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SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D. C. 20549
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FORM 10-SB
General Form for Registration of Securities
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
L.C.M. Equity, Inc.
(Exact name of registrant as specific in its charter)
Nevada Applied For
(State of Incorporation) (I.R.S. Employer
Identification No.)
1028 Hamilton Street
Suite 404
Vancouver, British Columbia
Canada V6B 2R9
(Address of executive offices, including postal code)
Registrant's telephone number: (604) 408-7553
Copies to: Conrad C. Lysiak, Esq.
601 West First Avenue
Suite 503
Spokane, Washington 99201
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
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(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK
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(Title of Class)
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ITEM 1. DESCRIPTION OF BUSINESS.
Background
L.C.M. Equity, Inc. was incorporated under the laws of the state
of Nevada on January 12, 1999 to engage in the business of determining
the sex of animals prior to conception. On or about March 10, 2000,
L.C.M. Equity changed it business purpose to creating and implementing
on-line Internet literary interaction. On March 20, 2000, L.C.M.
Equity, Inc. incorporated Uscribble.com Writing Inc. hereinafter
"Uscribble" as a wholly owned subsidiary corporation. Uscribble was
incorporated under the laws of the province of British Columbia. L.C.M
Equity, Inc. and Uscribble are collectively referred to hereinafter as
the "Company."
General
The Company is in the start-up stage and has not initiated
operations. The information set forth below has not been implemented
by the Company as of the date hereof, but represents the Company's plan
of operation in the future. Accordingly, there is no historical basis
for the following information.
The Company intends to engage in the business of creating and
implementing on-line Internet literary interaction for a membership
fee. On-line Internet literary interaction will provide a forum for
amateur writers to:
1. Showcase and improve their literary composition by way of
competitions.
2. Interact with one another through discussion on a chat site.
3. Obtain literary educational tools from the Company.
In order to implement the foregoing, the Company intends to
establish an Internet Web-site. As of the date hereof, the web-site
has not been established, however, the Company is in the process of
developing the same.
Internet Web-Site
The Company's website will be accessible to customers with a
desktop or laptop personal computer with Internet access through a dial
up server or cable or network access.
Persons who wish to participate will be able to subscribe for
membership over the Internet by completing an application form
appearing at the website. The membership fee will be $19.95 and will
be paid via a credit card. Additional fees will be charged to display
literary works.
The website will be controlled by the Company and will be designed
to invite customers to sign up and apply for a membership. Upon
acceptance, the approved customer is then given a username and password
and is thereby able to access the Company's website over the Internet
through their Internet service provider.
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The Company's website will allow customers enter contests,
interact with other authors on a chat page, and display their literary
compositions. No additional fee will be charged to interact on the
chat page or for one entry to each of the Company's annual contests,
however, a fee will be charged for additional entries to the annual
contests.
The Company owns and has the copyright to the website
www.Uscribble.com. The Company intends to sell space on its website
to advertisers. The Company does not intend to limit the nature of the
advertising.
Contests
The Company intends to promote prose and poetry contests. The
Company will charge a membership fee $19.95 which will allow one entry
into each of the Company's annual contests. The Company intends to
hire three established authors as independent contractors to act as
judges of the competition. As of the date hereof, the Company has
entered into negotiations with a number of individuals to act as judges
of the competition, however, no agreements have been reached with any
individual and there is no assurance that the Company will ever enter
into any agreements with any individuals to act as judges of the
Company's competition.
Publications
The Company intends to develop publications which are promoted by
the Company to the general public and for use in developing literary
skills such as writing and publish prose and poetry. The publications
will be written by the Company with the aid of literary consultants to
the Company. As of the date hereof, the Company has not retained the
services of any literary consultants and there is no assurance that the
Company will ever enter any agreements with any literary consultants.
The Company has not determined if it will print its own publications or
retain the services of a non-affiliated third party to print its
publications. As of the date hereof, the Company has not produced any
publications and there is no assurance that the Company will ever
produce any of its own publications.
Competition
The Company expects to encounter competition from existing
literary societies which sponsor writing and poetry contests as well
book publishers. Many of the Company's potential competitors have or
may have, as the case may be, greater capital and other resources than
the Company. There can be no assurance that the Company will be able
to generate meaningful revenues or earnings from its proposed Internet
website operations or otherwise successfully compete in the future.
The Company may have difficulty in attracting members to its site
if it is unable to construct its website in such a fashion as to
provide a unique and enjoyable literary experience for members. In
addition, the Company recognizes the need to spend funds on advertising
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and promotion of its site through a host of Internet sites that
management believes are visited by potential members who enjoy the
challenge of writing and/or attempting to publish prose or poetry.
Literary Skills Programs
The Company's intends to develop and offer a basic literary skill
education to its members. The basic literary skill education will
consist of articles and dialogue which serve to expand the literary
awareness of amateur writers. From time to time, the Company intends
to have online speakers present and teach writing skills to its
members. The Company intends to supplement its program with its
publications.
