SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended February 29, 2000
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File Number: 0-26329
BillyWeb Corp.
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(Exact name of small business issuer as specified in its charter)
Florida 65-0867538
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 E. 42nd Street, Suite 6-R,
New York, N.Y. 10017
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (212) 687-3629
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None None
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EZTALK, INC.
222 Lakeview Avenue, Suite 160-217, West Palm Beach, FL 33401
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(Former name or former address, if changed since last report)
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value per share
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(Title of class)
Copies of Communications Sent to:
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696
Fax: (561) 659-5371
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days:
Yes x No
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Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10KSB or any
amendment to this Form 10 KSB. [X]
Issuer's revenues for its 2000 fiscal year were $0.00.
Of the 2,050,000 shares of voting common of the registrant issued and
outstanding as of February 29, 2000, 1,050,000 shares are held by
non-affiliates. Because of the absence of an established trading market for the
voting stock, the registrant is unable to calculate the aggregate market value
of the voting stock held by non-affiliates as of a specified date within the
past 60 days.
Subsequent to the Company's February 29, 2000 year end it consummated a
reverse acquisition and reorganization which will have an impact on the number
of shares issued and outstanding. The Company filed an 8-K on May 15, 2000 with
the Securities and Exchange Commission and will file an amendment thereto within
60 days.
The Company anticipates filing an Amended 10 KSB for its present fiscal
year end of February 29, 2000.
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TABLE OF CONTENTS
PART I
Item 1. Description of Business.
Item 2. Description of Property.
Item 3. Legal Proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Item 7. Financial Statements.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
Item 10. Executive Compensation.
Item 11. Security Ownership of Certain Beneficial Owners and Management
Item 12. Certain Relationships and Related Transactions.
Item 13. Exhibits and Reports on Form 8-K.
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PART I
Item 1. Description of Business.
(a) Business Development.
Billy Webb Corp. f/k/a/ EZ Talk, Inc. (hereinafter referred to as the
"Company" or "BLWB") was organized under the laws of the State of Florida on
June 10, 1998. The Company was originally organized for the purpose of engaging
in the business of selling/marketing a universal, hands-free mobile speaker for
mobile phones. The Company's executive offices are presently located at The
Company leases offices at 20 E. 42nd Street, Suite 6-R, New York, N.Y. 10017,
Telephone: (212) 687-3629.
The initial business plan of the company was to market a product known
as EZTalk. EZTalk was designed to be the first of its kind, universal,
hands-free mobil speaker for portable phones. EZTalk was to be a compact,
hands-free mobil speaker system that connects directly to a portable phone and
runs off the battery of the portable assuring the user many hours of use. The
initial acquired rights (which were never reduced to writing) proved to be
worthless and this specific business plan was abandoned by agreement with
existing Company shareholders. The plan was abandoned on or about February 1,
1999, at an official meeting of shareholders called for that express purpose.
Due to the interest of the principals of the Company in marketing a product of
this nature, the business plan was modified to include its present concept as
outlined herein.
The Company has been inactive, having conducted no business operations
except organizational and fund raising activities since its inception. To date
the Company has no products, no customers, no revenues, and a history of losses.
BLWB received gross proceeds in the amount of $60,000 from the sale of 1,050,000
shares of common stock, $.0001 par value per share (the "Common Stock"), in
two(2) offerings conducted pursuant to Section 3(b) of the Securities Act of
1933, as amended (the "Act"), and Rule 504 of Regulation D promulgated
thereunder ("Rule 504"). These offerings were made in the State of New York and
Florida. The Company undertook its first offering of shares of Common Stock
pursuant to Rule 504 on June 15, 1998 and its second offering of shares of
Common Stock pursuant to Rule 504 on September 15, 1998. A Confidential Offering
Circular was used in connection with these offerings, and a summary of the
business plan of the Company was included with each Offering Circular.
There are no preliminary agreements or understandings between the
Company and its officers and directors or affiliates or lending institutions
with respect to any loan agreements or arrangements.
The Company intends to offer securities under Rule 506 of Regulation D
under the Act ("Rule 506) to fund its short and medium term expansion plans.
(See Part I, Item 1. "Description of Business - (b) Business of Issuer.")
See (b) "Business of Issuer" immediately below for a description of the
Company's proposed business. As of the date hereof, the Company has no temporary
staff or clients for placement of the Company's product and services.
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(b) Business of Issuer.
