Global Sourcing Group Inc – ‘SB-2’ on 2/19/99

As of:  Friday, 2/19/99   ·   Accession #:  928385-99-474   ·   File #:  333-72625

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Registration of Securities by a Small-Business Issuer   —   Form SB-2
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SB-2        Prospectus                                            45    247K 
 2: EX-3.1      Certificate of Incorporation                           7     22K 
 3: EX-3.2      Acquisition By-Laws                                   14     59K 
 4: EX-24.1     Accountants Consent                                    1      4K 

SB-2   —   Prospectus
Document Table of Contents

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As filed with the Securities and Exchange Commission on February 17, 1999 
                                          Registration No.
================================================================================

SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

------------------------  

FORM SB-2 
REGISTRATION STATEMENT  
UNDER 
THE SECURITIES ACT OF 1933  

--------------------------  

GLOBAL SOURCING GROUP, INC. 

--------------------------------- 
(Exact Name of registrant as specified in its charter)  

                                                        [Enlarge/Download Table]

                                                                                        
           Delaware                    52-2068992                     3540              
-------------------------------  ----------------------  -------------------------------
(State or other jurisdiction of    (I.R.S. Employer            (Primary Standard        
incorporation or organization)   Identification Number)  Industrial Classification Code)

--------------------- 
1111 Rancho Conejo Boulevard, Suite 202 
Newbury Park, California 91320  
805/375-6060  
(Address, including zip code, and telephone number, 
including area code, of registrant's principal executive offices) 

Rafael Littaua, President 
1111 Rancho Conejo Boulevard, Suite 202 
Newbury Park, California 91320  
805/375-6060  
(Name, address, including zip code, and telephone number, 
including area code, of agent for service)  

Copies to:   Cassidy & Associates, 1504 R Street, N.W.  
Washington, D.C. 20009, 202/387-5400  

Approximate date of commencement of proposed sale to the public:  
As soon as practicable after the effective date of this Registration Statement. 

If any of the securities being registered on this Form are to be offered on a   
delayed or continuous basis pursuant to Rule 415 under the Securities Act of    
1933, check the following box.  /  /                                            

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective       
registration statement for the same offering.   /  /                            

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under  
the Securities Act, check the following box and list the Securities Act         
registration statement number of the earlier registration statement for the same
offering.  /  /                                                                 

If delivery of the prospectus is expected to be made pursuant to Rule 434,      
please check the following box.  / /                                            

CALCULATION OF REGISTRATION FEE 

                                                        [Enlarge/Download Table]

=============================================================================================================
Title of Each Class of                    Amount to be  Proposed Maximum   Proposed Maximum     Amount of    
Securities to be Registered                Registered       Offering          Aggregate        Registration  
                                                         Price Per Share    Offering Price      Fee (1)(2)   
-------------------------------------------------------------------------------------------------------------
                                                                                                             
Common Stock held by Selling                 2,637,736          $.029 (1)          $ 76,494       $ 21.00    
Securityholders                                                                                              
-------------------------------------------------------------------------------------------------------------
Common Stock Purchase Warrants held by       1,000,000                NA                 NA            NA    
Selling Securityholders                                                                                      
-------------------------------------------------------------------------------------------------------------
Shares of Common Stock underlying            1,000,000          $   0.75           $750,000       $209.00    
Common Stock Purchase Warrants                                                                               
=============================================================================================================
TOTAL                                                                              $776,377       $230.00    
=============================================================================================================

(1)  There is no current market for the securities.  The value of the Shares    
    being registered is based upon the book value of the Company Stock ($0.029
per share).                                                           
(2)  Estimated solely for the purpose of calculating the registration fee based 
on Rule 457(f)(2).                                                    
(3)  Paid by electronic transfer.                                               

The Registrant hereby amends this Registration Statement on such date or dates  
as may be necessary to delay its effective date until the Registrant shall file 
a further amendment which specifically states that this Registration Statement  
shall thereafter become effective in accordance with Section 8(a) of the        
Securities Act of 1933, as amended, or until the Registration Statement shall   
become effective on such date as the Commission, acting pursuant to said        
Section 8(a), may determine.                                                    

    The information contained herein is subject to completion or amendment.  A
registration statement relating to these securities has been filed with the     
Securities and Exchange Commission.  These securities may not be sold nor may   
offers to buy be accepted prior to the time the registration statement becomes  
effective.  This prospectus shall not constitute an offer to sell or the        
solicitation of an offer to buy nor shall there be any sale of these securities 
in any state in which such offer, solicitation or sale would be unlawful prior  
to registration or qualification under the securities laws of any such state.   

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PROSPECTUS                              Subject to Completion, Dated  ____, 1999

GLOBAL SOURCING GROUP, INC. 

2,637,736 Shares of Common Stock to be Sold by  
the Holders thereof; 1,000,000 Warrants and 
1,000,000 Shares of Common Stock underlying 
such Warrants to be Sold by the Holders thereof.  

     The Registration Statement of which this Prospectus forms a part relates to
the offer and sale of certain securities of Global Sourcing Group, Inc., a      
Delaware Corporation (the "Company") by the holders thereof (the "Selling       
Securityholders") consisting of (i) 2,637,736 shares (the "Shares") of the      
Company's common stock, par value $.0001 per share  (the "Common Stock")        
(ii) 1,000,000 warrants (the "Warrants") and 1,000,000 shares of common stock   
underlying the Warrants.  The Shares, Warrants and Common Stock underlying the  
Warrants are hereinafter collectively referred to as the "Securities".  All     
costs incurred in the registration of the Securities are being borne by the     
Company.                                                                        

  The Company is a direct marketer and wholesaler of specialty power tools
under its brand name  "Great Tools Direct".  The Company buys specialty power   
tools from Chinese tool manufacturers, and merchandises the tools through       
advertisements in trade magazines, direct mailing and its Internet site.        
Consumers of specialty power tools can order the Company's Great Tools Direct   
products through the Company's toll free number or over the Internet.  The      
Company also sells its product to retail stores and a mail order catalog        
company.                                                                        

     The Company has limited operations and revenues and limited capital.  Prior
to the Company's offering of the Securities as described herein, there has been 
no public market for the Common Stock of the Company or the Warrants and there  
are no assurances  that a public market will develop following completion of    
this Offering or that, if any such market does develop, it will be sustained.   

  The Warrants may be transferred immediately upon the effective date (the
"Effective Date") of the registration statement of which this Prospectus forms a
part (the "Registration Statement).   Each  Warrant allows the holder thereof to
purchase one share of Common Stock at an exercise price of $0.75 for the        
12 months subsequent to the Effective Date or at an exercise price of $1.00 for 
the six months thereafter.                                                      

   The Securities will become tradeable on the Effective Date.  Sales of the
Securities being offered by Selling Securityholders, or even the potential of   
such sales, may likely have an adverse effect on the market prices of the       
Securities of the Company.  The Selling Securityholders will receive the        
proceeds from the sale of the Securities being offered by them.  The Company    
will not receive any of the proceeds from such sales.  The Selling              
Securityholders, directly or through agents, dealers or representatives to be   
designated from time to time, may sell their Securities on terms to be          
determined at the time of sale.  See "PLAN OF DISTRIBUTION."  The Selling       
Securityholders reserve the sole right to accept or reject, in whole or in part,
any proposed purchase of the Selling Securityholders' Securities being offered  
by them pursuant hereto.                                                        

THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.  SEE "RISK FACTORS"   
CONTAINED IN THIS PROSPECTUS BEGINNING ON PAGE 5.                               

  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE          
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED    
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE    
CONTRARY IS A CRIMINAL OFFENSE.                                                 

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 THE SECURITIES DESCRIBED HEREIN ARE OFFERED BY THE SELLING SHAREHOLDERS
SUBJECT TO PRIOR SALE, WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFERING,
WITHOUT NOTICE. IN ADDITION, THE RIGHT IS RESERVED TO CANCEL ANY CONFIRMATION OF
SALE EVEN IF THE PURCHASE PRICE HAS BEEN PAID, IF IN THE OPINION OF THE COMPANY 
OR ANY PARTICIPATING BROKER-DEALER, COMPLETION OF SUCH SALE WOULD VIOLATE       
FEDERAL OR STATE SECURITIES LAWS OR A RULE OR POLICY OF THE NATIONAL ASSOCIATION
OF SECURITIES DEALERS, INC.                                                     

  FOLLOWING THE COMPLETION OF THIS OFFERING, CERTAIN BROKER-DEALERS MAY BE
THE PRINCIPAL MARKET MAKERS FOR THE SECURITIES OFFERED HEREBY. UNDER THESE      
CIRCUMSTANCES, THE MARKET BID AND ASKED PRICES FOR THE SECURITIES MAY BE        
SIGNIFICANTLY INFLUENCED BY DECISIONS OF THE MARKET MAKERS TO BUY OR SELL THE   
SECURITIES FOR THEIR OWN ACCOUNT. NO ASSURANCE CAN BE GIVEN THAT ANY            
MARKETMAKING ACTIVITIES OF THE MARKET MAKERS, IF COMMENCED, WILL BE CONTINUED.  

   FOR A PERIOD OF AT LEAST ONE YEAR FOLLOWING CLOSING OF THIS OFFERING, THE
COMPANY WILL BE REQUIRED BY THE SECURITIES EXCHANGE ACT OF 1934 TO FILE PERIODIC
REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH 
MATERIAL MAY BE INSPECTED AT THE COMMISSION'S PRINCIPAL OFFICES AT JUDICIARY    
PLAZA, 450 FIFTH STREET, N.W. WASHINGTON, D.C. 20459 WHERE COPIES MAY BE        
OBTAINED ON PAYMENT OF CERTAIN FEES PRESCRIBED BY THE COMMISSION OR AT ITS WEB  
SITE HTTP://WWW.SEC.GOV. THE COMPANY WILL FURNISH TO HOLDERS OF ITS COMMON STOCK
ANNUAL REPORTS CONTAINING AUDITED FINANCIAL STATEMENTS EXAMINED AND REPORTED    
UPON, AND WITH AN OPINION EXPRESSED BY AN INDEPENDENT CERTIFIED PUBLIC          
ACCOUNTANT. THE COMPANY MAY ISSUE OTHER UNAUDITED INTERIM REPORTS TO ITS        
SHAREHOLDERS AS IT DEEMS APPROPRIATE.                                           

   CERTAIN SECURITIES HEREIN ARE TRANSFERRABLE WARRANTS. IT IS POSSIBLE THAT
THE WARRANTS MAY BE ACQUIRED BY PERSONS RESIDING IN STATES WHERE THE COMPANY IS 
UNABLE TO QUALIFY THE SHARES OF COMMON STOCK UNDERLYING THE WARRANTS FOR SALE   
UPON EXERCISE. WARRANTHOLDERS IN THOSE STATES WOULD HAVE NO CHOICE BUT TO       
ATTEMPT TO SELL THEIR WARRANTS OR LET THEM EXPIRE UNEXERCISED. IT IS ALSO       
POSSIBLE THAT THE COMPANY MAY BE UNABLE, FOR UNFORESEEN REASONS, TO CAUSE A     
REGISTRATION STATEMENT COVERING THE SHARES UNDERLYING THE WARRANTS TO BE IN     
EFFECT WHEN THE WARRANTS ARE EXERCISABLE. IN THAT EVENT, THE WARRANTS MAY EXPIRE
UNLESS EXTENDED BY THE COMPANY AS PERMITTED BY THE WARRANTS BECAUSE A           
REGISTRATION STATEMENT MUST BE IN EFFECT IN ORDER FOR WARRANTHOLDERS TO EXERCISE
THEIR WARRANTS.                                                                 

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PROSPECTUS SUMMARY  

The following summary is qualified in its entirety by reference to and
should be read in conjunction with more detailed information and financial data 
(including any financial statements and the notes thereto) appearing elsewhere  
in this Prospectus.  Each prospective investor is urged to read this Prospectus 
in its entirety, including the financial data.                                  

The Company                                                                     

   Global Sourcing Group, Inc.  (the "Company"), incorporated under the laws
of  Delaware, was formed through a merger on June 30, 1998 between its          
predecessor Global Sourcing Group, L.L.C., a limited liability company          
incorporated under the laws of California, and Penrith Acquisition Corporation, 
a newly formed Delaware corporation.  The surviving corporation was renamed     
Global Sourcing Group, Inc.                                                     

    The Company sells specialty power tools under the Great Tools Direct label
to department stores and a mail order catalog company.  All of the products     
offered by the Company are manufactured in China and labeled under the Company's
Great Tools Direct brand name.  The Company offers a variety of products        
consisting of approximately 90 different models of power tools, grinders,       
sanders and miscellaneous power tool accessories.                               

 The Company also markets its products through advertisements in various
consumer publications including Popular Mechanics, American Woodworker, Wood    
Magazine, Popular Woodworker and American How To. The Company's customers are   
users of specialty power tools including carpenters, plumbers, electricians and 
other repair professionals and hobbyists.  The Company also markets its products
on its Web page on the Internet.                                                

The Offering                                                                    

     The Company is not offering any shares for sale.  The Securities offered by
the Selling Securityholders consist of (i) 2,637,736 shares of Common Stock     
(ii) 1,000,000 Warrants and (iii) 1,000,000 shares of Common Stock underlying   
such Warrants.  The Selling Securityholders' Shares of Common Stock offered     
herein (without giving effect to the exercise of any Warrants) constitute       
approximately 37% of the outstanding Common Stock of the Company.               

Trading Market                                                                  

  The Company intends to initially apply for admission to quotation of its
securities on the NASD OTC Bulletin Board and to apply for listing on the Nasdaq
SmallCap Market when, and if, it qualifies for such admission. However, there   
can be no assurance that its Securities will be listed on any such exchange.    
See "RISK FACTORS--No Current Trading Market for the Company's Securities" and  
"DESCRIPTION OF SECURITIES--Admission to Quotation to Nasdaq SmallCap Market and
NASD OTC Bulletin Board".                                                       

Risk Factors                                                                    

   There are substantial risk factors involved in investment in the Company.
Investment in the Company is speculative and no assurances can be made of any   
return to investors.  See "CERTAIN RISK FACTORS"                                

Use of Proceeds                                                                 

   The Company will not receive any proceeds from the sale of the Securities
offered herein.                                                                 

Offered By                                                                      

   The Selling Securityholders are offering the Securities through their own
effort and, possibly, through one or more broker-dealers who are member firms on
the NASD, Inc.  If used, broker-dealers may receive a selling commission of the 
proceeds from the sale of the Securities.  No selling commission will be paid to
any officer or director of the Company.                                         

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Transfer Agent                                                                  

The Company has yet to retain a transfer agent for the Securities.    