The Company intends to advertise and promote its club through all
available advertising mediums, which are in any manner related to the
publications of books, book club, poetry clubs and publications,
television shows or Internet sites which relate to the foregoing. As
of the date hereof, the Company has not initiated any advertising and
does not intend to do so until such time as the construction of its
Internet website has been completed.
Software
In order to initiate its operations, the Company has entered into
a non-exclusive software license agreement with Web-Scape Internet
Management of Vancouver, British Columbia to acquire and develop all
software necessary to operate its literary website. The software is
customized and includes Hyper Text Mark-up Language (HTML) coding.
The Company does not intend to undertake any software development
or research, but intends to rely entirely on the efforts of Web-Scape
Internet Management. The Company may not license the software to
anyone other than wholly owned subsidiary corporations of the Company.
In the event that Web-Scape Internet Management ceases operations
for any reasons or refuses to renew its agreement with the Company, the
Company will seek the services of another vendor.
The Company also believes that the lack of financial security on
the Internet is hindering economic activity thereon. To ensure the
security of transactions occurring over the Internet, U.S. federal
regulations require that any computer software used within the United
States contain a 128-bit encoding encryption, while any computer
software exported to a foreign country contain a 40-bit encoding
encryption. There is uncertainty as to whether the 128-bit encoding
encryption required by the U.S. is sufficient security for transactions
occurring over the Internet. The Company believes that financial
security on the Internet is achievable by employing a VeriSign Secure
Site Digital ID from the Canadian Imperial Bank of Commerce (CIBC).
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Trademarks and Copyrights
The Company intends to obtain trademarks and copyrights when
necessary. As of the date hereof the Company owns no trademarks or
copyrights. Prose and poetry appearing on its website will be
copyrighted in the name of the author.
Year 2000
The Year 2000 issue is the result of computer programs written
using two digits rather than four to define the applicable year. As a
result, date-sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in system
failures or miscalculations causing disruptions of operations,
including among others, temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Since the Company has yet to acquire any technology in support of
its services, the planned acquisitions will most likely involve
hardware and software which is relatively new and therefore management
does not anticipate that it will incur significant operating expenses
or be required to invest heavily in computer systems improvements to be
Year 2000 compliant. As the Company makes arrangements with hardware
and software suppliers, the Company intends to determine the extent to
which the Company's systems may be vulnerable should those third
parties fail to address and correct their own Year 2000 issues and take
measures to reduce the Company's exposure, such as, finding alternative
suppliers or requiring the suppliers to correct Year 2000 compliance
issues prior to the Company acquiring the product. The Company
anticipates that this will be an ongoing process as the Company begins
to implement its plan of operation through 2000. There can be no
assurances that the systems of suppliers or other companies on which
the Company may rely on will be converted in a timely manner and will
not have a materially adverse effect on the Company's systems.
Additionally there can be no assurances that the computer systems
necessary to maintain the viability of the Internet will be Year 2000
compliant. The Company believes that it is taking the steps necessary
regarding Year 2000 compliance issues with respect to matters within
its control.
Company's Office
The Company's headquarters are located at 1028 Hamilton Street,
Suite 404, Vancouver, British Columbia, Canada V6B 2R9 and its
telephone number (604) 408-7553.
Employees
The Company is a development stage company and currently has one
employee other than its Officers and Directors. The Company intends to
hire additional employees as needed.
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Risk Factors
1. Company No History of Earnings. The Company has no operating
history and is subject to all of the risks inherent in a developing
business enterprise including lack of cash flow and service acceptance.
2. Development and Market Acceptance of Services. The Company's
success and growth will depend upon the Company's ability to market its
services. The Company's success will depend in part upon the market's
acceptance of, and the Company's ability to deliver and support its
literary club.
3. Dependence on Technology Suppliers. The Company is dependent
upon an outside technology suppliers for the preparation and creation
of its web site.
4. Liquidity; Need for Additional Financing. The Company
believes that it does not have the cash it needs for at least the next
twelve months based upon its internally prepared budget. Further, the
Company's cash requirements are not easily predictable and there is a
possibility that its budget estimates will prove to be inaccurate. If
the Company is unable to generate a positive cash flow, it will be
required to curtail operations substantially and seek additional
capital. There is no assurance that the Company will be able to obtain
additional capital if required, or if capital is available, to obtain
it on terms favorable to the Company. The Company may suffer from a
lack of liquidity in the future which could impair its short-term
marketing and sales efforts and adversely affect its results of
operations.
5. Foreign Operations Risks. The Company's principal business
operations will be located in Vancouver, British Columbia, Canada.
British Columbia laws relating to taxation, business licensing and
other areas may be different from those typically encountered in the
United States.
6. Competition. Most of the Company's competitors have
substantially greater financial, technical and marketing resources than
the Company. In addition, the Company's services compete indirectly
with all other forms of publishing.
