U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 333-83351
BRONZE MARKETING, INC.
(Exact name of registrant as specified in its charter)
NEVADA 87-0578370
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
426 South 1000 East, Salt Lake City, Utah 84106
(Address of principal executive offices)
(801) 537-1257
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such report(s), YES [X] NO [ ]
and (2) has been subject to such filing requirements for the past 90 days.
YES [X ] NO [ ]
The number of $.001 par value common shares outstanding at September 30, 2000:
1,050,000
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See attached.
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
CONTENTS
PAGE
Unaudited Condensed Balance Sheets,
September 30, 2000 and December 31, 1999 2
Unaudited Condensed Statements of
Operations, for the three and nine months
ended September 30, 2000 and 1999 and from
inception on May 1, 1997 through September 30,
2000 3
Unaudited Condensed Statements of Cash Flows,
for the nine months ended September 30, 2000
and 1999 and from inception on May 1, 1997
through September 30, 2000 4
Notes to Unaudited Condensed Financial
Statements 5 - 9
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
September 30, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash in bank $ 5,243 $ 10,128
Inventory on consignment 23,450 23,450
___________ ___________
Total Current Assets $ 28,693 $ 33,578
___________ ___________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable - related party $ - $ 790
Advances from shareholders 22,800 22,800
___________ ___________
Total Current Liabilities 22,800 23,590
___________ ___________
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,
1,050,000 shares issued and
outstanding 1,050 1,050
Capital in excess of par value 51,926 51,926
Deficit accumulated during the
development stage (47,083) (42,988)
___________ ___________
Total Stockholders' Equity 5,893 9,988
___________ ___________
$ 28,693 $ 33,578
___________ ___________
Note: The balance sheet at December 31, 1999 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
financial statements.
2
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
For the Three For the Nine From Inception
Months Ended Months Ended on May 1,
September 30, September 30, 1997, Through
__________________ _________________ September 30,
2000 1999 2000 1999 2000
_________ ________ ________ ________ ____________
REVENUE:
Sales Royalties $ - $ - $ - $ - $ 2,079
_________ ________ ________ ________ ____________
Total Revenues - - - - 2,079
_________ ________ ________ ________ ____________
EXPENSES:
General and
Administrative 1,137 4,455 4,095 6,246 26,457
Bad debt
expense -
related
party - - - 25,860 25,860
_________ ________ ________ ________ ____________
Total Expenses 1,137 4,455 4,095 32,106 52,317
_________ ________ ________ ________ ____________
LOSS FROM
OPERATIONS (1,137) (4,455) (4,095) (32,106) (50,238)
OTHER INCOME:
Interest Income
- related party - - - 1,267 3,821
_________ ________ ________ ________ ____________
LOSS BEFORE INCOME
TAXES (1,137) (4,455) (4,095) (30,839) (46,417)
CURRENT TAX
EXPENSE - - - - -
DEFERRED TAX
EXPENSE - - - - -
_________ ________ ________ ________ ____________
LOSS FROM
CONTINUING
OPERATIONS
BEFORE CHANGE IN
ACCOUNTING
PRINCIPLE (1,137) (4,455) (4,095) (30,839) (46,417)
_________ ________ ________ ________ ____________
CUMULATIVE EFFECT
OF CHANGE IN
ACCOUNTING
PRINCIPLE - - - (666) (666)
_________ ________ ________ ________ ____________
NET LOSS $ (1,137)$ (4,455)$ (4,095)$(31,505) $ (47,083)
_________ ________ ________ ________ ____________
LOSS PER COMMON
SHARE:
Continuing
operations $ (.00)$ .00 $ (.00)$ (.03) $ (.05)
Cumulative
Effect of
change in
accounting
principle - - - (.00) (.00)
_________ ________ ________ ________ ____________
Net Loss $ (.00)$ .00 $ (.00)$ (.03) $ (.05)
_________ ________ ________ ________ ____________
The accompanying notes are an integral part of these unaudited
financial statements.