General
Since its inception, the Company has conducted no business operations
except for organizational activities and an offering of Common Stock pursuant to
which it has received gross offering proceeds in the amount of $60,000. Further,
the Company has had no employees since its organization. The Company's initial
business plan and operation failed and was abondoned on or about February 1,
1999. Subsequent to the Company's decision to discontinue its original business
plan the Company was introduced to Share Exchange Corp. f/k/a Billy Web Corp., a
Florida corporation, and after determining the viability of this new company's
business executed a Share Exchange Agreement("Agreement") and
Reorganization.[See: Part III. - Item 13. - Exhibits and Reports on Form 8-K
incorporated by reference hereto] As a condition to the Agreement and
Reorganization the former officers and directors of the Company tendered their
resignations and new officers and directors were appointed. The Company
undertook a new direction pursuant to its Reorganization which involves the
Interactive accessing of the internet in a new and unprecedented manner.
As a reporting company, the Company is required to file quarterly
reports on Form 10-QSB and annually on Form 10-KSB and in each case, is required
to provide the financial and other information specified in such forms. In
addition, the Company would be required to file on Form 8-K in the event there
was a change of control, if the Company acquires or disposes of assets, if there
is a bankruptcy or receivership, if the Company changes its certified
accountants, upon the occurrence of other events which may be pertinent to the
security holders, and after certain resignations of directors. Being subject to
such reporting requirements reduces the pool of potential acquisitions or merger
candidates for the Company since such transactions require that certified
financials must be provided for the acquiring, acquired or merging candidate
within a specified period of time. That is why the Company intends to expand
through internal operations through the short and medium term. At such time as
the Company will seek acquisitions or mergers, it will limit itself to companies
which either already have certified financial statements or companies whose
operations lend themselves to review for a certified audit within the required
time.
Business Strategy
The Company's new focus aims to fulfill the perceived demand for
Interactive accessing of the internet. It believes that it is the first Internet
company that combines the technologies of traditional TV, radio and print medium
with the explosive Internet industry. The Company is named after an animated
character, Billy, which was created by Billy Web Corp. which was to be used as a
Disney star and Disney Club show host in partnership with Fprod Fenomen for the
initial European web site with a scenario interface. In 1996, the Walt Disney
Company looked for a "new face" to present the Disney Club broadcast on weekends
on TF1 (the largest European channel). Billy immediately started to attract
large audience attention, hosting the Disney Club show for three years. The
Internet show titled "Click & Net" at its peak captured an 8 million person
viewing audience.
The Company evolved from this initial show and acquired the sponsorship
of Club Internet, one of the largest Internet Service Providers("ISP") and
Tele7Jours, the largest and most read magazine in France. Under the sponsorship
terms a special page on the Internet was designed and published weekly under the
direction of the Company's in-house journalist. This magazine has an eight(8)
million person weekly readership.
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Billy has evolved further into a set of three-dimensional cartoon
character which is animated in real time. These animated characters provide
support for a series of live shows produced on televisions and professional
forums etc. The cyber character of Billy remains a central "hero" of the
Company's Internet site Billyweb.com. Through an additional partnership the
Company developed an "intelligent" search engine for Billyweb. In addition, a
German company was signed to co- produce a new music dance tune titled, Billyweb
"Surf the Net."
Billy, the former Disney Club host, is now the very first French TV
cyber host revealing the fascinating world of the Web to over 6 million French
viewers daily. Since April of last year, Billy has been on the air every day at
7:55 p.m. on TF1 just before the evening news. The Company believes that
Billyweb now offers the first online interactive teen and pre-teen community
that provides advertisers and businesses the ability to reach a significant
portion of over 200 million teenagers worldwide (including the pre-teen markets)
Billyweb.com has had as guests on its shows ranging from Latin
sensation Ricky Martin, to French President Jacques Chirac and Europe's answer
to the all boy band Backstreet Boys known as 2BE3. The Company believes that
this combination of diversity and excitement has made Billyweb.com one of the
hottest web sites in Europe.
Growth and Development
The company's mission is to establish permanent brand name recognition
for the host Billy and the Internet site Billyweb on an international basis,
with continuous emphasis in TV, music, videogames, shows, magazines and
periodicals, live shows, etc. The company believes that it will initiate a broad
stream of revenues when the geographical exposure of Billyweb has reached its
critical mass. Revenues will accrue from a natural extension of the Company's
current activities and will range from TV production, live and taped radio
shows, advertising, copyrights, endorsement and licensing, royalties on music
production and database sharing.