7. Reliance Upon Directors and Officers. The Company is wholly
dependent, at the present, upon the personal efforts and abilities of
its Officers and Directors, who exercise control over the day to day
affairs of the Company.
8. Issuance of Additional Shares. 194,850,000 shares of Common
Stock or 97.43% the 200,000,000 authorized shares of Common Stock of
the Company are unissued. The Board of Directors has the power to
issue such shares, subject to shareholder approval, in some instances.
Although the Company presently has no commitments or contracts to issue
any additional shares to other persons. The Company may in the future
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attempt to issue shares to acquire products, equipment or for other
corporate purposes. Any additional issuance by the Company, from its
authorized but unissued shares, would have the effect of diluting the
interest of existing shareholders.
9. Indemnification of Officers and Directors for Securities
Liabilities. The laws of the State of Nevada provide that the Company
could indemnify any Director, Officer, agent and/or employee as to
those liabilities and on those terms and conditions as are specified in
the Corporation Act of the State of Nevada. Further, the Company may
purchase and maintain insurance on behalf of any such persons whether
or not the corporation would have the power to indemnify such person
against the liability insured against. The foregoing could result in
substantial expenditures by the Company and prevent any recovery from
such Officers, Directors, agents and employees for losses incurred by
the Company as a result of their actions. Further, the Company has
been advised that in the opinion of the Securities and Exchange
Commission, indemnification is against public policy as expressed in
the Securities Act of 1933, as amended, and is, therefore,
unenforceable.
10. Cumulative Voting, Preemptive Rights and Control. There are
no preemptive rights in connection with the Company's Common Stock.
Shareholders may be further diluted in their percentage ownership of
the Company in the event additional shares are issued by the Company in
the future. Cumulative voting in the election of Directors is not
provided for. Accordingly, the holders of a majority of the shares of
Common Stock, present in person or by proxy, will be able to elect all
of the Company's Board of Directors.
11. No Dividends Anticipated. At the present time the Company
does not anticipate paying dividends, cash or otherwise, on its Common
Stock in the foreseeable future. Future dividends will depend on
earnings, if any, of the Company, its financial requirements and other
factors.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company has inadequate cash to maintain operations during the
next twelve months. In order to meet its cash requirements the Company
will have to raise additional capital through the sale of securities or
loans. As of the date hereof, the Company has not made sales of
additional securities and there is no assurance that it will be able to
raise additional capital through the sale of securities in the future.
Further, the Company has not initiated any negotiations for loans to
the Company and there is no assurance that the Company will be able to
raise additional capital in the future through loans. In the event
that the Company is unable to raise additional capital, it may have to
suspend or cease operations.
The Company does not intend to conduct any research or development
of its services during the next twelve months other than as described
herein.
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The Company does not intend to purchase a plant or significant
equipment.
The Company will hire employees on an as needed basis, however,
the Company does not expect any significant changes in the number of
employees.
The Company expects to earn revenues in the fourth quarter of
2000. There is no assurance, however, that the Company will earn said
revenues as planned.
ITEM 3. DESCRIPTION OF PROPERTIES.
The Company does not own any real or personal property. The
Company's only asset is cash.
The Company's headquarters are located at 1028 Hamilton Street,
Suite 404, Vancouver, British Columbia, Canada V6B 2R9 and its
telephone number is (604) 408-7553. The Company rents the office space
on a month-to-month basis from April 1, 2000, pursuant to an oral
agreement. The monthly rental is US$350.00.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth the Common Stock ownership of each
person known by the Company to be the beneficial owner of five percent
or more of the Company's Common Stock, each director individually and
all officers and directors of the Company as a group. Each person has
sole voting and investment power with respect to the shares of Common
Stock shown, unless otherwise noted, and all ownership is of record and
beneficial.
Name and Number of Percent of
address of owner Shares Position Class
Brian McAlister 2,000,000 President and Chairman 38.83%
1265 Jefferson of the Board of
West Vancouver, B.C. Directors
Canada V7T 2B1
Lisa Zumpano 100,000 Secretary, Treasurer 1.94%
283 Davie Street Chief Financial Officer
#702 and a Director
Vancouver, B.C.
Canada V6B 5T6
John Donaldson 555,561 Member of the Board 10.79%
7811 Angus Drive of Directors
Vancouver, B.C.
Canada V6P 5K7
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All officers and 2,655,561 51.56%
directors as a
group (3 persons)
James Chan 277,777 5.39%
c/o Brent Asia
Pte. Ltd.
12 Louang Cresent
Singapore 508980
Peter Chow 277,777 5.39%
12 Jalan SS - 22A
Kaula Lumpa
Malaysia
Donna Lavigne 555,554 10.79%
1980 Gilespie Rd.
RR#1
Sooke, B.C.
Canada V0S 1N0
Roland Kwang 277,777 5.39%
Motorola Innovation Center
Aug Mo Kio Industrial Park
Singapore
Peter Whyte 277,777 5.39%
151-10090 152nd St.
