U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-SB/A1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
BUCKEYE OIL AND GAS, INC.
-------------------------
(Name of Small Business Issuer in its charter)
Colorado 84-1026453
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5650 Greenwood Plaza Blvd.
Suite 216
Englewood, Colorado 80111
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(Address of principal executive offices) (Zip code)
Issuer's telephone number: (303) 741-1118
Securities to be registered pursuant to Section 12(b) of the Act:
none
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Page One of Forty Three Pages
Exhibit Index is Located at Page Forty
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TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business . . . . . . . . . . . . . 3
Item 2. Plan of Operation. . . . . . . . . . . . . . . . . 8
Item 3. Description of Property. . . . . . . . . . . . . . 14
Item 4. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . . 14
Item 5. Directors, Executive Officers, Promoters
and Control Persons. . . . . . . . . . . . . . . 16
Item 6. Executive Compensation . . . . . . . . . . . . . . 20
Item 7. Certain Relationships and
Related Transactions. . . . . . . . . . . . . . 21
Item 8. Description of Securities. . . . . . . . . . . . . 21
PART II
Item 1. Market for Common Equities and Related Stockholder
Matters . . . . . . . . . . . . . .. . . . . . . 22
Item 2. Legal Proceedings. . . . . . . . . . . . . . . . . 24
Item 3. Changes in and Disagreements with Accountants. . . 24
Item 4. Recent Sales of Unregistered Securities. . . . . . 24
Item 5. Indemnification of Directors and Officers. . . . . 25
PART F/S
Financial Statements . . . . . . . . . . . . . . . 26
PART III
Item 1. Index to Exhibits. . . . . . . . . . . . . . . . . 40
Item 2. Description of Exhibits. . . . . . . . . . . . . . 42
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Buckeye Oil and Gas, Inc. (the "Company") was incorporated on March 7,
1986, under the laws of the State of Colorado, for the purpose of exploiting oil
and gas venture opportunities which management believed were available at the
time of the Company's inception. In this regard, the Company acquired an oil and
gas lease and thereafter, drilled a well on this property, which well resulted
in a dry hole. This endeavor depleted all of the Company's financial resources
and no further oil and gas activity was undertaken and the Company's operations
have been dormant since September 1987. Other than issuing shares to its
original shareholders, the Company never commenced any other operational
activities. As such, the Company can be defined as a "shell" company, whose sole
purpose at this time is to locate and consummate a merger or acquisition with a
private entity. The Board of Directors of the Company has elected to commence
implementation of the Company's principal business purpose, described below
under "Item 2 - Plan of Operation."
The Company is filing this Registration Statement on a voluntary basis
because the primary attraction of the Company as a merger partner or acquisition
vehicle will be its status as a public company. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities or undertake any offering of the
Company's securities, either debt or equity, until such time as the Company has
successfully implemented its business plan described herein. Relevant thereto,
each shareholder of the Company has executed and delivered a "lock-up" letter
agreement, affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has successfully
consummated a merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that no trading
will occur in the Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who will
not release these respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully consummated.
However, while management believes that the procedures established to preclude
any sale of the Company's securities prior to closing of a merger or
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acquisition will be sufficient, there can be no assurances that the procedures
established relevant herein will unequivocally limit any shareholder's ability
to sell their respective securities before such closing.
The Company's business is subject to numerous risk factors, including the
following:
Going Concern; No Operating History or Revenue and Minimal Assets. The
Company's financial statements accompanying this Registration Statement have
been prepared assuming that the Company will continue as a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The financial statements do not include any
adjustment that might result from the outcome of this uncertainty. The Company
has had no operating history nor any revenues or earnings from operations. The
Company has no significant assets or financial resources. The Company will, in
all likelihood, sustain operating expenses without corresponding revenues, at
least until the consummation of a business combination. This may result in the
Company incurring a net operating loss which will increase continuously until
the Company can consummate a business combination with a profitable business
opportunity. There is no assurance that the Company can identify such a business
opportunity and consummate such a business combination.
Speculative Nature of Company's Proposed Operations. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified business
opportunity. While management intends to seek business combination(s) with
entities having established operating histories, there can be no assurance that
the Company will be successful in locating candidates meeting such criteria. In
the event the Company completes a business combination, of which there can be no
assurance, the success of the Company's operations may be dependent upon
management of the successor firm or venture partner firm and numerous other
factors beyond the Company's control.
Scarcity of and Competition for Business Opportunities and Combinations.
The Company is and will continue to be an insignificant participant in the
business of seeking mergers with, joint ventures with and acquisitions of small
private and public entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of companies which may be desirable target candidates for the
Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company and,
consequently, the Company will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a business
combination. Moreover, the Company will also compete in
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seeking merger or acquisition candidates with numerous other small public
companies.
No Agreement for Business Combination or Other Transaction-No Standards for
Business Combination. The Company has no arrangement, agreement or understanding
with respect to engaging in a merger with, joint venture with or acquisition of,
a private or public entity. There can be no assurance the Company will be
successful in identifying and evaluating suitable business opportunities or in
concluding a business combination. Management has not identified any particular
industry or specific business within an industry for evaluation by the Company.
There is no assurance the Company will be able to negotiate a business
combination on terms favorable to the Company. The Company has not established a
specific length of operating history or a specified level of earnings, assets,
net worth or other criteria which it will require a target business opportunity
to have achieved, and without which the Company would not consider a business
combination in any form with such business opportunity. Accordingly, the Company
may enter into a business combination with a business opportunity having no
significant operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.
Continued Management Control, Limited Time Availability. While seeking a
business combination, management anticipates devoting up to twenty hours per
month to the business of the Company. None of the Company's officers has entered
into a written employment agreement with the Company and none is expected to do
so in the foreseeable future. The Company has not obtained key man life
insurance on any of its officers or directors. Notwithstanding the combined
limited experience and time commitment of management, loss of the services of
any of these individuals would adversely affect development of the Company's
business and its likelihood of continuing operations. See "Item 5 - Directors,
Executive Officers, Promoters and Control Persons."
