<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________________ to _______________
Commission file number: 0-29836
MYCOM GROUP, INC.
----------------------------------------------------------------
(Exact name of small business issuer as specified in it charter)
<TABLE>
<S> <C>
NEVADA 33-0677545
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
602 MAIN STREET, CINCINNATI, OHIO 45202
--------------------------------------------------------------------------------
(Address of principal executive offices)
(513) 352-5560
---------------------------
(Issuer's telephone number)
BAD TOYS, INC., 2344 WOODRIDGE AVENUE, KINGSPORT, TN 37664
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: AS OF NOVEMBER 9, 2000, THE ISSUER
HAD 48,392,006 SHARES OF COMMON STOCK, $0.01 PAR VALUE, OUTSTANDING.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE> 2
INDEX
PART I - FINANCIAL INFORMATION PAGE
----
ITEM 1. - FINANCIAL STATEMENTS F-1
MYCOM GROUP, INC. AND SUBSIDIARY
FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
CONSOLIDATED BALANCE SHEETS F-2
CONSOLIDATED STATEMENTS OF OPERATIONS F-3
CONSOLIDATED STATEMENTS OF CASH FLOWS F-4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-5 - F-6
SEPTEMBER 30, 2000 AND 1999 AND DECEMBER 31, 1999
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS 2 - 5
PART II - OTHER INFORMATION 6
SIGNATURES 9
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
MYCOM GROUP, INC. AND SUBSIDIARY
FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
F-1
<PAGE> 4
MYCOM GROUP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
----------------- ------------------
December 31, 1999 September 30, 2000
----------------- ------------------
(unaudited)
<S> <C> <C>
ASSETS
Cash $ 9,528 $ 436,253
Accounts receivable, net of allowance for doubtful accounts of 812,445 2,596,069
$68,691 at December 31, 1999 and $68,885 at September 30, 2000
Prepaid expenses 7,880 15,484
---------- ----------
Total current assets 829,853 3,047,806
Property and equipment, net of
accumulated depreciation of $141,590
at December 31, 1999, and $182,942
at September 30, 2000 190,947 209,284
Other assets 9,037 8,239
---------- ----------
TOTAL ASSETS $1,029,837 $3,265,329
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Accounts payable and accrued expenses $ 279,230 $2,571,062
Deferred income taxes 180,794 18,387
Current maturities of note payable 69,457 474,565
Current maturities of obligations under capital leases 28,265 38,371
---------- ----------
Total current liabilities 557,746 3,102,385
Note payable, net of current maturities 171,393 108,652
Obligations under capital leases, net of current maturities 19,414 41,286
Deferred income taxes 11,450 9,075
---------- ----------
TOTAL LIABILITIES 760,003 3,261,398
Commitments and contingencies (notes 1, 2, 3, 4, 5, 6, 7, 10)
Stockholders' Equity:
Preferred stock, $.01 par value, 10,000,000 shares
authorized, none issued and outstanding -- --
Common stock, $.01 par value, 90,000,000 shares
authorized, 39,500,000 issued and outstanding at
December 31, 1999 and 47,392,006 at September 30, 2000 100 100
Treasury stock, 500,000 shares at no cost -- --
Retained earnings 269,734 3,831
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 269,834 3,931
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,029,837 $3,265,329
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE> 5
MYCOM GROUP, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------------- ---------------------------------
1999 2000 1999 2000
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Professional service revenue $ 1,369,593 $ 3,491,478 $ 4,110,839 $ 7,356,883
------------ ------------ ------------ ------------
Professional service costs and general and
administrative expenses:
Labor and benefits 936,114 1,116,038 2,050,592 2,841,856
Rebilled expenses 290,178 2,501,425 1,257,660 4,225,730
Depreciation 18,012 16,898 51,012 49,983
Rent 50,376 50,546 144,007 155,318
Bad Debts 12,525 12,387 50,102 12,387
Other 142,137 72,809 449,835 445,358
------------ ------------ ------------ ------------
Total 1,449,342 3,770,103 4,003,208 7,730,632
------------ ------------ ------------ ------------
Income (loss) from operations (79,749) (278,625) 107,630 (373,749)
------------ ------------ ------------ ------------
Other income (expense):
Interest expense (9,831) (23,803) (33,248) (47,211)
------------ ------------ ------------ ------------
