value
of these financial instruments approximates their carrying value,
unless otherwise noted.
F-10
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note D - Related Party Transactions
From September 1, 2001 through December 31, 2001, the Company paid
monthly management fees to Global Music Network, LLC. Fees paid in
accordance with this management agreement amounted to $0 and $8,000
for the nine months ended September 30, 2002 and 2001, respectively
and $32,000 for the period from the date of inception (October 31,
2000) through September 30, 2002.
Global Music Network, LLC also paid monthly operating expenses for the
Company from August 2001 through November 2001 that were reimbursed by
the Company on a monthly basis. These expenses and reimbursements
amounted to $46,330 in 2001.
The Company paid consulting fees to Ed Berkhof Management, Inc. that
amounted to $30,392 and $0 for the nine months ended September 30,
2002 and 2001, respectively and $50,392 for the period from the date
of inception (October 31, 2000) through September 30, 2002. Ed Berkhof
was the President of Global Broadcast Group, Inc. for the period from
October 31, 2000 through September 2, 2002.
The Company paid management fees to Sam Winer, Chairman, Chief
Executive Officer and Secretary of the Corporation, for services
provided in the amount of $46,000 and $6,000 for the nine months ended
September 30, 2002 and 2001, respectively and $52,000 for the period
from the date of inception (October 31, 2000) through September 30,
2002.
Note E - Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
using the asset and liability approach, which requires recognition of
deferred tax liabilities and assets for the expected future tax
consequences of temporary differences between the carrying amounts and
the tax basis of such assets and liabilities. This method utilizes
enacted statutory tax rates in effect for the year in which the
temporary differences are expected to reverse and gives immediate
effect to changes in the income tax rates upon enactment. The Company
has operating loss carryforwards for tax purposes of approximately
$395,000 as of September 30, 2002, which will begin to expire during
the year 2021.
Note F - Notes Payable
During September 2002, the Company entered into a loan agreement with
a former stockholder of the Company in the amount of $150,000. The
note is secured by two promissory notes and 150,000 restricted shares
of the Company's common stock. The notes bear interest at 8% per
annum. The notes are due in full, together with accrued interest, in
September 2003.
Note G - Stock Repurchase
During the nine months ended September 30, 2002, the Company
repurchased 5,416,229 shares of Global Broadcast Group, Inc. common
stock from two of the Company's stockholders at an aggregate sum of
$150,000.
F-11
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note H - Going Concern
The Company's financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business. The Company has reported net losses of $531,422 through
September 30, 2002. As a result, there is an accumulated deficit of
$531,422 at September 30, 2002.
The Company's continued existence is dependent upon its ability to
raise capital or to successfully market and sell its products. The
financial statements do not include any adjustments that might be
necessary should the Company be unable to continue as a going concern.
F-12
PART III
ITEM 1. INDEX TO EXHIBITS
2 Agreement and Plan of Merger Agreement
3 3.1 Certification of Incorporation
3.2 Certification of Amendment
3.3 Authorization to Transact Business in Florida
3.4 By-Laws
4 Instruments defining the rights of holders (refer to exhibit 3)
9 Voting Trust agreement (not applicable)
10 Material contracts (not applicable)
11 Statement re: Computation of per share earnings (not applicable)
21 Subsidiary of the Registrant (not applicable)
24 Power of Attorney (not applicable)
99 Additional Exhibits
16
SIGNATURE PAGE
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: January 17, 2003 Global Broadcast Group, Inc.
By: /s/ Sam Winer
------------------------------
Sam Winer, CEO
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange act of 1934, this
registration statement has been signed below by the followings persons on behalf
of the registrant and in the capacities and on the dates indicated.