Conflicts of Interest - General. Officers and directors of the Company may
in the future participate in business ventures which could be deemed to compete
directly with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the future in the event the Company's officers or
directors are involved in the management of any firm with which the Company
transacts business. Management has adopted a policy that the Company will not
seek a merger with, or acquisition of, any entity in which management serve as
officers, directors or partners, or in which they or their family members own or
hold any ownership interest.
Reporting Requirements May Delay or Preclude Acquisition. Sections 13 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") require
companies subject thereto to provide
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certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two, or three
years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to prepare such
statements may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by the Company. Acquisition prospects that do
not have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the 1934
Act are applicable.
Lack of Market Research or Marketing Organization. The Company has neither
conducted, nor have others made available to it, results of market research
indicating that market demand exists for the transactions contemplated by the
Company. Moreover, the Company does not have, and does not plan to establish, a
marketing organization. Even in the event demand is identified for a merger or
acquisition contemplated by the Company, there is no assurance the Company will
be successful in completing any such business combination.
Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a business
combination with a business opportunity. Consequently, the Company's activities
may be limited to those engaged in by business opportunities which the Company
merges with or acquires. The Company's inability to diversify its activities
into a number of areas may subject the Company to economic fluctuations within a
particular business or industry and therefore increase the risks associated with
the Company's operations.
Regulation. Although the Company will be subject to regulation under the
Securities Exchange Act of 1934, management believes the Company will not be
subject to regulation under the Investment Company Act of 1940, insofar as the
Company will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations which
result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences.
Probable Change in Control and Management. A business combination involving
the issuance of the Company's Common Shares will, in all likelihood, result in
shareholders of a private company obtaining a controlling interest in the
Company. Any such
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business combination may require management of the Company to sell or transfer
all or a portion of the Company's Common Shares held by them, or resign as
members of the Board of Directors of the Company. The resulting change in
control of the Company could result in removal of one or more present officers
and directors of the Company and a corresponding reduction in or elimination of
their participation in the future affairs of the Company.
Reduction of Percentage Share Ownership Following Business Combination. The
Company's primary plan of operation is based upon a business combination with a
private concern which, in all likelihood, would result in the Company issuing
securities to shareholders of any such private company. The issuance of
previously authorized and unissued Common Shares of the Company would result in
reduction in percentage of shares owned by present and prospective shareholders
of the Company and may result in a change in control or management of the
Company.
Disadvantages of Blank Check Offering. The Company may enter into a
business combination with an entity that desires to establish a public trading
market for its shares. A business opportunity may attempt to avoid what it deems
to be adverse consequences of undertaking its own public offering by seeking a
business combination with the Company. Such consequences may include, but are
not limited to, time delays of the registration process, significant expenses to
be incurred in such an offering, loss of voting control to public shareholders
and the inability or unwillingness to comply with various federal and state laws
enacted for the protection of investors.
Taxation. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may undertake.
Currently, such transactions may be structured so as to result in tax-free
treatment to both companies, pursuant to various federal and state tax
provisions. The Company intends to structure any business combination so as to
minimize the federal and state tax consequences to both the Company and the
target entity; however, there can be no assurance that such business combination
will meet the statutory requirements of a tax-free reorganization or that the
parties will obtain the intended tax-free treatment upon a transfer of stock or
assets. A non-qualifying reorganization could result in the imposition of both
federal and state taxes which may have an adverse effect on both parties to the
transaction.
Requirement of Audited Financial Statements May Disqualify Business
Opportunities. Management of the Company believes that any potential business
opportunity must provide audited financial statements for review, for the
protection of all parties to the business combination. One or more attractive
business opportunities may choose to forego the possibility of a business
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combination with the Company, rather than incur the expenses associated with
preparing audited financial statements.
ITEM 2. PLAN OF OPERATION
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business which generates revenues, in exchange for its
securities. The Company has no particular acquisitions in mind and has not
entered into any negotiations regarding such an acquisition. None of the
Company's officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between the Company and
such other company as of the date of this Registration Statement.
The Company has no full time employees. The Company's President and
Secretary have agreed to allocate a portion of their time to the activities of
the Company, without compensation. These officers anticipate that the business
plan of the Company can be implemented by their devoting minimal time per month
to the business affairs of the Company and, consequently, conflicts of interest
may arise with respect to the limited time commitment by such officers. See
"Item 5 - Directors, Executive Officers, Promoters and Control Persons -
Resumes."
The Company's officers and directors were formerly involved with other
"blank check" companies. The Company's officers and directors may, in the
future, become involved with other companies who have a business purpose similar
to that of the Company. As a result, additional potential conflicts of interest
may arise in the future. If such a conflict does arise and an officer or
director of the Company is presented with business opportunities under
circumstances where there may be a doubt as to whether the opportunity should
belong to the Company or another "blank check" company they are affiliated with,
they will disclose the opportunity to all such companies. If a situation arises
in which more than one company desires to merge with or acquire that target
company and the principals of the proposed target company has no preference as
to which company will merger or acquire such target company, the company which
first filed a registration statement with the Securities and Exchange Commission
will be entitled to proceed with the proposed transaction. See "Item 5 -
Directors, Executive Officers, Promoters and Control Persons - Prior 'Blank
Check' Experience."
The Articles of Incorporation of the Company provides that the Company
shall possess and may indemnify officers and/or directors of the Company for
liabilities, which can include liabilities arising under the securities laws.
Therefore, assets of the Company could be used or attached to satisfy any
liabilities
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subject to such indemnification. See "Part II - Item 5 - Indemnification of
Directors and Officers."
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. The Company will not restrict its search to
any specific business, industry, or geographical location and the Company may
participate in a business venture of virtually any kind or nature. This
discussion of the proposed business is purposefully general and is not meant to
be restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities. Management anticipates that it may
be able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources. See "Part F/S -
Financial Statements." This lack of diversification should be considered a
substantial risk to shareholders of the Company because it will not permit the
Company to offset potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have
recently commenced operations, or which wish to utilize the public marketplace
in order to raise additional capital in order to expand into new products or
markets, to develop a new product or service, or for other corporate purposes.