The developmental process of the Company involves several steps:
Various local hosts will be selected according to their sensitivity to
the local teenage market, present Billyweb TV and Radio Billyweb shows, which
share the characteristics of short, focused and area specific animation by a
common player: Billy, the "big wig" host and guide to the Internet world. The
key visual effect is obtained without any language reference, so that Billy can
perform anywhere without dubbing. In addition to the local host and Billy,
virtual video-composite characters appear in real time from technology developed
in partnership with City Media.
On-line co-branding, partnerships and Joint Ventures are being actively
negotiated for the purpose to reach the best possible content, optimize traffic
and visibility and maximize profitability by reducing development costs. The
various agreements are being negotiated with leading companies that specialize
in teen markets such as Music, Video, Movies, Videogames, Toys, Fashion, Travel
and Culture, History and Literature.
The Company's final objective is to interconnect the different mirrored
website platforms. The creation of a "World" family where French,
Anglo-American, Hispanic, German and possibly Asian characters are joined,
linked and mixed in order to create the first multilingual worldwide access
portal for pre-teens and teens.
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The Company's primary direct costs will be (i) salaries to its
executive officers(payroll cost), (ii) marketing and sales related costs, (iii)
employment related taxes and (iv) health benefits. Employment related taxes
consist of the employer's portion of payroll taxes required under the Federal
Income Contribution Act ("FICA"), which includes Social Security and Medicare,
and federal and state unemployment taxes. The federal tax rates are defined by
the appropriate federal regulations. State of Florida unemployment tax rates are
effected by claims experience, of which the Company has none at this time.
Health benefits are comprised primarily of medical insurance costs, but also
include costs of other employee benefits such as prescription coverage, vision
care, disability insurance and employee assistance plans.
Sales and Marketing
Marketing
Music: Billyweb is releasing his first single, a duet with the American singer,
Chris Willis. The Company believes that this dance track may become a popular
summer hit.
Press: Every week, the Billy 7 Web column in Tele7Jours (around 10 million
readers), introduces the general public to the thrills of the Web. This month,
Billy web and Tele7Jours will launch the first web program schedule magazine.
Radio: Billy will be broadcasting audio capsules discussing the Internet on a
major French radio station.
Shows and Events: In its role as a true professional showman, Billy hosts a
series of multimedia shows interacting with Web avatars. Following on from the
Elysee Christmas Tree event (1999), to the Cannes Film Festival Billyweb will
now be at the World Firefighters games in July.
Mobile Phones: Ever up-to-date when it comes to the latest technological trends,
Billyweb will be broadcasting his audio columns on Diora, the first customizable
radio which you can time into using your mobile phone.
Merchandising: Billyweb has established an extensive product distribution
platform. All products have something to do with the Billyweb universe or with
the web and the latest technology.
Competition
There are numerous entertainment options for teens and pre-teens on
the internet presenting various and competing options for their attention.
However, the Company believes that the unique multi-medium delivery of its
BillyWeb.com website is the premier e-commerce alternative to interactive
entertainment community for pre-teens and teens worldwide, showcasing well-known
players of music, film and sports. The Company believes its competitive
advantage will increase as it is able to take advantage of increased broadband
access.
Industry Regulation
Environment
The Company engages in activities to comply with various federal, state and
local laws and regulations. Compliance with such laws and regulations does not
currently have a significant effect on the Company's capital expenditures,
earnings, or competitive position.
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Government Regulation
The Company's operations are subject to various federal, state and
local requirements which affect businesses generally, such as taxes, postal
regulations, labor laws, and environment and zoning regulations and ordinances
and the Federal Communications Commission.
We believe that current state and federal regulations concerning
electronic commerce do not apply to our current product line. However, there is
a move towards taxation of Internet use by several states including the State of
Washington.
FCC Regulatory Environment
The Company's efforts will be subject to the regulation of the Federal
Communication Commission ("FCC") because it will be operating an interactive
media broadcasting industry. Both federal and state authorities regulate the
manufacture and sale of multimedia production. The Company will obtain all
required federal and state permits, licenses, and bonds to operate its
facilities. There can be no assurance that the Company's operation and
profitability will not be subject to more restrictive regulation and increased
taxation by federal, state, or local agencies. All Billy Web Corp. programming
is proprietary and will be protected by copyright laws.
Employees and Consultants
The Company has had no employees since its organization. The Company
anticipates that it will rely greatly on the management skills of its newly
appointed post reorganization officers Frederic Richard and Alberto Afonso
Facilities
The Company maintains an office at 20 E. 42nd Street, Suite 6-R, New
York, N.Y. 10017, Telephone: (212) 687-3629, and 28 Bd Malesherbes, Paris
France, 75008, Telephone: 011-33-0-1- 40-17. The Company owns no real or
personal property.
