As filed with the Securities and Exchange Commission on September 24, 1999
Registration No. 333-83351
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Amendment No. 1)
BRONZE MARKETING, INC.
(Name of small business issuer in its charter)
Nevada 87-0578370
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number)Identification No.)
426 South 1000 East, #704, Salt Lake City, Utah 84102
(801) 537-1257
(Address and telephone number of principal executive offices and place of
business)
Heather Hamby
426 South 1000 East, #704, Salt Lake City, Utah 84102
(801) 537-1257
(Name, address and telephone number of agent for service)
Copies to:
Thomas G. Kimble & Van L. Butler
THOMAS G. KIMBLE & ASSOCIATES
311 South State Street, #440
Salt Lake City, Utah 84111
(801) 531-0066
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the effective date of this registration statement.
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Title of Each Class Amount to be Proposed Maximum Proposed Maximum Amount
of Securities to be Registered Offering Price/Unit Aggregate Price of fee
Registered
Warrants; underlying 1,000,000 $ 1.00 $ 1,000,000 $278.00
Common Stock
TOTALS 278.00
</TABLE>
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 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section
8(a), may determine.
<PAGE>
BRONZE MARKETING, INC.
1,000,000 SHARES OF COMMON STOCK
UNDERLYING COMMON STOCK PURCHASE WARRANTS
Our company, Bronze Marketing, Inc., has registered:
bullet 1,000,000 warrants, to be distributed as soon as practicable after
the date of this prospectus to common stockholders of record as of
__________, 1999.
bullet 1,000,000 shares of common stock, to be issued upon exercise of the
warrants, at $1.00 per share underlying warrants.
Each warrant allows you to purchase one share of our common stock, at
any time until June 30, 2002, if this prospectus is still current or has been
updated. Whether or not a current prospectus is in effect, we can call and
redeem the warrants for $.01 per warrant, on 30 days notice, at any time after
the date of this prospectus.
Our common stock is quoted on the NASD Electronic Bulletin Board under
the Symbol "BNZE". The current bid price quotation is $.50.
We are a new company formed to provide inventory financing for the
marketing of bronze sculpture artwork. See "Business."
YOU SHOULD NOT PURCHASE THESE SECURITIES IF YOU CANNOT AFFORD TO RISK THE LOSS
OF YOUR ENTIRE INVESTMENT. INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL
RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THE PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Warrants are being distributed without cash consideration. Shares of common
stock are being offered only to holders of the warrants, and will be sold by
Bronze Marketing without any underwriting discounts or other commissions. The
offering price is payable in cash upon exercise of the warrants. No minimum
number of warrants must be exercised, and no assurance exists that any
warrants will be exercised.
The date of this prospectus is , 1999
<PAGE>
TABLE OF CONTENTS Page
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
COMPARATIVE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . 8
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
MARKET INFORMATION & DIVIDEND POLICY . . . . . . . . . . . . . . . . 9
MANAGEMENT'S DISCUSSION AND ANALYSIS . . . . . . . . . . . . . . . . 9
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .12
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . .14
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . .15
DESCRIPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . .16
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . .19
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . F-1
<PAGE>
PROSPECTUS SUMMARY
This summary highlights important information. As a summary, it is
necessarily incomplete and does not contain all the information you
should consider before investing. You should read the entire prospectus
carefully.
OUR COMPANY
Bronze Marketing, Inc. is engaged in business to provide inventory
financing for bronze sculpture artwork created by a relative of the
President. Bronze Marketing will pay for casting limited edition copies
of the artwork. The copies will then be consigned to and exhibited in
art galleries and retail outlets to facilitate marketing and sale of the
artwork. Bronze Marketing will be entitled to a part of the proceeds
from sale of the artwork, in return for providing the financing. See
"Business."
Our address is 426 South 1000 East, #704, Salt Lake City, Utah
84102. Our telephone number is (801) 537-1257.
THE OFFERING
Securities 1,000,000 shares of common stock,
offered underlying warrants. See "Description of Securities".
Offering Prices $1.00 per share underlying the warrants.
Plan of DistributionShares will be offered and sold without
any discounts or
other commissions, to holders of the
warrants, when they
exercise them. See "Plan of Distribution."
Use of Proceeds We could receive as much as $1,000,000
from sale of the
1,000,000 shares of our common stock to
be issued upon
exercise of the warrants, if all
warrants are exercised. Any
proceeds will be used generally to
provide additional
working capital, but have not been
specifically allocated, as
we do not know if any warrants will be exercised.
Transfer Agent Interwest Transfer Company, Inc., 1981
East 4800 South,
Suite 100, Salt Lake City, Utah 84117,
(801) 272-9294.
Securities OutstandingWe are authorized to issue 24,000,000
shares of common
stock and presently have 1,000,000
shares of common stock
issued and outstanding. We have
reserved from our
authorized capital 1,000,000 shares of
<PAGE>
common stock for issuance upon
exercise of the
warrants. We are alsoauthorized to
issue up to 1,000,000 shares
of preferred stock in one or more
series with the rights and
preferences the board of directors may
designate. The board of directors has
not designated any series of
preferred stock.
Warrants Each warrant allows you to purchase one
share of common
stock at any time until June 30, 2002,
if this prospectus is
still current or has been updated. The
exercise price is $1.00
per share, with adjustment in certain
events. Each of the
warrants is callable and can be
redeemed by us for $.01 per
warrant on 30 days notice at any time
after the date of this
prospectus. See "Description of
Securities - Warrants."
Risk Factors An investment in Bronze Marketing is
highly speculative.
You will suffer substantial dilution in
the book value per
share of the common stock compared to
the purchase price.
If substantial funds are not received
from exercise of the
warrants, which is not assured, we may
require additional
funding for which we have no
commitments. No person
should invest who cannot afford to risk
loss of the entire
investment. See "Risk Factors."
<PAGE>
RISK FACTORS
The securities involve a high degree of risk. You should carefully
consider the following risk factors and all other information in this
prospectus before investing in Bronze Marketing.
RISKS INHERENT IN A NEW START UP COMPANY
BRONZE MARKETING WAS ONLY RECENTLY INCORPORATED, HAS NO SIGNIFICANT
HISTORY OF OPERATIONS AND IS CONSIDERED A DEVELOPMENT STAGE ENTERPRISE. We
have incurred net losses since inception, have an accumulated deficit, and no
assurance of future profitability. These facts raise substantial doubt about
our ability to continue as a going concern. See financial statements.
WE PRESENTLY HAVE VERY LIMITED OPERATING CAPITAL AND DEPEND UPON RECEIPT
OF ADDITIONAL CAPITAL TO EXPAND. We have no assurance of receiving any
proceeds from exercise of warrants and have no commitments for additional cash
funding if no proceeds are received from warrant exercise. See "Business".
OUR ARTICLES OF INCORPORATION AND BYLAWS LIMIT THE LIABILITY OF OFFICERS
AND DIRECTORS, AND REQUIRE INDEMNIFICATION. This will limit your ability as
shareholders to hold officers and directors liable and collect monetary
damages for breaches of fiduciary duty, and requires us to indemnify officers
and directors to the full extent permitted by law. Officers and directors have
no personal liability for breach of their fiduciary duties, except for a
breach of their duty of loyalty, acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of law, unlawful payment
of dividends or unlawful stock purchases or redemptions, or any transaction
from which a director derives an improper personal benefit. See "Certain
Transactions - Indemnification and Limitation of Liability of Management".
RISKS RELATED TO THE NATURE OF THE PROPOSED BUSINESS
BRONZE MARKETING DEPENDS UPON THE CREATIVE TALENTS AND ABILITIES OF THE
SCULPTOR AND ARTIST WHO CREATES THE ARTWORK. This individual is not an
officer or director of Bronze Marketing, but has a contractual arrangement
with Bronze Marketing. We do not know how long this arrangement may continue,
nor how long the services of this individual will continue to be available.
See "Certain Transactions - Conflicts of Interest".
OUR BUSINESS INVOLVES THE MARKETING OF ARTWORK WHICH DOES NOT HAVE A
WELL ESTABLISHED MARKET DEMAND. We are not assured of market acceptance, and
our business will be subject to all the risks associated with introducing and
marketing new artwork.
RISKS RELATED TO THE OFFERING
YOU ARE NOT ASSURED THAT ANY PROCEEDS WILL BE RECEIVED FROM EXERCISE OF
WARRANTS. This increases your risk if you do exercise your warrants, because
<PAGE>
you do not know that any additional warrants will be exercised or that we
will receive further funding. Proceeds may not be sufficient to defray
offering expenses. Because no minimum number of warrants must be exercised
there is no escrow of funds. Any proceeds received will immediately be
retained by us to be used in our business. The amount of capital currently
available to us is limited. In the event any proceeds from this offering and
our existing capital are not sufficient to enable us to develop and expand our
business and generate a profit, we may need additional financing, for which we
have no commitments or arrangements from commercial lenders or other sources.
YOU CAN EXERCISE YOUR WARRANTS ONLY IF THIS PROSPECTUS IS EFFECTIVE AND
CURRENT AND THE EXERCISE IS PERMITTED UNDER THE SECURITIES LAWS OF YOUR STATE.