The Company may acquire assets and establish wholly owned subsidiaries in
various businesses or acquire existing businesses as subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances being made in some industries
and shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes), for all shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
The Company has, and will continue to have, no capital with which to
provide the owners of business opportunities with any significant cash or other
assets. However, management believes the Company will be able to offer owners of
acquisition candidates the
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opportunity to acquire a controlling ownership interest in a publicly registered
company without incurring the cost and time required to conduct an initial
public offering. The owners of the business opportunities will, however, incur
significant legal and accounting costs in connection with acquisition of a
business opportunity, including the costs of preparing Form 8-K's, 10-K's or
10-KSB's, agreements and related reports and documents. The Securities Exchange
Act of 1934 (the "34 Act") specifically requires that any merger or acquisition
candidate comply with all applicable reporting requirements, which include
providing audited financial statements to be included within the numerous
filings relevant to complying with the 34 Act. Nevertheless, the officers and
directors of the Company have not conducted market research and are not aware of
statistical data which would support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company, none of whom is a
professional business analyst. Management intends to concentrate on identifying
preliminary prospective business opportunities which may be brought to its
attention through present associations of the Company's officers and directors,
or by the Company's shareholders. In analyzing prospective business
opportunities, management will consider such matters as the available technical,
financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of
present and expected competition; the quality and experience of management
services which may be available and the depth of that management; the potential
for further research, development, or exploration; specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; the potential for growth or expansion; the potential for profit;
the perceived public recognition of acceptance of products, services, or trades;
name identification; and other relevant factors. Officers and directors of the
Company expect to meet personally with management and key personnel of the
business opportunity as part of their investigation. To the extent possible, the
Company intends to utilize written reports and personal investigation to
evaluate the above factors. The Company will not acquire or merge with any
company for which audited financial statements cannot be obtained within a
reasonable period of time after closing of the proposed transaction.
Management of the Company, while not especially experienced in matters
relating to the new business of the Company, shall rely upon their own efforts
and, to a much lesser extent, the efforts of the Company's shareholders, in
accomplishing the business purposes of the Company. It is not anticipated that
any outside consultants or advisors will be utilized by the Company to
effectuate its business purposes described herein. However, if the Company does
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retain such an outside consultant or advisor, any cash fee earned by such party
will need to be paid by the prospective merger/ acquisition candidate, as the
Company has no cash assets with which to pay such obligation. There have been no
contracts or agreements with any outside consultants and none are anticipated in
the future.
The Company will not restrict its search for any specific kind of firms,
but may acquire a venture which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status of any business in
which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. However, the Company
does not intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
It is anticipated that the Company will incur nominal expenses in the
implementation of its business plan described herein. Because the Company has no
capital with which to pay these anticipated expenses, present management of the
Company will pay these charges with their personal funds, as interest free loans
to the Company. However, the only opportunity which management has to have these
loans repaid will be from a prospective merger or acquisition candidate.
Management has agreed among themselves that the repayment of any loans made on
behalf of the Company will not impede, or be made conditional in any manner, to
consummation of a proposed transaction.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. On the consummation of a
transaction, it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition, the Company's
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of the Company's shareholders or may
sell their stock in the Company. Any terms of sale of the shares presently held
by officers and/or directors of the Company will be also afforded to all other
shareholders of the Company on similar terms and conditions. Any and all such
sales will only be made in compliance with the securities laws of the United
States and any applicable state.
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It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has successfully consummated a merger or acquisition and the Company is no
longer considered a "shell" company. Until such time as this occurs, the Company
will not attempt to register any additional securities. The issuance of
substantial additional securities and their potential sale into any trading
market which may develop in the Company's securities may have a depressive
effect on the value of the Company's securities in the future, if such a market
develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company, would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis of verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise. The manner in which the
Company participates in an opportunity will depend on the nature of the
opportunity, the respective needs and desires of the Company and other parties,
the management of the opportunity and the relative negotiation strength of the
Company and such other management.
With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of the Company which the
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may
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be subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.
As stated hereinabove, the Company will not acquire or merge with any
entity which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The Company
is subject to all of the reporting requirements included in the 34 Act. Included
in these requirements is the affirmative duty of the Company to file independent
audited financial statements as part of its Form 8-K to be filed with the
Securities and Exchange Commission upon consummation of a merger or acquisition,
as well as the Company's audited financial statements included in its annual
report on Form 10-K (or 10-KSB, as applicable). If such audited financial
statements are not available at closing, or within time parameters necessary to
insure the Company's compliance with the requirements of the 34 Act, or if the
audited financial statements provided do not conform to the representations made
by the candidate to be acquired in the closing documents, the closing documents
will provide that the proposed transaction will be voidable, at the discretion
of the present management of the Company. If such transaction is voided, the
agreement will also contain a provision providing for the acquisition entity to
reimburse the Company for all costs associated with the proposed transaction.
YEAR 2000 DISCLOSURE
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, many
computer applications could fail or create erroneous results by or at the Year
2000. As a result, many companies will be required to undertake major projects
to address the Year 2000 issue. Because the Company has no assets, including any
personal property such as computers, it is not anticipated that the Company will
incur any negative impact as a result of this potential problem. However, it is
possible that
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this issue may have an impact on the Company after the Company successfully
consummates a merger or acquisition. Management intends to address this
potential problem with any prospective merger or acquisition candidate. There
can be no assurances that new management of the Company will be able to avoid a
problem in this regard after a merger or acquisition is so consummated.
COMPETITION
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to acquire
any properties. The Company intends to attempt to acquire assets or a business
in exchange for its securities which assets or business is determined to be
desirable for its objectives.
The Company operates from its offices at 5650 Greenwood Plaza Blvd., Suite
216, Englewood, Colorado 80111. This space is provided to the Company on a rent
free basis by Gregory J. Simonds, an officer and director and a principal
shareholder of the Company, and it is anticipated that this arrangement will
remain until such time as the Company successfully consummates a merger or
acquisition. Management believes that this space will meet the Company's needs
for the foreseeable future.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as the securities of the Company
beneficially owned by all directors and officers of the Company. Unless
otherwise indicated, the shareholders listed possess sole voting and investment
power with respect to the shares shown.