Date: January 17, 2003 By: /s/ Sam Winer
------------------------------
Sam Winer, Chairman
Date: January 17, 2003 By: /s/ James Goodman
------------------------------
James Goodman, Director
Date: January 17, 2003 By: /s/ Michael D. Rocha
-------------------------------
Michael D. Rocha, Director
AGREEMENT AND PLAN OF MERGER
(FILED
OF 02 APR - 9 PM 1:50
SECRETARY OF STATE
CITY VIEW TV, INC. TALLAHASSEE, FLORIDA
(a Florida corporation)
AND
GLOBAL BROADCAST GROUP, INC.
(formerly known as Galli Process, Inc.)
(a Delaware corporation)
Agreement and Plan of Merger entered into effective March 1, 2002 by and
among, City View TV, Inc., a business corporation of the State of Florida, and
approved by resolution adopted by its Board of Directors on said date, and
entered into on March 1, 2002 by Global Broadcast Group, Inc. (formerly known as
Galli Process, Inc.), a business corporation of the State of Delaware, and
approved by resolution adopted by its Board of Directors on said date.
WHEREAS City View TV, Inc. is a busi corporation of the State of Florida
with its principal office therein located at 5770 Roosevelt Boulevard, Suite
510, Clearwater, Florida, 33760.
WHEREAS the total number of shares of stock which City View TV, Inc. has
authority to issue is 10,000,000 (as amended), all of which are of one class and
of a par value of$.001 each; and
WHEREAS Global Broadcast Group, Inc. (formerly known as Gaffi Process,
Inc.) is a business corporation of the State of Delaware with its registered
office therein located at 2711 Centerville Road, Suite 400, City of Wilmington,
County of Newcastle, Delaware; and
WHEREAS the total number of shares of stock which Global Broadcast
Group, Inc. (formerly known as Galli Process, Inc.) has authority to issue is
50,000,000, all of which are of one class and, of a par value of $.00l each; and
WHEREAS the Florida law permits a merger of a business corporation of
the State of Florida with and into a business corporation of another
jurisdiction; and
WHEREAS the Delaware General Corporation Law permits the merger of a
business corporation of another jurisdiction with and into a business corporation
of the State of Delaware; and
WHEREAS City View TV, Inc. and Global Broadcast Group, Inc. (formerly
known as Galli Process, Inc.) and the respective Boards of Directors thereof
deem it advisable and to the advantage, welfare, and best interests of said
corporations and their respective stockholders to merge City View TV, Inc. with
and into Global Broadcast Group, Inc. pursuant to the provisions of the Florida
Business Corporation Act and pursuant to the provisions of the Delaware General
Corporation Law upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement of the parties hereto, being thereunto duly entered into by City View
TV, Inc. and approved by a resolution adopted by its Board of Directors and
being thereunto duly entered into by Global Broadcast Group, Inc. and approved
by a resolution adopted by its Board of Directors, the Agreement of Merger and
the terms and conditions thereof and the mode of carrying the same into effect,
together with any provisions required or permitted to be set forth therein, are
hereby determined and agreed upon as hereinafter in this Agreement and Plan set
forth.
1. City View TV, Inc. and Global Broadcast Group, Inc. shall, pursuant
to the provisions of the Florida Business Corporation Act and the provisions of
the Delaware General Corporation Law, be merged with and into a single
corporation, to wit, Global Broadcast Group, Inc., which shall be the surviving
corporation from and after the effective time of the merger, and which is
sometimes hereinafter referred to as the "Surviving Corporation", and which
shall continue to exist as said surviving corporation under its present name
pursuant to the provisions of the Delaware General Corporation Law. The separate
existence of City View TV, Inc., which is sometimes hereinafter referred to as
the "Terminating Corporation", shall cease at said effective time in accordance
with the provisions of the Florida Business Corporation Act.
2. Attached hereto and made a part here of is a copy of the Certificate
of Incorporation of the Surviving Corporation as the same shall be in force and
effect at the effective time in the State of Delaware of the merger herein
provided for; and said Certificate of Incorporation as therein amended and
changed shall continue to be the Certificate of Incorporation of said Surviving
Corporation until further amended and changed pursuant to the provisions of the
Delaware General Corporation Law.
