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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended July 31, 2000
Commission File Number
333-57043
BANNER HOLDING CORP.
(Name of Small Business Issuer in its charter)
FLORIDA 65-0826508
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
120 N. U.S. Highway One 33469
Suite 100 (Zip Code)
Tequesta, FL
(Address of principal executive offices)
Issuer's telephone number: (561) 747-0244
--------------------------------
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[x] Yes [ ] No
As of August 31, 2000 the issuer had 3,200,000 shares of $.01
par value common stock outstanding.
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INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet July 31, 2000
Statement of Operations
Three months ended July 31, 2000
Statement of Cash Flows
Three months ended July 31, 2000
Selected Notes to Financial Statements
Item 2. Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Change in Securities
Item 3. Default Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
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BANNER HOLDING CORP.
(a development stage company)
BALANCE SHEET
July 31, 2000
(unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current assets:
Cash $ 271
Cash restricted 50,004
---------
Total current assets 50,275
Other assets:
Deferred offering costs 66,072
---------
$ 116,347
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 23,215
Liability for stock in escrow 50,004
---------
Total current liabilities 73,219
---------
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized
no shares issued or outstanding --
Common stock, $.01 par value, 25,000,000 shares authorized,
3,200,000 shares issued and outstanding 32,000
Additional paid in capital 88,834
Stock reserved for contingency (50,000)
Deficit accumulated during the development stage (27,706)
---------
Total stockholders' equity 43,128
---------
$ 116,347
=========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
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BANNER HOLDING CORP.
(a development stage company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended July 31, January 26, 1998
--------------------------- (inception) to
2000 1999 July 31, 2000
----------- ----------- ----------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Revenues $ -- $ -- $ --
General and administrative expenses 8,459 1,559 27,706
----------- ----------- -----------
Net loss $ (8,459) $ (1,559) $ (27,706)
=========== =========== ===========
Loss per share, basic and diluted $ (0.00) $ (0.00)
=========== ===========
Weighted averages shares outstanding 3,016,667 3,000,000
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
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BANNER HOLDING CORP.
(a development stage company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three months ended July 31, January 26, 1998
--------------------------- (inception) to
2000 1999 July 31, 2000
----------- ----------- ----------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (8,459) $ (1,559) $(27,706)
Adjustments to reconcile net loss to
net cash used in operating activities:
Non-cash charge for general and
administrative expenses 1,500 1,500 15,000
Changes in assets and liabilities:
Increase in liabilty for stock 4 -- 4
Increase in accounts payable and
accrued expenses 186 8,318 23,215
-------- -------- --------
Net cash provided by operating activities (6,769) 8,259 10,513
-------- -------- --------
Cash flows from financing activities:
Increase in deferred offering costs -- (9,318) (82,590)
Sale of common stock 50,000 -- 50,000
Contribution of capital 6,900 -- 42,824
Proceeds stockholder receivable -- 500 29,528
-------- -------- --------
Net cash used in financing activities 56,900 (8,818) 39,762
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents: 50,131 (559) 50,275
-------- -------- --------
Cash and cash equivalents, beginning of period 144 747 --
-------- -------- --------
Cash and cash equivalents, end of period $ 50,275 $ 188 $ 50,275
======== ======== ========
Supplemental disclosure of cash flow information:
Cash paid for interest during the period $ -- $ -- $ --
======== ======== ========
Cash paid for income taxes during the period $ -- $ -- $ --
======== ======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
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BANNER HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
SELECTED NOTES TO FINANCIAL STATEMENTS
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of the Company for the three months ended
July 31, 2000 and 1999, and for the period from January 26, 1998 (inception) to
July 31, 2000, are unaudited, but, in the opinion of management, reflect the
adjustments, all of which are of a normal recurring nature, necessary for a fair
presentation of these financial statements in accordance with generally accepted
accounting principles. The preparation of financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amount of revenue and expense during the reporting period. Actual results could
differ from those estimates.
The results of operations for an interim period are not necessarily indicative
of the results for a full year.
The interim unaudited financial statements should be read in conjunction with
the financials statements and notes for the year ended April 30, 2000 filed as
part of the Company's Form 10-KSB.