Selected Financial Data 

The Company is providing the following selected financial data to aid 
investors in their analysis of this potential investment.  This information was 
derived from (1) the Company's 1997 and 1996 historical financials statements   
and (2) the Company's internally prepared unaudited financials statements for   
the period ended September 30, 1998.  The financial statements as of            
December 31, 1997 and 1996 with the notes thereto and the related reports of    
Singer Lewak Greenbaum & Goldstein LLP, independent certified public            
accountants, together with the Company's internally prepared unaudited financial
statements for the period ended September 30, 1998 are included elsewhere in the
Prospectus.  The Company' unaudited financial statements, in the opinion of     
management, include all adjustments (consisting normal recurring adjustments)   
necessary for a fair presentation of the Company's financial position and       
results of operations for the unaudited interim period.  The selected financial 
data set forth below should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the Company's
financial statements and related notes thereto included elsewhere in the        
prospectus.                                                                     

                                                        [Enlarge/Download Table]

                                At September 30,  At December 31,   At December 31        
                                ----------------  ----------------  ---------------       
                                      1998             1997             1996              
                                ----------------  ----------------  ---------------       
                                  (unaudited)                                             
                                                                                          
Balance Sheet Data:                                                                       
------------------                                                                        
Current assets                     $1,155,966         256,802          284,068            
Total Assets                       $1,175,296         286,453          309,468            
Total Current Liabilities             199,244         299,673          139,141            
Long-term debt                        949,808              --               --            
Stockholders' equity (deficit)         26,245         (13,220)         170,327            


                                       Nine Months Ended                At December 31    
                                          September 30                  --------------    
                                     1998             1997             1997         1996  
                                  ----------        ---------       ----------   ---------
                                          (Unaudited)                                     
                                                                                          
Income Statement Data:                                                                    
---------------------                                                                     
Net Sales                            851,910        1,410,189       $1,526,464   1,368,136
Cost of Sales                        540,080          813,903          701,330     691,959
Net income (loss)                     39,465          (19,328)        (138,578)    107,276

  The selected financial data above is a summary only and has been derived
from and is qualified in its entirety by reference to the Company's financial   
statements and the report related thereto of Singer, Lewak Greenbaum & Goldstein
LLP, Certified Public Accountants, included elsewhere in this Prospectus.  See  
"EXPERTS" and "FINANCIAL STATEMENTS."                                           

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RISK FACTORS  

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND INVOLVE A HIGH      
DEGREE OF RISK.  THEREFORE, EACH PROSPECTIVE INVESTOR SHOULD, PRIOR TO PURCHASE,
CONSIDER VERY CAREFULLY THE FOLLOWING RISK FACTORS, AS WELL AS ALL OF THE OTHER 
INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS AND THE INFORMATION CONTAINED
IN THE FINANCIAL STATEMENTS, INCLUDING ALL NOTES THERETO.                       

Limited Operating History                                                       

     The Company, whose predecessor was incorporated in California as a  limited
liability company  in 1996, has a limited operating history.  The likelihood of 
the success of the Company must be considered in light of the problems,         
expenses, difficulties, complications and delays frequently encountered in      
connection with a new business and the competitive environment in which the     
Company operates.  No assurance can be given that the operations of the Company 
will result in any revenues or that the Company will be profitable.  There is   
little operating history on which to determine if management will sustain       
product quality, adjust to product cycle or whether consumers may tire of       
existing products or the Company will increase or retain its customer base.  See
"BUSINESS."                                                                     

Operating At a Loss                                                             

   The Company has been operating for two years and in 1997 it operated at a
cash deficit.  The Company has not achieved its planned level of operations or  
realized significant revenues and it has incurred losses and it may continue to 
incur losses.  A substantial portion of the Company's operating loss during the 
1997 fiscal year resulted from an increase in operating costs triggered by an   
increase in advertisements and promotions conducted by the Company in 1997.  The
Company has been covering it losses with the personal funding of Rafael Littaua,
the Chief Executive Officer, President and a director of the Company.  There are
no assurances that the Company will not continue operating at a net loss in the 
future.                                                                         

Source of Supply                                                                

  Since 1996, the Company has been operating pursuant to an oral agreement
with Shanghai Tehao Company ("Tehao"), a manufacturer located in Shanghai,      
China, which manufactures 70% of the products sold by the Company. Tehao has    
been financing the Company's inventory with up to US$1,000,000 and it has       
granted the Company certain guarantees that the price per product to the Company
will be at least ten percent less than what Tehao charges other marketers of    
power tools in the United States.   In exchange, Tehao receives a percentage of 
profits from the wholesale sales by the Company.  While the Company anticipates 
that it will continue operating under the oral agreement, it entered into a     
written joint venture agreement with Tehao in May, 1998.  The Company entered   
into this joint venture to assure it could finance a large single order of its  
products.  The Company anticipates that it will begin operating under this joint
venture agreement if the Company requires a large single shipment of product on 
credit.                                                                         

     The joint venture is to last through June 30, 2003 or dissolution by mutual
agreement of the parties.  Under the agreement, Tehao agreed to contribute      
$500,000 worth of tools as its investment of capital into the joint venture.    
Under both the joint venture and the oral agreement, the Company has agreed to  
pay for the advertising, purchasing, design, marketing, overhead and the cost of
shipping the power tools to the United States.  Tehao has also agreed that it   
will sell all products covered by the joint venture agreement to the Company for
at least ten percent below the lowest United States landed cost Tehao charges to
any other purchasers who sell the products either directly or indirectly in the 
United States.                                                                  

Under both the oral agreement and joint venture, Tehao and the Company
divide the net profits annually with 51% of the net profits allocated to the    
Company and 49% of the net profits allocated to Tehao.  Although not expressly  
defined in the joint venture agreement, the Company believes net profits means  
revenue remaining after deduction from gross revenues the cost of the product   
the Company pays Tehao and all costs associated with selling the product        
including advertising, design, marketing, overhead, shipping, and duties.  Over 
the course of its                                                               

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relationship with Tehao, Tehao has received over $900,000 in shared profits and 
the Company is current on all bills owed to Teaho.                              

     Both the Company and Tehao will indemnify and hold harmless each other from
any and all expense and liability resulting from or arising out of any          
misconduct on either company's part to the extent that the amount exceeds the   
applicable insurance carried by the joint venture.  Both companies also agree   
that any disputes under the joint venture will be settled by the Courts of      
California.                                                                     

     Tehao could decide to end the relationship with the Company for any reason.
Tehao could stop supplying tools under the oral agreement or choose not to      
participate in the joint venture agreement. Although the Company believes that  
its relations with Tehao are good, as the Company's major source of product, the
loss of this supplier or the shortage or loss of any significant product line   
could adversely affect the Company's ability to supply customers and, as a      
result, could have a material adverse effect on the Company's operating results.

Managing Anticipated Growth                                                     

Until recently, the Company derived almost all of it revenues from its
direct marketing distribution, however, the Company now derives most of its     
revenues from sales to wholesalers.  Wholesale distribution is distinct from    
direct marketing because it involves selling product to large retailers and     
cataloguers.  Rather than shipping one item at a time as is the practice in     
direct marketing, wholesale distribution requires that the Company ship large   
amounts of product in a limited time period.   Because the Company has limited  
capital, it has entered into an agreement with Tehao to finance these larger    
transactions in exchange for the Company sharing profits with Tehao.  Expansion 
of the Company's business into the wholesale arena may significantly increase   
the Company's overhead costs which may not be necessarily recovered by revenues 
from increased sales.  While the Company believes the agreement it has with     
Tehao is necessary for its growth strategy, there are no assurances that the    
Company has properly accounted for the increases in customer support, marketing,
sales and other overhead costs which may accompany growth into wholesale        
distribution.  If the Company did not accurately account for the cost of growth 
when negotiating its agreement with Tehao, its operating profits may be         
adversely effected.  See "BUSINESS - AGREEMENT WITH TEHAO".                     

Overseas Transactions                                                           

     The Company is subject to the risks of obtaining products abroad, including
adverse fluctuations in currency exchange rates, increases in import duties,    
decreases in quotas, increased customs regulations and political turmoil.       
Because the Company's suppliers manufacture products in China, the following    
risks relating to operations in China could adversely effect the Company's      
supplier and consequently could have material adverse effect on the Company's   
revenues.                                                                       

  Most Favored Nation Trading Status.  The United States Congress annually
considers the renewal of most favored nation trading status, which currently is 
in place for China. However, in the future the Congress may attach conditions to
the renewal of such status which China may decline, or be unable, to meet.  Most
favored nation trading status allows countries to export goods at favorable     
tariff rates.  In 1994, President Clinton announced that such favored nation    
status would no longer be linked to China's achievement of overall progress in  
the area of human rights.  Prior to this announcement, renewal of such status   
had been contingent on the achievement of such progress.  There can be no       
assurance that renewal of such status in the future will not be linked to human 
rights issues or other requirements or that, notwithstanding continuing         
Presidential support for such status, Congress, for any reason in the future,   
will not deny such status beyond the President's ability to veto such denial.   
Revocation or conditional extension by the United States of China's most favored
nation trading status could increase the cost of importing the Company's product
from Tehao because a higher tariff would be imposed.  Consequently, the         
Company's profitability could be materially effected.                           

Internal Political Risks.  The Company's interests may be adversely   
affected by China's political environment.  China is a socialist state which    
since 1949 has been, and is expected to continue to be, controlled by the       
Communist Party of China.  Changes in the political leadership of the Chinese   
government may have a significant impact on policy and the political and        
economic environment in China.  Moreover, economic reforms                      

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and growth in China have been more successful in certain provinces than in      
others, and the continuation or increase of such disparities could affect       
political or social stability.                                                  

     Government Control Over Economy.  China only recently has permitted greater
provincial and local economic autonomy and private economic activities, and the 
government of China has exercised and continues to exercise substantial control 
over virtually every section of the Chinese economy through regulation and state
ownership. Accordingly, government actions in the future, including any decision
not to continue to support the economic reform program that commenced in the    
late 1970's and possibly to return to the more centrally-planned economy that   
existed prior thereto, could have a significant effect on economic conditions in
China and on the operations of the Company's supplier.                          

    Inflation.  Over the last few years, China's economy has registered a high
growth rate and there have been recent indications that rates of inflation have 
increased.  In response, the Chinese government has taken measures to curb the  
excessive expansion of the economy.  These measures have included devaluations  
of the Chinese currency, the Renminbi, restrictions on the availability of      
domestic credit and limited recentralization of the approval process for        
purchases of some foreign products. There can be no assurance that these        
austerity measures alone will succeed in slowing down the economy's excessive   
expansion or control inflation, nor that they will not result in severe         
dislocations in the Chinese economy in general.  To further combat inflation,   
the Chinese government may adopt additional measures, including the             
establishment of freezes or restraints on certain projects or markets, which may
have an adverse effect on the Company's supplier's operations.                  

    Legal System.  China' legal system is a civil law system which is based on
written statutes and in which decided legal cases have little precedential      
value.  China does not have a well developed, consolidated body of laws         
governing foreign agreements. As a result, the administration of laws and       
regulations by government agencies may be subject to considerable discretion.   
As the legal system in China develops, foreign business entities may be         
adversely affected by new laws, changes to existing laws, and preemption of     
provincial or local laws by national laws.  In circumstances where adequate laws
exist, it may not be possible to obtain swift and equitable enforcement thereof.

Government Regulations                                                          

The Company labels and markets its products under the brand name Great
Tools Direct.  Government regulations regarding labeling and the marketing and  
distribution of the Company's products could adversely affect the performance of
the Company.  More stringent government limitations on products could impact the
Company's ability to market and distribute its products to its customers.  Any  
Government regulation necessitating that manufacturers place safety or other    
devices on its product might increase the cost of manufacturing the product and 
materially effect the Company's profitability.                                  

Intellectual Property Matters                                                   

     The Company believes that a large portion of success relies on the goodwill
it has created in its "Great Tools Direct" brand name.  The Company has not     
filed an application with the United States Patent and Trademark Office for     
protection for the Great Tools Direct brand name nor is there assurance that the
Company will ever be issued trademark registration.  The Company has conducted a
trademark search on the label Great Tools Direct which did not result in the    
discovery on any other commercial entity using the Great Tools Direct or a      
substantially similar label in the United States.  The Company decided that it  
could better use its limited capital in advertising and other expenses rather   
than investing in protecting its Great Tools Direct brand name.                 

   There is also no assurance that any of the Company's rights in protecting
its brand name will be enforceable, even if registered, against any prior users 
of a similar name or competitors of the Company who seek to utilize a similar   
name in areas where the Company operates.  The failure to enforce any of the    
Company's rights could have the effect of reducing the Company's ability to     
capitalize on the goodwill associated with the brand name Great Tools Direct.   
It is also possible that the Company will encounter claims from prior users of a
similar name in areas where the Company operates thereby causing the Company to 
pay damages to a prior user.                                                    

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Dependence on Centralized Systems                                               

Because the Company takes all of its orders through its Thousand Oaks,
California offices, any disruption to the telephone service in the Thousand Oaks
offices might adversely effect the ability of the Company to accept orders.     
Also, a substantial electrical or communications link outage, fire, flood,      
earthquake or other natural disaster might damage either the Company's computer 
system it uses to manage the ordering, inventory management, and delivery       
functions or the customer database it uses for marketing purposes.  If either   
the computer system or database were damaged,  the Company's operations might be
adversely effected.                                                             

Dependence on Major Customers                                                   

    Three customers account for 65% of the Company's revenues.  If the Company
lost any of these three customers its operating revenues would be materially    
impacted.                                                                       

Computer Systems Redesigned for Year 2000                                       

   Many existing computer programs use only two digits to identify a year in
such program's date field.  These programs were designed and developed without  
consideration of the impact of the change in the century for which four digits  
will be required to accurately report the date.  If not corrected, many computer
applications could fail or create erroneous results by or following the year    
2000.  Many of the computer programs containing such date language problems have
been corrected by the companies or governments operating such programs.         
Although none of the Company's systems are effected by this problem, the Company
could be impacted by the failure of other companies to timely correct their     
computer systems.  The Company's operations are dependent on the Internet, the  
telephone system, and delivery systems.  If any of these systems become         
inoperational the Company will be directly and significantly effected.          