3. The present by-laws of the Surviving Corporation will be the by-laws
of said Surviving Corporation and will continue in full force and effect until
changed, altered or amended as therein provided and in the manner prescribed by
the provisions of the Delaware General Corporation Law.
4. The directors and officers in office of the Surviving Corporation at
the effective time of the merger shall be the members of the first Board of
Directors and the first officers of the Surviving Corporation, all of whom shall
hold their directorships and offices until the election and qualification of
their respective successors or until their tenure is otherwise terminated in
accordance with the by laws of the surviving corporation.
5. Each three (3) issued and outstanding shares of the Terminating
Corporation, at the effective time of the merger, shall be converted into one
share of the Surviving Corporation. The issued shares of the Surviving
Corporation shall not be converted or exchanged in any manner, but each said
share which is issued as of the effective date of the merger shall continue to
represent one issued share of the Surviving Corporation. The resulting shares of
each of the Terminating Corporation and Surviving Corporation shall be as set
forth on Schedule "A".
6. In the event that this Agreement of Merger shall have been fully
approved and adopted upon behalf of the Terminating Corporation in accordance
with the provisions of the Florida Business Corporation Act and upon behalf of
the Surviving Corporation in accordance with the provisions of the Delaware
General Corporation Law, the said corporations agree that they will cause to be
executed and filed and recorded any document or documents prescribed by the laws
of the State of Florida and by the laws of the State of Delaware, and that they
will cause to be performed all necessary acts within the State of Florida and
the State of Delaware and elsewhere to effectuate the merger herein provided
for.
7. The Board of Directors and the proper officers of the Terminating
Corporation and of the Surviving Corporation are hereby authorized, empowered,
and directed to do any and all acts and things, and to make, execute, deliver,
file, and record any and all instruments, papers, and documents which shall be
or become necessary, proper, or convenient to carry out or put into effect any
of the provisions of this Agreement and Plan of Merger or of the merger herein
provided for.
IN WITNESS WHEREOF, this Agreement and Plan of Merger is hereby executed
upon behalf of each of the constituent corporations parties thereto.
Executed effective on this 1st day of March, 2002.
Global Broadcast Group, Inc.
(formerly known as Galli Process, Inc.)
By: /s/ Ed Berkhof
---------------------------------
Name: Ed Berkhof
---------------------------------
Title of Authorized Officer: President
----------
City View/V, Inc.
By: /s/ Sam Winer
---------------------------------
Name: Sam Winer
---------------------------------
Title of Authorized Officer: President
----------
SCHEDULE A
CITYVIEW TV SHAREHOLDERS ALLOCATION
OF GBG SHARES
Attached
H:\LIBRARY\Clients\WINER\CityView-Galli Merger\Agreement and Plan of Merger(2) wpd
03/20/02 05:44 PM
GBG Shares City View Shares
To Be Issued to be retired
------------ ------------------ ------------- --------------- ----------------
Sam Winer 1,275,000 3,825,000
Ed Berkhof 201,584 604,752
Leo Plasman 1,823,416 5,470,248
OHERS BELOW 928,500 2,785,500
Danny Haan 125,000 375,000
------------ ------------------------------------------------------------------
Total 0 0 4,353,500 13,060,500
------------ ------------------ ------------- --------------- -----------------
First Name Last Name Shares City View Shares Social/Tax ID
------------ ------------------ ------------- --------------- ----------------- --------------
C.P. Breg 22,500 67,500 112112821
Breg 30,000 90,000
M.M.M Aker 15,000 45,000 30222072
Aker 30,000 90,000
Mr. S. Steltenpool 7,500 22,500 187967453
William Cooper 7,500 22,500 000-00-0000
Marco Pavesi 30,000 90,000 000-00-0000
Andreas Swiebel 30,000 90,000
M.E.J. Vermaat 45,000 135,000
H.J. Smit 30,000 90,000
Eric Lotterjonk 30,000 90,000
Wim van der Sanden 150,000 450,000
Sjef Matthijssen 150,000 450,000
Peter Bergman 225,000 675,000
Gerard Mecking 30,000 90,000
J. E. Brouwer-Blom 30,000 90,000
Bruijs 15,000 45,000
Bert Krooswijk 45,000 135,000
M.J.Th. Diederiks-Hiemstra 6,000 18,000
--------------- -----------------
928,500 2,785,500
ARTICLES OF MERGER
The following articles of merger are being submitted in accordance with
section(s) 607.1109, 608.4382, and/or 620.203, Florida Statutes.