#401
Surrey, B.C.
Canada V3R 8X8
Fred Lee 277,777 5.39%
Seven Union Trading Co. Ltd.
2nd Floor
162 Shun South Road
Taipei, Taiwan
Steve McKee 500,000 9.71%
5177 Alderfield Place
West Vancouver, BC
Canada V7W 2W7
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The officers and directors of the Company are as follows:
Name Age Position
Brian McAlister 43 President and Chairman of the Board
of Directors
Lisa Zumpano 28 Secretary, Treasurer, Chief
Financial Officer and a member of
the Board of Directors
John Donaldson 64 Member of the Board of Directors
Each director serves for a term of one year and are elected at the
annual meeting of shareholders. The Company's officers are appointed by
the Board of Directors and hold office at the discretion of the Board.
Brian McAlister - President and Chairman of the Board of Directors
Mr. McAlister has been the President and Chairman of the Board of
Directors of the Company since March 12, 2000. Since March 20, 2000,
Mr. McAlister has been a Director of Uscribble.com Writing Inc. Since
1988, Mr. McAlister has been President of Cornet Capital Corp., a
corporation owned and controlled by Mr. McAlister which is engaged in
the business of assisting start-up corporations with capital raising,
funding and other consulting activities. From November 1999 to July
2000, Mr. McAlister was a director of Advanced Interactive, Inc., a
Vancouver, British Columbia corporation, engaged in the business of
developing interactive television. From February 1992 to October 1997,
Mr. McAlister was a member of the Board of Directors of Novadigm, Inc.
a corporation whose securities were traded on the NASDAQ small cap
system. Mr. McAlister holds a Bachelor of Science degree in Business
Administration with a major in finance from the University of Denver.
Mr. McAlister is the husband of Lisa Zumpano, the Company's Secretary,
Treasurer, Chief Financial Officer and a member of the Board of
Directors.
Lisa Zumpano - Secretary, Treasurer, Chief Financial Officer and a
member of the Board of Directors.
Ms. Zumpano has been Secretary,Treasurer, Chief Financial Officer,
and a and a member of the Board of Directors of the Company since
March 12, 2000. Since March 20, 2000, Ms. Zumpano has been President
and a member of the Board of Directors of Uscribble.com Writing Inc.
From 1997 to 2000, Ms. Zumpano was employed by Red Emerald Ltd.,
formerly known as Neary Resources Corporation, a corporation located
in Vancouver, British Columbia which was engaged in the business of
introducing of a rare gemstone to the gem and jewelry business. Ms.
Zumpano was responsible for operations and from 1998 to 1999 was
employed by Red Emerald in marketing. From 1994 to 1997, Mr. Zumpano
was employed Cornet Capital Corp., a Vancouver, British Columbia
corporation which was engaged in the business of assisting start-up
corporations with capital raising, funding and other consulting
activities. Ms. Zumpano's was responsible assisting clients with
public relations. From 1994 to 1998, Ms. Zumpano was engaged in
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investor relations by the following corporations: Proginet Corp.;
Forecross Corp.; Novadigm Inc; and, Red Emerald Ltd. (formerly Neary
Resources Corp.) all of which are listed for trading on the Vancouver
Stock Exchange. Ms. Zumpano is the wife of Brian McAlister, the
Company's President and Chairman of the Board of Directors.
John Donaldson - Member of the Board of Directors.
Since inception of the Company, Mr. Donaldson has been a member of
the Board of Directors of the Company. From inception of the Company
until March 12, 2000, Mr. Donaldson served as President of the Company.
From 1980 to May 2000, Mr. Donaldson was self-employed operating
a private investor relations and financing company in Vancouver,
British Columbia.
ITEM 6. EXECUTIVE COMPENSATION.
Summary Compensation.
The following table sets forth the compensation paid by the
Company during the last three years, for each officer and director of
the Company. This information includes the dollar value of base
salaries, bonus awards and number of stock options granted, and certain
other compensation, if any.
SUMMARY COMPENSATION TABLE
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted Securities All
Name and Annual Stock Underlying LTIP Other
Principal Compen- Options/ Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
($) ($) ($) ($) (#) ($) ($)
Brian 1999 0 0 0 0 0 0 0
McAlister 1998 0 0 0 0 0 0 0
President 1997 0 0 0 0 0 0 0
Lisa 1999 0 0 0 0 0 0 0
Zumpano 1998 0 0 0 0 0 0 0
Secretary 1997 0 0 0 0 0 0 0
Treasurer
John 1999 0 0 0 0 0 0 0
Donaldson 1998 0 0 0 0 0 0 0
Director 1997 0 0 0 0 0 0 0
The Company intends to pay the following salaries in 2000, subject
to the Company beginning profitable operations and generating
sufficient revenues to pay the same:
Brian McAlister President 2000 $ -0-
Lisa Zumpano Secretary/Treasurer 2000 $24,000
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There are no retirement, pension, stock option plans, or profit
sharing plans for the benefit of the Company's officers and directors.