Risk Factors
Before making an investment decision, prospective investors in the
Company's Common Stock should carefully consider, along with other matters
referred to herein, the following risk factors inherent in and affecting the
business of the Company.
1. Development Stage Company. BLWB was only recently organized on June
10, 1998, and accordingly, is in the early form of development stage and must be
considered promotional. There are numerous competitors for pre-teen and teen
viewing attention on the Internet several of which are large public companies,
which are already positioned in the ecommerce business and which are better
financed than the Company. There can be no assurance that the Company, with its
limited capitalization, will be able to compete with these companies and achieve
profitability. (See Part I, Item 1. "Description of Business.")
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2. Minimal Assets, Working Capital and Net Worth. As of February 29,
2000, the Company's total assets in the amount of $51,841, consisted,
principally, of paid-in capital of $59,895 less accrued expenses. As a result of
its minimal assets, as of February 29, 2000, the Company has very minimal net
worth presently. Further, BLWB's working capital is presently minimal and there
can be no assurance that the Company's financial condition will improve. The
Company is not expected to continue in operation without an infusion of capital.
In order to obtain additional equity financing, management may be required to
dilute the interest of existing shareholders. (See Part I, Item 1. "Description
of Business")
3. Need for Additional Capital: Going Concern Qualification Expressed
by Auditor. Without an infusion of capital or profits from operations, the
Company is not expected to continue in operation after the expiration of its
2001 fiscal year end. Accordingly, the Company is not expected to become a
viable business entity unless additional equity and/or debt financing is
obtained. BLWB's independent certified public accountant has expressed this as a
"going concern" qualification to the opinion of Durland and Company, CPAs P.A.
on the Company's financial statements. The Company does not anticipate the
receipt of operating revenues until management successfully implements its
Reorganized business plan, which is not assured. Further, BLWB may incur
significant unanticipated expenditures which deplete its capital at a more rapid
rate because of among other things, the development stage of its business, its
limited personnel and other resources. Because of these and other factors,
management is presently unable to predict what additional costs might be
incurred by the Company beyond those currently contemplated to obtain additional
financing and achieve market penetration of Billyweb.com on a commercial scale.
BLWB has no identified sources of funds, and there can be no assurance that
resources will be available to the Company when needed.
4. Competition. The internet entertainment market is highly competitive
The Company's competitors include local, regional and national companies, many
of which are larger and have greater financial and marketing resources than the
Company. There can be no assurance that the Company will be able to compete
effectively against such competitors in the future. (See Part I. Item 1.
"Description of Business," (b) "Business
5. Potential Anti-Takeover and Other Effects of Issuance of Preferred
Stock May Be Detrimental to Common Shareholders. The Company is authorized to
issue up to 10,000,000 shares of preferred stock. $.0001 par value per share
(hereinafter referred to as the "Preferred Stock"); none of which shares has
been issued. The issuance of Preferred Stock does not require approval by the
shareholders of the Company's Common Stock. The Board of Directors, in its sole
discretion, has the power to issue shares of Preferred Stock in one or more
series and to establish the dividend rates and preferences, liquidation
preferences, voting rights, redemption and conversion terms and conditions and
any other relative rights and preferences with respect to any series of
Preferred Stock. Holders of Preferred Stock may have the right to receive
dividends, certain preferences in liquidation and conversion and other rights;
any of which rights and preferences may operate to the detriment of the
shareholders of the Company's Common Stock. Further, the issuance of any shares
of Preferred Stock having rights superior to those of the Company's Common Stock
may result in a decrease in the value of market price of the Common Stock
provided a market exists, and additionally, could be used by the Board of
Directors as an anti-takeover measure or device to prevent a change in control
of the Company.
6. Possible Adverse Effect of Penny Stock Regulations on Liquidity of
Common Stock in any Secondary Market. In the event a market develops in the
Company's shares, of which there can be no assurance, then if a secondary
trading market develops in the shares of Common Stock of the
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Company, of which there can be no assurance, the Common Stock is expected to
come within the meaning of the term "penny stock" under 17 CAR 240.3a51-1
because such shares are issued by a small company; are low-priced (under five
dollars); and are not traded on NASDAQ or on a national stock exchange. The
Securities and Exchange Commission has established risk disclosure requirements
for broker-dealers participating in penny stock transactions as part of a system
of disclosure and regulatory oversight for the operation of the penny stock
market. Rule 15g-9 under the Securities Exchange Act of 1934, as amended,
obligates a broker-dealer to satisfy special sales practice requirements,
including a requirement that it make an individualized written suitability
determination of the purchaser and receive the purchaser's written consent prior
to the transaction. Further, the Securities Enforcement Remedies and Penny Stock
Reform Act of 1990 require a broker-dealer, prior to a transaction in a penny
stock, to deliver a standardized risk disclosure instrument that provides
information about penny stocks and the risks in the penny stock market.