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NAME AND AMOUNT AND
ADDRESS OF NATURE OF
BENEFICIAL BENEFICIAL PERCENT OF
TITLE OF CLASS OWNER OWNER CLASS
- -------------- ----- ----- -----
Common Gregory J. Simonds(1) 135,184 27.0%
5650 Greenwood Plaza Blvd.
Suite 216
Englewood, CO 80111
Common Gregory W. Skufca 119,184 23.8%
2191 W. Dry Creek Road
Littleton, CO 80120
Common Gilberta Gara(1) 35,000 7.0%
RR 2, Box 241
Torrington, WY 82240
Common Ray Daniels 40,000 8.0%
898 Pimlico Court
Boulder, CO 80303
Common Gerald Loffredo 49,000 9.8%
1990 W. Rockrose Way
Chandler, AZ 85248
Common Jack Beam 47,816 9.6%
5910 S. University Blvd.
Suite C-18, #429
Littleton, CO 80121
Common Mike Wolf 43,612 8.7%
3430 E. Geddes Place
Littleton, CO 80122
Common All Officers and 170,184 34.0%
Directors as a
Group (2 person)
- ------------------------------
(1) Officer and Director.
The balance of the Company's outstanding Common Shares are held by 3
persons.
(b) Security Ownership of Management.
The following table sets forth the beneficial ownership for each class of
equity securities of Buckeye Oil and Gas, Inc. beneficially owned by all
directors and officers of the Company.
15
<PAGE>
NAME AND AMOUNT AND
ADDRESS OF NATURE OF
BENEFICIAL BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNER OF CLASS
- -------------- ----- ----- --------
Common Gregory J. Simonds(1) 135,184 27.0%
5650 Greenwood Plaza Blvd.
Suite 216
Englewood, CO 80111
Common Gilberta Gara(1) 35,000 7.0%
RR 2, Box 241
Torrington, WY 82240
Common All Officers and 170,184 34.0%
Directors as a
Group (2 person)
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
The directors and officers of the Company are as follows:
Name Age Position
---- --- --------
Gregory J. Simonds 48 President and Director
Gilberta P. Gara 57 Secretary, Treasurer
and Director
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly elected
and qualified. Vacancies in the existing Board of Directors are filled by
majority vote of the remaining Directors. Officers of the Company serve at the
will of the Board of Directors. There is no family relationship between any
executive officer and director of the Company.
RESUMES
GREGORY J. SIMONDS, is President and a director of the Company, positions
he has held since June 1998. In addition, since October 1994 Mr. Simonds has
been President and a director of 3PM Holding Corp., Inc., a public reporting
company whose business plan is similar to that of the Company. From November
1996 through November 1998, Mr. Simonds was President and a director of
Princeton Management Corp., a public reporting company whose business was also
similar to that of the Company. Relevant to the two previous entities, see
"Previous Blank Check Experience" and "Conflicts of Interest" below. Since June
1991, Mr. Simonds has been self-employed, acting as a consultant to various
different
16
<PAGE>
companies, both public and private, as well as managing his own investment
portfolio. During the last five years, some of the companies which Mr. Simonds
provided consulting services included Knight Natural Gas, Inc., a publicly held
company located in Denver, Colorado, where Mr. Simonds arranged for the merger
between the aforesaid company and Kalan Gold Corp., Golden Chain Marketing, a
privately held marketing company, which Mr. Simonds assisted in arranging for
said company to become publicly held and Marquee Display, Inc., a privately held
marketing company engaged in selling and marketing golf related products. Mr.
Simonds received a Bachelor of Science degree from New England College,
Henniker, New Hampshire in 1973. Mr. Simonds devotes only such time as necessary
to the business of the Company, which time is not expected to exceed 20 hours
per month.
GILBERTA P. GARA, is Secretary, Treasurer and a director of the Company,
positions she has held since June 1998. Prior, from the Company's inception
until June 1998, she was President, Treasurer and a director of the Company. In
addition to her positions with the Company, since November 1994, Ms. Gara has
also been an independent distributor for The People's Network, a television
network based in Dallas, Texas. From October 1986 through November 1998, Ms.
Gara was an officer and director of Princeton Management Corp., a Colorado
corporation whose principal business was similar to that of the Company. See
"Prior Blank Check Experience" below. Prior, from 1990 through October 1994, she
was the owner and operator of Gara & Sons, Torrington, Wyoming, a distributor of
giftware lines. In January 1992, Ms. Gara filed a petition for protection under
the U.S. Bankruptcy Code with the United States Federal Bankruptcy Court located
in Denver, Colorado, where a discharge was entered in May 1992. She devotes only
such time as necessary to the business of the Company, which is not expected to
exceed 20 hours per month.
PRIOR "BLANK CHECK" EXPERIENCE
Mr. Simonds and Ms. Gara were officers and directors of Princeton
Management Corporation, a Colorado corporation ("Princeton"), whose principal
business was consistent with the business of the Company as outlined
hereinabove. Princeton filed a registration statement with the SEC on Form
10-SB, which became effective in March 1997. Effective November 17, 1998,
pursuant to a definitive agreement, Princeton acquired all of the issued and
outstanding securities of USA Service Systems, Inc. ("USA"), a Florida
corporation. The terms of the transaction provided that Princeton undertook a
forward split of its issued and outstanding common stock, whereby 4.33 shares of
common stock were issued in exchange for each share of common stock then issued
and outstanding in order to establish the number of issued and outstanding
common shares at closing to be 1,250,000 shares. Princeton and USA entered into
a share exchange agreement wherein Princeton issued an aggregate of 3,750,000
"restricted" shares of the its Common Stock
17
<PAGE>
to the USA shareholders in exchange for all of the issued and outstanding shares
of USA. USA became a wholly owned subsidiary of Princeton. Princeton also
changed its name to "USA Service Systems, Inc." Mr. Simonds and Ms. Gara
resigned their positions as officers and directors upon closing of the aforesaid
transaction.