We intend to update the prospectus as necessary to keep it current and
maintain federal and state registration or qualification for the exercise, but
may not be able to do so when you wish to exercise. Whether a current
prospectus is in effect or not, the warrants are redeemable for $.01 per
warrant at any time. If redeemed when no current prospectus is in effect, you
will have no opportunity to exercise the warrants, but will be compelled to
accept the nominal redemption price.
YOU WILL SUFFER SUBSTANTIAL DILUTION IN THE PURCHASE PRICE OF YOUR STOCK
COMPARED TO THE NET TANGIBLE BOOK VALUE PER SHARE IMMEDIATELY AFTER THE
PURCHASE. The exact amount of dilution will vary depending upon the number of
warrants exercised. The fewer warrants exercised, the greater dilution will
be on the warrants that are exercised. See "Dilution."
TO THE EXTENT AUTHORIZED, DIRECTORS CAN ISSUE ADDITIONAL COMMON AND/OR
PREFERRED STOCK WITHOUT FURTHER SHAREHOLDER APPROVAL. Issuance of additional
common stock in the future will reduce the proportionate ownership and voting
power of your common stock. Designation and issuance of series of preferred
stock in the future will create additional securities with dividend and
liquidation preferences over common stock. We are authorized to issue
24,000,000 shares of common stock and 1,000,000 shares of preferred stock. The
rights and preferences of preferred stock may be designated in series by our
board of directors. The board has not designated any series or issued any
shares of preferred stock. See "Description of Securities."
THE ABILITY OF DIRECTORS, WITHOUT STOCKHOLDER APPROVAL, TO ISSUE
ADDITIONAL SHARES OF COMMON STOCK AND/OR PREFERRED STOCK COULD BE USED AS
ANTI-TAKEOVER MEASURES. These provisions could prevent, discourage or delay a
takeover attempt and result in stockholders receiving less for their stock
than they otherwise might. See "Description of Securities".
EXERCISING WARRANT HOLDERS ARE NOT ASSURED THEY WILL BE ABLE TO SELL
THEIR COMMON STOCK IN THE FUTURE AT A PRICE WHICH EQUALS OR EXCEEDS THE
EXERCISE PRICE. The exercise price of the warrants was arbitrarily determined
by us and set at a level substantially in excess of prices recently paid for
securities of the same class. The price bears no relationship to our assets,
book value, net worth or other economic or recognized criteria of value. In
no event should the exercise price be regarded as an indicator of any future
market price of our securities.
YOU ARE NOT ASSURED THAT AN ACTIVE TRADING MARKET WILL DEVELOP OR THAT
<PAGE>
IF A MARKET DOES DEVELOP, THAT IT WILL CONTINUE. Although our common stock is
eligible for quotation on the Electronic Bulletin Board maintained by the
NASD, there has been no active public trading market. As a result, an
investment in our common stock may be totally illiquid and you may not be able
to liquidate your investment readily or at all when you need or desire to
sell.
SALES OF SUBSTANTIAL AMOUNTS OF COMMON STOCK IN THE PUBLIC MARKET COULD
ADVERSELY AFFECT THE MARKET PRICE. 100,000 of the 1,000,000 shares of our
common stock presently outstanding are freely tradeable, and all of the
remaining shares are eligible for public resale under Rule 144 promulgated
under the Securities Act of 1933. See "Shares Eligible for Future Sale".
OUR COMMON STOCK IS CONSIDERED A LOW PRICED SECURITY UNDER RULES
PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION. Under these rules,
broker-dealers participating in transactions in these securities must first
deliver a risk disclosure document which describes risks associated with these
stocks, broker-dealers' duties, customers' rights and remedies, market and
other information, and make suitability determinations approving the customers
for these stock transactions based on financial situation, investment
experience and objectives. Broker-dealers must also disclose these
restrictions in writing, provide monthly account statements to customers, and
obtain specific written consent of each customer. With these restrictions,
the likely effect of designation as a low priced stock is to decrease the
willingness of broker-dealers to make a market for the stock, to decrease the
liquidity of the stock and increase the transaction cost of sales and
purchases of these stocks compared to other securities.
DILUTION
Dilution is the difference between the warrant exercise price of $1.00
per share, and the net tangible book value per share of common stock
immediately after its purchase. Net tangible book value per share is
calculated by subtracting total liabilities from total assets less intangible
assets, and then dividing by the number of shares of common stock then
outstanding. Based on the June 30, 1999, financial statements of Bronze
Marketing, net tangible book value was $7,683 or about $.008 per common share.
Before the exercise of any warrants, 1,000,000 shares of common stock are
outstanding.
If all the warrants get exercised, which is not assured, we would have
2,000,000 shares of common stock outstanding. The estimated pro forma net
tangible book value (which gives effect to receipt of the net proceeds from
the exercise and issuance of the underlying shares of common stock, but does
not take into consideration any other changes in net tangible book value after
June 30, 1999), would then be $987,683 or about $.49 per share. This would
result in dilution to persons exercising warrants of $.51 per share, or 51% of
the exercise price of $1.00 per share. Net tangible book value per share
would increase to the benefit of present stockholders from $.008 before the
offering to $.49 after the offering, or an increase of $.482 per share from
exercise of the warrants. The following table shows the estimated net tangible
book value ("NTBV") per share after exercise of the warrants and dilution to
persons purchasing the underlying common stock.
<PAGE>
<TABLE>
<S> <C> <C>
Exercise of all warrants:
Warrant exercise price/share $1.00
NTBV/share before exercise $.008
Increase from warrant exercise .482
Pro forma NTBV/share after exercise .49
Dilution $ .51
</TABLE>
If less than all the warrants are exercised, dilution to the exercising
warrant holders will be greater than the amount shown. The fewer warrants
exercised, the greater dilution will be.
COMPARATIVE DATA
The following chart shows the prices paid for, and proportionate
ownership in Bronze Marketing represented by common stock purchased since
inception by initial shareholders and other present shareholders, compared to
the price that will be paid and proportionate ownership represented by common
stock that will be acquired by exercising warrant holders, assuming all
warrants are exercised.
<TABLE>
<S> <C> <C> <C> <C> <C>
Shares Owned Percent Cash Paid Percent Price/share
Initial 900,000 45% $ 5,400 .5% $.006
Shareholders
Other Shareholders 100,000 5% $ 35,000 3.4% $.35
Warrant Holders 1,000,000 50% $1,000,000 96.1% $1.00
</TABLE>
USE OF PROCEEDS
The net proceeds to Bronze Marketing from the sale of the shares of
common stock underlying the warrants at the exercise price of $1.00 per share
will vary depending upon the total number of warrants exercised. If all
warrants get exercised we would receive gross proceeds of $1,000,000. We are
not assured that all or any warrants will be exercised. Regardless of the
number of warrants exercised, we expect to incur offering expenses estimated
at $20,000 for legal, accounting, printing and other costs of the offering.
Since we do not know that any warrants will be exercised and there is no
requirement that any minimum number of the warrants be exercised, there are no
escrow provisions. Any proceeds that are received will be immediately
available to Bronze Marketing to provide additional working capital to be used
for general corporate purposes. Proceeds have not been specifically
allocated, and the exact uses of the proceeds will depend on the amounts
received and the timing of receipt. Management's general intent is to use
whatever additional funds may be generated from warrant exercise to finance
additional artwork (i.e. sculptures).
<PAGE>
MARKET INFORMATION & DIVIDEND POLICY
The common stock of Bronze Marketing is quoted on the National
Association of Securities Dealers, Inc. Electronic Bulletin Board under the
symbol "BNZE", but has not been traded in the over-the-counter market except
on a very limited and sporadic basis. The only bid quotation has been $.50.
The above price represents interdealer quotations, without retail markup,
markdown or commissions, and may not represent actual transactions. As of
September 21, 1999, there were about 47 record holders of the common stock.
DIVIDEND POLICY
Bronze Marketing has not previously paid any cash dividends on common
stock and does not anticipate or contemplate paying dividends on common stock
in the foreseeable future. It is the present intention of management to
utilize all available funds for the development of the business. The only
restrictions that limit the ability to pay dividends on common equity or that
are likely to do so in the future, are those restrictions imposed by law.
Under Nevada corporate law, no dividends or other distributions may be made
which would render a company insolvent or reduce assets to less than the sum
of its liabilities plus the amount needed to satisfy outstanding liquidation
preferences.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis should be read in conjunction with
the financial statements of Bronze Marketing and the notes associated with
them contained elsewhere in this prospectus. This discussion should not be
construed to imply that the results discussed will necessarily continue into
the future or that any conclusion reached will necessarily be indicative of
actual operating results in the future. The discussion represents only the
best present assessment of management.
PLAN OF OPERATIONS.
Bronze Marketing was only recently incorporated on May 1, 1997, has not
generated significant revenues from operations and is still considered a
development stage company. Management's plan of operation for the next twelve
months is to use any funds received from exercise of warrants in this offering
to provide financing for the creation of additional works of art and increased
marketing exposure of the artworks, and also to provide general working
capital during the next twelve months. Under this plan of operations Bronze
Marketing has no specific capital commitments and the timing of expenditures
will depend upon the receipt of additional funds from warrant exercise or
elsewhere, none of which is assured. Cash flows will also depend upon the
timing of sale of the artwork, which is also not assured, and receipt of the
proceeds from these sales. There have not been any sales during 1998 or 1999.