(9,831) (23,803) (33,248) (47,211)
------------ ------------ ------------ ------------
Income (loss) from continuing operations,
before provision for income taxes (89,580) (302,428) 74,382 (420,960)
------------ ------------ ------------ ------------
Provision for income taxes on income
(loss) from continuing operations:
------------ ------------ ------------ ------------
Deferred (expense) credit 7,981 120,971 (9,796) 155,057
------------ ------------ ------------ ------------
Net income (loss) from continuing
operations (81,599) (181,457) 64,586 (265,903)
Income (loss) from discontinued
operations, net of income taxes 46,720 (25,921)
------------ ------------ ------------ ------------
Net income (loss) $ (34,879) $ (181,457) $ 38,665 $ (265,903)
============ ============ ============ ============
Per share information:
Net income (loss) per share from
continuing operations $nil $nil $nil $ 0.1
Net income (loss) per share from
discontinued operations nil nil nil nil
------------ ------------ ------------ ------------
Net income (loss) per share $nil $nil $nil $ 0.1
============ ============ ============ ============
Weighted average common share,
Outstanding 39,500,000 47,892,006 39,500,000 47,892,006
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 6
MYCOM GROUP, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30
1999 2000
(unaudited) (unaudited)
<S> <C> <C>
Net income (loss) $ 38,665 $ (265,902)
----------- -----------
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Depreciation 51,012 49,983
Loss on disposal of property and equipment
Deferred income tax (7,483) (162,407)
Decrease (increase) in:
Accounts receivable (399,809) (1,783,624)
Advances and prepaid expenses 1,150 (7,604)
Deposits -- 798
Increase (decrease) in:
Accounts payable and accrued expenses 61,859 2,291,832
----------- -----------
Net cash (used in) operating activities (254,606) 123,076
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment and other (28,231) (10,029)
----------- -----------
Net cash (used in) investing activities (28,231) (10,029)
----------- -----------
Cash flows from financing activities:
Leases 5,999 22,629
Capital advances on long-term financing 308,248 353,965
Payments on long-term financing (56,160) (62,916)
Payments on line of credit
----------- -----------
Net cash provided by financing activities 258,087 313,678
----------- -----------
Net increase (decrease) in cash (24,750) 426,725
Cash and cash equivalents:
Beginning of year 28,365 9,528
----------- -----------
End of Period $ 3,615 $ 436,253
=========== ===========
Supplemental cash flow information:
Cash paid for interest $ 33,248 $ 47,211
=========== ===========
Cash paid for income taxes $ -- $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 7
MYCOM GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999 AND DECEMBER 31, 1999
1) Unaudited Statements
The Balance Sheet as of September 30, 2000, the Statements of
Operations for the three month and nine month periods ended September
30, 2000, and 1999, and the Statement of Cash Flows for the nine month
periods ended September 30, 2000, and 1999, 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 changes in
financial position at September 30, 2000, and for all periods
presented, have been made.
These statements should be read in conjunction with the
company's audit for the year ended December 31, 1999, as filed on Form
8K dated August 23, 2000, and included herein for reference, with the
Securities and Exchange Commission.
2) Calculation of Earnings (loss) Per Share
The earnings (loss) per share is calculated by estimating the
Net Income (loss) to common shareholders by the weighted average number
of common shares outstanding.
3) Principles of Consolidation
Mycom formed Mycom Enterprises on July 28, 2000, for the
purpose of distributing a 51% interest in its advertising business to
certain stockholders of Mycom. Mycom retained a 49% interest in Mycom
Enterprises. Since the 51% shareholders of Mycom Enterprises are
significant shareholders, officers and directors of Mycom, Mycom has
significant influence over the operations of Mycom Enterprises and in
substance controls Mycom Enterprises. Therefore, the accounts of Mycom
Enterprises are included in the consolidated financial statements and a
provision for the 51% ownership has been eliminated from the
consolidated net income. Stockholders' equity is after the deduction of
the 51% interest.