Impact of Increased Shipping and Postage Costs                                  

Shipping and postage are significant expenses in the operation of the 
Company's business.  The Company ships its products to customers generally by   
United Parcel Service. There can be no assurance that the Company will be able  
to pass on any significant shipping cost increases to its customers.            
Additionally, strike or other service interruptions by shippers could adversely 
affect the Company's ability to market or deliver product on a timely basis. Any
additional increases in shipping or postal costs could have an adverse effect on
the Company's operating results.                                                

General Economic Conditions                                                     

     Periods of sustained slow economic growth or future economic recessions may
have a material adverse effect on the Company.  The Company's customers include 
smaller home repair and improvement contractors, retail stores and a catalog    
company and the Company may be affected by prolonged economic downturns or      
significant declines in consumer spending.                                      

     The Company predicates its success on achieving certain economies of scale.
In order to be able to fund its future growth, the Company has to reach a       
certain level of sales.  The future profitability of the Company may be         
dependent on increasing sales, higher efficiency and lower costs.  The Company, 
for a variety of reasons, may prove incapable of achieving and sustaining these 
goals.                                                                          

Reliance on Key Management                                                      

The Company's success is dependent upon the experience and ability of 
Rafael Littaua, the President and Chief Executive Officer of the Company.  All  
decisions with respect to the daily operations of the Company will be made by   
Management.  The Company has not entered into an employment agreement or other  
understanding with any key executive or obtained any "key man" life insurance on
any officer's life.  The loss of the services of a key executive could have a   
material adverse effect on the Company's ability to successfully achieve its    
business objectives.                                                            

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Direct Marketing Strategy                                                       

The Company's products are marketed in part by advertisements in trade
magazines, and selling directly to customers over the telephone and through its 
Internet Web site.  Accordingly, the Company is dependent in part on the        
continued growth of direct distribution channels in which to sell its products  
and services.  There can be no assurance that the Company's direct marketing    
channels will experience growth or even be maintained at current levels or that 
the larger manufacturers who currently sell products through traditional market 
channels will not enter the direct market industry and gain some of the         
Company's market share.                                                         

Delays in Delivery                                                              

The Company's success depends on its ability to deliver tools to its  
customers promptly after receipt of customers' orders.  Failure of the Company  
to successfully compete with its competitors' ability to deliver tools promptly 
could have a material adverse effect on the Company's revenues.  The Company    
imports all of its tools from China while many of its competitors' products are 
manufactured domestically.  There is no assurance that the Company will not be  
at a competitive disadvantage due to delays in delivery from China that may     
occur more frequently than delays from United States produced power tools.      

Reduced Profits in Sales Through Other Distribution Channels                    

    As the Company seeks to expand its market share and brand recognition, the
Company has increasingly utilized the wholesale distribution channels.  The     
Company expects that any material increase in sales through indirect            
distribution channels as a percentage of total revenues would reduce the        
Company's average selling prices and gross margins due to the lower unit prices 
that are typically charged when selling through indirect channels. If the       
Company further expands its indirect distribution channels, there can be no     
assurance that the Company will be able to sell its products effectively or that
it will be able to manage conflicts among its distribution channels.  The       
inability to establish, manage or retain direct and indirect distribution       
channels, or the Company's inability to penetrate other market segments, could  
materially adversely affect the Company.                                        

Competition from Other More Established Entities                                

     The market in which the Company competes is highly fragmented.  The Company
competes with retailers and direct marketers who sell merchandise over the      
Internet and through catalogs, including merchandise similar to that sold by the
Company.  Certain of the Company's competitors have greater financial resources 
than the Company.  Increased competition by existing and future competitors     
could result in reductions in sales and pricing of Company products that could  
materially adversely affect the Company's profitability.  Further, as the       
Company seeks to increase market penetration, its success will depend, in part, 
on its ability to gain market share from established competitors.  Also some    
larger companies might engage in the practice of setting prices at a level that 
will not allow smaller competitors, such as the Company, to compete.            

Risks of Strategic Alliances and Joint Ventures                                 

 A substantial portion of the Company's operations currently relies on a
strategic alliance and in the future may rely on the joint venture agreement    
between the Company and Tehao.  The Company also relies on its contract with    
Shanghai Hitachi Power Tools ("Hitachi").  Investment in strategic alliance     
partnerships and joint ventures involve risk not otherwise present, including   
among other things, the risk of bankruptcy of the partner, the inability of the 
partner to undertake necessary financial obligations, the possible inconsistent 
business goals or interests of an alliance partner, or a possible conflict on   
business decisions or positions.  If any of these events occur, the Company     
could lose a supplier upon which it relies.  There is no assurance that the     
Company would be able to fill its orders or that even if could fill orders that 
it would only be able to do so on a timely basis if it lost one of its          
suppliers.  If the Company is unable or late in filling orders, its revenues    
could be materially impacted.                                                   

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Product Liability and Insurance                                                 

     The Company merchandises power tools.  Because of the possibility of injury
resulting from operating power tools, the Company may be subject to product     
liability claims from consumers.  The Company maintains product liability       
insurance with a limit of $2,000,000.  There can be no assurance that this      
insurance will be sufficient to cover potential claims or that adequate levels  
of coverage will be available in the future at a reasonable cost.  While no     
product liability claims have been alleged against the Company since its        
inception, any partially or completely successful claim in the future against   
the Company could materially impact the Company's financial condition and       
reputation.                                                                     

Integration of Prospective Acquisitions                                         

    An element of the Company's future growth strategy may include a plan to
pursue selected acquisitions that either expand or complement its business in   
new or existing markets.  There can be no assurance that in the future the      
Company will be able to identify and to acquire acceptable candidates on terms  
favorable to the Company's growth strategy.  The failure to complete or         
successfully integrate prospective acquisitions may have an adverse impact on   
the Company's growth strategy.  The Company is not currently a party to any oral
or written acquisition agreement or engaged in any negotiations with respect to 
any material acquisition candidate.                                             

Continuing Control by Present Stockholders                                      

   The number of outstanding shares of Common Stock will not change pursuant
to this Offering, except with the exercise of the Warrants.  Prior to the       
issuance of the Securities offered herein, officers, directors and affiliates of
the Company owned 5,500,000 shares, 77%, of the Company's outstanding Common    
Stock.  After sale of the Securities by the Selling Securityholders, including  
certain members of Management, Management will own 62.4% of the outstanding     
Common Stock of the Company assuming no exercise of the Warrants.  Accordingly, 
such officers and directors are in a position to elect all of the Company's     
directors, to approve amendments to its Certificate of Incorporation, to        
authorize issuance of additional shares of stock, to award performance bonuses  
and other compensation arrangements and otherwise to direct the affairs of the  
Company.  See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT". 

Possible Need for Additional Financing to Continue Operations                   

     The Company anticipates that the proceeds from earlier stock subscriptions,
anticipated revenue from current operations, and the line of credit available   
from Gino International and Tehao will be sufficient to meet the Company's      
contemplated operating and capital requirements for approximately 12 months     
following the Effective Date.  However, the Company's revenue from operations   
depend on numerous factors, including the rate of market acceptance of the      
Company's products, the Company's ability to maintain and expand its client     
base, the rate of expansion of the Company's products and the level of resources
required to expand the Company's marketing and sales organization.  The timing  
and amount of such capital requirements cannot accurately be predicted. If      
capital requirements vary materially from those currently anticipated, the      
Company may require financing sooner than expected.  Other than its agreement   
with its supplier, the Company has no commitments for any financing, and there  
can be no assurance that any such commitments can be obtained on terms          
acceptable to the Company, if at all.  The Company has been and anticipates in  
the future that additional required financing will be provided by Rafael        
Littaua, Chief Executive Officer, President and a director of the Company.      
There is no assurance that Mr. Littaua will be willing or able to provide the   
Company financing.  Any equity financing may be dilutive to the Company's       
stockholders, and debt financing, if available, may involve restrictive         
covenants with respect to dividends, raising future capital and other financial 
and operational matters. If the Company is unable to obtain financing as needed,
the Company may be required to reduce the scope of its operations or its        
anticipated expansion, which could have a material adverse effect on the        
Company, as well as the market price of the Common Stock.  See "BUSINESS."      

Acquisition Financing; Additional Dilution                                      

   The Company currently intends to finance some of its future acquisitions,
if any, by using shares of the Company's Common Stock, Warrants, cash, borrowed 
funds or a combination thereof.  If the Company's Common                        

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Stock does not maintain a sufficient market value, the price of the Company's   
Common Stock is highly volatile, or potential acquisition candidates are        
otherwise unwilling to accept the Company's Common Stock as part of the         
consideration for the sale of their businesses, the Company may be required to  
use more of its cash resources or more borrowed funds in order to initiate and  
maintain its acquisitions program. Such limitations may cause the Company to    
rely more heavily on cash or borrowed funds to support its acquisition program. 
If the Company does not have sufficient cash resources, its growth could be     
limited unless it is able to obtain additional capital though debt or equity    
offerings. The Company may also enter into credit facilities with one or more   
lenders to obtain financing to be used in connection with future acquisitions.  
There can be no assurance that the Company, will be able to obtain such         
financing if and when it is needed or that any such financing will be available 
on terms it deems acceptable.                                                   

The Company has authorized but unissued and unreserved shares of the  
Company's Common Stock which the Company will be able to issue in order to      
finance acquisitions without obtaining stockholder approval for such issuance.  
Existing shareholders may suffer dilution if the Company uses its Common Stock  
as consideration for future acquisitions.  Moreover, the issuance of additional 
shares of Company Common Stock may have a negative impact on earnings per share 
and may negatively impact the market price of the Company's Common Stock if any 
trading market is then established.                                             

Issuance of Future Securities May Dilute Investors Share Value                  

    The Certificate of Incorporation of the Company authorizes the issuance of
a maximum of 100,000,000 shares of Common Stock, $.0001 par value and 20,000,000
shares of Preferred Stock, $.0001 par value.  As of the date hereof there are   
7,100,000 shares of Common Stock outstanding and no shares of Preferred Stock   
outstanding. The future issuance of all or part of the remaining authorized     
Common Stock may result in substantial dilution in the percentage of the        
Company's Common Stock held by the Company's then existing shareholders,        
including purchasers of the Securities offered herein.  Moreover, any Common    
Stock issued in the future may be valued on an arbitrary basis by the Company.  
The issuance of the Company's Securities for future services or acquisitions or 
other corporate actions may have the effect of diluting the value of the        
Securities held by investors, and might have an adverse effect on any trading   
market, should a trading market develop for the Company's Common Stock. See     
"BUSINESS".                                                                     

Potential Adverse Effects of Authorization of Preferred Stock                   

The Company has not designated or issued any shares of its authorized 
shares of Preferred Stock.  The Company may, without further action or vote by  
shareholders of the Company, designate and issue shares of Preferred Stock.  The
terms of any series of Preferred Stock, which may include priority claims to    
assets and dividends and special voting rights, could adversely affect the      
rights of holders of the Common Stock and thereby reduce the value of the Common
Stock.  The designation and issuance of Preferred Stock favorable to current    
management or shareholders could make the possible takeover of the Company or   
the removal of management of the Company more difficult and discourage hostile  
bids for control of the Company which might have provided shareholders with     
premiums for its Securities.                                                    

Resales of the Securities under State Securities Laws--The National Securities  
Market Improvement Act of 1996                                                  

     The National Securities Market Improvement Act of 1996 ("NMSIA") limits the
authority of states to impose restrictions upon sales of securities made        
pursuant to Sections 4(1) and 4(3) of the Securities Act of 1933, as amended    
(the "Securities Act")  of companies which file reports under Sections 13 or    
15(d) of the Securities Exchange Act.  Sales of the Securities in the secondary 
trading market by  Selling Securityholders are expected to be made pursuant to  
Section 4(1) (sales other than by an issuer, underwriter or broker).  It is     
anticipated that following the Effective Date the Selling Securityholders'      
Securities will be eligible for resale in the secondary market.                 

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No Current Trading Market for the Company's Securities                          

     There is currently no established public trading market for the Securities.
No assurance can be given that an active trading market in the Company's        
securities will develop after completion of the Offering, or, if developed, that
it will be sustained.  No assurance can be given that the market price of the   
Company's securities will not fall below the initial sales price.  The Company  
intends to apply for admission to quotation of the Securities on the NASD OTC   
Bulletin Board.  If it should become qualified, of which there is no assurance, 
the Company intends to apply for listing on the Nasdaq SmallCap Market.  See    
"DESCRIPTION OF SECURITIES".   There can be no assurance that a regular trading 
market for the Common Stock will develop or that, if developed, it will be      
sustained.  There is no assurance that the Company will ever meet the           
requirements for admission to the Nasdaq SmallCap Market.  Various factors, such
as the Company's operating results, changes in laws, rules or regulations,      
general market fluctuations, changes in financial estimates by securities       
analysts and other factors may have a significant impact on the market price of 
the Securities.  The market price for the securities of public companies often  
experience wide fluctuations which are not necessarily related to the operating 
performance of such public companies.                                           

Limitation of Liability and Indemnification of Officers and Directors           

  The Certificate of Incorporation and By-Laws of the Company provide that
the Company shall indemnify its officers and directors against losses sustained 
or liabilities incurred which arise from any transaction in such officer's or   
director's respective managerial capacity unless such officer or director       
violates a duty of loyalty, did not act in good faith, engaged in intentional   
misconduct or knowingly violated the law, approved an improper dividend, or     
derived an improper benefit from the transaction.  The Company's Certificate of 
Incorporation and By-Laws also provide for the indemnification by it of its     
officers and directors against any losses or liabilities incurred as a result of
the manner in which such officers and directors operate the Company's business  
or conduct its internal affairs, provided that in connection with these         
activities they act in good faith and in a manner which they reasonably believe 
to be in, or not opposed to, the best interests of the Company, and their       
conduct does not constitute gross negligence, misconduct or breach of fiduciary 
obligations.  See "MANAGEMENT--Indemnification of Officers, Directors,          
Employees, and Agents".                                                         

Penny Stock Regulation                                                          

The Company's Common Stock may be considered "penny stocks".  "Penny  
stocks" generally are equity securities with a price of less than $5.00 per     
share other than securities registered on certain national securities exchanges 
or quoted on the Nasdaq Stock Market, provided that current price and volume    
information with respect to transactions in such securities is provided by the  
exchange or system, and are subject to certain additional rules. The penny stock
rules impose additional sales practice requirements on broker-dealers who sell  
such securities to persons other than established customers and accredited      
investors (generally those with assets in excess of $1,000,000 or annual income 
exceeding $200,000 or $300,000 together with their spouse).  For transactions   
covered by these rules, the broker-dealer must make a special suitability       
determination for the purchase of such securities and have received the         
purchaser's written consent to the transaction prior to the purchase.           
Additionally, for any transaction involving a penny stock, unless exempt, the   
rules require the delivery, prior to the transaction, of a disclosure schedule  
prescribed by the Commission relating to the penny stock market.  The broker-   
dealer also must disclose the commissions payable to both the broker-dealer and 
the registered representative and current quotations for the securities.        
Finally, monthly statements must be sent disclosing recent price information on 
the limited market in penny stocks.  Consequently, the "penny stock" rules may  
restrict the ability of broker-dealers to sell the Company's securities.  The   
foregoing required penny stock restrictions will apply to the Company's         
securities unless such securities maintain a market price of $5.00 or greater.  
There can be no assurance that the price of the Company's securities will       
achieve or be maintained at such a level.                                       

