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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 October 31, 2000
BANNER HOLDING CORP.
(Name of Small Business Issuer in its charter)
333-57043
Commission File Number
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 November 30, 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
Condensed Balance Sheet
October 31, 2000
Condensed Statement of Operations
Three months ended October 31, 2000
Condensed Statement of Cash Flows
Three months ended October 31, 2000
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)
CONDENSED BALANCE SHEET
OCTOBER 31, 2000
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash $ 238
Cash - restricted 45,794
--------
Total Current Assets 46,032
DEFERRED OFFERING COSTS 66,072
--------
TOTAL ASSETS $112,104
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 21,777
Liability for stock in escrow 50,794
--------
Total Current Liabilities 72,571
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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 94,209
Stock reserved for contingency (50,000)
Deficit accumulated during the development
stage (36,676)
--------
Total Stockholders' Equity 39,533
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $112,104
========
Read accompanying Notes to Financial Statements.
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BANNER HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Period From
Three Months Six Months January 26, 1998
Ended October 31, Ended October 31, (Inception) to
2000 1999 2000 1999 October 31, 2000
----------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
REVENUES $ -- $ -- $ -- $ -- $ --
EXPENSES
General and administrative 8,969 1,646 17,428 3,205 36,676
----------- ----------- ----------- ----------- -----------
NET LOSS $ (8,969) $ (1,646) $ (17,428) $ (3,205) $ (36,676)
=========== =========== =========== =========== ===========
LOSS PER SHARE $ -- $ -- $ -- $ --
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 3,200,000 3,000,000 3,135,870 3,000,000
=========== =========== =========== ===========
</TABLE>
Read accompanying Notes to Financial Statements.
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BANNER HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Period From
January 26, 1998
Six Months Six Months (Inception)
Ended October 31, Ended October 31, To October
2000 1999 31, 2000
----------------- ---------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net (loss) $(17,428) $ (3,205) $(36,676)
Adjustments to reconcile
net loss to cash provided
by (used in) operating
activities:
Noncash charge for general
and administrative
expenses 3,000 3,000 18,000
Increase(decrease) in:
Accounts payable (1,253) (7,655) 21,777
Liability for stock in
escrow 794 -- 794
Notes payable-related
party -- 12,974 --
-------- -------- --------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (14,887) 5,114 3,895
-------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in deferred offering
costs -- (15,278) (82,590)
Proceeds of stockholder
receivable -- 9,583 29,528
Sale of common stock 50,000 -- 50,000
Contribution of capital 10,775 -- 45,199
-------- -------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 60,775 5,695 42,137
-------- -------- --------
NET INCREASE (DECREASE) IN
CASH 45,888 (581) 46,032
CASH - BEGINNING 144 747 --
-------- -------- --------
CASH - ENDING $ 46,032 $ 166 $ 46,032
======== ======== ========
</TABLE>
Read accompanying Notes to Financial Statements.
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BANNER HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2000
NOTE 1. ORGANIZATION
Banner Holding Corp. was incorporated on January 26, 1998 under the laws
of the State of Florida and has a fiscal year ending April 30. The
company is a "shell" company, the purpose of which is to seek and
consummate a merger or acquisition. The company's headquarters is in
Tequesta, Florida.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed financial statements are unaudited. These
statements have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission (SEC). Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments (which
include only normal recurring adjustments) considered necessary for a
fair presentation have been included. These financial statements should
be read in conjunction with the Company's financial statements and notes
thereto for the year ended April 30, 2000, included in the Company's
Form 10K-SB as filed with the SEC.
LOSS PER SHARE
Loss per share is computed by dividing net loss for the year by the
weighted average number of shares outstanding.
USE OF ESTIMATES
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses. Accordingly, actual results
could vary from the estimates that were assumed in preparing the
financial statements.
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BANNER HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2000
NOTE 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 October 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.
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
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BANNER HOLDING CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2000
NOTE 3. SALE OF SECURITIES, PUBLIC OFFERING AND RESTRICTED CASH (CONTINUED)
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
November 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
N/A
ITEM 2. CHANGES IN SECURITIES
N/A
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: December 14,2000 By: /s/ John M. O'Keefe, Sr.
-----------------------------------
John M. O'Keefe, Sr.
President and Chief
Executive Officer
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