4) Disposal of a Segment of Business
Effective January 1, 2000, the company disposed of its Lottery
Machine Service business and two other businesses in development stage.
The Lottery Machine Service contract and conceptual rights were
distributed to the existing stockholders of Mycom. No value was
assigned to the contractual or conceptual rights distributed, as the
contract was for a Minority Business Enterprise only and cannot be
maintained by a public entity.
F-5
<PAGE> 8
MYCOM GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999 AND DECEMBER 31, 1999
5) Line of Credit and Note Payable
The Company has available $400,000 under a revolving credit agreement
that expires December 30, 2000. At December 31, 1999, the Company had no
amount outstanding on the line of credit. At September 30, 2000, the
Company had $400,000 outstanding under the line of credit. The line of
credit bears interest at the bank's prime rate plus 2%. The line of credit
is collateralized by substantially all assets of the Company, as well as
the personal guarantees of four stockholders.
<TABLE>
<CAPTION>
Note payable consisted of the December 31, 1999 September 30, 2000
following: (unaudited)
<S> <C> <C>
Line of credit $ -- $ 400,000
Note payable to bank collateralized by
substantially all assets of the company,
payable in monthly installments of
$7,447 including interest at the bank's
prime rate plus 1%, final payment due
January 21, 2003. 240,850 183,217
-------- ---------
240,850 583,217
Less amounts due within one year 69,457 474,565
-------- ---------
$ 171,393 $ 108,652
-------- ---------
</TABLE>
Maturities of the note payable as of December 31, are as follows:
2000 $ 69,457
2001 76,350
2002 83,928
2003 11,115
--------
$240,850
========
Maturities of the notes payable as of September 30, 2000, are as
follows:
2000 $ 411,824
2001 76,350
2002 83,928
2003 11,115
---------
$ 583,217
=========
F-6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
The following discussion should be used in conjunction with the company's
financial statements, including the footnotes for the fiscal period ended
December 31, 1999:
Description of Business
Mycom Group, Inc. ("Mycom") is principally an e-business enterprise
communications and information management company providing such services as
technology consulting, applications development, multimedia design and
marketing, web design and training for businesses headquartered in the United
States. The Company changed its name from Myca Group, Inc. to Mycom.com, Inc. on
March 28, 2000, and then changed its name to Mycom Group, Inc. on August 1,
2000. The Company's principal office is located in Cincinnati, Ohio.
Effective August 23, 2000, a business combination of Mycom Group, Inc. (MGI), an
Ohio corporation, and Bad Toys, Inc., a Nevada corporation, was completed. Prior
to the business combination, Bad Toys, Inc. spun off all of its assets,
liabilities and business thereby making Bad Toys, Inc. an inactive publicly
traded company. Bad Toys, Inc. issued 39,500,000 shares of its common stock to
the shareholders of MGI in exchange for 100% ownership of MGI. MGI was then
merged into Bad Toys, Inc. with Bad Toys, Inc. being the survivor corporation.
Bad Toys, Inc. then changed its name to Mycom Group, Inc. and retained its
Nevada charter. Immediately prior to the business combination, Bad Toys, Inc.
had approximately 8,892,006 shares of common stock outstanding. Certain Bad
Toys, Inc. shareholders agreed to return to the treasury 500,000 shares of Bad
Toys, Inc. stock. The Company has cancelled these shares. Since the former
shareholders of MGI own approximately 82% of Mycom after the business
combination, the transaction has been accounted for as a reverse acquisition.
Effective January 1, 2000, the Company disposed of its Lottery Machine Service
business and two other businesses in development stage. The Lottery Machine
Service contract and conceptual rights were distributed to the existing
stockholders of Mycom. No value was assigned to the contractual or conceptual
rights distributed, as the contract was for a Minority Business Enterprise only
and cannot be maintained by a public entity.