Additional Securities Entering Public Market without Additional Capital Pursuant
to Rule 144                                                                     

All the issued and outstanding shares of the Company other than those 
registered herein to the extent not sold or transferred pursuant to this        
Offering, are "restricted securities" as such term is defined in Rule 144 ("Rule
144") of the General Rules and Regulations of the Securities and Exchange       
Commission (the "Rules") promulgated                                            

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under the Securities Act. In general, under Rule 144, if adequate public        
information is available with respect to a company, a person who has satisfied a
one-year holding period as to his restricted securities or an affiliate who     
holds unrestricted securities may sell, within any three month period, a number 
of that company's shares that does not exceed the greater of one percent of the 
then outstanding shares of the class of securities being sold or, if the        
securities are then listed on the Nasdaq SmallCap market or an exchange the     
average weekly trading volume during the four calendar weeks prior to such sale.
Sales of restricted securities by a person who is not an affiliate of the       
Company (as defined in the Securities Act) and who has satisfied a two-year     
holding period may be made without any volume limitation. After the expiration  
of the two-year holding period certain shares of Common Stock now restricted for
trading will become eligible for trading in the public market without any       
payment therefore or increase to the Company's capitalization. Possible or      
actual sales of the Company's outstanding Common Stock by all or some of the    
present stockholders may have an adverse effect on the market price of the      
Company's Shares should a public trading market develop. The additional         
availability of such shares to be traded in the public market would increase the
public float of the Company without any corresponding increase in the Company's 
capital.                                                                        

Selling Securityholders May Sell Securities at any Price or Time                

    Selling Securityholders may offer and sell their Securities at a price and
time determined by the particular Selling Securityholder. The timing of such    
sales and the price at which the Selling Securityholder Securities are sold by  
the individual Selling Securityholder could have an adverse effect upon the     
public market for the Securities, should one develop.                           

Factors Beyond the Company's Control                                            

   Numerous conditions beyond the Company's control may substantially affect
its success such as rates of, and costs associated with, new customer           
acquisition, customer retention, capital expenditures and other costs relating  
to the expansion of operations, including upgrading the Company's systems and   
infrastructure, the timing and market acceptance of new products, changes in the
pricing policies of the Company and its competitors, changes in operating       
expenses, personnel changes, the introduction of alternative technologies, the  
effect of potential acquisitions, increased competition in the Company's markets
and other general economic factors.                                             

Forward Looking Statements                                                      

    This Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those  
anticipated in these forward-looking statements as a result of certain factors, 
including those set forth in these risk factors and elsewhere in this           
Prospectus.                                                                     

THE COMPANY 

   On June 30, 1998 Global Sourcing Group, L.L.C., the Company's predecessor
company a California limited liability company, merged with and into Penrith    
Acquisition Corporation, a newly formed Delaware corporation.  Penrith          
Acquisition Corporation, the surviving corporation, was renamed Global Sourcing 
Group, Inc. The Company through its predecessor, Global Sourcing Group L.L.C.,  
began operations in 1996 as a direct marketer and wholesaler of specialty power 
tools under the brand name "Great Tools Direct".  See "DESCRIPTION OF           
SECURITIES".                                                                    

Properties                                                                      

The Company leases its principle executive offices, as well as its    
administrative offices, which are located in a 3,840 square  feet office park   
facility at 1111 Rancho Conejo Boulevard, Suite 202, Newbury Park, California   
91320.  This facility also houses the Company's customer service, warehouse and 
distribution center functions.  The Company leases this unit on a month to month
tenancy for its primary rental unit at a monthly rental fee of $2,403.   The    
offices of the Company are located Its telephone number is 805/375-6060 and its 
fax number is 805/375-6064. The Company's Web site address on the Internet is   
http://www.greattools.com.                                                      
--------------------------                                                      

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   The Company also maintains an approximately 600 square feet showroom at
Tehao's's offices in Shanghai, China.  The Company uses the showroom to display 
its products to potential buyers.  The Showroom is provided to the Company as   
part of its agreement with Tehao.                                               

Employees                                                                       

     The Company employs six full time individuals: two in customer service, two
in the warehouse and two in operations and management.  The Company also employs
one part time employee who works in the customer service area.  All of the      
Company's employees are located at its headquarters in Newbury Park, except for 
one employee who runs the Company's show room in Tehao's office in China.  The  
Company's employees are not unionized.  The Company considers its relations with
its employees to be good.                                                       

USE OF PROCEEDS 

   The Company will not receive any proceeds from the sale of the Securities
being registered herein. The Company will receive the proceeds, if any, of which
there can be no assurance, from the exercise of the Warrants.                   

DIVIDEND POLICY 

     The Company has not to date nor does it plan on paying any dividends on its
Common Stock.                                                                   

DILUTION  

Purchasers of the Securities may experience immediate and substantial 
dilution in the value of the Common Stock.  Dilution represents the difference  
between the price per share paid by the purchasers in the Offering and the net  
tangible book value per share.  Net tangible book value per share represents the
net tangible assets of the Company (total assets less total liabilities),       
divided by the number of shares of Common Stock outstanding upon closing of the 
Offering.                                                                       

 The price paid by the purchasers of the Securities does not necessarily
bear any relationship to the Company's assets, net worth or established criteria
of value.  The future issuance of all or part of the remaining authorized       
Common Stock may result in substantial dilution in the percentage of the        
Company's Common Stock held by the Company's then existing shareholders,        
including purchasers of the Securities offered herein.  Moreover, any Common    
Stock issued in the future may be valued on an arbitrary basis by the Company.  
The issuance of the Company's Securities for future services or acquisitions or 
other corporate actions may have the effect of diluting the value of the        
Securities held by investors, and might have an adverse effect on any trading   
market, should a trading market develop for the Company's Common Stock.  See    
"BUSINESS".                                                                     

BUSINESS  

General                                                                         

The Company sells power tools primarily through wholesale business    
distribution.  Its largest customers include large retailers and cataloguers    
including Damark International, Inc. ("Damark International"), Menard           
Corporation ("Menard"), United Hardware Stores, Inc. ("United Hardware"), and   
Northern Hydraulics, Inc. ("Northern Hydraulics").  Sales to these four         
companies account for 70% of the Company's revenues.  The Company also sells    
directly to retail customers by marketing its products under the label Great    
Tools Direct through display advertisements in various consumer publications    
including Popular Mechanics, American Woodworker, Wood Magazine, Popular        
Woodworker and American How To.  Retail customers order the merchandise directly
through the Company's toll free telephone number or through its Web site.  The  
Company targets customers who use tools for light to heavy industrial           
applications.  These customers include professionals who use power tools in     
their daily activities such as plumbers, carpenters, electricians, repair       
personnel and other service oriented people. The Company also targets customers 
who use tools for home based chores and hobbies.                                

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All orders are received at the Company's Newbury Park, California     
headquarters which also serves as the warehousing and merchandise shipping      
center.   The Company maintains an inventory of most of the products it offers  
for sale directly to retail customers and can directly ship a product on order. 
If the Company does not have the product in stock or a large order from a       
wholesaler is placed, the products are shipped direct from Tehao or Hitachi to  
the individual customer or wholesaler.  The Company's business has been designed
to conserve capital with no direct investment in manufacturing operations and   
minimum investment in home delivery.                                            

Industry Overview                                                               

The Company operates in a large, fragmented industry characterized by 
multiple channels of distribution. The distribution channels in the power tools 
market include retail outlets, small distributorships, national, regional and   
local distributors, direct mail suppliers, large warehouse stores and a         
manufacturers' own sales force.  Products imported from low-cost labor countries
have increased the competitive pressure on pricing.  Cost pressures from more   
established name brands are providing a focus on high quality and low cost      
alternatives.  Aggressive value pricing has redefined the basis for competing in
many segments of the industry.                                                  

There are many discount retailers in the industry and discount stores 
offering merchandise at competitive prices have blurred the line between retail 
and wholesale.  Warehouse clubs and other category leaders are establishing a   
new economic framework for the retail business that is forcing industry         
participants to reduce cost. Major marketers have focused on value pricing      
strategies that have changed the nature of merchandising throughout the         
industry.                                                                       

Product Offerings                                                               

Most of the Company's products are manufactured in China by Tehao and 
Hitachi and labeled under the Company's Great Tools Direct brand-name.  The     
Company offers a variety of products aggregating approximately 90 different     
models of cordless drills, batteries, cutting tools, sanders, grinders and      
miscellaneous power tool accessories.  The Company's main product and primary   
source of revenue is the cordless drill.  The Company offers a variety of       
cordless drills from the least powerful 2.4 volt model to the more advanced     
18.8 volt power drill. The 14.4 volt cordless drill has become the standard     
consumer drill for household use. The Company offers a 16.8 volt drill and an   
18.8 volt drill at discounted prices. The Company has recently introduced a 24  
volt drill and plans on introducing other products based on Management's        
assessment of trends and market demand.                                         

The Company maintains a standard refund policy to any consumer who    
purchases a defective product. Since the Company began operations in 1996, the  
Company has refunded on the average less than one percent of its sales.         

Customers and Marketing                                                         

   The Company sells 70% of its products directly to Damark International,
Menard, United Hardware and Northern Hydraulics.  Damark International is a     
national mail catalog company while Menard, United Hardware and Northern        
Hydraulics are chain retail stores.   The Company also sells products directly  
to consumers in the United States and Canada from its Thousand Oaks, California 
office by orders placed on its toll free phone service or Internet Web site.    

The market targeted by the Company consists of retail customers and   
wholesale buyers throughout the United States and Canada. No one end customer   
represents a significant portion of the Company's sales.  The Company targets   
consumers who use power tools for light to heavy industrial applications  but   
choose not to pay the high prices usually associated with established brands.   
These include professionals who require power tools in their daily activity such
as plumbers, carpenters, electricians and a variety of other service and repair 
professionals. The Company also targets consumers who use power tools for       
household applications.  These include hobbyists, homemakers, students and      
housekeepers who have the responsibility of maintaining the household.          

 The Company's market development strategy is based on several marketing
channels:                                                                       

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    Entry Into Wholesale Business Distribution Channel.  The Company's current
marketing strategy focuses on targeting larger retailers.  Damark               
International, a catalog retailer with sales in excess of $350 million, has     
placed a orders for the Company's power drills accounting for approximately 30% 
of the Company's revenues. Approximately 25% of all of the Company's revenues   
are generated from sales to Menards, a chain with over 300 stores.              
Approximately 10% of the Company's revenues are generated from sales to United  
Hardware and approximately 5% of the Company's revenues are generated from sales
to Northern Hydraulics.  For these larger customers, the Company forwards the   
order to Tehao which then fills the order directly to the chain store.  In      
exchange, the Company shares its wholesale profits with Tehao.                  

     Direct Response Advertising.  The Company advertises in specialty magazines
and consumer publications with large exposure to prospective customers. These   
magazines include Popular Mechanics (circulation: 1,000,000), American          
Woodworker (circulation: 400,000), Wood Magazine (circulation: 650,000), Popular
Woodworker (circulation: 220,000) and American How To (circulation: 750,000).   
This strategy reflects the Company's belief that these publications are the most
overall efficient medium to reach its target market. The advertisements feature 
a toll free telephone number, inviting the customer to purchase a product with  
their credit card. The advertisements emphasize value, and prices, pictures and 
detailed specifications of the advertised product are included in a typical     
layout. The Company delivers directly to the customer's home via United Parcel  
Service.                                                                        

  Database Marketing.  The Company has created a database of customers for
repeat sales and special promotions.  It contains approximately 35,000 names.   
Because of the ability to sort consumers by various criteria, the Company       
believes it receives a greater percentage of responses from the database targets
than it would receive from a generic mass mailing.  The Company repeatedly mails
marketing material, catalogs and brochures to its customers.  The Company       
catalog, produced once a year, lists the products the Company maintains in its  
warehouse and products it can directly order from Tehao.  The Catalog is mailed 
to all of the 35,000 names on its mailing list as well as new potential         
customers generated by the Company's Web site and regular advertisements.  The  
informational material sent directly to the customer contains a toll free       
telephone number, allowing the customer to directly purchase a product with     
their credit card.                                                              

World Wide Web Site.  The Company's home page on the Internet at      
http://www.greattools.com features advertisements and promotions, allowing      
-------------------------                                                       
direct access to interested visitors.  The Company's Web site  provides         
potential and actual customers with product information and the ability to      
directly purchase a product over the Internet by providing credit card          
information.  As of the date hereof, the Company receives approximately 3% of   
all of its orders through the Internet.                                         

Manufacturing By Tehao                                                          

  Approximately 70% of the Company's products are manufactured by Shanghai
Tehao ("Tehao"), a large power tool manufacturer located in Shanghai, China.    
Tehao is among the world's largest manufacturers of power tools and the Company 
believes that Tehao is capable of supplying the Company's current and           
anticipated need for power tools.  Since the Company's inception, it has been   
operating under an oral understanding with Tehao under which the Company        
purchases product from Tehao at a per unit price for the tools it sells directly
to the customers and stocks its warehouse with drills and batteries and then    
sells and ships the product directly to the customer.  For the larger wholesale 
business marketing channel, Tehao has agreed to finance the Company's inventory.
Specifically, when a retailer places a large order, the Company will send the   
order directly to Tehao which finances that order and ships the product directly
to the retailer.  In exchange the Company shares  profits with Tehao.  Profits  
in this agreement are defined as  revenue remaining after deducting from        
revenues, the cost of the product the Company pays Tehao and all costs          
associated with selling the product including advertising, design, marketing,   
overhead, shipping, and duties.                                                 

Joint Venture Agreement with Tehao                                              

     The Company entered into a California joint venture agreement with Tehao on
April 22, 1998.  The Company entered into this joint venture agreement to       
provide a formal credit facility for handling single large orders the Company   
anticipates it will receive in the future.  The terms of the joint venture are  
substantially similar to the terms of the oral agreement.  The joint venture is 
to last through June 30, 2003 or dissolution by mutual agreement                

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of the parties. Under the agreement, Tehao has agreed to contribute $500,000    
worth of tools as its investment of capital into the joint venture. The Company 
has agreed to pay for the advertising, purchasing, design, marketing, overhead  
and the cost of shipping the power tools to the United States. Tehao has also   
agreed to sell all products covered by the joint venture agreement to the       
Company for at least ten percent below the lowest United States landed cost     
Tehao charges to any other purchasers who will sell the products either directly
or indirectly in the United States.                                             

   At the end of each year, the net profits from the venture will be divided
with 51% of the net profits allocated to the Company and 49% of the net profits 
allocated to Tehao.  Although not expressly defined, the Company understands net
profits to mean revenue remaining after deduction from gross revenues, the cost 
of the product the Company pays Tehao and all costs associated with selling the 
product including advertising, design, marketing, overhead, shipping, and       
duties.   Pursuant to the agreement, both companies are entitled to draw out    
funds against the profits of the venture but neither company may draw more than 
70% of its share of the profits under the agreement.  At all times the joint    
venture will maintain a cash reserve equal to one month's operating overhead of 
the joint venture.                                                              

    The Company and Tehao will indemnify and hold harmless each other from any
and all expense and liability resulting from or arising out of any misconduct on
either company's part to the extent that the amount exceeds the applicable      
insurance carried by the joint venture.                                         

Agreement with Shanghai Hitachi Power Tools                                     

  Approximately 30% of the Company's products are manufactured by Shanghai
Hitachi Power Tools ("Hitachi"), a Chinese power tool manufacturer.  Under its  
agreement with Hitachi, the Company purchases 18 and 14 volt cordless drills    
from Hitachi and the Company pays Hitachi 90% of the invoice within 14 days     
after the shipment of the product.  Under the terms of this agreement, the      
Company guaranteed Hitachi that it would sell 50,000 of Hitachi's drills within 
the first year of the contract.  In exchange, the Company was granted the       
exclusive right to sell Hitachi's 18 volt drills in the United States.  The     
Company is current on all money owed to Hitachi and there have been no material 
disagreements between the Company and Hitachi.                                  