3
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited]
For the Nine From Inception
Months Ended on May 1,
September 30, 1997 Through
___________________ September 30,
2000 1999 2000
_________ _________ ____________
Cash Flows From Operating
Activities:
Net loss $ (4,095)$ (31,505) $ (47,083)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Bad debt expense - related
party - 25,860 25,860
Effect of change in
accounting principle - 666 666
Amortization expense - - 334
Change in assets and
liabilities:
(Increase) in interest
receivable - related
party - (1,267) (3,821)
Increase (decrease) in
accounts payable (790) - -
_________ _________ ____________
Net Cash (Used) by
Operating Activities (4,885) (6,246) (24,044)
_________ _________ ____________
Cash Flows From Investing
Activities:
Payment of organization costs - - (1,000)
(Increase) in note receivable
- related party - - (36,489)
(Increase) in advance
receivable - related party - - (9,000)
_________ _________ ____________
Net Cash (Used) by
Investing Activities - - (46,489)
_________ _________ ____________
Cash Flows From Financing
Activities:
Proceeds from common stock
issuance - - 57,900
Proceeds from advances from
shareholders - 6,800 22,800
Stock offering costs - - (4,924)
_________ _________ ____________
Net Cash Provided by
Financing Activities - 6,800 75,776
_________ _________ ____________
Net Increase (Decrease) in Cash (4,885) 554 5,243
Cash at Beginning of Period 10,128 24 -
_________ _________ ____________
Cash at End of Period $ 5,243 $ 578 $ 5,243
_________ _________ ____________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the periods for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the nine months ended September 30, 2000:
None.
For the nine months ended September 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 unaudited
financial statements.
4
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Bronze Marketing, Inc. (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 restructured its business plans
and currently is attempting to market its inventory of bronze
artwork and sculptures. 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 Statement of Financial Accounting Standards
(SFAS) No. 7.
Condensed Financial Statements - The accompanying 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
September 30, 2000 and 1999 and for the periods then ended have
been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1999 audited financial
statements. The results of operations for the periods ended
September 30, 2000 are not necessarily indicative of the
operating results for the full year.
Organization Costs - Organization costs, which reflect amounts
expended to organize the Company, amounted to $1,000 and 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 upon delivery of the product.
Inventory - Inventory is carried at the lower of cost or market
using the First In, First Out method. [See Note 2]
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 financial
statements, the Company considers all highly liquid debt
investments purchased with a maturity of three months or less to
be cash equivalents.
5
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, 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.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a
not for profit organization or charitable trust that raises or
holds contributions for others", SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133.),", SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No.
53 and Amendment to SFAS No 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued SFAS No.
136, 137, 138, 139 and 140 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - INVENTORY
At September 30, 2000 and December 31, 1999, inventory consisted
of finished bronze sculptures valued at $23,450, acquired from a
relative of the President of the Company [See Note 6]. The
inventory is held on consignment by an art gallery and the
Sculptor in the states of Utah and New York.
NOTE 3 - CAPITAL STOCK AND WARRANTS
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 - During 1997 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. Total
proceeds from the sale of stock amounted to $35,000. 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 as a reduction
to capital in excess of par value.
During December 1999, the Company issued 50,000 shares of its
previously authorized, but unissued common stock. Total proceeds
from the sale of stock amounted to $17,500 (or $.35 per share.)
6
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 3 - CAPITAL STOCK AND WARRANTS [Continued]
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
September 30, 2000.
Common Stock Warrants Offering -. During 1999 the Company
declared a dividend of 1,000,000 warrants to purchase common
stock ("the warrants") to shareholders of record as of October
27, 1999. The Company filed a registration statement with the
United States Securities and Exchange Commission on Form SB-2
under the Securities Act of 1933 to register the shares of common
stock underlying the warrants. Each warrant allows the holder to
acquire one share of common stock at $1.00 per share. The
warrants are exercisable at any time until June 30, 2002. The
Company 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.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". SFAS No. 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
September 30, 2000, an operating loss carryforward of
approximately $46,600, which may be applied against future
taxable income and which expires in various years through 2020.