Additionally, the customer must be provided by the broker-dealer with current
bid and offer quotations for the penny stock, the compensation of the
broker-dealer and the salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. For so long as the Company's Common Stock is considered penny stock,
the penny stock regulations can be expected to have an adverse effect on the
liquidity of the Common Stock in the secondary market, if any, which develops.
Item 2. Description of Property
The Company leases offices at 20 E. 42nd Street, Suite 6-R, New York,
N.Y. 10017, Telephone: (212) 687-3629, and 28 Bd Malesherbes, Paris France,
75008, Telephone: 011-33-0-1- 40-17. The Company owns no real or personal
property.
Item 3. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the Company's shareholders during
the Fourth Quarter of the fiscal year ended February 29, 2000, covered by this
annual report , through the solicitation of proxies or otherwise.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
(a) Market Information.
There has been no established public trading market for the Common Stock
since the Company's inception on June 10, 1998.
(b) Holders.
As of February 29, 2000, the Company had 36 shareholders of record of its
2,050,000 outstanding shares of Common Stock.
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(c) Dividends.
The Company has never paid or declared any dividends on its Common Stock
and does not anticipate paying cash dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Plan of Operations
Since its inception, the Company has conducted minimal business
operations except for organizational and capital raising activities. The Company
has not realized any revenues since its inception due to the fact that it has
been primarily engaged in organizational and promotional activities. As a
result, from inception (June 10, 1998) through Febraury 29, 2000 , the Company
had $0 in revenue. Total Company operating expenses as of February 29, 2000 were
$2,901. The Company has reorganized and discontinued its original business plan.
The Company has decided to pursue a new direction subsequent to its
Reorganization which involves the Interactive accessing of the internet in a new
and unprecedented manner.
Financial Condition, Capital Resources and Liquidity
At February 29, 2000, the Company had assets totaling $51,841 and an
accumulated net loss of $11,644. The increase in the Company's accumulated
deficit is attributable to accrued legal expenses, organization expenses and
professional fees. Since the Company's inception, it has received $60,000 in
cash contributed as consideration for the issuance of shares of Common Stock.
Liquidity/Working Capital
BLWB's working capital is presently minimal and there can be no
assurance that the Company's financial condition will improve. The Company is
expected to continue to have minimal working capital or a working capital
deficit as a result of current liabilities. The Company, at inception, issued
1,000,000 shares of the Company's Common Stock to Mr. A. Rene Dervaes (850,000
shares), President and Director of BLWB, for the fair value of services rendered
valued at $85.00, and Ms. Johanna Bonnier (150,000 shares), Secretary and
Treasurer of BLWB, for the fair value of services rendered valued at $15.00.
During the period June 1998 through September 24, 1998 the Company issued and
sold an aggregate of 1,000,000 shares of Common Stock to New York, Florida and
the Country of France residents for cash consideration totaling $10,000. No
underwriter was employed in connection with the offering and sale of the shares.
The Company claimed the exemption from registration in connection with each of
the offerings provided under Section 3(b) of the Act and Rule 504 of Regulation
D promulgated thereunder, Section 359-(f)(2) of the New York Statutes and
Section 517.061(11) of the Florida Code. On or about September 15, 1998, the
Company issued and sold 50,000 shares of unrestricted Common Stock to five(5)
French nationals for cash consideration totaling $50,000 at $1.00 per share.
The Company claimed the exemption from registration in connection with
each of the offerings provided under Section 3(b) of the Act and Rule 504 of
Regulation D promulgated thereunder, and Section 517.061(11) of the Florida
Code. Even though management believes, without assurance, that it will obtain
sufficient capital with which to implement its business plan on
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a limited scale, the Company is not expected to continue in operation without an
infusion of capital. In order to obtain additional equity financing, management
may be required to dilute the interest of existing shareholders or forego a
substantial interest of its revenues, if any. (See Part I, Item 1. "Description
of Business"; See Part I, Item 4. "Security Ownership of Certain Beneficial
Owners and Managers" and Part I, Item 7. "Certain Relationships and Related
Transactions.")