 The Agreement between Hitachi and the Company does not provide a formal
procedure for settling disputes nor does it contain any provisions detailing the
consequences if either party breaches the contract.                             

Financing                                                                       

    The Company has entered into a financing agreement with Gino International
("GINO"), a Chinese trading Company.  The Company entered into this agreement as
a method to finance tools it anticipates purchasing in the future from          
manufactures other than Tehao.  Under the terms of the agreement, GINO has      
extended to the Company a five year revolving line of credit for $1,500,000     
ending May 30, 2003.  The amount of funding available to the Company from time  
to time is the difference between $1,500,000 and funds previously advanced to   
the Company under this line of credit agreements.  The Company has yet to borrow
on the line of credit.                                                          

Under the terms of the agreement, the Company has agreed to pay GINO  
interest on any money withdrawn from the line of credit at 1% per month on the  
balance due to GINO from the Company.  Any interest not paid will be added to   
the balance and will be treated as if it had been advanced to the Company by    
GINO.                                                                           

    Under the terms of the agreement, the Company will pay GINO thirty percent
of net profits it earns from products it sells that were financed by the GINO   
line of credit.  Net profits, in the context of this agreement, is defined as   
the revenue remaining after deducting all sales made under the contract with    
Tehao and all expenses incurred by the Company in selling product.              

Operations                                                                      

    The Company's headquarters are at 1111 Rancho Conejo Boulevard, Suite 202,
Newbury Park, California 91320.  The headquarters occupy 3,840 square feet of   
office and warehouse space in an industrial park outside Los                    

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Angeles. The leased facility is designed to house the corporate, marketing,     
finance and administrative departments and serve as the warehousing and shipping
center. Customer service representatives are also at that location.             

     The Company's products are manufactured in China by Tehao and Hitachi.  The
Company distributes to its direct marketing customers via United Parcel Service.
The Company employs two on site customer service representatives to respond to  
customer inquiries and comments.  The Company uses an in-house computer system  
to manage the ordering, inventory management, and delivery functions.  The      
computer system also tracks customer satisfaction and market penetration.       

Competition                                                                     

The power tool market in which the Company operates is extremely      
competitive, and the Company expects such competition to intensify in the       
future.  The Company's current and prospective competitors include many large   
companies that have substantially greater market presence and financial,        
technical, marketing and other resources than the Company.  The Company competes
with many retailers and direct marketers who sell merchandise over the Internet 
and through catalogs.  It also competes with retailers who sell similar         
merchandise to that sold by the Company.  Those retailers usually offer brand   
name products at prices higher than the Company's.  As newer and more powerful  
tools are being introduced into the market, intense competition between         
manufacturers has developed. Companies in the industry are developing new       
features to attract customers and tools are becoming  more reliable, efficient  
and quiet.  At the same time, prices are becoming more competitive as power tool
companies are vying to gain market share.  Companies with greater resources have
the ability to set prices at a level that may preclude the ability of a smaller 
Company to compete.                                                             

    The Company believes that its ability to compete successfully depends on a
number of factors, including its ability to continually offer quality products  
at prices lower than the prices usually charged  for  name brand products.  The 
Company's success will also depend on the adequacy of the Company's customer    
support services, its ability to support its current product and introductions  
of new product, and its ability to sell its product to wholesalers.  There can  
be no assurance that the Company will have financial resources, marketing and   
support capabilities to compete successfully.                                   

Acquisition Strategy                                                            

 The Company believes there are acquisition opportunities among the many
small sellers of power tools. In furtherance of its acquisition strategy, the   
Company anticipates reviewing and conducting investigations of potential        
acquisitions.  If the Company believes a favorable opportunity exists, the      
Company anticipates that it will enter into discussions with the owners of such 
businesses regarding the possibility of a acquisition by the Company. As of the 
date hereof, the Company does not have any agreements or pending acquisitions   
and has not entered into any letters of intent with respect to pending          
acquisitions.                                                                   

Intellectual Property Rights                                                    

   The Company believes that a large portion of its potential success relies
on the reputation it has created in its "Great Tools Direct" brand name.        
However, the Company does not have any specific plans to protect its mark "Great
Tools Direct" by filing a trademark application with the United States Patent   
and Trademark office (PTO). The Company has conducted a trademark search on the 
label Great Tools Direct which did not result in the discovery of any other     
commercial entity using the Great Tools Direct or a substantially similar label 
in the United States.  The Company decided that it could better use its limited 
capital in advertising and other expenses rather than investing in protecting   
its Great Tools Direct brand name.                                              

Certain Transactions                                                            

   During the year ended December 31, 1997, the Company was advanced $65,000
by Rafael Littaua, its Chief Executive Officer, President and a director and    
$20,644 by one of its directors, Eric Manlunas in the form of promissary notes. 

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS 

Overview                                                                        

 The Company is a marketing company, selling power tools, hand tools and
related small tools direct to consumers and to wholesale customers.             

Results and Plan of Operation                                                   

     The following table sets forth certain items reflected in the statements of
operations contained in the financial statements of the Company, expressed as a 
percentage of the net sales for the six months ended June 30, 1998 compared to  
the six months ended June 30, 1997.                                             

                                                                [Download Table]

                         Percentage of Net Sales
                         -----------------------
                           Nine Months ended    
                           -----------------    
                              (unaudited)       
                           6/30/98      6/30/97 
                           -------      ------- 
                                                
Net Sales                    100%         100%  
Cost of Sales               63.4%        42.8%  
Gross Profit                36.6%        57.2%  
Operating Expenses          31.9%        58.8%  
Net income (loss)            4.6%         2.4%  

  The Company's net sales decreased $425,359 or 66.7%, to $851,910 for the
nine months ending September 30, 1998 from $1,277,269 for the nine months ending
September 30, 1997.  The decrease is a result of the drill and batteries        
business declining because of product cycles that ended and exhaustion of       
consumer demand for some of the Company's products.                             

     Gross Profits decreased by $418,701 or 42.7% to $311,830 in the nine months
ending September 30, 1998 from $730,531 in the nine months ending September 30, 
1997.  Gross profit margin decreased to 36.6% in the nine months ending         
September 30, 1998 compared to 57.2% in the nine months ending September 30,    
1997, primarily as a result of the partial transition to wholesale distribution.

Operating expenses decreased by 36.2% to $271,822 for the nine months 
ending September 30, 1998, compared to $751,139 in the nine months ending       
September 30, 1997.  As a percent of sales, operating expenses was 31.9% for the
nine months ending September 30, 1998 compared to 58.8% for the nine months     
ending September 30, 1997.  The decrease was due to cost cutting measures and   
adjusting to lower level of sales and a substantial decrease in advertising     
costs related to the switch in emphasis from retail to wholesale environments.  

Net income was $39,465 (4.6% of sales) for the nine months ending     
September 30, 1998, compared to net loss of $30,639 (2.4% of sales) for the nine
months ending September 30, 1997.                                               

Liquidity and Capital Resources                                                 

     Cash provided by operating activities continues to be the Company's primary
source of funds to finance operating needs and internal growth opportunities.   
Cash provided in 1998 has been used to finance the Company's inventory growth   
and advertising.  The Company has no outside sources of capital except Tehao    
which finances up to $1 million of the Company's inventory and GINO which       
provides $1.5 million as a line of credit.  The Company does not know any trends
expected to make a material impact on the Company's liquidity, sales, revenues  
or income.  The Company does experience seasonal impacts on its operations as   
most sales are typically in the months of November and December in anticipation 
of holidays, while June and July are the slowest sales months.                  

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Computer Systems Redesigned for Year 2000                                       

   Many existing computer programs use only two digits to identify a year in
such program's date field.  These programs were designed and developed without  
consideration of the impact of the change in the century for which four digits  
will be required to accurately report the date.  If not corrected, many computer
applications could fail or create erroneous results by or following the year    
2000.  Many of the computer programs containing such date language problems have
been corrected by the companies or governments operating such programs.         
Although none of the Company's systems are effected by this problem, the Company
could be impacted by the failure of other companies to timely correct their     
computer systems.  The Company's operations are dependent on the Internet, the  
telephone system, and delivery systems.  If any of these systems become         
inoperational the Company will be directly and significantly effected.          

MANAGEMENT  

Officers and Directors                                                          

The officers and directors of the Company are as follows:             

                                                                [Download Table]

Name                                Title                                 
----                                -----                                 
                                                                          
Rafael Littaua                      President and Chief Executive Officer,
                                    Director                              

Eric Manlunas                       Director                              

   All directors of the Company hold office until the next annual meeting of
shareholders or until their successors are elected and qualified.  The principal
occupation and business experience for each officer and director of the Company,
for at least the last five years are as follows:                                

     Rafael Littaua, 41, has been Chairman of the Board, Chief Executive Officer
since the Company's organization. Prior to founding Global Sourcing Group ,     
L.L.C., the predecessor to the Company, Mr Littaua was an executive with Harbor 
Freight Tools, an Oxnard, California wholesaler and retailer of power tools. At 
Harbor Freight Tools, Mr. Littaua served the following positions: Head          
Buyer/Merchandiser (1993-1996); International Buyer (1991-1993); Buyer for      
Domestic Merchandise (1990-1991); and Import Manager (1986-1990). From 1983 to  
1986, Mr. Littaua worked for Frank P. Dow Co. and James J. Boyle Co. as a       
Customs House Broker. Mr. Littaua received his Masters of Business              
Administration in finance from Golden Gate University in 1983 and he received   
his Bachelor of Science degree in Business Management from Ateneo De Manilla in 
1979.                                                                           

 Eric Manlunas, 30, has been a Director of the Company since February of
1996. Mr. Manlunas manages Gateway Holdings, a private equity fund based in Los 
Angeles. Prior to Founding Gateway, Mr. Manlunas was a Senior Consultant of     
Arthur Andersen & Company specializing in complex distribution processes and    
formulation of store operations strategies in the retail channel. Mr Manlunas is
also Chief Executive Officer of Holland American International Supplies, and he 
serves as Director for MenuDirect Corporation and Xcel Medical Pharmacy. Mr.    
Manlunas received a Bachelor of Science degree in Journalism from the Florida   
International University and he earned a Masters of Business Administration     
degree from Pepperdine University.                                              

Remuneration                                                                    

Directors and Officers of the Company may receive compensation as     
determined by the Company from time to time by vote of the Board of Directors.  
Such compensation might be in the form of stock options.   Directors may be     
reimbursed by the Company for expenses incurred in attending meetings of the    
Board of Directors.                                                             

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  The following table sets forth the total compensation paid or accrued by
the Company on behalf of the Chief Executive Officer and President of the       
Company during 1997.  No officer of the Company received a salary and bonus in  
excess of $100,000 for services rendered during 1997.                           

SUMMARY COMPENSATION TABLE  

                                                                [Download Table]

                                   ANNUAL COMPENSATION                              
                                   -------------------                              
                                                       OTHER LONG-TERM   ALL OTHER  
PRINCIPAL POSITION       YEAR  SALARY   BONUS  AWARDS    COMPENSATION   COMPENSATION
                                                                                    
Rafael Littaua           1997  $60,000   N/A     N/A          N/A            N/A    
Chief Executive Officer                                                             

Employment Agreements                                                           

The Company has not entered into employment agreements with any of its  
officers or employees.  All key employees serve in their positions until further
action of the President of the Company or the Board of Directors.               

Indemnification of Officers, Directors, Employees and Agents                    

   The Certificate of Incorporation and Bylaws of the Company provide that the
Company shall, to the fullest extent permitted by applicable law, as amended    
from time to time, indemnify all directors of the Company, as well as any       
officers or employees of the Company to whom the Company has agreed to grant    
indemnification.                                                                

Section 145 of the Delaware General Corporation Law ("DGCL") empowers a 
corporation to indemnify its directors and officers and to purchase insurance   
with respect to liability arising out of their capacity or status as directors  
and officers provided that this provision shall not eliminate or limit the      
liability of a director (i) for any breach of the director's duty of loyalty to 
the corporation or its shareholders, (ii) for acts or omissions not in good     
faith or which involve intentional misconduct or a knowing violation of law,    
(iii) arising under Section 174 (relating to liability for unauthorized         
acquisitions or redemptions of, or dividends on, capital stock) of the Delaware 
General Corporation Law, or (iv) for any transaction from which the director    
derived an improper personal benefit.                                           

The Delaware General Corporation Law provides further that the          
indemnification permitted thereunder shall not be deemed exclusive of any other 
rights to which the directors and officers may be entitled under the            
corporation's by-laws, any agreement, vote of shareholders or otherwise.        