Long-Term Incentive Plan Awards.
The Company does not have any long-term incentive plans that
provide compensation intended to serve as incentive for performance.
Compensation of Directors.
Directors do not receive any compensation for serving as members
of the Board of Directors. The Board has not implemented a plan to
award options to any Directors. There are no contractual arrangements
with any member of the Board of Directors.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On April 5, 1999, the Company issued 555,561 shares of common
stock to John Donaldson and Donna Lavigne in consideration of
$2,777.81. At the time, Mr. Donaldson was President and a member of
the Board of Directors of the Company and Ms. Lavigne was Secretary and
a member of the Board of Directors of the Company. Mr. Donaldson has
since resigned his position as President, but continues to be a member
of the Board of Directors. On March 12, 2000, Ms. Lavigne resigned as
an officer and director of the Company.
On April 5, 1999, the Company issued an additional 555,554 shares
of common stock to Mr. Donaldson and Ms. Lavigne in consideration of
$2,777.77.
On March 15, 2000, the Company issued 2,100,000 shares of common
stock to Brian McAlister and Lisa Zumpano in consideration of $21,000.
Mr. McAlister and Ms. Zumpano were officers and directors of the
Company at the time of issuance.
ITEM 8. LEGAL PROCEEDINGS.
The Company is not a party defendant in any pending or threatened
litigation and to its knowledge, no action, suit or proceedings has
been threatened against its officers and its directors.
ITEM 9. MARKET PRICE FOR COMMON EQUITY AND OTHER SHAREHOLDER MATTERS.
No market exists for the Company's securities and there is no
assurance that a regular trading market will develop, or if developed,
that it will be sustainable. A shareholder in all likelihood, there
fore, will be unable to resell the securities referred to herein should
he or she desire to do so. Furthermore, it is unlikely that a lending
institution will accept the Company's securities as pledged collateral
for loans unless a regular trading market develops.
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There are no plans, proposals, arrangements or understandings with
any person with regard to the development of a trading market in any of
the Company's securities. On January 4, 1999, the NASD amended its
rules regarding listing of securities for trading on the Bulletin Board
which it operates. Effective January 4, 1999, securities of
corporations will not be listed for trading on the Bulletin Board
unless the corporation files reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934. Accordingly, the Company's common
stock will not be listed for trading on the Bulletin Board until such
time as this registration is declared effective by operation of law and
the Company has satisfied all outstanding comments issued by the
Securities and Exchange Commission.
As of June 30, 2000, the Company had 12 holders of record of its
Common Stock.
The Company has not paid any dividends since its inception and
does not anticipate paying any dividends on its Common Stock in the
foreseeable future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
The Company has 5,150,000 shares of Common Stock issued and
outstanding as of June 30, 2000. Of the 5,150,000 shares of the
Company's Common Stock outstanding, 1,388,885 shares are freely
tradeable and 3,761,115 shares can only be resold in compliance with
Reg. 144 adopted under the Securities Act of 1933 (the "Act").
In general, under Rule 144 as currently in effect, a person (or
persons whose Shares are aggregated) who has beneficially owned Shares
privately acquired directly or indirectly from the Company or from an
affiliate, for at least one year, or who is an affiliate, is entitled
to sell within any three month period a number of such Shares that does
not exceed the greater of 1% of the then outstanding shares of the
Company's Common Stock or the average weekly trading volume in the
Company's Common Stock during the four calendar weeks, immediately
preceding such sale. Sales under Rule 144 are also subject to certain
manner of sale provisions, notice requirements and the availability of
current public information about the Company. A person (or persons
whose Shares are aggregated) who is not deemed to have been an
affiliate at any time during the 90 day preceding a sale, and who has
beneficially owned Restricted Shares for at least two years, is
entitled to sell all such Shares under Rule 144 without regard to the
volume limitations, current public information requirements, manner of
sale provisions or notice requirements.
On April 5, 1999, the Company sold 2,500,000 shares of common
stock to John Donaldson and Donna Lavigne and five other individuals in
consideration of $$12,500. The shares were issued pursuant to Reg. 504
of the Securities Act of 1933 (the "Act").
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On March 15, 2000, the Company issued 2,150,000 shares of common
stock to Brian McAlister (2,000,000); Lisa Zumpano (100,000); and Marie
Cash (50,000) in consideration of $21,500. The shares were issued
pursuant to Section 4(2) of the Act.
On March 30, 2000, the Company issued 500,000 shares of common
stock to Steve McKee in consideration of $100,000. The shares were
issued pursuant to Section 4(2) of the Act.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The authorized Common Stock of the Company consists of 200,000,000
shares, $0.001 par value per share. All shares have equal voting
rights, are non-assessable and have one vote per share. Voting rights
are not cumulative and, therefore, the holders of more than 50% of the
Common Stock could, if they choose to do so, elect all of the directors
of the Company.