FIRST The exact name, street address of its principal office,
jurisdiction, and entity type for each merging party are as follows:
Name and Street Address Jurisdiction Entity Type
1. City View TV, Inc. Florida Corporation (for profit)
5770 Roosevent Blvd.
Suite 510
Clearwater, FL 33760
Florida Document/Registration No. P01000039204 FEI Number: 59-3714121
SECOND: The exact name, street address of its principal office,
jurisdiction, and entity type of the surviving party are as
follows:
Name and Street Address Jurisdiction Entity Type
Global Broadcast Group, Inc. Delaware Corporation
Registered Office:
c/o The Company Corporation
2711 Centeville Road, Suite 400
Wilmington, Delaware
Principal Offices
5770 Roosevelt Blvd., Suite 510
Clearwater, FL 33760
Delaware Document/Registration, No. 00 1546742-33080701 FEI Number:02-0563302
THIRD: The attached Plan of Merger meets the requirements of section(s)
607.1108,608.438, 617.1103, and/or 620.20 1, Florida Statutes, and was approved
bY each domestic corporation, limited liability company, partnership and/or
limited partnership that is a party to the merger in accordance with Chapter(s)
607, 617, 608 and/or 620, Florida Statutes.
FOURTH: If applicable, the attached Plan of Merger was
approved by the other business entity(ies) that is/are party(ies) to tile merger
in accordance with the respective laws of all applicable jurisdictions.
FIFTH: If not incorporated, organized, or otherwise formed
under the laws of the state of Florida, the surviving entity hereby appoints the
Florida Secretary of State as its agent for substitute service of process
pursuant to Chapter 48, Florida Statutes, in any proceeding to enforce any
obligation or rights of any dissenting shareholders, partners, and/or members of
each domestic corporation, partnership, limited partnership and/or limited
liability company that is a party to the merger.
SIXTH: If not incorporated, organized, or otherwise formed
under the laws of the state of Florida, the surviving entity agrees to pay the
dissenting shareholders, partners, and/or members of each domestic corporation,
partnership, limited partnership and/or limited liability company that is a
party to the merger the amount, if any, to which they are entitled under
section(s) 607.1302, 620.205, and/or 608.4384, Florida Statutes.
SEVENTH: If applicable, the surviving entity has obtained the
written consent of each shareholder, member or person that as a result of the
merger is now a general partner of the surviving entity pursuant to section(s)
607.1108(5), 608.4381(2), and/or 620.202(2), Florida Statutes.
EIGHTH: The merger is permitted under the respective laws of
all applicable jurisdictions and is not prohibited by the agreement of any
partnership or limited partnership or the regulations or articles of
organization of any limited liability company that is a party to the merger.
NINTH: The merger shall become effective as of:
The date the Articles of Merger are filed with Florida Department of State
TENTH: The Articles of Merger comply and were executed in
accordance with the laws of each party's applicable jurisdiction.
ELEVENTH:SIGNATURE(S) FOR EACH PARTY
Name of Entity Signature(s) Typed or Printed Name of Individual
City View TV, Inc. /s/ Sam Winer Sam Winer, President
/s/ Ed Berkhoff Ed Berkhoff, VP
Global Broadcast,
Group, Inc /s/ Sam Winer Sam Winer, Chairman and CEO
/s/ Ed Berkhoff Ed Berkhoff, President
CERTIFICATE OF SECRETARY OF GLOBAL BROADCAST GROUP, INC.