The effect of the foregoing is to require the Company to indemnify the  
officers and directors of the Company for any claim arising against such persons
in their official capacities if such person acted in good faith and in a manner 
that he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no     
reasonable cause to believe his conduct was unlawful.                           

INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF  
1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING
THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION OF THE      
SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC  
POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.                  

SECURITY OWNERSHIP OF CERTAIN 
BENEFICIAL OWNERS AND MANAGEMENT  

  The following table sets forth certain information as of the Effective
Date regarding the beneficial ownership of the Company's Common Stock by each   
officer and director of the Company and by each person who owns in excess of    
five percent of the Company's Common Stock.                                     

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                                                        [Enlarge/Download Table]

                                                                 Percentage of Shares Owned:   
                                     Shares of Common Stock  ----------------------------------
Name, Position and Address             Beneficially Owned    Prior to Offering   After Offering
-----------------------------------  ----------------------  -----------------   --------------
                                                                                               
Rafael Littaua                              4,427,666             62.4%              62.4%     
5663 Camino Deville                                                                            
Camarillo, CA 93012                                                                            

Gateway Holdings (1)                        1,037,736             14.6%                 0%     
1800 Century Park East                                                                         
Suite 600                                                                                      
Los Angeles, CA 90067                                                                          

TPG Capital Corporation (2)                   587,500              8.3%                 0%     
1504 R Street, N.W.                                                                            
Washington, D.C. 20009                                                                         

Kessef Investment Corporation (3)           1,012,500             14.2%                 0%     
1 First Canadian Place                                                                         
100 King Street West, Suite 700                                                                
Toronto, Ontario M5X 1C7 Canada                                                                

All the officers and directors as           5,465,402             77.0%              62.4%     
a group (2 persons)                                                                            

(1)  Eric Manlunas is a principal of Gateway Holdings, a venture capital firm.  
Mr. Manlunas is a director of the Company.                            

(2)  TPG Capital Corporation is an affiliate of Cassidy & Associates, the law   
firm which prepared this registration statement.                      

SALES BY SELLING SECURITYHOLDERS  

   The Selling Securityholders are offering for sale (i) 2,637,736 shares of
Common Stock (ii) 1,000,000 Warrants and (iii) 1,000,000 shares of Common Stock 
underlying such Warrants.  The amount of discounts or commissions, if any, which
may be paid by the Selling Securityholders on the sale of their Securities      
registered herein is not now known.                                             

   The Company intends to apply for admission to the NASD OTC Bulletin Board
for the Securities; however, there can be no assurance that the Securities  will
be so listed.  See "RISK FACTORS--Absence of Trading Market" and "DESCRIPTION OF
SECURITIES--Admission to Quotation on the Nasdaq SmallCap Market or NASD OTC    
Bulletin Board".                                                                

   The following table sets forth the beneficial ownership of the Securities
of the Company held by each person who is a Selling Securityholder and by all   
Selling Securityholders as a group.                                             

                                                        [Enlarge/Download Table]

                                                             Percent of Stock Owned          
                                                      ---------------------------------------
Name and Address of Beneficial Owner    Common Stock  Prior to Offering(1)  After Offering(2)
--------------------------------------  ------------  --------------------  -----------------
                                                                                             

Gateway Holdings                          1,037,736           14.6%                 0%       
1800 Century Park East                                                                       
Suite 600                                                                                    
Los Angeles, CA 90067 (1)                                                                    

TPG Capital Corporation                     587,500            8.3%                 0%       
1504 R Street, N.W.                                                                          
Washington, D.C. 20009 (2)                                                                   

Kessef Investment Corporation             1,012,500           14.2%                 0%       
1 First Canadian Place                                                                       
100 King Street West, Suite 700                                                              
Toronto, Ontario M5X 1C7 Canada                                                              

All Selling Securityholders               2,637,736           37.1%                 0%       
as a Group                                                                                   

________________________                                                        

(1)  Gateway Holdings is a venture capital company whose Chief Investment       
Officer is Eric Manlunas, a director of the Company.                  

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DESCRIPTION OF SECURITIES 

Incorporation                                                                   

    The Company was originally incorporated in 1996 in California as a limited
liability company and reincorporated in the state of Delaware on June 30, 1998  
through a merger with Penrith Acquisition Corporation, a newly formed Delaware  
Corporation.  The Company's Certificate of Incorporation, By-Laws and corporate 
governance, including matters involving the issuance, redemption and conversion 
of securities, are subject to the provisions of the Delaware General Corporation
Law, as amended and interpreted from time to time.                              

Common Stock                                                                    

The Company's Certificate of Incorporation authorizes the issuance of 
100,000,000 shares of Common Stock, $.0001 value per share, of which 7,100,000  
shares are outstanding as of the date hereof.  Holders of shares of Common Stock
are entitled to one vote for each share on all matters to be voted on by the    
shareholders.  Holders of Common Stock do not have cumulative voting rights.    
Holders 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 a liquidation,          
dissolution or winding up of the Company, the holders of Common Stock are       
entitled to share pro rata all assets remaining after payment in full of all    
liabilities.  All of the outstanding shares of Common Stock are, and the shares 
of Common Stock offered by the Company pursuant to this offering will be, when  
issued and delivered, fully paid and non-assessable.                            

     Holders of Common Stock have no preemptive rights to purchase the Company's
Common Stock.  There are no conversion or redemption rights or sinking fund     
provisions with respect to the Common Stock.                                    

   All outstanding shares of Common Stock are validly issued, fully paid and
nonassessable, and all Shares to be sold and issued as contemplated hereby will 
be fully paid and nonassessable when sold in accordance with the terms hereof   
and pursuant to a valid and current prospectus.  The Board of Directors is      
authorized to issue additional shares, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder     
action.                                                                         

Preferred Stock                                                                 

The Company's Certificate of Incorporation authorizes the issuance of 
20,000,000 shares of Preferred Stock, $.0001 par value per share (the "Preferred
Stock"), none of which have been designated and issued.                         

 In the case of the voluntary or involuntary liquidation, dissolution or
winding up of the Company, holders of shares of Preferred Stock are entitled to 
receive the liquidation preference before any payment or distribution is made to
the holders of Common Stock or any other series or class of the Company's stock 
hereafter issued that ranks junior as to liquidation rights to the Preferred    
Stock, but holders of the shares of the Preferred Stock will not be entitled to 
receive the liquidation preference of such shares until the liquidation         
preference of any other series or class of the Company's stock hereafter issued 
that ranks senior as to liquidation rights to the Preferred Stock has been paid 
in full.  The holders of Preferred Stock and all series or classes of the       
Company's stock hereafter issued that rank on                                   

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a parity as to liquidation rights with the Preferred Stock are entitled to share
ratable, in accordance with the respective preferential amounts payable on such 
stock, in any distribution (after payment of the liquidation preference of the  
senior liquidation stock) which is not sufficient to pay in full the aggregate  
of the amounts payable thereon. After payment in full of the liquidation        
preference of the shares of the Preferred Stock, the holders of such shares will
not be entitled to any further participation in any distribution of assets by   
the Company. Neither a consolidation or merger of the Company with another      
corporation, nor a sale or transfer of all or part of the Company's assets for  
cash, securities or other property will be considered a liquidation, dissolution
or winding up of the Company.                                                   

The Board of Directors is authorized to provide for the issuance of   
additional shares of Preferred Stock in series and, by filing a certificate     
pursuant to the applicable law of the State of Delaware, to establish from time 
to time the number of shares to be included in each such series, and to fix the 
designation, powers, preferences and rights of the shares of each such series   
and the qualifications, limitations or restrictions thereof without any further 
vote or action by the shareholders.  Any shares of Preferred Stock so issued    
would have priority over the Common Stock with respect to dividend or           
liquidation rights.  Any future issuance of Preferred Stock may have the effect 
of delaying, deferring or preventing a change in control of the Company without 
further action by the shareholders and may adversely affect the voting and other
rights of the holders of Common Stock.  At present, the Company has no plans to 
issue any Preferred Stock nor adopt any series, preferences or other            
classification of Preferred Stock.                                              

Additional Information Describing Stock                                         

 The above descriptions concerning the Common and Preferred Stock of the
Company do not purport to be complete.  Reference is made to the Company's      
Certificate of Incorporation and By-Laws which are included in the Registration 
Statement of which this Prospectus is a part and which are available for        
inspection at the Company's offices.  Reference is also made to the applicable  
statutes of the State of Delaware for a more complete description concerning    
rights and liabilities of shareholders.                                         

Warrants                                                                        

  This is a summary of certain provisions governing the Warrants, but such
summary does not purport to be complete and is qualified in all respects by     
reference to the Warrant agreement filed as an exhibit to the Registration      
Statement of which this Prospectus forms a part.  Prior to the merger, Penrith  
Acquisition Corporation issued 1,000,000 Warrants.  Each Warrant entitles the   
holder thereof to purchase one share of the Company's Common Stock for an       
exercise price of $0.75 for one year following the Effective date of this       
registration statement and for an exercise price of $1.00 for six months        
thereafter.                                                                     

 The Company has also issued 1,500,000 warrants to the management of the
Company ("Management Warrants")simultaneous to the merger of Global Sourcing    
Group, L.L.C. and Penrith Acquisition Corporation.   Each Management Warrant    
entitles the holder to purchase one share of the Company's Common Stock for an  
exercise price of $2.00 per share for a term of three years following the date  
of issuance.                                                                    

Admission to Quotation to Nasdaq SmallCap Market and NASD OTC Bulletin Board    

  The Company intends to apply for quotation of the Securities on the NASD
OTC Bulletin Board.  The over-the-counter market differs from national and      
regional stock exchanges in that it (1) is not cited in a single location but   
operates through communication of bids, offers and confirmations between broker-
dealers and (2) securities admitted to quotation are offered by one or more     
broker-dealers rather than the "specialist" common to stock exchanges.  To      
qualify for quotation on the NASD OTC Bulletin Board, an equity security must   
have one registered broker-dealer, known as the market maker, willing to list   
bid or sale quotations and to sponsor such a Company listing.                   

  To qualify for listing on the Nasdaq SmallCap Market, an equity security
must, in relevant summary, (1) be registered under the Securities Exchange Act  
of 1934; (2) have at least three registered and active market makers, one of    
which may be a market maker entering a stabilizing bid; (3) for initial         
inclusion, be issued by a company with $4,000,000 in net tangible assets, or    
$50,000,0000 in market capitalization, or $750,000 in net income in two of the  
last three years (if operating history is less than one year than market        
capitalization must be at least $50,000,000); (4)                               

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have at a public float of at least 1,000,000 shares with a value of at least    
$5,000,000; (5) have minimum a bid price of $4.00 per share; and (6) have at    
least 300 beneficial shareholders.                                              

    If admitted for quotation, the Company's Securities will trade on the NASD
OTC Bulletin Board until such future time, if ever, the Company's Securities    
qualify for listing on the Nasdaq SmallCap Market.  There is no assurance that  
the Company's Securities will ever be accepted for listing on the Nasdaq        
SmallCap Market.                                                                

Trading of Securities                                                           

There are no outstanding options, warrants to purchase, or securities 
convertible into, the shares of the Company other than those offered herein and 
1,500,000 warrants owned by the Company's Management.  The Management Warrants  
are convertible into Company Common Stock for $2 per share for a period of three
years.                                                                          

Transfer Agent and Registrar                                                    

The Company has yet retained a transfer agent for its Securities.     

Reports to Shareholders                                                         

The Company will furnish to its shareholders annual reports containing
audited financial statements examined and  reported upon, and with an opinion   
expressed by, an independent certified public accountant.  The Company may issue
other unaudited interim reports to its shareholders as it deems appropriate.    

PLAN OF DISTRIBUTION

    The Company will not receive the proceeds of any sale of Securities by the
Selling Securityholders pursuant to this Prospectus.  The Selling Securityholder
Securities may be sold to purchasers from time to time directly by and subject  
to the discretion of the Selling Securityholders.  The Selling Securityholders  
may from time to time offer their Securities for sale through underwriters,     
dealers or agents, who may receive compensation in the form of underwriting     
discounts, concessions or commissions from the Selling Securityholders and/or   
the purchasers of the Securities for whom they may act as agents.  Any          
underwriters, dealers or agents who participate in the distribution of the      
Securities may be deemed to be "underwriters" under the Securities Act and any  
discounts, commissions or concessions received by any such underwriters, dealers
or agents may be deemed to be underwriting discounts and commissions under the  
Securities Act.                                                                 

   At the time a particular offer is made by or on the behalf of the Selling
Securityholders, a Prospectus, including any necessary supplement thereto, will 
be distributed which will set forth the number of shares of Common Stock and    
other Securities being offered and the terms of the offering, including the name
or names of any underwriters, dealers or agents, the purchase price paid by any 
underwriter for the Securities purchased from the Selling Securityholders, any  
discounts, commissions and other items constituting compensation from the       
Selling Securityholders, any discounts, commissions or concessions allowed,     
reallowed or paid to dealers, and the proposed selling price to the public.     

     The Securities sold by the Selling Securityholders may be sold from time to
time in one or more transactions: (i) at an offering price that is fixed or that
may vary from transaction to transaction depending upon the time of sale or (ii)
at prices otherwise negotiated at the time of sale.  Such prices will be        
determined by the Selling Securityholders or by agreement between the Selling   
Securityholders and any underwriters.                                           

   In order to comply with the applicable securities laws of certain states,
the Securities may be offered or sold in such states through registered or      
licensed brokers or dealers.  In addition, in certain states, the Securities may
not be offered or sold unless they have been registered or qualified for sale in
such states or an exemption from such registration or qualification requirement 
is available with which the Company has complied.                               

    Under applicable rules and regulations promulgated under the Exchange Act,
any person engaged in a distribution of securities may not simultaneously bid   
for or purchase securities of the same class for a period of two                

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business days prior to the commencement of such distribution. In addition and   
without limiting the foregoing, the Selling Securityholders will be subject to  
applicable provisions of the Exchange Act and the rules and regulations         
thereunder in connection with transactions in Securities during the             
effectiveness of the Registration Statement of which this Prospectus is a part. 

  The Company will pay all of the expenses incident to the registration of
the Selling Securityholders' Securities (including registration pursuant to the 
securities laws of certain states) other than commissions, expenses,            
reimbursements and discounts of underwriters, dealers or agents, if any.        

LEGAL MATTERS 

Legal Proceedings                                                               

The Company is not a party to any litigation and Management has no    
knowledge of any threatened or pending litigation against the Company.          