In addition, Mr. Simonds is also an officer and director of 3PM Holding
Corp., a Colorado corporation ("3PM"), whose principal business is consistent
with the business of the Company as outlined hereinabove. 3PM filed a
registration statement with the SEC on Form 10-SB, which became effective in
January 1998. Effective May 19, 1998, 3PM entered into a letter of intent with
Northwood Sports, Inc., a Canadian corporation ("Northwood"), whereby 3PM agreed
in principle to acquire all of the issued and outstanding shares of Northwood in
exchange for issuance by 3PM of previously unissued "restricted" common stock.
The relevant terms of the proposed transaction require 3PM to (i) undertake a
"forward split" of its common stock, whereby 2.4 shares of common stock shall be
issued in exchange for each share of common stock issued and outstanding, in
order to establish the number of issued and outstanding common shares of 3PM at
Closing to be 1,200,000 shares; and (ii) issue to the Northwood shareholders an
aggregate of 4,800,000 "restricted" common shares (post split), representing 80%
of the 3PM's then outstanding common stock, in exchange for all of the issued
and outstanding shares of Northwood.
The proposed transaction between 3PM and Northwood was terminated prior to
closing as a result of certain inconsistencies in information provided to 3PM by
Northwood which arose as part of the due diligence review undertaken by 3PM
prior to closing. In this regard, management of 3PM is continuing to review
prospective merger or acquisition candidates, but as of the date of this
Registration Statement, there is no agreement between 3PM and any third party
providing for 3PM to merge or acquire any assets.
The foregoing is a complete description of all "blank check" companies with
whom management of the Company has been, or is, involved.
CONFLICTS OF INTEREST
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.
The officers and directors of the Company are now and may in the future
become shareholders, officers or directors of other
18
<PAGE>
companies which may be formed for the purpose of engaging in business activities
similar to those conducted by the Company. Accordingly, additional direct
conflicts of interest may arise in the future with respect to such individuals
acting on behalf of the Company or other entities. Moreover, additional
conflicts of interest may arise with respect to opportunities which come to the
attention of such individuals in the performance of their duties or otherwise.
The Company does not currently have a right of first refusal pertaining to
opportunities that come to management's attention insofar as such opportunities
may relate to the Company's proposed business operations.
The officers and directors are, so long as they are officers or directors
of the Company, subject to the restriction that all opportunities contemplated
by the Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director. If the Company or
the companies in which the officers and directors are affiliated with both
desire to take advantage of an opportunity, then said officers and directors
would abstain from negotiating and voting upon the opportunity. However, all
directors may still individually take advantage of opportunities if the Company
should decline to do so. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities Act
of 1933 and the Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company Act of 1940
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences. The Company's Board
of Directors unanimously approved a resolution stating that it is the Company's
desire to be exempt from the Investment Company Act of 1940 via Regulation 3a-2
thereto.
19
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION.
None of the Company's officers and/or directors receive any compensation
for their respective services rendered unto the Company, nor have they received
such compensation in the past. They all have agreed to act without compensation
until authorized by the Board of Directors, which is not expected to occur until
the Company has generated revenues from operations after consummation of a
merger or acquisition. As of the date of this Registration Statement, the
Company has no funds available to pay directors. Further, none of the directors
are accruing any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of the Company's management for the purposes
of providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted common stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will be tendered by the acquisition or merger candidate, because the
Company has insufficient cash available. The amount of such finder's fee cannot
be determined as of the date of this Registration Statement, but is expected to
be comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.
20
<PAGE>
No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its employees.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There have been no related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES.
The Company's authorized capital stock consists of 125,000,000 shares, of
which 25,000,000 shares are Preferred Shares, par value $0.01 per share, and
100,000,000 are Common Shares, par value $0.001 per share. There are 500,000
Common Shares issued and outstanding as of the date of this filing. There are no
preferred shares issued or outstanding.
Common Stock. All shares of Common Stock have equal voting rights and, when
validly issued and outstanding, are entitled to one vote per share in all
matters to be voted upon by shareholders. The shares of Common Stock have no
preemptive, subscription, conversion or redemption rights and may be issued only
as fully-paid and nonassessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any. All shares of the Company's Common Stock issued and outstanding are
fully-paid and nonassessable. Holders of the Common Stock are entitled to share
pro rata in dividends and distributions with respect to the Common Stock, as may
be declared by the Board of Directors out of funds legally available therefor.
Preferred Shares. Shares of Preferred Stock may be issued from time to time
in one or more series as may be determined by the Board of Directors. The voting
powers and preferences, the relative rights of each such series and the
qualifications, limitations and restrictions thereof shall be established by the
Board of Directors, except that no holder of Preferred Stock shall have
preemptive rights. The Company has no shares of Preferred Stock outstanding, and
the Board of Directors does not plan to issue any shares of Preferred Stock for
the foreseeable future, unless the issuance thereof shall be in the best
interests of the Company.
21
<PAGE>
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein. Relevant thereto,
each shareholder of the Company has executed and delivered a "lock-up" letter
agreement, affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has successfully
consummated a merger or acquisition and the Company is no longer classified as a
"blank check" company. In order to provide further assurances that no trading
will occur in the Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who will
not release these respective certificates until such time as legal counsel has
confirmed that a merger or acquisition has been successfully consummated.
However, while management believes that the procedures established to preclude
any sale of the Company's securities prior to closing of a merger or acquisition
will be sufficient, there can be no assurances that the procedures established
relevant herein will unequivocally limit any shareholder's ability to sell their
respective securities before such closing.
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
There is no trading market for the Company's Common Stock at present and
there has been no trading market to date. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities and management does not intend to initiate any such
discussions until such time as the Company has consummated a merger or
acquisition. There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
a. Market Price. The Company's Common Stock is not quoted at the present
time.