If necessary, management may auction or liquidate the existing inventory of
sculptures in which Bronze Marketing has acquired an interest through online
auctioning of the pieces using Internet sites that feature online auctions of
sculptures and other art. Management believes this will allow Bronze Marketing
<PAGE>
to liquidate the existing inventory as promptly as possible, if that becomes
necessary. Management believes the existing inventory can be auctioned for
half or more of its retail value, and has discounted the inventory on the
books to half its retail value.
As soon as possible after Bronze Marketing receives the proceeds from
these sales and/or receives additional funds from warrant exercise, management
will use the funds to pay for the casting cost of additional limited edition
copies of those sculptures which management and the artist believe have the
best market potential. Management believes that with the additional funding it
could receive from warrant exercise in this offering, Bronze Marketing could
provide sufficient financing for more copies of artwork to be made and placed
on consignment to increase marketing exposure. Management is hopeful that
increased marketing exposure will result in increases in sales sufficient to
generate enough revenue to Bronze Marketing to become profitable. However, we
are not assured of this nor do we know how much may be raised from warrant
exercise, because we do not know if all or any minimum number of the warrants
will be exercised.
BUSINESS
HISTORY AND DEVELOPMENT OF BRONZE MARKETING
Bronze Marketing, Inc. was recently incorporated under the laws of the
State of Nevada on May 1, 1997. In connection with its organization, the
founders contributed $5,400 cash to initially capitalize Bronze Marketing in
exchange for 900,000 shares of common stock.
On May 22, 1997, Bronze Marketing commenced a public offering of up to
100,000 shares of its common stock, in reliance upon Rule 504 of Regulation D,
promulgated by the U.S. Securities & Exchange Commission under the Securities
Act of 1933. The offering closed in July, 1997. Bronze Marketing sold
100,000 shares of common stock, at $.35 per share, and raised gross proceeds
of $35,000. This increased the total issued and outstanding common stock to
1,000,000 shares.
BUSINESS OF BRONZE MARKETING
Bronze Marketing was formed to raise capital from public offerings of
its securities, and use the capital or net proceeds from the offering to
provide inventory financing to facilitate the marketing and sale of bronze
sculptures and other artwork created by Michael Hamby, dba Michael Hamby
Studios. Michael Hamby is the brother of the President of Bronze Marketing,
Heather Hamby. Mr. Hamby is a freelance artist who has been engaged in
business for the past several years creating, producing and marketing
sculptures, paintings and illustrations. Mr. Hamby has developed a specialty
in bronze sculptures and has created almost two dozen original bronze
sculptures which are being re-produced and marketed in limited editions of as
few as seven and as many as one thousand copies per edition. These limited
edition copies are being offered to the public at prices ranging from $300 to
$38,000 per copy, depending on the particular sculpture and the number of
copies in the edition.
<PAGE>
To provide increased exposure to the public of the bronze sculptures,
increase public awareness of Mr. Hamby's artwork, and reach greater numbers of
people who might be interested in acquiring the artwork, both Mr. Hamby and
management of Bronze Marketing believe it is necessary to have these limited
edition copies on display in as many art galleries as possible, as well as
other retail outlets which are frequented by potential art purchasers. Mr.
Hamby has found that the art galleries and retail outlets are typically
willing to take and display the items only on a consignment basis. Due to the
lack of available financing, Mr. Hamby has been unable to effect any
widespread distribution of his artwork on consignment. Consequently,
management of Bronze Marketing entered into an arrangement with Mr. Hamby's
studio under which Bronze Marketing agreed to raise capital through securities
offerings, and use the net proceeds to provide financing. In return, Mr.
Hamby agreed that Bronze Marketing will be entitled to a portion of the gross
proceeds received from the marketing and sale of the artwork. Under this
arrangement, Bronze Marketing advanced funds to pay for the cost of casting
copies of Mr. Hamby's limited edition bronze sculptures. This cost typically
is about 18-22% of the retail price. Mr. Hamby then arranged for these copies
to be placed on consignment with art galleries or other retail outlets where
they are on display to be seen by the patrons of these establishments. Upon
any sale, Bronze Marketing is entitled to a portion of the gross proceeds.
On September 1, 1999, Bronze Marketing and Mr. Hamby revised the
arrangement. Bronze Marketing took ownership of the remaining sculpture
inventory as payment in full of the advances, notes receivable and accrued
interest owed to it. Bronze Marketing has discounted the inventory on its
books to half the retail value. The existing inventory has a retail value of
$46,900 but if necessary to provide liquidity, management may liquidate the
existing inventory of sculptures in which Bronze Marketing has acquired an
interest through online auctioning of the pieces using Internet sites that
feature online auctions of sculptures and other art. Management believes the
existing inventory can be sold or auctioned for half or more of its retail
value. Bronze Marketing and Mr. Hamby also revised the arrangement for
additional bronze sculptures in the future. Under the new formula worked out
between Bronze Marketing and Mr. Hamby, Bronze Marketing will be entitled to
recoup the amount it provides to pay the casting cost, plus receive 50% of the
balance of the proceeds from any sale. To the extent any funds become
available from warrant exercise or from sale of the existing inventory, Bronze
Marketing will pay the casting cost, but only of two sculptures which
management of Bronze Marketing and Mr. Hamby believe have the best market
potential. One sculpture titled "Wapiti"is a larger than life size statue of a
bull elk. The other is a sculpture of a cowboy titled "Cowboy's Day Off"
which can be made in a three foot size or life size. Mr. Hamby has received
indications from an art gallery regarding sales of these sculptures which the
gallery believes could have been made from stock on hand if the gallery had
one or more copies in its inventory. Based on these indications, management
of Bronze Marketing and Mr. Hamby believe these two sculptures have the best
current market potential. Without pre-casting the sculptures to allow for sale
from stock on hand with immediate delivery, it takes several months to produce
and deliver a sculpture. However, even with pre-casting, there is no
assurance of the amount of sales, if any, there might be under this
arrangement, nor do we know how long it may be from the time Bronze Marketing
pays for the production cost of a sculpture and the time, if ever, that Bronze
Marketing will receive any proceeds from the sale.
<PAGE>
PRODUCTS AND SERVICES
Bronze Marketing's current inventory of Mr. Hamby's original sculptures
include the following:
<TABLE>
<S> <C> <C>
TITLE AND DESCRIPTION No. Retail Price
acquired
"GUS" (Cowboy bust, 1st in series of four) 1 $ 1,400
"COWBOY BOOTS" 10 $ 1,100
"THE MOUNTAIN MAN" (Hunter with Bird) 2 $ 4,400
"SUPPER TIME" (Bald Eagle with Trout) 1 $ 2,800
"SPIRITS IN THE WIND" (Lodge Pole) 2 $ 9,600
"CHALLENGE ON THE YELLOWSTONE" 1 $ 4,800
"A SIGN OF PEACE" 1 $ 5,200
"WAR HORSE" (Indians protector dressed forbattle) 3 $ 3,600
"WISDOM OF A CHIEF" (Indian figure) 2 $ 4,400
"RUNNIN THUNDER" (Buffalo) 1 $ 1,400
"MONTANA REX" (Bull) 1 $ 2,400
"TRUTH IN JUSTICE" (Bald Eagle in Justice)1 $ 5,800
</TABLE>
COMPETITION
The marketing of artwork in general and bronze sculptures in particular
is a business which is intensely competitive, with many artists who have a
more widespread reputation than Mr. Hamby, and many providers who have greater
technical expertise, financial resources and marketing capabilities than we
do. We do not know if we will be able to overcome competitive disadvantages
we face as a small, start up company with limited capital. If Bronze
Marketing cannot compete effectively, regardless of the success of this
offering, it will not succeed.
FACILITIES AND EMPLOYEES
Bronze Marketing presently has no lease or office facilities but will
use the address of its President without charge for the time being. The
President will work out of her home until Bronze Marketing commences active
business operations and has the need to lease commercial office space and the
ability to pay for the facilities. As of the date of this prospectus, Bronze
Marketing has no full-time employees.
AVAILABLE INFORMATION
We filed a registration statement on Form SB-2 with the United States
<PAGE>
Securities and Exchange Commission, under the Securities Act of 1933, covering
the securities in this offering. As permitted by rules and regulations of the
Commission, this prospectus does not contain all of the information in the
registration statement. For further information regarding both Bronze
Marketing and the securities in this offering, we refer you to the
registration statement, including all exhibits and schedules, 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. Copies may be obtained upon request and payment of prescribed fees.
As of the date of this prospectus, we became subject to the information
requirements of the Securities Exchange Act of 1934. Accordingly, we will
file reports and other information with the Commission. These materials will
be available for inspection and copying at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: New York
Regional Office, 75 Park Place, New York, New York 10007; Chicago Regional
Office, 500 West Madison Street, Chicago, Illinois 60661. Copies of the
material may be obtained from the public reference section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission maintains an Internet Web site located at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding issuers that file reports electronically with the Commission. The
site is accessible by the public through any Internet access service provider.