The ability of the Company to continue as a going concern is dependent
upon its ability to deliver on its commitment to its new business plan. The
Company has sufficient capital to continue in the current limited manner for two
to three more years. The Company does not wish to continue in the current
limited manner. Once the company has completed the registration process it
intends to seek, (and has begun searching for), a competent registered
broker/dealer to assist the Company in raising the funds necessary to begin its
planned operations. The company is aware of its limited resources and is
attempting to conserve those resources by concentrating on completing one step
of the process at a time.
Net Operating Losses
The Company has net operating loss carry-forwards of $11,600 expiring
at February 28, 2019. The company has a $1,750 deferred tax asset resulting from
the loss carry-forwards, for which it has established a 100% valuation
allowance. The Company may not be able to utilize such carry- forwards as the
Company has no history of profitable operations.
Year 2000 Compliance
The Company has not experienced a material impact to its operations or
financial condition as a result of Year 2000 compliance. The Company does not
expect to experience any future cost to be Year 2000 compliant. The Company does
not anticipate any material disruption in its operations as a result of any
failure by the Company to be in compliance.
Forward-Looking Statements
This Form 10-KSB includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included or incorporated by reference in
this Form 10-KSB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature thereof),
business strategy, expansion and growth of the Company's business and
operations, and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it believes
are appropriate in the circumstances. However, whether actual results or
developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form 10-KSB are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequence to
or effects on the Company or its business or operations. The Company assumes no
obligations to update any such forward-looking statements.
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Item 7. Financial Statements.
The information called for by this item is indexed on Page F-1 of this report
and is contained on the pages following said page F-1.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
NONE
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.
Executive Officers and Directors *
Set forth below are the names, ages, positions with the Company and
business experiences of the executive officers and directors of the Company.
Name Age Position(s) with Company
- ---- --- ------------------------
A. Rene Dervaes, Jr.(2) 61 President & Director *
Johanna Bonnier(2) 27 Secretary & Treasurer *
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(2) The above-named person may be deemed to be "promoters" and "parents" of the
Company, as those terms are defined under the Rules and Regulations
promulgated under the Act.
All directors hold office until the next annual meeting of the
Company's shareholders and until their successors have been elected and qualify.
Officers serve at the pleasure of the Board of Director. Mr. Richard* and
Bonnier* will devote such time and effort to the business and affairs of the
Company as may be necessary to perform their responsibilities as executive
officers and/or directors of the Company.[* See: Part III Item 13 Exhibits and
Reports on Form 8-K]
Aside from the above officer and director, there are no other persons
whose activities will be material to the operations of the Company at this time.
Dervaes and Bonnier are the sole "promoters" of the Company as such term is
defined under the Act.
Family Relationships
There are no family relationships between or among the executive
officers and director of the Company.
Business Experience *
A. Rene Dervaes has served as the President and Director of the Company
since its inception(June 10, 1998).
13
<PAGE>
Mr Dervaes has served as the President and Director of the Company since
its inception on June 10, 1998. As such he acts as the CEO. Mr. Dervaes was the
co-founder and then Chairman of the A.R. Dervaes Company, Inc. from 1961 to
1982, a 125 employee manufacturer and supplier of equipment to heavy industry.
Mr. Dervaes terminated his employment at A.R. Dervaes Company when control of
the company was acquired by third parties. From 1982 to 1985 he was the
President of Khonbu Industries, a designer and nationwide distributor of
exclusive consumer products. From 1978 to 1986 he was the Chairman and CEO of
Eagle Rock Corporation. From 1986 to 1990 he was the Chairman and CEO of Vantage
Industries, an international marketing firm. From 1991 to the present he has
served as the Chairman and CEO of Secured Retirement International, Inc.,
specializing in the design and marketing of proprietary U.S. Treasury and
municipal bond mutual funds. Mr. Dervaes also co-invented a unique finance
product that pays increasing distributions through a patented method for pooling
and distributing bond income. Mr. Dervaes also currently serves as a consultant
for developing businesses in fields that his prior experience qualifies him for.
Ms. Johanna Bonnier has served since the Company's inception (June 10,
1998) as the Company's Secretary and Treasurer.
Ms. Bonnier has served as the Secretary and Treasurer of the Company
since its inception on June 10, 1998. As such she acts as the CFO. Ms. Bonnier
graduated from Cap Sante in Paris, France, where she majored in Marketing and
Business Science, and has been working in various sales capacities. Since
September 1996 Ms. Bonnier has been a sales representative for COSMECO, a French
cosmetics company. She left COSMECO in August, 1998 to work as the Marketing and
Sales Director for the U.S. operations of DMI, another French cosmetics company.