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
22
<PAGE>
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
Management intends to strongly consider undertaking a transaction with any
merger or acquisition candidate which will allow the Company's securities to be
traded on a national exchange. However, there can be no assurances that, upon a
successful merger or acquisition, the Company will qualify its securities for
listing on NASDAQ or some other national exchange, or be able to maintain the
maintenance criteria necessary to insure continued listing. The failure of the
Company to qualify its securities or to meet the relevant maintenance criteria
after such qualification in the future may result in the discontinuance of the
inclusion of the Company's securities on a national exchange. In such event,
trading, if any, in the Company's securities may then continue in the OTC
Bulletin Board operated by the NASD or another low volume market, presuming that
such a listing is approved, of which there can be no assurance. As a result, a
shareholder may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's securities.
b. Holders. There are ten (10) holders of the Company's Common Stock. In
March 1986, the Company issued 245,000 of its Common Shares at $1.00 per share
for an aggregate of $245,000 in cash and services. In March 1999, the Board of
Directors authorized a forward split, issuing 2.040817 shares for each share
issued and outstanding, establishing the present issued and outstanding Common
Stock of 500,000 shares. All of the issued and outstanding shares of the
Company's Common Stock were issued in
23
<PAGE>
accordance with the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933.
As of the date of this Registration Statement, 500,000 shares of the
Company's Common Stock are eligible for sale under Rule 144 promulgated under
the Securities Act of 1933, as amended, subject to certain limitations included
in said Rule. In general, under Rule 144, a person (or persons whose shares are
aggregated), who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two-year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.
c. Dividends. The Company has not paid any dividends to date and has no
plans to do so in the immediate future.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and there are
no disagreements with the findings of said accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
In March 1986 the Company issued 245,000 shares of its common stock to 10
persons at a price of $1.00 per share, and in March 1999, declared a 2.040817
for one forward split. These shares were issued pursuant to exemption from the
registration requirements included under the Securities Act of 1933, as amended,
including but not necessarily limited to Section 4(2) of said Act. Each
shareholder was either an "accredited investor" (as that term is defined in the
1933 Act) or a sophisticated investor, and each shareholder was provided all
information necessary in order to allow each investor to exercise their
respective business judgment as to the merits of the investment. All of the
shares of Common Stock of the Company previously issued have been issued for
investment purposes in a "private transaction" and are "restricted" shares as
defined in Rule 144 under the Securities Act of 1933, as amended (the "Act").
These shares may not be offered for public sale except under Rule 144, or
otherwise, pursuant to the Act.
24
<PAGE>
As of the date of this Registration Statement, all of the issued and
outstanding shares of the Company's Common Stock are eligible for sale under
Rule 144 promulgated under the Securities Act of 1933, as amended, subject to
certain limitations included in said Rule. However, all of the shareholders of
the Company have executed and delivered a "lock-up" letter agreement which
provides that each such shareholder shall not sell their respective securities
until such time as the Company has successfully consummated a merger or
acquisition. Further, each shareholder has placed their respective stock
certificate with the Company's legal counsel, Andrew I. Telsey, P.C., who has
agreed not to release any of the certificates until the Company has closed a
merger or acquisition. Any liquidation by the current shareholders after the
release from the "lock-up" selling limitation period may have a depressive
effect upon the trading prices of the Company's securities in any future market
which may develop.
In general, under Rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of shares which
does not exceed the greater of one percent of the then outstanding Common Stock
or the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also permits, under certain circumstances, the sale of
shares without any quantity limitation by a person who has satisfied a two year
holding period and who is not, and has not been for the preceding three months,
an affiliate of the Company.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation incorporate the provisions of the
Colorado Business Corporation Act providing for the indemnification of officers
and directors and other persons against expenses, judgments, fines and amounts
paid in settlement in connection with threatened, pending or completed suits or
proceedings against such persons by reason of serving or having served as
officers, directors or in other capacities, except in relation to matters with
respect to which such persons shall be determined not to have acted in good
faith and in the best interests of the Company. With respect to matters as to
which the Company's officers and directors and others are determined to be
liable for misconduct or negligence, including gross negligence in the
performance of their duties to the Company, Colorado law provides for
indemnification only to the extent that the court in which the action or suit is
brought determines that such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to officers, directors or persons controlling the Company pursuant
to the foregoing, the Company has been informed that in the opinion of the U.S.
Securities and
25
<PAGE>
Exchange Commission such indemnification is against public policy as expressed
in the 1933 Act, and is therefore unenforceable.
PART F/S
FINANCIAL STATEMENTS.
The following financial statements are attached to this Registration
Statement and filed as a part thereof. See page 27.
1) Table of Contents - Financial Statements
2) Independent Auditors' Report
3) Balance Sheet
4) Statement of Operations
5) Statement of Cash Flows
6) Statement of Shareholders' Equity
7) Notes to Financial Statements
26
<PAGE>
BUCKEYE OIL AND GAS, INC.
FINANCIAL STATEMENTS
with
INDEPENDENT AUDITORS' REPORT
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
AND FOR THE PERIOD JANUARY 1, 1997 (INCEPTION)
THROUGH DECEMBER 31, 1998
27
<PAGE>
BUCKEYE OIL & GAS, INC.
TABLE OF CONTENTS
Page
----
Independent Auditors' Report 1
Balance Sheet 2
Statement of Operations 3
Statement of Cash Flows 4
Statement of Changes in Stockholders' Equity 5
Notes to Financial Statements 6
28
<PAGE>
Kish, Leake & Associates P.C.
Certified Public Accountants
J.D.Kish, C.P.A., M.B.A. 7901 E Belleview Ave - Suite 220
James D. Leake, C.P.A., M.T. Englewood, Colorado 80111
--------------------- Telephone (303) 779-5006
Arleen R. Brogan, C.P.A. Facsimile (303) 779-5724
Independent Auditors' Report
Board of Directors
Buckeye Oil and Gas, Inc.
We have audited the accompanying balance sheet of Buckeye Oil and Gas, Inc. (a
Developmental Stage Company), at December 31, 1998 and the related statement of
operations, stockholders' equity, and cash flows for he years ended December 31,
1998 and 1997 and the period January 1, 997 (Inception) through December 31,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Buckeye Oil and Gas, Inc., at
December 31, 1998 and the results of its operations and its cash flows for the
years ended December 31, 1998 and 1997 and the period January 1, 1997
(Inception) through December 31, 1998 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is a development stage
enterprise. The deficiency in working capital as of December 31, 1998 raises
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.
s/Kish, Leake & Associates, P.C.
Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
February 2, 1999
-1-
29
<PAGE>
<TABLE>
Buckeye Oil and Gas, Inc.
(A Development Stage Company)
Balance Sheet
- ------------------------------------------------------------------------------
<CAPTION>
Audited
December
31, 1998
--------
<S> <C>
ASSETS $ 0
========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES $ 0
--------
SHAREHOLDERS' EQUITY
Common Stock, $.001 Par Value
Authorized 245,000 Shares;
Issued and Outstanding 245,000 Shares 245
Capital Paid in Excess Of
Par Value of Common Stock 244,755
Retained (Deficit) (245,000)
Retained Earnings (Deficit) Accumulated During The
Development Stage 0
--------
TOTAL SHAREHOLDERS' EQUITY 0
--------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 0
========
The Accompanying Notes Are An Integral Part Of These Financial
Statements.
-2-
</TABLE>
30
<PAGE>
<TABLE>
Buckeye Oil and Gas, Inc.
(A Development Stage Company)
Statement Of Operations
- ------------------------------------------------------------------------------
<CAPTION>
January
1, 1997
Audited Audited (Inception)
Year Ended Year Ended through
December December December
31, 1998 31, 1997 31, 1998
-------- -------- --------
<S> <C> <C> <C>
REVENUE: $ 0 $ 0 $ 0
EXPENSES: 0 0 0
-------- -------- --------
Net (Loss) Before Other Income 0 0 0
-------- -------- --------
Other Income - Interest 0 0 0
-------- -------- --------
Net Income (Loss) $ 0 $ 0 $ 0
======== ======== ========
Basic Earnings (Loss) Per Share $0.00 $0.00 $0.00
======== ======== ========
Common Shares Outstanding 245,000 245,000 245,000
======== ======== ========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
-3-
</TABLE>
31
<PAGE>
<TABLE>
Buckeye Oil and Gas, Inc.
(A Development Stage Company)
Statement Of Cash Flows
- ------------------------------------------------------------------------------
<CAPTION>
January
1, 1997
Audited Audited (Inception)
Year Ended Year Ended through
December December December
31, 1998 31, 1997 31, 1998
-------- -------- --------
<S> <C> <C> <C>
Net Income (Loss) $ 0 $ 0 $ 0
Adjustments to Reconcile Net Loss
to Net Cash Used in Operating Activities: 0 0 0
Net Flows From Operations 0 0 0
-------- -------- --------
Cash Flows From Investing Activities 0 0 0
-------- -------- --------
Cash Flows From Financing Activities 0 0 0
-------- -------- --------
Net Increase In Cash 0 0 0
Cash At Beginning Of Period 0 0 0
-------- -------- --------
Cash At End Of Period $ 0 $ 0 $ 0
======== ======== ========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
-4-
</TABLE>
32
<PAGE>
<TABLE>
Buckeye Oil and Gas, Inc.
(A Development Stage Company)
Statement Of Shareholders' Equity
- ---------------------------------------------------------------------------------------
<CAPTION>
Accumulated
Number Of Capital Paid During The
Common Common In Excess Of Development Retained
Shares Stock Par Value Stage (Deficit) Total
-------- ------ ---------- ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance At
December 31, 1996 245,000 $ 245 $ 244,755 $ 0 ($245,000) $ 0
Net (Loss) At
December 31, 1997 0 0
-------- ------ ---------- ----------- -------- -------
Balance At
December 31, 1997 245,000 245 244,755 0 (245,000) 0
Net (Loss) At
December 31, 1998 0 0
-------- ------ ---------- ----------- -------- -------
Balance At
December 31, 1998 245,000 $ 245 $ 244,755 $ 0 ($245,000) $ 0
======== ====== ========== =========== ======== =======
The Accompanying Notes Are An Integral Part Of These Financial Statements.
-5-
</TABLE>
33
<PAGE>
Buckeye Oil and Gas, Inc.
(A Development Stage Company)
Notes to Financial Statements
For The Year Ended December 31, 1998
- ------------------------------------
Note 1 - Organization and Summary of Significant Accounting Policies
- --------------------------------------------------------------------
ORGANIZATION:
On March 7, 1986 Buckeye Oil and Ga, Inc. (the Company) was incorporated under
the laws of Colorado, for the purpose of gas exploration. In December 1989 the
Company ceased operations in the oil and gas business. On January 1, 1997, the
Company's new management decided to search for a merger or acquisition candidate
and therefore has entered into the development stage.
DEVELOPMENT STAGE:
The Company is currently in the developmental stage and has no significant
operations to date.
STATEMENT OF CASH FLOWS:
For purposes of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Cash paid for interest and taxes for the years ended December 31, 1998 and 1997
was $-0-.
USE OF 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. Actual results could differ from those estimates.
BASIC (LOSS) PER COMMON SHARE:
The basic (loss) per common share is computed by dividing the net (Loss) for the
period by the weighted average number of shares outstanding at December 31, 1998
and 1997.
-6-
34
<PAGE>
<TABLE>
Buckeye Oil & Gas, Inc.
(A Development Stage Company)
Balance Sheet
- ----------------------------------------------------------------------
<CAPTION>
Unaudited Audited
March December
31, 1999 31, 1998
--------- ---------
<S> <C> <C>
ASSETS
Current Assets - Cash $ 3,000 $ 0
--------- ---------
TOTAL ASSETS $ 3,000 $ 0
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts Payable $ 2,700 $ 0
--------- ---------
Total Current Liabilities 2,700 0
--------- ---------
SHAREHOLDERS' EQUITY
Preferred Stock, $.01 Par Value
Authorized 25,000,000 Shares;
Issued And Outstanding 0 Shares 0 0
Common Stock, $.001 Par Value
Authorized 100,000,000 Shares;
Issued And Outstanding 500,000 Shares** 500 500
Capital Paid In Excess of
Par Value of Common Stock 252,500 244,500
Retained Earnings (Deficit) (245,000) (245,000)
Deficit Accumulated During The
Development Stage (7,700) 0
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 300 0
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,000 $ 0
========= =========
**Restated to reflect forward split of 2.040817 to 1.
The Accompanying Notes Are An Integral Part Of These
Financial Statements.