Copies of our Annual, Quarterly and other Reports filed with the
Commission, starting with the Quarterly Report for the first quarter ended
after the date of this prospectus (due 45 days after the end of the quarter)
will also be available upon request, without charge, by writing Bronze
Marketing, Inc., 426 South 1000 East, #704, Salt Lake City, Utah 84102.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table shows the directors, executive officers and other
significant employees of Bronze Marketing, their ages, and all offices and
positions with Bronze Marketing. Each director is elected for a period of one
year and thereafter serves until a successor is duly elected by the
stockholders and qualifies. Officers and other employees serve at the will of
the board of directors.
<TABLE>
<S> <C> <C>
Term Served As Positions
Name of DirectorAge Director/OfficerWith Company
Since inception
Heather Hamby29 President, Secretary-
Treasurer & Director
</TABLE>
This individual will serve as the sole officer and director of Bronze
<PAGE>
Marketing. A brief description of her background and business experience
follows:
HEATHER HAMBY has been engaged in the fashion modeling industry for the
past several years. After graduation from high school in 1987, Ms. Hamby
attended college for two years, and then began a modeling career, initially in
New York City. One year later, she received a modeling contract with McCarty
Modeling Agency in Salt Lake City, Utah. In 1991, she began working for Kutte
- - Le Gunn Modeling Agency and pursued her career there until 1996. In 1994
she began working with various Conventions and Trade Shows for a wide variety
of companies nationwide, and is currently working as an independent model with
Nordstrom Fashion Trend Shows. Ms. Hamby is the sister of Mike Hamby.
There are no arrangements or understandings regarding how long a
director of Bronze Marketing is to serve in that capacity.
EXECUTIVE COMPENSATION
Bronze Marketing was only recently incorporated, and has not paid any
compensation to its executive officer and director to date. Bronze Marketing
has no employment agreement with nor key man life insurance on management.
Management is entitled to reimbursement of any out of pocket expenses
reasonably and actually incurred on behalf of Bronze Marketing. The officer
does not devote full time or a significant amount of time to the affairs of
Bronze Marketing, is not a full time employee and does not receive any salary
or wage. We do not know how long this arrangement may continue, nor do we
know how long the services of the officer will continue to be available.
CERTAIN TRANSACTIONS
In connection with the organization of Bronze Marketing, its officers,
directors and other stockholders paid an aggregate of $5,400 cash to purchase
900,000 shares of Common Stock of Bronze Marketing at a price of $.006 per
share. See "Principal Shareholders."
In July, 1997, Bronze Marketing completed an offering under Regulation
D, Rule 504 as promulgated by the Securities and Exchange Commission and sold
100,000 shares of common stock, at $.35 per share, and raised gross proceeds
of $35,000. These are free-trading shares.
Bronze Marketing has the business arrangement with Michael Hamby
Studios, previously described in the business section of this prospectus.
Michael Hamby is the brother of the President of Bronze Marketing, Heather
Hamby. He is not an officer, director or shareholder of Bronze Marketing, but
because of the business arrangement with Bronze Marketing, may be regarded as
engaged in the distribution of the securities of Bronze Marketing, within the
meaning of Section 2(11) of the Securities Act of 1933.
<PAGE>
CONFLICTS OF INTEREST
Other than as described in this prospectus Bronze Marketing is not
expected to have significant further dealings with affiliates. However, if
there are these dealings the parties will attempt to deal on terms competitive
in the market and on the same terms that either party would deal with a third
person. Presently none of the officers and directors have any transactions
which they contemplate entering into with Bronze Marketing, aside from the
matters described in this prospectus.
Management will attempt to resolve any conflicts of interest that may
arise in favor of Bronze Marketing. Failure to do so could result in
fiduciary liability to management.
INDEMNIFICATION AND LIMITATION OF LIABILITY OF MANAGEMENT
The General Corporation Law of Nevada permits provisions in the
articles, by-laws or resolutions approved by shareholders which limit
liability of directors for breach of fiduciary duty to certain specified
circumstances, namely, breaches of their duties of loyalty, acts or omissions
not in good faith or which involve intentional misconduct or knowing violation
of law, acts involving unlawful payment of dividends or unlawful stock
purchases or redemptions, or any transaction from which a director derives an
improper personal benefit. The by-laws indemnify officers and directors to
the full extent permitted by Nevada law. The by-laws with these exceptions
eliminate any personal liability of a director to Bronze Marketing or its
shareholders for monetary damages for the breach of a director's fiduciary
duty. Therefore a director cannot be held liable for damages to Bronze
Marketing or its shareholders for gross negligence or lack of due care in
carrying out his fiduciary duties as a director. The Articles provide for
indemnification to the full extent permitted under law which includes all
liability, damages and costs or expenses arising from or in connection with
service for, employment by, or other affiliation to the maximum extent and
under all circumstances permitted by law. Nevada law permits indemnification
if a director or officer acts in good faith in a manner reasonably believed to
be in, or not opposed to, the best interest's of the corporation. A director
or officer must be indemnified as to any matter in which he successfully
defends himself. Indemnification is prohibited as to any matter in which the
director or officer is adjudged liable to the corporation. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers, and controlling persons under the foregoing
provisions or otherwise, Bronze Marketing has been advised that in the opinion
of the Securities and Exchange Commission, indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
PRINCIPAL SHAREHOLDERS
The following table gives stock ownership information for any officer,
director, or other stockholder who we know to be a beneficial owner of more
that 5% of our stock. A beneficial owner of stock is any person who has or
shares the power to decide how to vote or whether to dispose of the stock.
<PAGE>
<TABLE>
<S> <C> <C> <C>
Title of Amount & Nature of % of
Name and Address Class Beneficial Ownership Class
Heather Hamby Common 500,000 shares 50%
426 S. 1000 E. #704
SLC, UT 84102
Lynn Dixon
311 S. State, #460 Common 400,000 shares 40%
SLC, UT 84111
All officers and
directors as a group Common 500,000 shares 50%
(1 person)
</TABLE>
The foregoing amounts include all shares these persons are deemed to
beneficially own regardless of the form of ownership. See "Certain
Transactions."
DESCRIPTION OF SECURITIES
The following statements do not purport to be complete and are qualified
in their entirety by reference to the detailed provisions of the articles of
incorporation and bylaws, copies of which will be furnished to an investor
upon written request. See "Additional Information."
COMMON STOCK
Bronze Marketing is presently authorized to issue 24,000,000 shares of
common stock. Bronze Marketing presently has 1,000,000 shares of common stock
outstanding. Bronze Marketing has reserved from its authorized but unissued
shares a sufficient number of shares of common stock for issuance of the
shares in this offering. The shares of common stock to be issued on
completion of the offering will be, when issued according to the terms of the
offering, fully paid and non-assessable.
The holders of common stock, including the shares in this offering, are
entitled to equal dividends and distributions, per share, on the common stock
when, as and if declared by the board of directors from funds legally
available for that. No holder of any shares of common stock has a pre-emptive
right to subscribe for any securities of Bronze Marketing nor are any common
shares subject to redemption or convertible into other securities of Bronze
Marketing. Upon liquidation, dissolution or winding up of Bronze Marketing,
and after payment of creditors and preferred stockholders, if any, the assets
will be divided pro-rata on a share-for-share basis among the holders of the
shares of common stock. All shares of common stock now outstanding are fully
paid, validly issued and non-assessable. Each share of common stock is
entitled to one vote on the election of any director or any other matter upon
which shareholders are required or permitted to vote. Holders of common stock
do not have cumulative voting rights, so that the holders of more than 50% of
<PAGE>
the combined shares voting for the election of directors may elect all of the
directors, if they choose to do so and, in that event, the holders of the
remaining shares will not be able to elect any members to the board of
directors.
PREFERRED STOCK
Bronze Marketing is also presently authorized to issue 1,000,000 shares
of preferred stock. Under the articles of incorporation, the board of
directors has the power, without further action by the holders of the common
stock, to designate the relative rights and preferences of the preferred
stock, and issue the preferred stock in one or more series as designated by
the board of directors. The designation of rights and preferences could
include preferences as to liquidation, redemption and conversion rights,
voting rights, dividends or other preferences, any of which may be dilutive of
the interest of the holders of the common stock or the preferred stock of any
other series. The issuance of preferred stock may have the effect of delaying
or preventing a change in control of Bronze Marketing without further
shareholder action and may adversely effect the rights and powers, including
voting rights, of the holders of common stock. In certain circumstances, the
issuance of preferred stock could depress the market price of the common
stock. The board of directors effects a designation of each series of
preferred stock by filing with the Nevada Secretary of State a Certificate of
Designation defining the rights and preferences of each series. Documents so
filed are matters of public record and may be examined according to procedures
of the Nevada Secretary of State, or copies may be obtained from Bronze
Marketing.
WARRANTS
Bronze Marketing has declared a distribution of 1,000,000 common stock
purchase warrants to shareholders of record as of __________, 1999. The
warrants are exercisable at $1.00 per share, until June 30, 2002, upon
effectiveness of registration of the warrants and underlying shares.
(a) Bronze Marketing may redeem all or a portion of the warrants,
at $.01 per warrant, at any time upon 30 days' prior written notice to
the warrant holders. The warrants may be redeemed whether or not a
current registration statement is in effect. Any warrant holder who
does not exercise his warrants before the Redemption Date, as set forth
on the Notice of Redemption, will forfeit his right to purchase the
shares of common stock underlying the warrants, and after the Redemption
Date any outstanding warrants referred to in the Notice will become void
and be canceled. If we do not redeem the warrants, they will expire at
the conclusion of the exercise period unless extended by Bronze
Marketing.