Upon liquidation, dissolution or winding up of the Company, the
assets of the Company, after the payment of liabilities, will be
distributed pro rata to the holders of the Common Stock. The holders
of the Common Stock do not have preemptive rights to subscribe for any
securities of the Company and have no right to require the Company to
redeem or purchase their shares. The shares of Common Stock presently
outstanding are fully paid and non-assessable.
Dividends
Holders of the Common Stock are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Common Stock since inception, and none is contemplated
in the foreseeable future.
Transfer and Agent
The Company's transfer and warrant agent is Pacific Stock Transfer
Company, 5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120 and
its telephone number is (702) 361-3033.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The laws of the state of Nevada under certain circumstances
provide for indemnification of the Company's Officers, Directors and
controlling persons against liabilities which they may incur in such
capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this
description is qualified in its entirety by reference to the Company's
Articles of Incorporation and to the statutory provisions.
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In general, any Officer, Director, employee or agent may be
indemnified against expenses, fines, settlements or judgments arising
in connection with a legal proceeding to which such person is a party,
if that person's actions were in good faith, were believed to be in the
Company's best interest, and were not unlawful. Unless such person is
successful upon the merits in such an action, indemnification may be
awarded only after a determination by independent decision of the Board
of Directors, by legal counsel, or by a vote of the shareholders, that
the applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in
connection with an action brought on behalf of the Company is generally
the same as those set forth above; however, with respect to such
actions, indemnification is granted only with respect to expenses
actually incurred in connection with the defense or settlement of the
action. In such actions, the person to be indemnified must have acted
in good faith and in a manner believed to have been in the Company's
best interest, and have not been adjudged liable for negligence or
misconduct.
The Company's articles of incorporation and bylaws do not contain
provisions for indemnification.
ITEM 13. FINANCIAL STATEMENTS.
Financial Statements begin on following page.
L.C.M. EQUITY, INC.
(A Development Stage Company)
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT . . . . . . F-1
FINANCIAL STATEMENTS
Consolidated Balance Sheets . . . . . F-2
Consolidated Statements of Operations . . . F-3
Consolidated Statement of Stockholders' Equity . F-4
Consolidated Statements of Cash Flows . . . F-5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS . . F-6
<PAGE> 16
Board of Directors
L.C.M. Equity, Inc.
Vancouver, British Columbia
Canada
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying consolidated balance sheets of L.C.M.
Equity, Inc. (a development stage company) as of March 31, 2000 and
1999, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year ended March 31, 2000,
the period from January 12, 1999 (inception) to March 31, 1999, and the
period from January 12, 1999 (inception) to March 31, 2000. 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
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 significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide 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 L.C.M.
Equity, Inc. as of March 31, 2000 and 1999, and the results of its
operations and its cash flows for the year ended March 31, 2000, the
period from January 12, 1999 (inception) to March 31, 1999, and the
period from January 12, 1999 (inception) to March 31, 2000 in
conformity with generally accepted accounting principles.
As discussed in Note 2, the Company has been in the development stage
since its inception and has no revenues. Realization of a major
portion of the assets is dependent upon the Company's ability to meet
its future financing requirements, and the success of future
operations. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans regarding
those matters are described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
June 21, 2000
F-1
<PAGE> 17
L.C.M. EQUITY, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, March 31,
2000 1999
ASSETS
CURRENT ASSETS
Cash $ 114,279 $ 10,600
--------- --------
Total Current Assets 114,279 10,600
--------- --------
TOTAL ASSETS $ 114,279 $ 10,600
========= ========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,032 $ -
--------- --------
Total Current Liabilities 1,032 -
--------- --------
COMMITMENTS AND CONTINGENCIES - -
--------- --------
STOCKHOLDERS' EQUITY
Common stock, 200,000,000 shares
authorized, $.001 par value;
5,150,000 shares and 2,500,000
shares issued and outstanding,
respectively 5,150 2,500
Additional paid-in capital 128,850 10,000
Deficit accumulated during
development stage (20,753) (1,900)
--------- --------
Total Stockholders' Equity 113,247 10,600
--------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 114,279 $ 10,600
========= ========
The accompanying notes are an integral part of these financial
statements.
F-2
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L.C.M. EQUITY, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For From From
the 1-12-99 1-12-1999
Year (Inception) (Inception)
Ended to to
3-31-2000 3-31-1999 3-31-2000
REVENUES $ - $ - $ -
------------ ------------ ------------
OPERATING EXPENSES
General and administrative
expense 457 - 457
Rent 344 - 344
Management fees 11,632 - 11,632
Web site expenses 6,430 - 6,430
Accounting and legal expense - 1,150 1,150
Stock transfer expense - 750 750
------------ ------------ ------------
Total Operating Expenses 18,863 1,900 20,763
------------ ------------ ------------
LOSS FROM OPERATIONS (18,863) (1,900) (20,763)
Other Income (Expenses):
Interest Income 10 - 10
------------ ------------ ------------
LOSS BEFORE INCOME TAXES (18,853) (1,900) (20,753)
INCOME TAXES - - -
------------ ------------ ------------
NET LOSS $ (18,853)$ (1,900)$ (20,753)
============ ============ ============
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ (0.01)$ nil $ (0.01)
============ ============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING,
BASIC AND DILUTED 2,602,057 2,500,000 2,596,126
============ ============ ============
The accompanying notes are an integral part of these financial
statements.