THREE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1999
Result of Operations
Revenue increased $2,121,885 or 155% from $1,369,593 in 1999 to $3,491,478 in
2000. This increase is the result of a contract between Mycom Enterprises (see
footnote 3 of the financial statements) and the Ohio Lottery of $2,334,511 and a
decrease in core business of $212,626. This decrease occurred because projects
ended and management re-deployed personnel into e-commerce consulting
activities.
Operating expenses increased $2,320,761 or 160% from $1,449,342 in 1999 to
$3,770,103 in 2000. Of the increase, $2,257,202 or 97% is the result of rebilled
expenses for the Ohio Lottery Contract, leaving an increase of $63,559.
This increase is comprised of the following elements:
Labor and benefits increased $179,924 or 19% from $936,114 in 1999 to
$1,116,038 in 2000. This increase is a result of addition of staff for
the purpose of product development, new business development, and
addition of new technology resources applicable to current projects.
Rebilled expenses, other than Ohio Lottery, decreased $45,955 or 19%
from $290,178 in 1999 to $244,233 in 2000 ($2,501,425 less Ohio Lottery
of $2,257,202). This reflects the decrease in core business revenues of
$212,626.
2
<PAGE> 10
Other expenses decreased by $69,328 or 49% from $142,132 in 1999 to
$72,809 in 2000. This decrease resulted from cost management policies.
As a result of the foregoing, net operating income (before interest
charges and taxes) decreased $198,876 from a loss of $79,749 in 1999 to
a loss of $278,625 in 2000.
Interest expenses increased $13,972 or 142% from $9,831 in 1999 to
$23,803 in 2000 as a result of increased short term borrowings
Combining the loss from operations with other expenses/income resulted
in a decrease in net income before taxes of $212,848, from a loss of
$89,580 for the period in 1999 to a loss of $302,428 for the period in
2000.
Net loss from continuing operations to common shareholders after taxes
remained nil in both periods.
NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1999
Result of Operations
Revenues increased $3,246,044 or 79% from $4,110,839 in 1999 to $7,356,883 in
2000. This increase is in part attributable to the addition of the Ohio Lottery
contract which generated additional revenues of $3,791,150 from 1999 to 2000.
The remaining decrease in core-business revenues of $545,106, (increase of
$2,152,220 less Ohio Lottery revenues of $3,791,150) resulted from Y2K related
delays by major clients.
Operating Expenses increased $3,727,424 or 93% from $4,003,208 in 1999 to
$7,730,632 in 2000. Of this increase, rebilled expenses increased $2,968,070 or
236% from $1,257,660 in 1999 to $4,225,730 in 2000. This increase is due
primarily to placed media sold pursuant to the Ohio Lottery contract, amounting
to $3,591,755, and a decrease in core business rebilled of $623,684 attributable
to Y2K-related delays by major clients.
In addition, labor and benefits increased $790,264 or 39% from $2,051,592 in
1999 to $2,841,856 in 2000. This increase is due to two factors. First is the
addition of approximately $230,000 in labor and benefits associated with
advertising projects, and second is the addition of approximately $562,000 in
staff dedicated to product development, business expansion, and addition of new
technology resources applicable to current projects.
Rent increased $11,311 or 8% from $144,007 in 1999 to $155,318 in 2000. This
reflects a nominal increase in cost per square foot.
Bad debts decreased by $37,715 or 304% from $50,102 in 1999 to $12,387 in 2000.
This decrease resulted from more stringent billing and collection procedures.
The cumulative effect (before interest and other income and taxes) of the above
is a loss from operations of $373,749, a decrease of $438,179 from income of
$107,630 in 1999 to a loss from operations of $373,749 in 2000.
Interest expense increased $13,963 or 42% from $33,248 in 1999 to $47,211 in
2000. This resulted from increased short term borrowings at 2% over bank prime
(see footnote 5 of the financial statements).