2. GOING CONCERN CONTINGENCY
The Company is a development stage entity having no revenue or operations from
its inception to July 31, 2000. The accompanying financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. As shown
in the accompanying financial statements, the Company incurred a net loss of
$27,706 for the period January 26, 1998 (inception) to July 31, 2000. The
Company has no operations. The Company is dependent upon its shareholders for
its financial support. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
In order to begin any significant operations, the Company will have to pursue
other sources of capital, such as raising equity as discussed in Note 3 and a
merger with an operating company. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
3. SALE OF SECURITIES, PUBLIC OFFERING AND RESTRICTED CASH
The Company is in the process of selling to the public an initial offering of
common stock which calls for a minimum of 200,000 or a maximum of 1,000,000
common shares to be sold at $.25 per share on a "best efforts" basis. As of July
31, 2000, the Company sold 200,000 shares for a total of $50,000 less offering
costs of $16,518. The funds are deposited in a restricted escrow cash account.
Since the funds including interest earnings are returnable, a liability has been
recorded for the contingency. Since the shares may be returnable, the equity
includes a charge for the stock reserved for the contingency.
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BANNER HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
SELECTED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. SALE OF SECURITIES, PUBLIC OFFERING AND RESTRICED CASH (CONTINUED)
If proceeds of this offering are insufficient to conclude a business
combination, the Company may be required to seek additional capital. No
assurance can be given that the Company will be able to obtain such additional
capital, or even if available, that such additional capital will be available on
terms acceptable to the Company. In the event that management determines that
the Company is unable to conduct any business whatsoever, management, subject to
the requirements of SEC Rule 419, which provides that the deposited funds from
the offering will be returned on a pro rata basis if an acquisition meeting
certain prescribed criteria is not consummated within 18 months of the date of
the prospectus (May 3, 2000), may, in its sole discretion, seek stockholders
approval to liquidate the Company. While management has not established any
guidelines for determining at what point in time it might elect to discontinue
its efforts to engage in a business combination and seek stockholder approval to
liquidate the Company, management is subject to the 18 month time frame set
forth in Rule 419 in which to effect an acquisition.
The Company has no revenues to date and is entirely dependent upon the proceeds
of this offering to begin operations relating to selection of a prospective
business combination. Although the Company believes that the proceeds of the
offering will be sufficient to effect a business combination, it has not
identified any combination and therefore; the Company cannot ascertain with any
degree of certainty the capital requirements for any particular transaction. The
Company is limited to utilizing 10% of the net proceeds to search for a target.
In the event that the net proceeds of the offering prove to be insufficient for
purposes of effecting a business combination (because of the size of the
business combination or due to a lack of remaining funds through which to
complete a business combination), the Company will be required to seek
additional financing. If the Company does not locate a suitable business
combination or if the Company expends all of its available resources, the
founding stockholders may lend the Company funds for operations, they may obtain
financing or they may cease operations.
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ITEM 2. PLAN OF OPERATION
Banner Holding Corp., ("Company"), became a registered public company on April
20, 2000. The Company has not yet engaged in any commercial business and has not
determined when it will do so. The Company has no full-time employees. The
officers and directors allocate a portion of their time to the activities of the
Company without compensation. The Company has minimal capital, operating costs
limited to legal, accounting, escrow and stock transfer and reporting-related
fees. The Company anticipates these costs will be paid for with loans from
shareholders John O'Keefe, Sr. and Vicki J. Lavache or another company
wholly-owned by them, or from offering proceeds. It does not expect to make any
acquisitions of property.
The Offering
The Company is conducting a "blank check" offering subject to Rule 419 of
Regulation C under the Securities Act of 1934, thereby selling to the public an
initial offering of common stock as registered in the state of New York. At June
30, 2000 two hundred thousand shares of stock had been sold and eight hundred
thousand shares remain available, all at the offering price of $.25 per share.
The 200,000 shares were sold by John O'Keefe, Sr. and are not subject to
commission. The $50,000 proceeds and the stock certificates (as issued) are
deposited in the escrow account maintained by Escrow Agent Republic Security
Bank in West Palm Beach, Florida. The offering will remain open until the
maximum 1,000,000 shares have been sold or until it expires on November 3, 2001
unless management determines for whatever reason that it should be closed prior
to either event.
Target Companies
The Company is seeking a candidate for a business combination. It has not yet
identified a specific target company. The search is not restricted to any
specific business, industry or geographic location. The ideal candidate is an
entity that wants to use the public marketplace to raise capital for expansion,
development or other corporate purposes. Once a viable candidate is identified
management will analyze the feasibility of an opportunity considering such
matters as:
- costs associated with effecting a Business Combination
- equity interest in and possible management participation in the
Target
- growth potential of the Target and its industry
- experience and skill of management and availability of additional
personnel of the Target
- capital requirements of the Target
- competitive position of the Target
- potential for further research, development or exploration
- degree of current or potential market acceptance of product/service
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- risk factors
- regulatory environment of the Target's industry
- profit potential
The evaluation as to the merits of a particular Business Combination will be
based on relevant factors above as well as other considerations deemed by
management to be relevant to effecting a Business Combination consistent with
the Company's business objective. Management will conduct an extensive due
diligence review which will encompass, among other things, meeting with
incumbent management and inspection of facilities, as well as review of
financial or other information made available to the Company.