F-3
<PAGE> 19
L.C.M. EQUITY, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock Additional During Total
Number Paid-in Development Stockholders'
of Shares Amount Capital Stage Equity
Issuance of common
stock in March 1999
for cash at $.005
per share 2,500,000 $ 2,500 $ 10,000 $ - $ 12,500
Net loss for
period ending
March 31, 1999 - - (1,900) (1,900)
--------- ------- ---------- ---------- -----------
Balance,
March 31, 1999 2,500,000 2,500 10,000 (1,900) 10,600
Issuance of common
stock in March 2000
for cash at an
average of $0.01
per share 2,650,000 2,650 118,850 - 121,500
Net loss for year ending
March 31, 2000 - - - (18,853) (18,853)
--------- ------- ---------- ---------- -----------
Balance,
March 31, 2000 5,150,000 $ 5,150 $ 128,850 $ (20,753) $ 113,247
========= ======= ========== ========== ===========
The accompanying notes are an integral part of these financial
statements.
F-4
<PAGE> 20
L.C.M. EQUITY, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For From From
the 01/12/99 01/12/99
Year (Inception) (Inception)
Ended to to
12/31/00 12/31/99 12/31/00
2000 1999 2000
Cash flows from operating
activities:
Net loss $ (18,853) $ (1,900) $ (20,753)
Increase in accounts
payable 1,032 - 1,032
--------- -------- ---------
Net cash used in operating
activities (17,821) (1,900) (19,721)
--------- -------- ---------
Cash flows from investing
activities - - -
--------- -------- ---------
Cash flows from financing
activities:
Issuance of stock for
cash 121,500 12,500 134,000
--------- -------- ---------
Net cash provided by financing
activities 121,500 12,500 134,000
--------- -------- ---------
Net increase in cash 103,679 10,600 114,279
Cash, beginning of period 10,600 - -
--------- -------- ---------
Cash, end of period $ 114,279 $ 10,600 $ 114,279
========= ======== =========
SUPPLEMENTAL DISCLOSURES:
Interest expense $ - $ - $ -
========= ======== =========
Income taxes $ - $ - $ -
========= ======== =========
The accompanying notes are an integral part of these financial
statements.
F-5
<PAGE> 21
L.C.M. EQUITY, INC.
(A Development Stage Company)
Notes to the Consolidate Financial Statements
March 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
L.C.M. Equity, Inc. (herein after "the Company"), was incorporated ion
January 12, 1999 under the laws of the State of Nevada primarily for
the purpose of acting as a holding company for subsidiaries that sell
goods or provide services via the Internet. As of March 31, 2000, the
Company's principal office is located Vancouver, British Columbia,
Canada.
In March 2000, the Company formed a subsidiary, Uscribble.com Writing
Inc. ("Uscribble"). Uscribble is expected to create a web site that
will be used as an interactive literary site for aspiring amateur
writers. L.C.M. Equity, Inc. and Uscribble.com Writing, Inc. are in
the development stage and, at March 31, 2000, had not realized any
significant revenues from their planned operations.
The Company serves as a holding company for its subsidiary's
operations. References herein to the Company include the Company and
it subsidiary, unless the context otherwise requires.
The Company's and its subsidiary's fiscal year end is March 31.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist
in understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management,
which is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.
Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
Use of Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of estimates
and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated
amounts.
Development Stage Activities
The Company has been in the development stage since its formation on
January 12, 1999. It is primarily engaged in acting as a holding
company for subsidiaries that sell goods or provide services via the
internet.
<PAGE> 22
L.C.M. EQUITY, INC.
(A Development Stage Company)
Notes to the Consolidate Financial Statements
March 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its subsidiary. All significant intercompany transactions
and balances have been eliminated in consolidation.
Concentration of Risk
The Company maintains three cash accounts in one commercial bank in
Vancouver, British Columbia, Canada. One of the Company's cash
accounts is a business checking account maintained in U.S. dollars,
which totaled $80,446 as of March 31, 2000. This account is not
insured.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
Derivative Instruments
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This new standard
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the
consolidated balance sheet and measure those instruments at fair value.
At March 31, 2000, the Company has not engaged in any transactions that
would be considered derivative instruments or hedging activities.
Impaired Asset Policy
In March 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Impairment of Long-lived Assets." In
complying with this standard, the Company reviews its long-lived assets
quarterly to determine if any events or changes in circumstances have
transpired which indicate that the carrying value of its assets may not
be recoverable. The Company does not believe any additional
adjustments are needed to the carrying value of its assets at March 31,
2000.