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 $17,000 as of September 30, 2000, with an
offsetting valuation allowance at September 30, 2000 of the same
amount. The change in the valuation allowance for the nine
months ended September 30, 2000 is approximately $1,500.
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, 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 in achieving profitable operations. The financial statements
do not include any adjustments that might result from the outcome
of these uncertainties.
7
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - 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.
Advances From Shareholders - At September 30, 2000, shareholders
of the Company had advanced a total of $22,800 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 a relative 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 were 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 three to seven 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
provided for payments as specific sculptures were sold. The note
also provided for interest at 7% per annum. Interest income of
$3,821 was earned on the note receivable through September 1,
1999.
During 1998 the Company made additional advances for the
production of sculptures totaling $9,000 The advances were made
to an entity owned by a relative of the Company's President. No
interest has been accrued on the additional advances. No
payments were received on the advances.
On September 1, 1999, the Company entered into an agreement with
a relative 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. The inventory was
valued at $23,450 by the Company, which took into account the
carry-over basis of the inventory and expected future realization
of the inventory [See Note 2]. The excess of $25,860 was
recorded as bad debt expense.
8
<PAGE>
BRONZE MARKETING, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7 - EARNINGS (LOSS) PER SHARE
The following data shows the amounts used in computing loss per
share and the weighted average number of shares of common stock
outstanding for the periods presented:
Three Months Nine Months From Inception
Period Ended Period Ended on May 1,
September 30, September 30, 1997, Through
___________________ ___________________ September 30,
2000 1999 2000 1999 2000
_________ _________ _________ _________ ______________
Loss from
continuing
operations
available to
common
shareholders
(numerator) $ (1,137)$ (4,455)$ (4,095)$ (30,839)$ (46,417)
_________ _________ _________ _________ ______________
Cumulative
effect of
change in
accounting
principle
(numerator) $ - $ - $ - $ (666)$ (666)
_________ _________ _________ _________ ______________
Weighted
average
number of
common
shares
outstanding
during the
period
used in
loss per
share
(denominator) 1,050,000 1,000,000 1,050,000 1,000,000 1,002,611
_________ _________ _________ _________ ______________
Dilutive earnings (loss) per share was not presented, as its
affect for all periods presented was anti dilutive.
At September 30, 2000, the Company had 1,000,000 outstanding
common stock purchase warrants which were not used in the loss
per share computation because their effect would be anti-
dilutive.
During 1999, the Company adopted Statement of Position 98-5 and
accordingly expensed its remaining organization costs of $666.
This has been reflected as a cumulative effect of change in
accounting principle.
9
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS
The Company was incorporated May 1, 1997. Upon inception, the Company
issued 900,000 shares of common stock to its founding stockholders. On May
22, 1997, the Company 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. The Company sold 100,000 shares,
increasing the total issued and outstanding common stock to 1,000,000 shares.
In July, 1999, the Company filed a registration statement on Form SB-2 with
the U.S. Securities & Exchange Commission under the Securities Act of 1933, to
register the distribution and exercise of warrants. This registration
statement was declared effective on October 27, 1999. At that time the
Company became subject to the information requirements of the Securities
Exchange Act of 1934. Accordingly, the Company will file annual and quarterly
reports and other information with the Commission, starting with this report
on Form 10-QSB. No securities have yet been sold pursuant to the offering.
PLAN OF OPERATIONS.
Bronze Marketing was 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 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. There are 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 were no sales royalties generated or
received during 1998 or 1999, because there have not been any sales of the
existing artwork. As a result, Bronze Marketing took ownership of the
remaining sculpture inventory as payment in full of the advances, notes
receivable and accrued interest owed to it, which totaled $49,310 at June 30,
1999. If necessary to provide liquidity, 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 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 $23,450 or 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,
but only of those sculptures which management and the artist believe have the
best market potential, based on indications of interest received. 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.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) None.
(b) None.
(c) See Part I, Item 1 (financial statements) and Item 2 (management's
discussion) for financial information and a discussion regarding
use of proceeds.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BRONZE MARKETING, INC.
Date: November 13, 2000 by: /s/ Heather Hamby
Heather Hamby, President & Director