(b) Bronze Marketing may at any time, and from time to time,
extend the exercise period of the warrants if written notice of the
extension is given to the warrant holders before the expiration date.
Also, Bronze Marketing may, at any time, reduce the exercise price by
written notification to the holders. We do not presently contemplate
any extensions of the exercise period or reduction in the exercise price
of the warrants.
<PAGE>
(c) The warrants contain anti-dilution provisions on the
occurrence of events like stock splits or stock dividends. The anti-
dilution provisions do not apply in the event of a merger or
acquisition. In the event of liquidation, dissolution or winding-up of
Bronze Marketing, warrant holders will not be entitled to participate in
the assets of Bronze Marketing. Warrant holders have no voting,
preemptive, liquidation or other rights of a stockholder of a company,
and no dividends may be declared on the warrants.
(d) The warrants may be exercised by surrendering to Bronze
Marketing, a warrant certificate evidencing the warrants to be
exercised, with the exercise form included duly completed and executed,
and paying to Bronze Marketing the exercise price per share in cash or
check payable to Bronze Marketing. Stock certificates will be issued as
soon thereafter as practicable.
(e) The warrants will not be exercisable unless the warrants and
the shares of common stock underlying the warrants are registered or
otherwise qualified in applicable jurisdictions.
(f) The warrants are nontransferable by their terms, cannot be
transferred without the consent of Bronze Marketing and will be
"restricted securities" under the definition of that term used in Rule
144. The warrants will be stamped with a restrictive legend.
SHARES ELIGIBLE FOR FUTURE SALE
Of the 1,000,000 shares of common stock outstanding before the exercise
of any warrants, 100,000 shares are currently freely tradeable. In addition,
the 1,000,000 shares of common stock underlying the warrants will also be
freely tradeable into the public market immediately upon issuance. Sales of
substantial amounts of this common stock in the public market could adversely
affect the market price of the common stock. Furthermore, all of the
remaining shares of common stock presently outstanding are restricted and/or
affiliate securities which are not presently, but may in the future be sold,
under Rule 144, into any public market that may exist for the common stock.
Future sales by current shareholders could depress the market prices of the
common stock in any market.
In general, under Rule 144 as currently in effect, a person (or group of
persons whose shares are aggregated), including affiliates of an issuer, can
sell within any three-month period, an amount of restricted securities that
does not exceed the greater of 1% of the total number of outstanding shares of
the same class, or (if the stock becomes quoted on NASDAQ or a stock
exchange), the reported average weekly trading volume during the four calendar
weeks preceding the sale; if at least one year has elapsed since the
restricted securities being sold were acquired from the issuer or any
affiliate of the issuer, and certain other conditions are also satisfied. If
at least two years have elapsed since the restricted securities were acquired
from the issuer or an affiliate of the issuer, a person who has not been an
affiliate of the issuer for at least three months can sell restricted shares
under Rule 144 without regard to any limitations on the amount.
<PAGE>
PLAN OF DISTRIBUTION
This prospectus and the registration statement of which it is part
relate to the offer and sale of 1,000,000 shares of common stock of Bronze
Marketing to be issued upon the exercise of the warrants at an exercise price
of $1.00 per share. The warrants will be distributed as a dividend on the
common stock of Bronze Marketing to all shareholders of record as of
__________, 1999. The warrants are exercisable until June 30, 2002, if this
prospectus is still current or has been updated.
The offering will be managed by Bronze Marketing without an underwriter,
and the shares will be offered and sold by Bronze Marketing, without any
discount, sales commissions or other compensation being paid to anyone in
connection with the offering. Bronze Marketing will pay the costs of
preparing, mailing and distributing this prospectus to holders of the
warrants. Brokers, nominees, fiduciaries and other custodians will be
requested to forward copies of this prospectus to the beneficial owners of
securities held of record by them, and the custodians will be reimbursed for
their expenses.
We do not know that all or any shares will be sold, and there is no
requirement nor escrow provisions to assure that any minimum amount of
warrants will be exercised. All funds received upon the exercise of any
warrants will be immediately available to Bronze Marketing for its use.
EXERCISE PROCEDURES
The warrants may be exercised in whole or in part by presentation of the
warrant certificate, with the purchase form on the reverse side filled out and
signed at the bottom, together with payment of the exercise price and any
applicable taxes at the principal office of Interwest Stock Transfer Co., 1981
East 4800 South, Suite 100, Salt Lake City, Utah 84117. Payment of the
exercise price shall be made in lawful money of the United States of America
in cash or by cashier's or certified check payable to the order of "Bronze
Marketing, Inc., Warrant Exercise Account."
All holders of warrants will be given an independent right to exercise
their purchase rights. If, as and when properly completed and duly executed
notices of exercise are received by the Transfer Agent and/or Warrant Agent,
together with the Certificates being surrendered and full payment of the
Exercise Price in cleared funds, the checks or other funds will be delivered
to Bronze Marketing and the Transfer Agent and/or Warrant Agent will promptly
issue certificates for the underlying common stock. It is presently estimated
that certificates for the shares of common stock will be available for
delivery in Salt Lake City, Utah at the close of business on the tenth
business day after the receipt of all required documents and funds.
<PAGE>
LEGAL MATTERS
To the knowledge of management, there is no material litigation pending
or threatened against Bronze Marketing. The validity of the issuance of the
shares in this offering will be passed upon for Bronze Marketing by Thomas G.
Kimble & Associates, Salt Lake City, Utah.
EXPERTS
The December 31, 1998 financial statements of Bronze Marketing, included
in this prospectus have been examined by Pritchett, Siler & Hardy, P.C.,
independent certified public accountants, as indicated in their report on the
financial statements, and are included in this prospectus in reliance on the
report given upon the authority of that firm as experts in accounting and
auditing.
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
DECEMBER 31, 1998
PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Independent Auditor's Report 1
- Balance Sheet, December 31, 1998 2
- Statements of Operations, for the year ended
December 31, 1998 and for the periods
from inception on May 1, 1997 through
December 31, 1997 and 1998 3
- Statement of Stockholders' Equity, from
inception on May 1, 1997 through
December 31, 1998 4
- Statements of Cash Flows, for the year ended
December 31, 1998 and for the periods
from inception on May 1, 1997 through
December 31, 1997 and 1998 5
- Notes to Financial Statements 6 - 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
BRONZE MARKETING, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Bronze
Marketing, Inc. [a development stage company] at December 31,
1998, and the related statements of operations, stockholders'
equity and cash flows for the year ended December 31, 1998 and
for the periods from inception on May 1, 1997 through December
31, 1997 and 1998. 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 audited by us present
fairly, in all material respects, the financial position of
Bronze Marketing, Inc. as of December 31, 1998, and the results
of its operations and its cash flows for the year ended December
31, 1998 and for the periods from inception through December 31,
1997 and 1998, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 6 to the financial statements, the Company has incurred
losses since its inception, has current liabilities in excess of
current assets and has not yet been successful in establishing
profitable operations, raising substantial doubt about its
ability to continue as a going concern. Management's plans in
regards to these matters are also described in Note 6. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
/s/ Pritchett, Siler & Hardy, P.C.
March 17, 1999
Salt Lake City, Utah
1
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
December 31,
1998
___________
CURRENT ASSETS:
Cash in bank $ 24
Advance receivable - related party 9,000
Interest receivable - related party 2,554
___________
Total Current Assets 11,578
___________
OTHER ASSETS:
Notes receivable - related party 36,489
Organization costs, net 666
___________
Total Other Assets 37,155
___________
Total Assets $ 48,733
___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ -
Advance from shareholders 14,000
___________
14,000
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
1,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
24,000,000 shares authorized,
1,000,000 shares issued and
outstanding 1,000
Capital in excess of par value 34,476
Deficit accumulated during the
development stage (743)
___________
Total Stockholders' Equity 34,733
___________
$ 48,733
___________
The accompanying notes are an integral part of this financial
statement.
2
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
From Inception
on May 1,
For the 1997 Through
Year Ended December 31,
December 31, __________________
1998 1997 1998
___________ ________ ________
REVENUE:
Sales Royalties $ - $ 2,079 $ 2,079
Interest Income 2,554 - 2,554
___________ ________ ________
EXPENSES:
General and Administrative (3,058) (2,318) (5,376)
___________ ________ ________
LOSS BEFORE INCOME TAXES (504) (239) (743)
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
___________ ________ ________
NET LOSS $ (504) $ (239) $ (743)
___________ ________ ________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00)
___________ ________ ________
The accompanying notes are an integral part of these financial
statements.