Basic and Diluted Loss Per Share
Net loss per share was computed by dividing the net loss by the
weighted average number of shares outstanding during the period. The
weighted average number of shares was calculated by taking the number
of shares outstanding and weighting them by the amount of time that
they were outstanding. Basic and diluted loss per share were the same,
as there were no common stock equivalents outstanding.
F-7
<PAGE> 23
L.C.M. EQUITY, INC.
(A Development Stage Company)
Notes to the Consolidate Financial Statements
March 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition
Revenues and cost of revenues are recognized when services and products
are furnished or delivered. At March 31, 2000 and 1999, no revenues
were realized or recognized by the Company or its subsidiary.
Income Taxes
No provision for taxes or tax benefit has been reported in the
financial statements, as there is not a measurable means of assessing
future profits or losses.
Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has
generated no revenues since inception. The Company recorded a loss of
$18,853 for the year ended March 31, 2000, and has an accumulated
deficit of $20,753 at that date. The Company, being a development
stage enterprise, is currently putting technology in place which will,
if successful, mitigate these factors which raise substantial doubt
about the Company's ability to continue as a going concern. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts
and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.
Management has established plans designed to increase the sales of the
Company's services. Management intends to seek new capital from new
equity securities issuances that will provide funds needed to increase
liquidity, fund internal growth and fully implement its business plan.
Year 2000
The Company, like other firms, could be adversely affected if the
computer systems used by it, its suppliers or customers do not properly
process and calculate date-related information and data from the period
surrounding and including January 1, 2000. This is commonly known as
the "Year 2000" issue. Additionally, this issue could impact non-
computer systems and devices such as production equipment.
The Company has not purchased any software or hardware. When the
Company does purchase software and hardware it will determine at that
time if there could be any adverse effects to the Company's operations
regarding Year 2000 issues. Management also believes that Year 2000
issues should not adversely affect the ability of its clients and
customers to conduct business with the Company. As of March 31, 2000
the Company has not experienced any significant problems. Any costs
associated with Year 2000 compliance will be expensed when incurred.
<PAGE> 24
L.C.M. EQUITY, INC.
(A Development Stage Company)
Notes to the Consolidate Financial Statements
March 31, 2000
NOTE 3 - COMMON STOCK
Upon incorporation, the Company authorized the issuance of 200,000,000
shares of common stock at a par value of $0.001 per share, of which
there were 5,150,000 and 2,500,000 shares outstanding at March 31, 2000
and 1999, respectively.
In March 1999, 2,500,000 shares of common stock were sold through a
private placement at a price of $0.005 per share. The offering was
made pursuant to exemptions afforded by Sections (4)2 or 3(b) of the
Securities Act of 1933 and Rule 504 of Regulation D. The private
placement raised a total of $12,500, which proceeds will be used for
general corporate purposes. Of the total shares issued, 1,111,115
shares were issued to officers and directors of the Company.
In March 2000, 2,650,000 shares of common stock were sold through a
private placement at an average price of $0.01 per share. The shares
were issued pursuant to Rule 144 of the 1933 Securities Act and are
restricted as to public transfer for a minimum period of one year. Of
the total shares issued, 2,100,000 shares were issued to officers and
directors of the Company.
NOTE 4 - TRANSLATION OF FOREIGN CURRENCY
The Company has adopted Financial Accounting Standard No. 52. Monetary
assets and liabilities denominated in foreign currencies are translated
into United States dollars at rates of exchange in effect at the
balance sheet date. Gains or losses are included in income for the
year, except gains or losses relating to long-term debt which are
deferred and amortized over the remaining term of the debt. Non-
monetary assets and liabilities and items recorded in income arising
from transactions denominated in foreign currencies are translated at
rates of exchange in effect at the date of the transaction.
F-9
<PAGE> 25
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial
disclosures from the inception of the Company through the date of this
registration statement.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
(a) List of Financial Statements
Independent Auditors' Report
Balance Sheet
Statement of Income
Statement of Cash Flows
Statement of Shareholders' Equity
Notes to Financial Statements
Unaudited Quarterly Financial Statements
b) List of Exhibits.
Exhibit No. Description
3.1 Articles of Incorporation - L.C.M.
3.2 Bylaws - L.C.M.
3.3 Articles of Incorporation - Uscribble
4.1 Specimen Stock Certificate.
27.1 Financial Data Schedule
<PAGE> 26
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
L.C.M. Equity, Inc.
BY: /s/ Brian McAlister
Brian McAlister, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this Form 10-SB Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
Signatures Title Date
/s/ Brian McAlister
Brian McAlister President and Chairman July 11, 2000
of the Board of Directors
/s/ Lisa Zumpano
Lisa Zumpano Secretary, Treasurer, July 11, 2000
Chief Financial Officer,
and a member of the
Board of Directors
_______________________
John Donaldson ___________, 2000
Member of the Board of
Directors