Deferred taxes were reduced by $155,057 as a result of the operating loss. The
loss from operations of $373,749 and interest expenses of $47,211 produced a net
loss of $265,903, a decrease of $304,567 from net income in 1999 of $38,665 to
net loss in 2000 of $265,903.
Liquidity and Capital Resources
The company incurred a working capital deficit during the quarter ended
September 30, 2000. The company had a working capital surplus of $272,107, and a
working capital deficit of $54,579 at September 30, 2000. The change of $326,686
is a result of using short term bank financing to fund the current loss of
$420,959 before taxes. This bank financing consists of: 1) a $400,000 line of
credit secured by corporate assets and certain shareholders' personal
3
<PAGE> 11
guarantees and bearing interest at the bank's prime rate plus 2% and is
renewable December 30, 2000, and 2) a bank loan of original principal at January
21, 1999 of $300,000 maturing on January 21, 2003, with interest at 1% over bank
prime and monthly payments of $7,447 including principal and interest, (see
footnote 5 of the financial statements.)
During the quarter ended September 30, 2000, the company placed $6,000,000 in
equity funding with Tricorp. Tricorp defaulted on its obligations and the
company cancelled the shares issued pursuant to the agreement.
The company believes it has an adequate capital to fund anticipated operations
for fiscal 2000. However, repayment of the line of credit will be required
either through refinancing or equity funding. There can be no assurance that any
additional capital can be satisfactorily obtained if and when required or that
renewal of bank credit can be obtained.
Reviewing the change in financial position over the nine months, current assets
comprised of cash accounts receivable and prepaid expenses increased $2,217,953
or 267% from $829,853 at December 31, 1999 to $3,047,806 at September 30, 2000.
Of these amounts, cash and cash equivalents increased $426,725 from $9,528 at
December 31, 1999, to $436,253 at September 30, 2000.
Accounts receivable increased $1,783,624 from $812,445 at December 31, 1999 to
$2,596,065, due primarily to the addition of the Ohio Lottery Contract, whose
balance at September 30, 2000 was approximately $1,819,680. Prepaid expenses
increased $7,604 from $7,880 at December 31, 1999 to $15,484 at September 30,
2000.
Current liabilities increased $2,544,639 or 456% from $557,746 at December 31,
1999 to $3,102,385 at September 30, 2000. Accounts payable increased $2,291,832
or 820% from $279,230 at December 31, 1999, to $2,571,062 at September 30, 2000.
Of this increase, placed media for the Ohio Lottery amounts to approximately
$2,159,599 at September 30, 2000. Deferred income taxes decreased $162,407, from
$180,794 at December 31, 1999 to $18,387 at September 30, 2000, a decrease of
883% resulting from the tax effect of current period losses. Current maturities
of notes payable increased $405,108 or 583% from $69,457 at December 31, 1999 to
$474,565 at September 30, 2000, as a result of the addition of the line of
credit (see footnote 5 of the Financial Statements), the balance of which was
$400,000 at September 30, 2000. Current maturities of obligations under capital
leases increased $10,106 or 36% from $28,265 at December 31, 1999, to $38,371 at
September 30, 2000. This reflects a replacement of fully depreciated assets,
principally computers, through capital leases. The company has no commitment for
capital expenditures through December 31, 2000.
Stockholders' equity decreased $265,903 as a result of the net loss for the nine
months ended September 30, 2000.
Factors That May Affect Future Operating Results.
In addition to the other information contained in this report, prospective
investors should carefully consider the following factors in evaluating the
company and its business:
RECENT LOSSES. The company has incurred operating losses since fiscal
1999. In addition, the company incurred a $265,908 loss for the nine
months ended September 30, 2000. There is no assurance that the company
will return to profitability in any subsequent period.
NEED FOR ADDITIONAL CAPITAL. The company had a working capital deficit
of $54,579 at September 30, 2000. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations". While the
company believes that it has sufficient capital to fund anticipated
operations for the balance of fiscal year 2000, it will need to either
generate additional capital or negotiate renewal of the $400,000 line
of credit (see footnote 5 of the financial statements). Additional
capital may be sought through private placement equity offerings. Such
additional equity financing may result in additional dilution to
investors. In any case, there can be no assurance that additional
capital can be satisfactorily obtained if and when required or that
renewal of bank credit can be obtained.