3
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MAY 1, 1997
THROUGH DECEMBER 31, 1998
Capital Deficit
Preferred Stock Common Stock in Accumulated
_________________ ____________________ Excess During the
of Par Development
Shares Amount Shares Amount Value Stage
________ ________ __________ _________ ________ ___________
BALANCE, May 1, 1997 - $ - - $ - $ - $ -
Issuance of 900,000
shares common stock
for cash, May 7,
1997 at $.006 per
share - - 900,000 900 4,500 -
Issuance of 100,000
shares common stock
for cash, July, 1997
at $.35 per share,
net of offering
costs of $4,924 - - 100,000 100 29,976 -
Net loss for the
period ended
December 31, 1997 - - - - - (239)
________ ________ __________ _________ ________ ___________
BALANCE,
December 31, 1997 - - 1,000,000 1,000 34,476 (239)
Net loss for the
period ended
December 31, 1998 - - - - - (504)
________ ________ __________ _________ ________ ___________
BALANCE,
December 31, 1998 - $ - 1,000,000 $ 1,000 $34,476 $ (743)
________ ________ __________ _________ ________ ___________
The accompanying notes are an integral part of this financial
statement.
4
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
From Inception
on May 1,
For the 1997 Through
Year Ended December 31,
December 31, ___________________
1998 1997 1998
____________ _________ _________
Cash Flows From Operating Activities:
Net loss $ (504) $ (239) $ (743)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Amortization Expense 200 134 334
Change in assets and liabilities:
(Increase) decrease in interest
receivable (2,554) - (2,554)
Increase (decrease) in accounts
payable (300) 300 -
____________ _________ _________
Net Cash (Used) by Operating
Activities (3,158) 195 (2,963)
____________ _________ _________
Cash Flows From Investing Activities:
Payment of organization costs - (1,000) (1,000)
(Increase) in note receivable -
related party - (36,489) (36,489)
(Increase) in advance receivable -
related party (9,000) - (9,000)
____________ _________ _________
Net Cash (Used) by Investing
Activities (9,000) (37,489) (46,489)
____________ _________ _________
Cash Flows From Financing Activities:
Proceeds from common stock issuance - 40,400 40,400
Proceeds from advance from
shareholder 10,500 3,500 14,000
Stock Offering Costs - (4,924) (4,924)
____________ _________ _________
Net Cash Provided by Financing
Activities 10,500 38,976 49,476
____________ _________ _________
Net Increase (Decrease) in Cash (1,658) 1,682 24
Cash at Beginning of Period 1,682 - -
____________ _________ _________
Cash at End of Period $ 24 $ 1,682 $ 24
____________ _________ _________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the year ended December 31, 1998:
None
For the period ended December 31, 1997:
None
The accompanying notes are an integral part of these financial
statements.
5
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the
State of Nevada on May 1, 1997. The Company initially engaged in
the business of providing inventory financing to facilitate the
marketing of bronze artwork and sculptures created by a relative
of the Company's President. The Company received royalties from
the sale of the Inventory. However, during 1998 the Company
restructured its business plans and currently is holding interest
bearing notes. The Company has, at the present time, not paid
any dividends and any dividends that may be paid in the future
will depend upon the financial requirements of the Company and
other relevant factors. The Company has not generated
significant revenues and is considered a development stage
company as defined in SFAS No. 7.
Organization Costs - The Company is amortizing its organization
costs, which reflect amounts expended to organize the Company,
over sixty [60] months using the straight line method.
Revenue Recognition - The Company recognizes revenue from sales
royalties in the period when the underlying sales take place.
Loss Per Share - The Company computes loss per share in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 128 "Earnings Per Share," which requires the Company
to present basic earnings per share and dilutive earning per
share when the effect is dilutive. [See Note 7]
Income Taxes - The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes." This statement requires an
asset and liability approach for accounting for income taxes.
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income", SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information", SFAS No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits",
SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities", and SFAS No. 134, "Accounting for
Mortgage-Backed Securities." were recently issued. These
accounting standards have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
6
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - ADVANCES AND NOTE RECEIVABLE - RELATED PARTY
During 1998, the Company made advances for the casting of
sculptures amounting to $9,000. These amounts have not yet been
secured by a note receivable and the Company has not accrued
interest on the balance. The advances were made to an entity
owned by the brother of the Company's President.
During 1997, the Company made advances for the casting of
sculptures amounting to $36,489. The advances were made to an
entity owned by the brother of the Company's President. The
advances were converted to a note receivable during January,
1998. The note provides for interest at 7 percent per annum and
is due January 1, 2000. The note also provides for payments to
be made as certain related sculptures are sold. As of December
31, 1998, no payments had been received on the Note [See Note 5].
NOTE 3 - CAPITAL STOCK
Common Stock - During May, 1997, in connection with its
organization, the Company issued 900,000 shares of its previously
authorized, but unissued common stock. Total proceeds from the
sale of stock amounted to $5,400 (or $.006 per share).
Public Offering of Common Stock - The Company made a public
offering of 100,000 shares of its previously authorized but
unissued common stock. This offering was exempt from
registration with the Securities and Exchange Commission under
Rule 504 of Regulation D as promulgated under the Securities Act
of 1933, as amended. The offering price of $.35 per share was
arbitrarily determined by the Company. The offering was managed
by the Company without any underwriter. The shares were offered
and sold by an officer of the Company, who received no sales
commissions or other compensation in connection with the
offering, except for reimbursement of expenses actually incurred
on behalf of the Company in connection with the offering. The
Company incurred stock offering costs of $4,924 in connection
with the stock offering. The stock offering costs have been
netted against the proceeds of the public stock offering.
Preferred Stock - The Company has authorized 1,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences
and designations and to be issued in such series as determined by
the Board of Directors. No shares are issued and outstanding at
December 31, 1998.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". FASB 109 requires the Company to provide a
net deferred tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book
and tax accounting methods and any available operating loss or
tax credit carryforwards. The Company has available at December
31, 1998, an operating loss carryforward of approximately $700,
which may be applied against future taxable income and which
expires in various years through 2018.
7
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - INCOME TAXES [Continued]
The amount of and ultimate realization of the benefits from the
operating loss carryforward for income tax purposes is dependent,
in part, upon the tax laws in effect, the future earnings of the
Company, and other future events, the effects of which cannot be
determined. Because of the uncertainty surrounding the
realization of the loss carryforward the Company has established
a valuation allowance equal to the amount of the loss
carryforward and, therefore, no deferred tax asset has been
recognized for the loss carryforward. The net deferred tax asset
is approximately $250 as of December 31, 1998, with an offsetting
valuation allowance at December 31, 1998 of the same amount. The
change in the valuation allowance for 1998 is approximately $170.
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any
compensation to its officers and directors as the services
provided by them to date have only been nominal.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use her office as a mailing address, as needed, at no
expense to the Company.
Advance From Shareholders - During 1998, a shareholder of the
Company advanced a total of $10,500 to the Company. The advances
are due upon demand and do not accrue interest
During 1997, two shareholders of the Company advanced a total of
$3,500 to the Company. The advances are due upon demand and do
not accrue interest.
Marketing Arrangement - The Company had entered into an
arrangement with the brother of the Company's President, who is a
freelance artist and who has an inventory of original bronze
sculptures which are being re-produced and marketed in limited
editions. The Company raised capital to provide financing to
produce limited edition bronze sculptures which will be placed in
art studios and galleries on consignment. Upon the ultimate sale
of the sculptures the Company was to receive the casting costs
plus an amount from 3 to 7 percent of the underlying sales
proceeds depending upon the level of sales achieved. As of
December 31, 1997 the Company had received payments of $2,079
based on sales.
Advance and Note Receivable - On January 1, 1998, the above
marketing arrangement was amended to include the conversion of
the advances to a note receivable for $36,489. Specific
sculptures were also identified as collateral for the Note. The
note matures on January 1, 2000 but provides for payments as
specific sculptures are sold. The note also provides for
interest at 7 percent per annum.
During 1998 the Company made additional advances for the
production of sculptures totaling $9,000 which have not yet been
converted to a note payable. No interest has been accrued on the
additional advances.
8
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception, has
current liabilities in excess of current assets of $2,422 and has
not yet been successful in establishing profitable operations.
These factors raise substantial doubt about the ability of the
Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds
not provided by operations through loans and/or through
additional sales of its common stock. There is no assurance that
the Company will be successful in raising this additional capital
or achieving profitable operations. The financial statements do
not include any adjustments that might result from the outcome of
these uncertainties.
NOTE 7 -LOSS PER SHARE
The following data show the amounts used in computing loss per
share and the weighted average number of shares of common
stock for the year ended December 31, 1998 and for the periods
from inception through December 31, 1997 and 1998:
From Inception
on May 1,
For the 1997 Through
Year Ended December 31,
December 31, ___________________
1998 1997 1998
____________ _________ _________
Income (loss) from continuing
operations applicable to
common stock $ (504) $ (239) $ (743)
Less: preferred dividends - - -
____________ _________ _________
Income (loss) available to common
Stockholders used in loss per share $ (504) $ (239) $ (743)
____________ _________ _________
Weighted average number of common
shares outstanding during the
period used in earnings (loss)
per share 1,000,000 956,590 982,608
____________ _________ _________
Dilutive loss per share was not presented, as the Company had no
common equivalent share for all periods presented that would
effect the computation of diluted loss per share.
9
BRONZE MARKETING, INC.
[A Development Stage Company]
BALANCE SHEET
[Unaudited - See Accountant's Disclaimer]
ASSETS
June 30,
1999
___________
CURRENT ASSETS:
Cash in bank $ 133
___________
Total Current Assets 133
___________
OTHER ASSETS:
Receivables - related party, net 23,450
___________
Total Other Assets 23,450
___________
$ 23,583
___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,600
Advance from shareholders 14,300
___________
Total Current Liabilities 15,900
___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
1,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
24,000,000 shares authorized,
1,000,000 shares issued and
outstanding 1,000
Capital in excess of par value 34,476
(Deficit) accumulated during the
development stage (27,793)
___________
Total Stockholders' Equity 7,683
___________
$ 23,583
___________
The accompanying notes are an integral part of this financial
statement.