</TABLE>
35
<PAGE>
<TABLE>
Buckeye Oil & Gas, Inc.
(A Development Stage Company)
Statement Of Operations
- ----------------------------------------------------------------------
<CAPTION>
Unaudited Unaudited Unaudited
Three Month Three Month Jan. 1, 1997
Interim Period Interim Period (Inception)
Ended Ended Through
March March March
31, 1999 31, 1998 31, 1999
------------ ------------ ----------
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
Expenses:
Administrative Services 900 0 900
Professional Fees 6,500 0 6,500
Rent 300 0 300
------------ ------------ ----------
Total 7,700 0 7,700
------------ ------------ ----------
Net (Loss) Before Other Income $ (7,700) $ 0 $ (7,700)
Other Income - Interest 0 0 0
------------ ------------ ----------
Net Income (Loss) $ (7,700) $ 0 $ (7,700)
============ ============ ==========
Basic Earnings (Loss)
Per Share $ (0.00) $ 0.00
============ ============
Weighted Average Common Shares
Outstanding 500,000 500,000
============ ============
The Accompanying Notes Are An Integral Part Of These
Financial Statements.
</TABLE>
36
<PAGE>
<TABLE>
Buckeye Oil & Gas, Inc.
(A Development Stage Company)
Statement Of Cash Flows
- ----------------------------------------------------------------------
<CAPTION>
Unaudited Unaudited Unaudited
Three Month Three Month Jan. 1, 1997
Interim Period Interim Period (Inception)
Ended Ended Through
March March March
31, 1999 31, 1998 31, 1999
------------ ------------ ----------
<S> <C> <C> <C>
Net (Loss) $ (7,700) $ 0 $ (7,700)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Increase in Account Payable 2,700 0 2,700
------------ ------------ ----------
Net Flows From Operations (5,000) 0 (5,000)
------------ ------------ ----------
Cash Flows From
Investing Activities:
0 0 0
------------ ------------ ----------
Net Cash Flows From Investing 0 0 0
------------ ------------ ----------
Cash Flows From
Financing Activities:
Additional Paid In Capital 8,000 0 8,000
------------ ------------ ----------
Cash Flows From Financing 8,000 0 8,000
------------ ------------ ----------
Net Increase In Cash 3,000 0 3,000
Cash At Beginning Of Period 0 0 0
------------ ------------ ----------
Cash At End Of Period $ 3,000 $ 0 $ 3,000
============ ============ ==========
The Accompanying Notes Are An Integral Part Of These
Financial Statements.
</TABLE>
37
<PAGE>
<TABLE>
Buckeye Oil & Gas, Inc.
(A Development Stage Company)
Unaudited Statement Of Shareholders' Equity
- -----------------------------------------------------------------------------------------------
<CAPTION>
Deficit
Accumulated
Number Of Capital Paid During The
Common Common In Excess of Development Retained
Shares** Stock** Par Value Stage Deficit Total
-------- ------- --------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance At
December 31, 1996 500,000 $ 500 $ 244,500 $ 0 $(245,000) $ 0
Net (Loss) At
December 31, 1997 - - - 0 - 0
-------- ------- --------- ----------- --------- --------
Balance At
December 31, 1997 500,000 $ 500 $ 244,500 $ 0 $(245,000) $ 0
Net (Loss) At
December 31, 1998 - - - 0 0
-------- ------- --------- ----------- --------- --------
Balance At
December 31, 1998 500,000 $ 500 $ 244,500 $ 0 $(245,000) 0
Net (Loss) At
March 31, 1999 - - 8,000 (7,700) - 300
-------- ------- --------- ----------- --------- --------
Balance at
March 31, 1999 500,000 $ 500 $ 252,500 $ (7,700) $(245,000) $ 300
======== ======= ========= =========== ========= ========
**Restated to reflect forward split of 2.040817 to 1.
The Accompanying Notes Are An Integral Part Of These
Financial Statements.
</TABLE>
38
<PAGE>
Buckeye Oil & Gas, Inc.
(A Development Stage Company)
Notes To Unaudited Financial Statements
For The Three Month Period Ended March 31, 1999
Note 1 - Unaudited Financial Information
The information furnished herein was taken from the books and records of the
Company without audit. The Company believes, however, that it has made all
adjustments necessary to reflect properly the results of operations for the
three month interim period ended March 31, 1999 and 1998. The adjustments
consist only of normal reoccurring accruals. The results of operations for the
three month interim period ended March 31, 1999 are not necessarily indicative
of the results to be expected for the year ended December 31, 1999.
Note 2 - Equity
On March 6, 1999 the Board of Directors approved a 2.040817 forward common stock
split.
39
<PAGE>
PART III
ITEM 1. EXHIBIT INDEX
No. Sequential
Page No.
(3) Articles of Incorporation and Bylaws
3.1 Restated Articles of Incorporation *
3.2 Bylaws *
(4) Instruments Defining the Rights of Holders
4.1 Form of Lock-up Agreements Executed
by the Company's Shareholders *
(27) Financial Data Schedule
27.1 Financial Data Schedule 42
- ------------------
* Previously filed with the SEC as part of the initial Form 10- SB filing
undertaken by the Company on or about April 7, 1999.
40
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
BUCKEYE OIL AND GAS, INC.
(Registrant)
Date: June 23, 1999
By: s/Gregory J. Simonds
------------------------------
Gregory J. Simonds
President
41
<PAGE>
BUCKEYE OIL AND GAS, INC.
EXHIBIT 27.1
FINANCIAL DATA SCHEDULE
42
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998, AND THE
UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1999,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-END> DEC-31-1998 MAR-31-1999
<CASH> 0 3,000
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 3,000
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 3,000
<CURRENT-LIABILITIES> 0 2,700
<BONDS> 0 0
0 0
0 0
<COMMON> 245 500
<OTHER-SE> (245) (200)
<TOTAL-LIABILITY-AND-EQUITY> 0 3,000
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 7,700
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 (7,700)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 (7,700)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 (7,700)
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
</TABLE>