CONCENTRATION OF CUSTOMERS. Two customers accounted for approximately
88% of revenues for the nine months ended September 30, 2000. Revenues
from one of those customers amounting to approximately 52% of
nine-month revenues, is subject to an annual contract renewable June
30, 2001.
4
<PAGE> 12
Revenues from the other customer is by project and encompasses multiple
projects with various start and end dates with no contractual periods.
5
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - None.
ITEM 2. CHANGES IN SECURITIES
A. On August 23, 2000, the Company filed a current report on Form 8-K to report
that a change in control of Bad Toys, Inc. ("Bad Toys") occurred in connection
with the consummation of the Plan and Agreement of Merger dated March 31, 2000
between Bad Toys and Mycom Group, Inc., formerly Myca Group, Inc. (the
"Agreement"). Pursuant to the Agreement, Mycom Group, Inc. ("Mycom") was merged
into Bad Toys with Bad Toys as the surviving company. On August 23, 2000, the
effective date, each issued and outstanding share of Mycom was converted
automatically to the right to receive 395,000 shares of Bad Toys common stock,
and as a result of the merger, Bad Toys issued a total of 39,500,000 shares of
its common stock to the former holders of record of Mycom on August 23, 2000.
The 39,500,000 shares of Bad Toys common stock issued to the former shareholders
of Mycom represented, immediately after their issuance, 81.6% of the total
issued and outstanding shares of Bad Toys common stock following the merger. The
transaction did not involve any public offering, no sales commissions were paid,
and a restrictive legend was placed on each certificate evidencing the shares.
The Company believes that the transaction was exempt from registration pursuant
to Section 4(2) and Section 4(6) of the Securities Act and/or Rule 506 of
Regulation D.
B. On August 14, 2000, the Company entered into a Purchase Agreement by and
among Mycom Group, Inc., Bad Toys, Inc. and Tricorp Financial, Inc., pursuant to
which Tricorp was issued 6,000,000 shares of common stock. The agreement was
subsequently terminated in October 2000, and the shares were returned and
cancelled in November 2000. The transaction did not involve any public offering,
no sales commissions were paid, and a restrictive legend was placed on each
certificate evidencing the shares. The Company believes that the transaction was
exempt from registration pursuant to Section 4(2) and Section 4(6) of the
Securities Act and/or Rule 506 of Regulation D.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None.
ITEM 5. OTHER INFORMATION - None.
6
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Exhibit Number and Brief Description
2.0 Plan and Agreement of Merger between Bad Toys, Inc.
and Myca Group, Inc. (Incorporated by reference to
Exhibit No. 2 to Form 10-KSB for the year ended
December 31, 1999 dated April 12, 2000 and filed
April 13, 2000.)
2.1 Closing Agreement dated August 23, 2000 to the Plan
and Agreement of Merger by and between Bad Toys, Inc.
and Mycom Group, Inc. (formerly Myca Group, Inc.)
dated March 31, 2000 (Incorporated by reference to
Exhibit No. 2 of the current report on Form 8-K filed
September 8, 2000.)
3.1 Bylaws (Incorporated by reference to Exhibit No. 3.1
of Form 10-SB, Commission File No. 0-29836, dated
February 22, 1999 and filed February 24, 1999.)
3.2 Articles of Incorporation, as amended and currently
in effect, of Mycom Group, Inc. (Incorporated by
reference to Exhibit No. 3 of the current report on
Form 8-K dated August 23, 2000 and filed September 8,
2000.)
10.2 Purchase Agreement by and among Mycom Group, Inc.,
Bad Toys, Inc. and Tricorp Financial, Inc., dated
August 14, 2000 (Incorporated by reference to Exhibit
No. 10 of the current report on Form 8-K dated August
23, 2000 and filed September 8, 2000.)