Legal Opinion                                                                   

    Cassidy & Associates, Washington, D.C. has given its opinion as attorneys-
at-law that the Securities, when sold pursuant to the terms hereof and pursuant 
to a valid and current prospectus in which those Securities are registered, will
be fully paid and non-assessable.  James M. Cassidy, a principal of Cassidy &   
Associates, is the President and a shareholder of TPG Capital Corporation, a    
Selling Securityholder.                                                         

EXPERTS 

The financial statements of Global Sourcing Group, L.L.C., as of      
December 31, 1996 and 1997 and for each of the two years in the period ended    
December 31, 1997 included in the Prospectus have been so included in reliance  
on the report of Singer Lewak Greenbaum & Goldstein LLP, independent            
accountants, given on authority of said firm as experts in auditing and         
accounting.                                                                     

AVAILABLE INFORMATION 

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form SB-2 (the "Registration          
Statement") under the Securities Act with respect to the securities offered     
hereby.  This Prospectus does not contain all the information contained in the  
Registration Statement.  For further information regarding the Company and the  
securities offered hereby, reference is made to the Registration Statement,     
including all exhibits and schedules thereto, which may be inspected without    
charge at the public reference facilities of the Commission's Washington, D.C.  
office, 450 Fifth Street, N.W., Washington, D.C. 20549.  Each statement         
contained in this Prospectus with respect to a document filed as an exhibit to  
the Registration Statement is qualified by reference to the exhibit for its     
complete terms and conditions.                                                  

The Company will be subject to the informational requirements of the  
Securities Exchange Act of 1934 ("Exchange Act") and in accordance therewith    
will file reports and other information with the Commission.  Reports, proxy    
statements and other information filed by the Company can be inspected and      
copied on the Commission's home page on the World Wide Web at http://www.sec.gov
or at the public reference facilities of the Commission, Judiciary Plaza,       
450 Fifth Street, N.W., Washington, D.C. 20549, as well as the following        
Regional Offices: 7 World Trade Center, Suite 1300, New York, N.Y. 10048;       
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois     
60661-2511. Such material can also be inspected at the New York, Boston,        
Midwest, Pacific and Philadelphia Stock Exchanges. Copies can be obtained from  
the Commission by mail at prescribed rates. Request should be directed to the   
Commission's Public Reference Section, Judiciary Plaza, 450 Fifth Street, N.W., 
Washington, D.C. 20549.                                                         

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FINANCIAL STATEMENTS

  The audited financial statements for the fiscal years ended December 31,
1996, and 1997 and the unaudited financial statements for the period ended      
September 30, 1998 follow herewith.                                             

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GLOBAL SOURCING GROUP, LLC                                                      
CONTENTS                                                                        
December 31, 1997                                                               
================================================================================

                                                                          Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                          1   

FINANCIAL STATEMENTS                                                            

Balance Sheets                                                            2 

Statements of Operations and Members' Interest                            3 

Statements of Cash Flows                                                  4 

 Notes to Financial Statements                                           5 - 8

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS  

To the Members of                                                               
Global Sourcing Group, LLC                                                      

We have audited the accompanying balance sheets of Global Sourcing Group, LLC as
of December 31, 1997 and 1996, and the related statements of operations and     
members' interest and cash flows for the years then ended.  These financial     
statements are the responsibility of the Company's management.  Our             
responsibility is to express an opinion on these financial statements based on  
our audits.                                                                     

We conducted our audits in accordance with generally accepted auditing          
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Global Sourcing Group, LLC as  
of December 31, 1997 and 1996, and the results of its operations and its cash   
flows for the years then ended in conformity with generally accepted accounting 
principles.                                                                     

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP                                          

Los Angeles, California                                                         
April 28, 1998                                                                  

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                                                      GLOBAL SOURCING GROUP, LLC
                                                                  BALANCE SHEETS
                                                                    December 31,
================================================================================

ASSETS

                                                                [Download Table]

                                                              1997      1996   
                                                            --------   --------
                                                                               
Current assets                                                                 
  Cash                                                      $ 31,672   $ 96,101
  Accounts receivable                                         10,795     38,516
  Inventory                                                  114,335    119,014
  Prepaid expenses                                                 -     30,437
                                                            --------   --------

     Total current assets                                    256,802    284,068

Furniture and equipment, net                                  22,672     18,172
Other assets                                                   6,979      7,228
                                                            --------   --------

       Total assets                                         $286,453   $309,468
                                                            ========   ========

                  LIABILITIES AND MEMBERS' INTEREST (DEFICIT)                  

Current liabilities                                                            
  Accounts payable                                          $253,440   $124,816
  Notes payable to related parties                            25,644          -
  Other accrued liabilities                                    8,989      7,525
  Taxes payable                                                7,600      3,800
  Deferred warranty revenue                                    4,000      3,000
                                                            --------   --------

     Total current liabilities                               299,673    139,141
                                                            --------   --------

Commitments                                                                    

Members' interest (deficit)                                  (13,220)   170,327
                                                            --------   --------

       Total liabilities and members' interest (deficit)    $286,453   $309,468
                                                            ========   ========

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                                                      GLOBAL SOURCING GROUP, LLC
                                  STATEMENTS OF OPERATIONS AND MEMBERS' INTEREST
                                                For the Years Ended December 31,
================================================================================

                                                                [Download Table]


                                                      1997         1996    
                                                   -----------  -----------
                                                                           

Net sales                                          $1,526,464   $1,368,136 

Cost of sales                                         701,330      691,959 
                                                   ----------   ---------- 

Gross profit                                          825,134      676,177 

Operating expenses                                    944,771      569,473 
                                                   ----------   ---------- 

Income (loss) from operations                        (119,637)     106,704 
                                                   ----------   ---------- 

Other income (expense)                                                     
  Interest income                                       1,535        1,647 
  Interest expense                                    (16,676)      (1,075)
                                                   ----------   ---------- 

     Total other income (expense)                     (15,141)         572 
                                                   ----------   ---------- 

Income (loss) before provision for income taxes      (134,778)     107,276 

Provision for income taxes                              3,800        3,800 
                                                                ---------- 

Net income (loss)                                    (138,578)     103,476 

Members' interest, beginning of year                  170,327       56,123 

Member contributions                                        -      195,000 

Distributions to members                              (44,969)    (184,272)
                                                   ----------   ---------- 

Members' interest (deficit), end of year           $  (13,220)  $  170,327 
                                                   ==========   ========== 

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                                                      GLOBAL SOURCING GROUP, LLC
                                                        STATEMENTS OF CASH FLOWS
                                                For the Years Ended December 31,
================================================================================

                                                        [Enlarge/Download Table]

                                                                 1997        1996    
                                                               ----------  ----------
                                                                                     

Cash flows from operating activities                                                 
  Net income (loss)                                            $(138,578)  $ 103,476 
  Adjustments to reconcile net income (loss) to net cash                             
     provided by (used in) operating activities                                      
       Depreciation and amortization                               6,811       1,853 
  (Increase) decrease in                                                             
     Accounts receivable                                         (72,278)    (13,927)
     Inventory                                                     4,679     (90,207)
     Prepaid expenses                                             30,436     (30,436)
     Other assets                                                    249      (7,228)
  Increase (decrease) in                                                             
     Accounts payable                                            128,623     124,816 
     Other accrued liabilities                                     5,265      11,325 
     Deferred warranty revenue                                     1,000       3,000 
                                                               ---------   --------- 

          Net cash provided by (used in) operating activities    (33,793)    102,672 
                                                               ---------   --------- 

Cash flows from investing activities                                                 
  Purchases of furniture and equipment                           (11,311)    (20,026)
                                                               ---------   --------- 

          Net cash used in investing activities                  (11,311)    (20,026)
                                                               ---------   --------- 

Cash flows from financing activities                                                 
  Principal payments in notes payable                            (60,000)          - 
  Proceeds from note payable                                      85,644           - 
  Member contributions                                                 -     195,000 
  Distributions to members                                       (44,969)   (184,272)
                                                               ---------   --------- 

          Net cash provided by (used in) financing activities    (19,325)     10,728 
                                                               ---------   --------- 

            Net increase (decrease) in cash                      (64,429)     93,374 

Cash, beginning of year                                           96,101       2,727 
                                                               ---------   --------- 

Cash, end of year                                              $  31,672   $  96,101 
                                                               =========   ========= 

Supplemental disclosures of cash flow information                                    
  Interest paid                                                $  16,676   $   1,075 
                                                               =========   ========= 
  Income taxes paid                                            $       -   $       - 
                                                               =========   ========= 

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                                                      GLOBAL SOURCING GROUP, LLC
                                                   NOTES TO FINANCIAL STATEMENTS
                                                For the Years Ended December 31,
================================================================================

NOTE 1 - SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES              

Organization and Line of Business                                     
---------------------------------                                     
Global Sourcing Group, LLC (the "Company") was formed originally as a 
     California general partnership on November 6, 1995 under the name of Global
   Sourcing Group. The Company conducts its business under the name of Great
     Tools Direct. On September 22, 1996, the Company became a limited liability
company under the laws of California and changed its name to Global   
  Sourcing Group, LLC. As of December 31, 1997, the Company had a total of
seven members.                                                        

    The Company is a direct-to-the-consumer marketing company selling cordless
     drills, drill bits, battery-powered hand tools, and related small tools and
parts to consumers both domestically and internationally.             

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, as well as the reported amounts of sales and expenses
during the reporting period. Actual results could differ from those   
estimates.                                                            

Revenue Recognition                                                   
-------------------                                                   
   Substantially all sales are made through credit cards and are recorded at
     the time of shipment. A reserve for anticipated merchandise returns, net of
 exchanges, is recorded based on the Company's prior returns experience.

Inventory                                                             
---------                                                             
     Inventory, which consists primarily of merchandise held for sale, is stated
at the lower of cost (first-in, first-out method) or market.          

Advertising                                                           
-----------                                                           
  The Company expenses the costs of advertisements placed in magazines and
   other publication media when the advertising takes place. The Company has
no direct-response advertising costs which have to be capitalized and 
amortized over their expected period of future benefits.              

Furniture and Equipment                                               
-----------------------                                               
     Furniture and equipment are stated at cost and are depreciated or amortized
using the straight-line method over the estimated useful lives of the 
assets as follows:                                                    

Furniture and equipment         5 to 7 years                
Leasehold improvements       18 to 24 months                

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                                                      GLOBAL SOURCING GROUP, LLC
                                                   NOTES TO FINANCIAL STATEMENTS
                                                For the Years Ended December 31,
================================================================================

NOTE 1 - SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)  

Furniture and Equipment (Continued)                                   
-----------------------                                               
   Betterments, renewals, and extraordinary repairs that extend the lives of
the assets are capitalized; other repairs and maintenance charges are 
expensed as incurred. The cost and related accumulated depreciation   
     applicable to assets retired are removed from the accounts, and the gain or
loss on disposition is recognized in current operations.              

Income Taxes                                                          
------------                                                          
The Company has elected to be taxed under sections of federal and     
  California income taxes whereby the members separately account for their
  pro rata share of the Company's items of income, deductions, losses, and
     credits. The provision for income taxes represents the statutory California
franchise tax applicable to limited liability companies.              

Fair Value of Financial Instruments                                   
-----------------------------------                                   
 The Company measures its financial assets and liabilities in accordance
     with generally accepted accounting principles. For certain of the Company's
financial instruments, including cash, accounts receivable, accounts  
  payable, and other accrued liabilities, the carrying amounts approximate
  fair value due to their short maturities. The amounts shown for the note
payable also approximate fair value because current interest rates and
   terms offered to the Company for similar debt are substantially the same.

Concentrations of Credit Risk                                         
-----------------------------                                         
Financial instruments which potentially subject the Company to        
  concentrations of credit risk consist of cash and trade receivables. The
 Company places its cash with high quality financial institutions and at
    times cash may exceed the FDIC $100,000 insurance limit. Concentrations of
     credit risk with respect to receivables are limited due to the large number
     of customers and their dispersion across geographic areas. The Company does
not send out a product until the customer's payment is received and   
verified. The Company has one major supplier which accounted for      
     approximately 90% and 99% of the Company's purchases during the years ended
December 31, 1997 and 1996, respectively.                             

NOTE 2 - ACCOUNTS RECEIVABLE                                                    

Accounts receivable at December 31 consisted of the following:        

                                                                [Download Table]

                                                       1997       1996  
                                                     --------    -------
                                                                        
     Amounts due from credit card companies for                         
       shipped customer orders and trade accounts    $ 18,911    $38,516
     Vendor adjustment credits receivable for                           
       returned goods                                  91,884          -
                                                     --------    -------

               Total                                 $110,795    $38,516
                                                     ========    =======

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                                                      GLOBAL SOURCING GROUP, LLC
                                                   NOTES TO FINANCIAL STATEMENTS
                                                For the Years Ended December 31,
================================================================================

NOTE 2 - ACCOUNTS RECEIVABLE (Continued)                                        

     The Company considers all receivables to be fully collectible; accordingly,
no allowance for doubtful accounts is required.                       

NOTE 3 - FURNITURE AND EQUIPMENT                                                

Furniture and equipment at December 31 consisted of the following:    

                                                                [Download Table]

                                                   1997      1996  
                                                  -------  --------
                                                                   

Furniture and equipment                           $27,444   $ 6,645
Leasehold improvements                              3,892     3,380
                                                  -------   -------

                                                   31,336    20,025
Less accumulated depreciation and amortization      8,664     1,853
                                                  -------   -------

  Total                                           $22,672   $18,172
                                                  =======   =======


NOTE 4 - NOTES PAYABLE TO RELATED PARTIES                                       

Notes payable at December 31 consisted of the following:              

                                                                [Download Table]

                                                    1997    1996 
                                                   -------  -----
                                                                 

Short-term unsecured note payable to a member                    
of the Company.  The note bears interest at                      
12% per annum with no stated due date              $ 5,000  $  0-

Short-term unsecured note payable to an officer                  
and member of the Company for $20,644.                           
The note bears interest at 12% per annum                         
and will be due on November 30, 1998.               20,644      -
                                                   -------       

          Total                                    $25,644  $   -
                                                   =======  =====


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                                                      GLOBAL SOURCING GROUP, LLC
                                                   NOTES TO FINANCIAL STATEMENTS
                                                For the Years Ended December 31,
================================================================================

NOTE 5 - COMMITMENTS                                                            

During the year ended December 31, 1997, the Company entered into an  
agreement with its major overseas supplier, whereby the Company shares
   profits in the sale of its products at the rate of 51% to the Company and
    49% to its supplier. This supplier is responsible for substantially all of
the Company's product requirements.                                   