1
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
STATEMENT OF OPERATIONS
[Unaudited - See Accountant's Disclaimer]
For the For the
Three Month Six Month
Period Ended Period Ended From Inception
June 30, June 30, on May 1,
___________________ ___________________ 1997 Through
1999 1998 1999 1998 June 30, 1999
_________ _________ _________ _________ _____________
REVENUE:
Sales Royalties $ - $ - $ - $ - $ 2,079
Interest Income -
related party 630 630 1,267 1,267 3,821
_________ _________ _________ _________ _____________
Total Revenues 630 630 1,267 1,267 5,900
_________ _________ _________ _________ _____________
EXPENSES:
General and
Administrative 67 49 1,791 2,627 7,167
Bad debt expense -
related party - - 25,860 - 25,860
_________ _________ _________ _________ _____________
Total Expenses 67 49 27,651 2,627 33,027
_________ _________ _________ _________ _____________
INCOME (LOSS) BEFORE
INCOME TAXES 563 581 (26,384) (1,360) (27,127)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
_________ _________ _________ _________ _____________
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE CHANGE IN
ACCOUNTING PRINCIPLE 563 581 (26,384) (1,360) (27,127)
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE - - (666) - (666)
_________ _________ _________ _________ _____________
NET INCOME (LOSS) $ 563 $ 581 $(27,050) $ (1,360) $ (27,793)
_________ _________ _________ _________ _____________
INCOME (LOSS) PER COMMON
SHARE:
Continuing operations $ .00 $ .00 $ (.03) $ (.00) $ (.03)
Cumulative effect of
change in accounting
principle - - (.00) - (.00)
_________ _________ _________ _________ _____________
Net Income (Loss) $ .00 $ .00 $ (.03) $ (.00) $ (.03)
_________ _________ _________ _________ _____________
The accompanying notes are an integral part of these financial
statements.
2
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
[Unaudited - See Accountant's Disclaimer]
For the
Six Month
Period Ended From Inception
June 30, on May 1,
___________________ 1997 Through
1999 1998 June 30, 1999
_________ _________ _____________
Cash Flows From Operating Activities:
Net income (loss) $(27,050) $ (1,360) $(27,793)
Adjustments to reconcile net loss to
net cash used by operating activities:
Bad debt expense - related party 25,860 - 25,860
Amortization expense - 100 334
Effect of change in accounting
principle 666 - 666
Change in assets and liabilities
(Increase) in interest receivable -
related party (1,267) (1,267) (3,821)
Increase in accounts payable 1,600 2,017 1,600
_________ _________ _____________
Net Cash Used by Operating
Activities (191) (510) (3,154)
_________ _________ _____________
Cash Flows From Investing Activities:
(Increase) in notes receivable -
related party - - (36,489)
(Increase) in advances - related party - (9,000) (9,000)
Payment of organization costs - - (1,000)
_________ _________ _____________
Net Cash Used by Investing
Activities - (9,000) (46,489)
_________ _________ _____________
Cash Flows From Financing Activities:
Proceeds from common stock issuance - - 40,400
Proceeds from advance from shareholder 300 10,000 14,300
Payment of stock Offering Costs - - (4,924)
_________ _________ _____________
Net Cash Provided by Financing
Activities 300 10,000 49,776
_________ _________ _____________
Net Increase in Cash 109 490 133
Cash at Beginning of Period 24 1,682 -
_________ _________ _____________
Cash at End of Period $ 133 $ 2,172 $ 133
_________ _________ _____________
[Continued]
3
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
[Unaudited - See Accountant's Disclaimer]
For the
Six Month
Period Ended From Inception
June 30, on May 1,
___________________ 1997 Through
1999 1998 June 30, 1999
_________ _________ _____________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the period ended June 30, 1999:
The Company expensed organizational costs in accordance with
Statement of Position 98-5.
The Company reduced related party receivables and advances to
their estimated net realizable value.
The accompanying notes are an integral part of these financial
statements.
4
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the
State of Nevada on May 1, 1997. The Company initially engaged in
the business of providing inventory financing to facilitate the
marketing of bronze artwork and sculptures created by a relative
of the Company's President. The Company received royalties from
the sale of the Inventory. However, during 1999 the Company has
restructured its business plans and currently plans to market and
sell bronze artwork and sculptures which are created by the
relative. The Company has, at the present time, not paid any
dividends and any dividends that may be paid in the future will
depend upon the financial requirements of the Company and other
relevant factors. The Company has not generated significant
revenues and is considered a development stage company as defined
in SFAS No. 7.
Interim Financial Statements - The accompanying interim financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June
30, 1999 and for all the periods presented have been made.
Organization Costs - Organization costs, which reflect amounts
expended to organize the Company, amounted to $1,000. During
1999, the remaining $666 in organizational cost were expensed in
accordance with Statement of Position 98-5, "Reporting on the
Costs of Start-Up Activities".
Revenue Recognition - The Company recognizes revenue from
royalties in the period when the underlying sales take place.
Revenue from sales are recognized in the period the sales take
place.
Loss Per Share - The Company computes loss per share in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 128 "Earnings Per Share," which requires the Company
to present basic earnings per share and dilutive earning per
share when the effect is dilutive. [See Note 6]
Income Taxes - The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes." This statement requires an
asset and liability approach for accounting for income taxes.
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
NOTE 2 - CAPITAL STOCK
Common Stock - During May, 1997, in connection with its
organization, the Company issued 900,000 shares of its previously
authorized, but unissued common stock. Total proceeds from the
sale of stock amounted to $5,400 (or $.006 per share).
5
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK [Continued]
Public Offering of Common Stock - The Company made a public
offering of 100,000 shares of its previously authorized but
unissued common stock. This offering was exempt from
registration with the Securities and Exchange Commission under
Rule 504 of Regulation D as promulgated under the Securities Act
of 1933, as amended. The offering price of $.35 per share was
arbitrarily determined by the Company. The offering was managed
by the Company without any underwriter. The shares were offered
and sold by an officer of the Company, who received no sales
commissions or other compensation in connection with the
offering, except for reimbursement of expenses actually incurred
on behalf of the Company in connection with the offering. The
Company incurred stock offering costs of $4,924 in connection
with the stock offering. The stock offering costs have been
netted against the proceeds of the public stock offering.
Preferred Stock - The Company has authorized 1,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences
and designations and to be issued in such series as determined by
the Board of Directors. No shares are issued and outstanding at
June 30, 1999.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". FASB 109 requires the Company to provide a
net deferred tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book
and tax accounting methods and any available operating loss or
tax credit carryforwards. The Company has available at June 30,
1999, an operating loss carryforward of approximately $1,933,
which may be applied against future taxable income and which
expires in various years through 2019.
The amount of and ultimate realization of the benefits from the
operating loss carryforward for income tax purposes is dependent,
in part, upon the tax laws in effect, the future earnings of the
Company, and other future events, the effects of which cannot be
determined. Because of the uncertainty surrounding the
realization of the loss carryforward the Company has established
a valuation allowance equal to the amount of the loss
carryforward and, therefore, no deferred tax asset has been
recognized for the loss carryforward. The net deferred tax asset
is approximately $4,000 as of June 30, 1999, with an offsetting
valuation allowance at June 30, 1999 of the same amount. The
change in the valuation allowance for the six months ended June
30, 1999 is approximately $3,750.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any
compensation to its officers and directors as the services
provided by them to date have only been nominal.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use her office as a mailing address, as needed, at no
expense to the Company.
6
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS [Continued]
Advance From Shareholders - During 1999, a shareholder of the
Company advanced a total of $300 to the Company. The advances
are due upon demand and do not accrue interest.
During 1998, a shareholder of the Company advanced a total of
$10,500 to the Company. The advances are due upon demand and do
not accrue interest.
During 1997, two shareholders of the Company advanced a total of
$3,500 to the Company. The advances are due upon demand and do
not accrue interest.
Note Receivable/Advances - The Company had entered into an
arrangement with the brother of the Company's President, who is a
freelance artist and who has an inventory of original bronze
sculptures which are being re-produced and marketed in limited
editions. The Company raised capital to provide financing to
produce limited edition bronze sculptures which will be placed in
art studios and galleries on consignment. Upon the ultimate sale
of the sculptures the Company was to receive the casting costs
plus an amount from 3 to 7 percent of the underlying sales
proceeds depending upon the level of sales achieved. During
1997, the Company received royalty payments of $2,079 based on
sales.
On January 1, 1998, the above marketing arrangement was amended
to include the conversion of the advances to a note receivable
for $36,489. Specific sculptures were also identified as
collateral for the note. The note matures on January 1, 2000 but
provides for payments as specific sculptures are sold. The note
also provides for interest at 7% per annum. Interest income of
$3,821 has been accrued on the note receivable as of June 30,
1999. No payments have been received on the note as of June 30,
1999.