Shareholder Approval By Written Consent
The undersigned, being the Secretary of Global Broadcast Group, Inc.,
does hereby certify that the holders of all of the outstanding stock of said
corporation dispensed with a notice meeting and vote of shareholders, and all of
the shareholders entitled to vote consented in writing, pursuant to the
provisions of Section 228 of the Delaware General Corporation Law, to the
adoption of the foregoing Agreement of Merger.
Executed effective on this 1st day of March, 2002.
/s/ Sam Winer
-----------------------------
Secretary of Global
Broadcasting Group, Inc.
Delaware Agreement of Merger - Foreign Corporation
into Domestic Corporation 1/96 -1
GLOBAL BROADCAST GROUP, INC.
SHAREHOLDER RESOLUTION
The undersigned being a majority of interest of all of the outstanding
shares entitled to vote of Global Broadcast Group, Inc., a Delaware corporation
(the "Company") do hereby adopt and consent to the following Resolution by
written consent in lieu of a meeting pursuant to the laws of the State of
Delaware and the bylaws of the Company, as if said Resolution had been adopted
at a meeting duly called and held:
IT IS HEREBY RESOLVED, that the Company enter into and carry out the
agreement and plan of merger between the Company and City View TV, Inc. dated
effective March 1, 2002; and
IT IS FURTHER RESOLVED, that any notice of meeting is hereby waived and
the written consent of the majority of shareholders authorizing the foregoing
Resolutions may be executed in counterparts and/or by facsimile.
Shareholders holding a majority interest of all outstanding shares:
Name No. Shares held Signature
Sam Winer 3,781,561 /s/ Sam Winer
Ed Berkhof 2,708,145 /s/ Ed Berkhof
Leo Plasman 2,708,084 /s/ Leo Plasman
_____________________ _________________ _________________________
_____________________ _________________ _________________________
_____________________ _________________ _________________________
_____________________ _________________ _________________________
_____________________ _________________ _________________________
_____________________ _________________ _________________________
_____________________ _________________ _________________________
H:\LIBRARY\Ctients\WINER\CityView-GaIli Merger\GBG Sec Cert and Shareholder
Reso(1).wpd 03/27/02 04:31 PM
Delaware Agreement of Merger - Foreign Corporation
into Domestic Corporation 1/96 - 2
(SEAL)
FLORIDA DEPARTMENT OF STATE
Katherine Harris
Secretary of State
April 11, 2002
GLOBAL MUSIC NETWORK
5770 ROOSEVELT BLVD., SUITE 510
CLEARWATER, FL 33760
The Articles of Merger were filed on April 9, 2002, for GLOBAL BROADCAST GROUP,
INC., the surviving Delaware entity not authorized to transact business in
Florida.
The certification you requested is enclosed.
Should you have any further questions regarding this matter, please feel free
to call (850) 245-6050, the Amendment Filing Section.
Carol Mustain
Corporate Specialist
Division of Corporations Letter Number: 3025A00021559
Division of Corporations - P.O. Box 6327 - Tallahassee, Florida 32314
State of Florida
(SEAL)
Department of State
I certify the attached is a true and correct copy of the Articles of Merger,
filed on April 9, 2002, for GLOBAL BROADCAST GROUP, INC., the surviving Delaware
entity not authorized to transact business in Florida, as shown by the records
of this office.
Given under my hand and the
Great Seal of the State of Florida
at Tallahassee, the Capitol, this the
Eleventh day of April, 2002
(SEAL) /s/ Katherine Harris
--------------------
Katherine Harris
Secretary of State
[Submit to the Secretary of State one (1)
executed original of the Certificate.]
[A signature should be in black, but may be
an original signature, or a facsimile,
conformed, or electronically transmitted
signature.]