Ms. Bonnier brings valuable marketing and sales knowledge to the Company. [*
See: Part III Item 13 Exhibits and Reports on Form 8-K]
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission (hereinafter referred to as the "Commission")
initial statements of beneficial ownership, reports of changes in ownership and
annual reports concerning their ownership, of Common Stock and other equity
securities of the Company on Forms 3, 4 and 5, respectively. Executive officers,
directors and greater than 10% shareholders are required by Commission
regulations to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's knowledge, Mr. Dervaes comprises all of the Company's
executive officers, directors and greater than 10% beneficial owners of its
common Stock, and has complied with Section 16(a) filing requirements applicable
to him during the Company's fiscal year ended February 29, 2000.[* See: Part III
Item 13 Exhibits and Reports on Form 8-K]
Item 10. Executive Compensation. *
The Company, in consideration for various services performed for the
Company, issued to Mr. Rene Dervaes, Jr., the Company's President and Director
850,000 shares of restricted common stock. The Company issued 150,000 shares of
restricted common stock to Ms. Johanna Bonnier for various services performed
for the Company. Except for the above-described compensation, it is not
14
<PAGE>
anticipated that any executive officer of the Company will receive any cash or
non-cash compensation for his or her services in all capacities to the Company
until such time as the Company commences business operations. At such time as
BLWB commences operations, it is expected that the Board of Directors will
approve the payment of salaries in a reasonable amount to each of its officers
for their services in the positions of President/Treasurer, Executive Vice
President and Secretary respectively, of the Company. At such time, the Board of
Directors may, in its discretion, approve the payment of additional cash or
non-cash compensation to the foregoing for their services to the Company. [*
See: Part III Item 13 Exhibits and Reports on Form 8-K]
The Company does not provide officers with pension, stock appreciation
rights, long-term incentive or other plans but has the intention of implementing
such plans in the future.
Compensation of Directors
The Company has no standard arrangements for compensating the directors
of the Company for their attendance at meetings of the Board of Directors.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of August 10, 1999, regarding
the ownership of the Company's Common Stock by each shareholder known by the
Company to be the beneficial owner of more than five per cent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Except as otherwise indicated, each of the shareholders
has sole voting and investment power with respect to the shares of Common Stock
beneficially owned.
Amount *
Name and Address of * Beneficially Percent of *
Beneficial Owner Owned Class (1)
---------------- ----- ---------
A. Rene Dervaes, Jr. 850,000 41.46%
222 Lakeview Ave., Ste.160
West Palm Beach, FL 33401
Johanna Bonnier 150,000 7.32%
222 Lakeview Ave., Ste. 160
West Palm Beach, FL 33401
All Executive Officers, Directors 1,000,000 48.78%
-------------------
(1) Based upon 2,050,000 shares of the Company's Common Stock issued and
outstanding as of February 29, 2000. [* See: Part III Item 13 Exhibits and
Reports on Form 8-K]
Item 12. Certain Relationships and Related Transactions. *
On June 10, 1998, at inception, the Company issued 850,000 shares of
restricted Common Stock to Mr. A. Rene Dervaes, the President and Director of
the Company and record and beneficial owner of approximately 41.46% of the
Company's outstanding Common Stock, in consideration and exchange therefore for
services in connection with the organization of BLWB performed for the
15
<PAGE>
Company by him.
On June 10, 1998, at inception, the Company issued 150,000 shares of
restricted Common Stock to Ms. Johanna Bonnier, the Secretary and Treasurer of
the Company and record and beneficial owner of approximately 7.32% of the
Company's outstanding Common Stock, in exchange for services for the Company in
connection with the organization of BLWB.
At the current time, the Company has no provision to issue any
additional securities to management, promoters or their respective affiliates or
associates. At such time as the Board of Directors adopts an employee stock
option or pension plan, any issuance would be in accordance with the terms
thereof and proper approval. Although the Company has a very large amount of
authorized but unissued Common Stock and Preferred Stock which may be issued
without further shareholder approval or notice, the Company intends to reserve
such stock for the Rule 506 offerings contemplated to implement continued
expansion, for acquisitions and for properly approved employee compensation at
such time as such plan is adopted. (See Part I, Item 1. "Description of Business
- (b) Business of Issuer.")[* See: Part III Item 13 Exhibits and Reports on Form
8-K]
Item 13. Exhibits and Reports on Form 8-K.