During 1998 the Company made additional advances for the
production of sculptures totaling $9,000 which have not yet been
converted to a note payable. The advances were made to an entity
owned by the brother of the Company's President. No interest has
been accrued on the additional advances. As of June 30, 1999 no
payments have been received on the advances.
On September 1, 1999, the Company entered into an agreement with
the brother of the Company's president which supercedes and
amends the above agreements. The terms of the new agreement
provides for the Company to take ownership of the remaining
sculpture inventory as payment in full on the advances, notes
receivable and accrued interest, which totaled $49,310 at June
30, 1999. The inventory will be valued at $23,450 by the
Company, which takes into account the carry-over basis of the
inventory and expected future realization of the inventory.
Accordingly, the balance of the related party receivables at June
30, 1999 have been adjusted down to $23,450, the estimated value
of the inventory subsequently received [See Note 7].
7
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception, has
current liabilities in excess of current assets of $15,767 and
has not yet been successful in establishing profitable
operations. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. In this
regard, management is proposing to raise any necessary additional
funds not provided by operations through loans and/or through
additional sales of its common stock. There is no assurance that
the Company will be successful in raising this additional capital
or achieving profitable operations. The financial statements do
not include any adjustments that might result from the outcome of
these uncertainties.
NOTE 6 - LOSS PER SHARE
The following data show the amounts used in computing loss per
share and the weighted average number of shares of common
stock outstanding for the periods presented:
For the
Six Month
Period Ended From Inception
June 30, on May 1,
___________________ 1997 Through
1999 1998 June 30, 1999
_________ _________ _____________
Loss from continuing operations
available to common shareholders
(Numerator) $ 563 $(26,384) $(27,127)
Cumulative effect of change in
Change in accounting principle
(Numerator) $ - $ (666) $ (666)
_________ _________ _____________
Weighted average number of common
shares outstanding during the
period used in loss per share
(Denominator) 1,000,000 1,000,000 986,592
_________ _________ _____________
Dilutive loss per share was not presented, as the Company had no
common equivalent share for all periods presented that would
effect the computation of diluted loss per share.
NOTE 7 - SUBSEQUENT EVENTS
On September 1, 1999, the Company entered into an agreement with
the brother of the Company's president which supercedes and
amends previous agreements with the related party. The terms of
the new agreement provides for the Company to take ownership of
the remaining sculpture inventory as payment in full on the
advances, notes receivable and accrued interest, which totaled
$49,310 at June 30, 1999. The inventory will be valued at
$23,450 by the Company, which takes into account the carry-over
basis of the inventory and expected future realization of the
inventory. Accordingly, the balance of the related party
receivables at June 30, 1999 have been adjusted down to $23,450,
the estimated value of the inventory subsequently received [See
Note 4].
8
No dealer, salesman or other person is
authorized to give any information or to
make any representations other that those
contained in this prospectus in connection
with the offer made in this offering. If
given or made, the information or
representations must not be relied upon
as having been authorized by Bronze
Marketing. This prospectus does not
constitute an offer to sell or a solicitation
of an offer to buy any of the securities
covered in this offering in any jurisdiction
or to any person to whom it is unlawful to
make the offer or solicitation in the
jurisdiction. Neither the delivery of this
prospectus nor any sale made hereunder
shall, in any circumstances, create any
implication that there has been no change
in the affairs of Bronze Marketing since
the date of this prospectus.
Until [90 days after the date of this
prospectus], 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
obligation of dealers to deliver a
prospectus when acting as underwriters
on their unsold allotments or
subscriptions.
BRONZE MARKETING, INC.
1,000,000 shares
Common Stock
PROSPECTUS
, 1999
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The statutes, charter provisions, bylaws, contracts or other arrangements
under which controlling persons, directors or officers of the registrant are
insured or indemnified in any manner against any liability which they may
incur in such capacity are as follows:
(a) Section 78.751 of the Nevada Business Corporation Act provides that each
corporation shall have the following powers:
1. A corporation may indemnify any person who was or is a party or is
threatened to be made party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by him
in connection with the action, suit or proceeding if he acted in good faith
and in a manner which 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. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses,
including amounts paid in settlement and attorneys' fees actually and
reasonably incurred by him in connection with the defense or settlement of
the action or suit if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue or matter
as to which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable to the
corporation or for amounts paid in settlement to the corporation, unless and
only to the extent that the court in which the action or suit was brought or
other court of competent jurisdiction, determines upon application that in
view of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsections 1 and 2, or in defense of any claim,
issue or matter therein, he must be indemnified by the corporation against
expenses, including attorneys' fees, actually and reasonably incurred by him
in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by a court
or advanced pursuant to subsection 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the act, suit
or proceeding cannot be obtained, by independent legal counsel in a written
opinion.
5. The certificate or articles of incorporation, the bylaws or an agreement
made by the corporation may provide that the expenses of officers and
directors incurred in defending a civil or criminal action, suit or proceeding
must be paid by the corporation as they are incurred and in advance of the
final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if
it is ultimately determined by a court of competent jurisdiction that he is
not entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which
corporate personnel other than director of officers may be entitled under any
contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
certificate or articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an action in
his official capacity or an action in another capacity while holding his
office, except that indemnification, unless ordered by a court pursuant to
subsection 2 or for the advancement of expenses made pursuant to subsection 5,
may not be made to or on behalf of any director or officer if a final
adjudication establishes that his acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was material to the
cause of action.
(b) Continues for a person who has ceased to be a director, officer, employee
or agent and inures to the benefit of the heirs, executors and administrators
of such a person."
(b) The registrant's Articles of Incorporation limit liability of its
Officers and Directors to the full extent permitted by the Nevada Business
Corporation Act.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
The following table sets forth all estimated costs and expenses, other than
underwriting discounts, commissions and expense allowances, payable by the
registrant in connection with the maximum offering for the securities included
in this registration statement:
Amount
SEC registration fee $ 278.00
Blue sky fees and expenses 1,500.00
Printing and shipping expenses 500.00
Legal fees and expenses 15,000.00
Accounting fees and expenses 1,000.00
Transfer and Miscellaneous expenses 2,000.00
-----------------
Total $ 20,000.00
* All expenses are estimated except the Commission filing fee.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
In connection with the organization of the Company, its sole officer,
director and other stockholder paid an aggregate of $5,400 cash to purchase
900,000 shares of Common Stock of the Company at a price of $.006 per share.
This transaction was not registered under the Act in reliance on the exemption
from registration in Section 4(2) of the Act, as a transaction not involving
any public offering. These securities were issued as restricted securities
and the certificates were stamped with restrictive legends to prevent any
resale without registration under the Act or in compliance with an exemption.
In July, 1997, the Company completed an offering under Regulation D,
Rule 504 as promulgated by the Securities and Exchange Commission and sold
100,000 shares of common stock, at $.35 per share, to 64 investors and raised
gross proceeds of $35,000. These transactions were not registered under the
Act in reliance on the exemption from registration in Section 3(b) of the Act,
and Rule 504 of Regulation D promulgated thereunder. Form D was filed with
the Securities and Exchange Commission.
ITEM 27. EXHIBITS INDEX
SEC No. Document Exhibit No.
3 Articles of Incorporation 3.1*
3 By-Laws 3.2*
4 Common Stock Specimen Certificate 4.1*
4 Form of Warrant Agreement 4.2*
4 Form of Warrant Certificate 4.3*
5,24 Opinion & Consent of Counsel 5.1 & 24.1*
23 Consent of Accountants 23.1
27 Financial Data Schedules 27
* exhibit previously filed
ITEM 28. UNDERTAKINGS
The registrant hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a post-
effective amendment to this Registration Statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
(ii) Include any additional or changed material information on the plan of
distribution; and
(iii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
Registration Statement.
(2) For determining any liability under the Securities Act, treat each post-
effective amendment as a new Registration Statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
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
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.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
City of Salt Lake, State of Utah, on September 23, 1999.
BRONZE MARKETING, INC.
By: /s/Heather Hamby
Heather Hamby, Chairman (Chief Executive/Financial Officer)
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Thomas G. Kimble or Van L. Butler, the
undersigned's true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same with all exhibits thereto, and all documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing, requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature: /s/Heather Hamby Date: September 23, 1999
Heather Hamby, Director
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting
part of this Amendment No. 1 to the Registration Statement on
Form SB-2 for Bronze Marketing, Inc., of our report dated March
17, 1999, relating to the December 31, 1998 financial statements
of Bronze Marketing, Inc., which appears in such Prospectus. We
also consent to the reference to us under the heading "Experts".
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
September 23, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BRONZE MARKETING, INC. AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> JUN-30-1999 DEC-31-1998
<CASH> 133 24
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 133 11,578
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 23,583 48,733
<CURRENT-LIABILITIES> 15,900 14,000
<BONDS> 0 0
0 0
0 0
<COMMON> 1,000 1,000
<OTHER-SE> 6,683 33,733
<TOTAL-LIABILITY-AND-EQUITY> 23,583 48,733
<SALES> 0 0
<TOTAL-REVENUES> 1,267 2,554
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 27,651 3,058
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (26,384) (504)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (26,384) (504)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> (666) 0
<NET-INCOME> (27,050) (504)
<EPS-BASIC> (.03) (.00)
<EPS-DILUTED> (.03) (.00)
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