The Company conducts its operations in a leased facility located in   
   Thousand Oaks, California. The lease, originally signed on April 1, 1996,
 is guaranteed by a member of the Company and expires on April 30, 1998.
Future minimum rental payments are as follows:                        

Year Ending                                               
December 31,                                                
------------                                                

1998                                         $4,368     
                                        ======

     Rent expense for the years ended December 31, 1997 and 1996 was $21,189 and
$8,106, respectively.                                                 

NOTE 6 - SUBSEQUENT EVENTS (UNAUDITED)                                          

Subsequent to April 1998, the Company's operating lease on its primary
   facility expired. The Company is currently leasing the same facility on a
    month-to-month basis with required monthly payments of $1,092. The Company
does not anticipate relocating its facilities in the near future.     

    Global Sourcing Group, LLC was merged into Penrith Acquisition Corporation
("Penrith"), a newly-formed Delaware company, on June 30, 1998. The   
   surviving corporation was renamed Global Sourcing Group, Inc. Penrith was
incorporated under the Laws of Delaware on December 16, 1997 with an  
    authorized capitalization of 100,000,000 shares of common stock, par value
of $0.0001 per share, and 20,000,000 shares of preferred stock.       

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GLOBAL SOURCING GROUP, INC. 
Unaudited Financial Statements
for Period Ending September 30, 1998

Global Sourcing Group                                                           
Balance Sheets                                                                  
For the Nine Months Ended September 30, 1998                                    
and Year Ended December 31, 1997                                            
------------------------------------------------                                

                                                        [Enlarge/Download Table]


                                                  September 30, 1998  December 31, 1997
                                                  ------------------  -----------------
                                                      (unaudited)                      
                                                                                       
Assets                                                                                 
Current Assets:                                                                        
  Cash and cash equivalents                           $    6,940         $  31,672     
  Credit Card Receivables                                    521                       
Trade receivables, net of reserve for                          -                       
    doubtful accounts                                    410,348           110,795     
  Inventory on hand                                      738,177           114,335     
                                                      ----------         ---------     

  Prepaid expenses                                             -                       
                                                      ----------         ---------     
    Total Current Assets                               1,155,986           256,802     
                                                      ----------         ---------     

Property and equipment, net                               14,952            22,672     
Undeposited funds                                                                      
Other assets                                               4,358             6,979     
                                                      ----------         ---------     
                                                      $1,175,296         $ 286,453     
                                                      ==========         =========     

Liabilities And Shareholders' Equity                                                   
Current liabilities                                                                    
  Notes Payable to Related Parties                    $   27,100         $  25,644     
  Accounts payable                                       145,044           253,440     
  Taxes Payable                                            1,524                       
  Accrued expenses and other current liabilities          25,575            20,589     
                                                      ----------         ---------     
    Total current liabilities                            199,244           299,673     
                                                      ----------         ---------     
Long Term debt                                           949,808                       

Members' Interest (deficit)                               26,245           (13,220)    
                                                      ----------         ---------     
                                                      $1,175,296         $ 286,453     

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Global Sourcing Group                                                           
Unaudited Statements of Income                                                  
For the Nine Months and Three Months                                            
Ended September 30, 1998 and 1997                                             
------------------------------------                                            

                                                        [Enlarge/Download Table]


                                       Nine Months Ended   Nine Months Ended  Three Months Ended  Three Months Ended
                                      September 30, 1998  September 30, 1997  September 30, 1998  September 30, 1997
                                      ------------------  ------------------  ------------------  ------------------
                                                                                                                    

Net Revenue                                  $851,910          $1,410,189            $485,679            $297,866   
Cost of Sales                                 540,080             813,903             344,493             170,861   
                                             --------          ----------            --------            --------   
         Gross Margin                         311,830             596,285             141,186             127,005   

Selling, General, and Administrative          271,822             603,229              74,346             205,670   
                                             --------          ----------            --------            --------   
Income from Operations                         40,008              (6,943)             66,840             (78,665)  

Other Income (expense)                           (543)            (12,385)                  -              (5,118)  
                                             --------          ----------            --------            --------   
Net Income                                   $ 39,465          $ (19,328)            $ 66,840            $(83,784)  

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Global Sourcing Group                                                           
Unaudited Statement of Cash Flows                                               
For the Nine Months Ended September 30, 1998 and 1997                         
------------------------------------------------------                          

                                                        [Enlarge/Download Table]


                                                                  9 months ended     9 months ended  
                                                                 September 30,1998  September 30,1997
                                                                 -----------------  -----------------
                                                                                                     
 Cash flows from operating activities                                                                
     Net Income (loss)                                                $  39,465         $ (19,328)   
       Adjustments to reconcile                                                                      
          Provided by (used in) operating activities                                                 
              Depreciation and Amortization                               7,721             4,481    
       (Increase) decrease in                                                                        
          Accounts receivable                                          (299,553)           16,335    
          Inventory                                                    (623,842)         (162,544)   
          Other Assets                                                    2,100             6,544    
       Increase (decrease) in                                                                        
          Accounts payable                                             (108,396)          (74,664)   
          Other accrued  liabilities                                     10,511             3,591    
          Deferred Warranty Revenue                                      (4,000)           (6,523)   
                                                                      ---------         ---------    
            Net Cash provided by (used in) operating activities        (975,995)         (231,748)   

Cash flows from investing activities                                                                 
     Purchases of fixed assets                                                -           (10,868)   
                                                                      ---------         ---------    
            Net cash used in investing activities                             -           (10,868)   

Cash flows from financing activities                                                                 
     Principal payments on notes payable to related parties             (44,833)                     
     Proceeds from notes payable to related parties                      46,289           147,041    

     Proceeds from long term notes payable                              949,808                 -    
                                                                      ---------                      
           Net cash provided by (used in) financing activities          951,264           147,041    
                                                                      ---------         ---------    
           Net increase (decrease) in cash                              (24,732)          (95,575)   
                                                                      =========         =========    

Cash, beginning of period                                                31,672            96,101    

Cash, end of period                                                   $   6,940         $     526    
                                                                      =========         =========    
                                                                              0                (0)   

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No dealer, salesman or any other person has been authorized to give any         
information or to make any representations other than those contained in this   
prospectus, and, if given  or  made,  such information  or representations may  
not be relied on as having been authorized by the Company or by any of the      
Underwriters. Neither the delivery of this Prospectus nor any sale  made        
hereunder  shall under any  circumstances create an implication that there has  
been no change in the affairs of the Company since the date hereof.  This       
Prospectus does not constitute an offer to sell, or solicitation of any offer to
buy, by any person in any jurisdiction in which it is unlawful for any such     
person to make such offer or solicitation.  Neither the delivery of this        
Prospectus nor any offer, solicitation or sale made hereunder, shall under any  
circumstances create any implication that the information herein is correct as  
of any time subsequent to the date of the Prospectus.                           

------------------------  

TABLE OF CONTENTS 
                                                                            Page
Prospectus Summary..............................................................
Risk Factors....................................................................
The Company.....................................................................
Use of Proceeds.................................................................
Dividend Policy.................................................................
Dilution........................................................................
Business........................................................................
Management's Discussion and Analysis of                                         
Financial Condition and Results of                                            
 Operations.....................................................................
Management......................................................................
Security Ownership of Certain                                                   
 Beneficial Owners and Management...............................................
Sales by Selling Securityholders................................................
Description of Securities.......................................................
Plan of Distribution............................................................
Legal Matters...................................................................
Experts.........................................................................
Available Information...........................................................
Index to Financial Statements...................................................

Until 90 days after the release of the registered securities from the 
Escrow Account, all dealers effecting transactions in the registered securities,
whether or not participating in this distribution, may be required to deliver a 
prospectus.  This is in addition to the obligations of dealers to deliver a     
Prospectus when Acting as underwriters and with respect to their unsold         
allotments or subscriptions.                                                    

======================= 

GLOBAL SOURCING GROUP, INC. 

2,637,736 Shares of Common Stock to be Sold 
by the Holders thereof; 
1,000,000 Warrants and 1,000,000 Shares 
of Common Stock underlying such Warrants  
to be Sold by the Holders thereof.  

----------  
PROSPECTUS  
----------  

_________, 1999 

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PART II 

INFORMATION NOT REQUIRED IN THE PROSPECTUS  

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 

The following table sets forth the expenses in connection with this   
Registration Statement.  All of such expenses are estimates, other than the     
filing fees payable to the Securities and Exchange Commission.                  

                                                                [Download Table]


                                                            
Filing Fee - Securities and Exchange Commission       $  230
Fees and Expenses of Accountants and Legal Counsel     1,000
Blue Sky Fees and Expenses                             3,000
Printing and Engraving Expenses                        3,000
Miscellaneous Expenses                                 1,500

   Total                                              $8,730
                                                      ======


ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS                             

    The Company is incorporated in Delaware.  Under Section 145 of the General
Corporation Law of the State of Delaware, a Delaware corporation has the power, 
under specified circumstances, to indemnify its directors, officers, employees  
and agents in connection with actions, suits or proceedings brought against them
by a third party or in the right of the corporation, by reason of the fact that 
they were or are such directors, officers, employees or agents, against expenses
incurred in any action, suit or proceeding.  The Certificate of Incorporation   
and the By-laws of the Company provide for indemnification of directors and     
officers to the fullest extent permitted by the General Corporation Law of the  
State of Delaware.                                                              

The General Corporation Law of the State of Delaware provides that a  
certificate of incorporation may contain a provision eliminating the personal   
liability of a director to the corporation or its stockholders for monetary     
damages for breach of fiduciary duty as a director provided that such provision 
shall not eliminate or limit the liability of a director (i) for any breach of  
the director's duty of loyalty to the corporation or its stockholders, (ii) for 
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 (relating to liability for    
unauthorized acquisitions or redemptions of, or dividends on, capital stock) of 
the General Corporation Law of the State of Delaware, or (iv) for any           
transaction from which the director derived an improper personal benefit.   The 
Company's Certificate of Incorporation contains such a provision.               

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES                               

  Global Sourcing Group, a California limited liability company was merged
into a Delaware Company on June 30, 1998.                                       

     As listed below, the Company issued shares in the limited liability company
to the following individuals or entities for the consideration as listed in cash
or services.  All sales made within the United States or to United States       
citizens or residents, were made in reliance upon the exemption from            
registration provided by Section 4(2) of the Securities Act of 1933.            

                                                                [Download Table]


Date                   Buyer                 Shares    Consideration     
---------  -----------------------------    ---------  -------------     
                                                                         

6/26/98    First Agate Capital Corporation                   587,500  59 
6/26/98    Kessef Investment Corporation    1,012,500            101     
6/30/98    Richard Haines                     103,774       $  5,000  *  
6/30/98    Rafael Littaua                   4,358,490          5,000  *  
6/30/98    Gateway Holdings                 1,037,736        185,000  *  

* Consideration paid for shares of Global Sourcing Group, L.L.C. which shares   
were exchanged for shares of the Company.                                       

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ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                            

(a)  Exhibits                                                                   

3.1       Certificate of Incorporation                                          
3.2       By-Laws of the Company                                                

4.1*      Form of Common Stock Certificate                                      
4.2*      Warrant Agreement and form of Warrant                                 

5.1*      Opinion of Cassidy & Associates                                       

10.1*     Joint Venture Agreement with Shanghai Tehao                           
10.2*     Supply Agreement with Shanghai Hitachi Power Tools                    
10.3*     Credit Extension Agreement between Global Sourcing Group and Gino     
International-GSG                                           
10.4*     Lease for 587 Ventu Park Road                                         

24.1      Consent of Accountant                                                 
24.2*     Consent of Cassidy & Associates (included in Exhibit 5)               

27*       Financial Data Schedule                                               
---------------                                                                 

*    To be filed by Amendment.                                                  

(b)       The following financial statement schedules are included in this      
Registration Statement.                                     

None.                                                       

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ITEM 17.  UNDERTAKINGS.                                                         

The undersigned registrant hereby undertakes:                         

   (a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:                        

     (i)   To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;                                                         

      (ii)  To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-      
effective amendment thereof) which, individually or in the aggregate, represent 
a fundamental change in the information set forth in the registration statement;

       (iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any      
material change to such information in the registration statement.              

     (b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of  
the registrant pursuant to the foregoing provisions, or otherwise, the          
registrant has been advised that in the opinion of the Securities and Exchange  
Commission is that such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable.  In the event that a claim for        
indemnification against such liabilities (other than the payment by the         
registrant of expenses incurred or paid by a director, officer or controlling   
person of the registrant in the successful defense of any action, suit or       
proceeding) is asserted by such director, officer or controlling person in      
connection with the Securities being registered, the registrant will, unless in 
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such         
indemnification by it is against public policy as expressed in the Act and will 
be governed by the final adjudication of such issue.                            

(c) The undersigned registrant hereby undertakes that:                

      (i)   For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part  
of this registration statement in reliance upon Rule 430A and contained in a    
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or 497(h) 
under the Securities Act shall be deemed to be part of this registration        
statement as of the time it was declared effective.                             

         (ii)  For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus   
shall be deemed to be a new registration statement relating to the Securities   
offered therein, and the offering of such securities at that time shall be      
deemed to be the initial bona fide offering thereof.                            

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SIGNATURES  

 Pursuant to the requirements of the Securities Act of 1933, as amended,
Global Sourcing Group, Inc. certifies that it has reasonable grounds to believe 
that it meets all of the requirements for filing on Form SB-2 and has duly      
caused this Registration Statement on Form SB-2 to be signed on its behalf by   
the undersigned, hereunto duly authorized, in the City of Thousand Oaks,        
California on the 10/th/ day of February, 1999.                                 

       GLOBAL SOURCING GROUP, INC.

 By /s/ Rafael Littaua
    --------------------
      Rafael Littaua
 President

 Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in   
the capacities and on the dates indicated.                                      

Signature                   Title                                  Date         
---------                   -----                                  ----         

/s/Rafael Littaua           Director, President                    2/10/99      
Rafael Littaua                                                        

/s/ Eric Manlunas           Director                               2/10/99      
Eric Manlunas                                                         

II-4

Dates Referenced Herein

				Referenced-On Page
This ‘SB-2’ Filing		Date		First		Last			Other Filings
		6/30/03		6		17			None on these Dates
		5/30/03		18
Filed on:		2/19/99
		2/17/99		1
		11/30/98		36
		9/30/98		5		40
		6/30/98		4		42
		4/30/98		37
		4/28/98		30
		4/22/98		17
		12/31/97		5		38
		12/16/97		37
		9/30/97		20		40
		6/30/97		20
		12/31/96		5		37
		9/22/96		34
		4/1/96		37
		11/6/95		34
									List all Filings