Business Combination
The actual terms of a business combination cannot be predicted. The Company may
participate in a business venture of virtually any kind. It may become party to
a merger, consolidation, reorganization, joint venture or licensing agreement
with another corporation or entity. The Company may acquire assets and establish
wholly-owned subsidiaries in various businesses, or acquire existing businesses
as subsidiaries.
Tax considerations as well as other relevant factors will be evaluated in
determining the precise structure of a particular Business Combination. The
parties will endeavor to structure the Business Combination to achieve the most
favorable tax treatment to the Company, the Target and their respective
shareholders. Although the Company has no commitments to date to issue any
Shares other than as described in the Initial Public Offering Prospectus, the
Company will, in all likelihood, issue a substantial number of additional shares
in connection with a Business Combination, possibly causing dilution to the
interests of the Company's shareholders or a change in control of the Company.
The written agreements executed in consummation of a Business Combination will
contain, but not be limited to, the following:
- representations and warranties by all parties thereto
- specifications as to default penalties
- terms of closing
- conditions to be met prior to closing
- conditions to be met after closing
- allocation of costs, including legal and accounting fees
Evaluation by Investors
In the "blank check" offering management has broad discretion with respect to
the specific application of the net proceeds of the offering. Substantially all
of the net proceeds of the offering are intended to be generally applied toward
effecting a Business Combination, but have not been marked for any specific
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purpose. Management has sole discretion in determining which businesses, if any,
are to be acquired, and the terms of such acquisition. Investors in the blank
check offering will have the opportunity to evaluate the merits and risks of an
acquisition and will be entitled to elect whether they desire to remain
investors in the Company. An acquisition will only be consummated if investors
representing 80% of the maximum offering proceeds reconfirm their investments
(as described in the following paragraph).
The "blank check" offering is subject to Rule 419 of Regulation C under the
Securities Act of 1933 as Amended. Rule 419 requires that net offering proceeds
and the securities issued to investors must be deposited in an escrow account.
The deposited funds (except for an amount up to 10% of the deposited funds) and
deposited securities may not be released until an acquisition conforming to
certain specified criteria has been consummated and a sufficient number of
investors reconfirm their investment in accordance with the procedures set forth
in Rule 419. At that time a new prospectus describing the acquisition candidate
and its business, and including audited financial statements, will be delivered
to all investors. The Company must return the pro rata portion of the deposited
funds to any investor who does not elect to remain an investor.
Reporting Requirements
The Company is subject to all the reporting requirements included in the
Exchange Act. It will exercise its affirmative duty to file independent audited
financial statements with the Securities and Exchange Commission as part of its
Form 8-K upon consummation of a merger or acquisition.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There is no litigation of any type whatsoever pending or threatened by
or against the Company, its officers and its directors.
ITEM 2. CHANGES IN SECURITIES
The Company is conducting a "blank check offering" as described in the
Initial Offering Prospectus included with the Registration Statement on Form
SB-2 filed with the Securities and Exchange Commission, File No. 333-57043. The
offering commenced on May 3, 2000. The offering remains open at September 14,
2000. There are no underwriters involved with this offering. The offering
specifies the sale of Common Stock: a minimum of 200,000 shares, a maximum of
1,000,000 shares all at $.25 a share. At June 30, 2000 the minimum of 200,000
shares had been sold at the $.25 offering price for an aggregate price of
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$50,000. No expenses have been incurred nor allocated in the issuance and
distribution of the securities. The $50,000 proceeds as well as the share
certificate(s) remain with the Escrow Agent at Republic Security Bank in West
Palm Beach, Florida and will remain so until a business combination is
consummated subject to the approval of investors as set forth in the Initial
Offering Prospectus. No material change in the use of proceeds as described in
the Prospectus is anticipated.
With the exception of the "blank check offering" described above, there
was no change in the Company's securities or in the instruments defining the
rights of the holders of such securities during the period covered by this
report (quarter ending July 31, 2000).
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
N/A
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
N/A
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
(a) Exhibits
(27) Financial Data Schedule (For SEC Use Only)
(b) Reports on Form 8-K
None
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BANNER HOLDING CORP.
(Registrant)
Date: October 16, 2000 By: /s/ John M. O'Keefe, Sr.
----------------------------
John M. O'Keefe, Sr.
President and Chief
Executive Officer
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