27 Financial Data Schedule. (Filed herewith.)
(b) Reports on Form 8-K
1. On September 8, 2000, the Company filed a current report on Form 8-K
dated August 23, 2000, to report that a change in control of Bad Toys, Inc.
("Bad Toys") occurred in connection with the consummation of the Plan and
Agreement of Merger dated March 31, 2000 between Bad Toys and Mycom Group, Inc.,
formerly Myca Group, Inc. (the "Agreement"). Pursuant to the Agreement, Mycom
Group, Inc. ("Mycom") was merged into Bad Toys with Bad Toys as the surviving
company. On August 23, 2000, the effective date, each issued and outstanding
share of Mycom was converted automatically to the right to receive 395,000
shares of Bad Toys common stock, and as a result of the merger, Bad Toys issued
a total of 39,500,000 shares of its common stock to the former holders of record
of Mycom on August 23, 2000. The 39,500,000 shares of Bad Toys common stock
issued to the former shareholders of Mycom represented, immediately after their
issuance, 81.6% of the total issued and outstanding shares of Bad Toys common
stock following the merger.
Upon the effective date of the merger three officers and directors of
Bad Toys resigned and a new slate of officers and directors were elected. In
addition, Bad Toys changed its name to Mycom Group, Inc.
2. On September 20, 2000, the Company filed a current report on Form 8-K to
report the resignation of Blackburn, Childers & Steagall, PLC who were the
independent accountants for Bad Toys prior to the merger. On September 20, 2000,
Schumacher & Associates, Inc., the accountants for Mycom Group, Inc. prior to
the merger, became the accountants of the Company.
3. On October 26, 2000, the Company filed a current report on Form 8-K to
report that the Company terminated its Stock Purchase Agreement dated August 14,
2000 between Bad Toys, Mycom Group, Inc. and Tricorp Financial, Inc.
4. On November 3, 2000, the Company filed a current report on Form 8-K/A to
provide additional information concerning the change in auditors reported in the
current report on Form 8-K dated September 20, 2000.
5. On November 3, 2000, the Company filed a current report on Form 8-KA to
provide certain financial statements required in connection with the merger
described in the current report on Form 8-K dated August 23, 2000.
7
<PAGE> 15
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MYCOM GROUP, INC.
By: /s/George W. Young
------------------------------------------
George W. Young, Chief Executive Officer
By: /s/ Terry Seipelt
------------------------------------------
Terry Seipelt, Chief Financial Officer
Date: November 14, 2000
8
<PAGE> 16
EXHIBIT INDEX
NUMBER BRIEF DESCRIPTION
2.0 Plan and Agreement of Merger between Bad Toys, Inc. and Myca
Group, Inc. (Incorporated by reference to Exhibit No. 2 to
Form 10-KSB for the year ended December 31, 1999 dated April
12, 2000 and filed April 13, 2000.)
2.1 Closing Agreement dated August 23, 2000 to the Plan and
Agreement of Merger by and between Bad Toys, Inc. and Mycom
Group, Inc. (formerly Myca Group, Inc.) dated March 31, 2000
(Incorporated by reference to Exhibit No. 2 of the current
report on Form 8-K filed September 8, 2000.)
3.1 Bylaws (Incorporated by reference to Exhibit No. 3.1 of Form
10-SB, Commission File No. 0-29836, dated February 22, 1999
and filed February 24, 1999.)
3.2 Articles of Incorporation, as amended and currently in effect,
of Mycom Group, Inc. (Incorporated by reference to Exhibit No.
3 of the current report on Form 8-K dated August 23, 2000 and
filed September 8, 2000.)
10.2 Purchase Agreement by and among Mycom Group, Inc., Bad Toys,
Inc. and Tricorp Financial, Inc., dated August 14, 2000
(Incorporated by reference to Exhibit No. 10 of the current
report on Form 8-K dated August 23, 2000 and filed September
8, 2000.)
27 Financial Data Schedule. (Filed herewith.)