Subsequent to the Company's February 29, 2000 year end it abandoned its
original business plan and executed a Share Exchange Agreement and
Reorganization. This resulted in the change of control of the Company. The
Company filed an 8-K with the Securities and Exchange Commission on May 15th,
2000 and will within 60 days thereto file an amended 8-K with complete
financials.
PART F/S
The Financial Statements of DSI, and Notes to Financial Statements together
with the Independent Auditor's Report of Durland and Company, CPA's, P.A.,
required by this Item 13 commence on page F-1 hereof and are incorporated herein
by this reference.
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report..............................................F-2
Balance Sheets............................................................F-3
Statements of Operations..................................................F-4
Statements of Stockholders' Equity........................................F-5
Statements of Cash Flows..................................................F-6
Notes to Financial Statements.............................................F-7
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
BillyWeb Corp.
(f/k/a EZ Talk, Inc.)
West Palm Beach, Florida
We have audited the accompanying balance sheets of BillyWeb Corp., f/k/a EZ
Talk, Inc., a development stage enterprise, as of February 29 and 28, 2000 and
1999 and the related statements of operations, stockholders' equity and cash
flows for the period from June 10, 1998 (Inception) through February 28, 1999
and for the year ended February 29, 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 audits.
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 BillyWeb Corp., f/k/a EZ Talk,
Inc., as of February 29 and 28, 2000 and 1999 and the results of its operations
and its cash flows for the period from June 10, 1998 (Inception) through
February 28, 1999 and the year ended February 29, 2000 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has experienced a loss since inception. The
Company's financial position and operating results raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Durland & Company
Durland & Company, CPAs, P.A.
Palm Beach, Florida
June 8, 2000
F-2
<PAGE>
<TABLE>
<CAPTION>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Balance Sheets
February 29 and 28,
2000 1999
------------------- ------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 51,841 $ 58,242
------------------- ------------------
Total Current Assets 51,841 58,242
------------------- ------------------
Total Assets $ 51,841 $ 58,242
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 3,385 $ 6,885
------------------- ------------------
Total Current Liabilities 3,385 6,885
------------------- ------------------
Total Liabilities 3,385 6,885
------------------- ------------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized 10,000,000
shares; none issued 0 0
Common stock, $0.0001 par value, authorized 50,000,000
shares; 2,050,000 issued and outstanding. 205 205
Additional paid in capital 59,895 59,895
Deficit accumulated during the development stage (11,644) (8,743)
------------------- ------------------
Total Stockholders' Equity 48,456 51,357
------------------- ------------------
Total Liabilities and Stockholders' Equity $ 51,841 $ 58,242
=================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
<TABLE>
<CAPTION>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Statements of Operations
Period from
June 10, 1998 Period from
(Inception) June 10, 1998
Year Ended through (Inception)
February 29, February 28, through
2000 1999 February 29, 2000
------------------ ------------------- ---------------------
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
------------------ ------------------- ---------------------
Expenses
General and administrative 245 43 288
Consulting fees 0 55 55
Consulting fees - related parties 0 100 100
Organization expenses 0 385 385
Professional fees 2,136 6,500 8,636
Transfer agent fees 520 1,660 2,180
------------------ ------------------- ---------------------
Total expenses 2,901 8,743 11,644
------------------ ------------------- ---------------------
Net loss $ (2,901)$ (8,743)$ (11,644)
================== =================== =====================
Net loss per weighted average share, basic $ (0.0)$ (0.01)
================== ===================
Weighted average number of shares 2,050,000 1,955,513
================== ===================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
<TABLE>
<CAPTION>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Statements of Stockholders' Equity
Deficit
Accumulated
Additional During the Total
Number of Preferred Common Paid-in Development Stockholders'
Shares Stock Stock Capital Stage Equity
------------ ----------- ---------- ------------ --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
BEGINNING BALANCE, June 10, 1998 0 $ 0 $ 0 $ 0 $ 0 $ 0
June 10, 1998 - services ($0.0001/sh) 1,000,000 0 100 0 0 100
June 15, 1998 - cash ($0.01/sh) 500,000 0 50 4,950 0 5,000
July 15, 1998 - cash ($0.01/sh) 500,000 0 50 4,950 0 5,000
September 15, 1998 - cash ($1.00/sh) 50,000 0 5 49,995 0 50,000
servicecashsssssssssssssssss ssssss (
Net loss 0 0 0 0 (8,743) (8,743)
------------ ----------- ---------- ------------ --------------- --------------
BALANCE, February 28, 1999 2,050,000 0 205 59,895 (8,743) 51,357
Net loss 0 0 0 0 (2,901) (2,901)
------------ ----------- ---------- ------------ --------------- --------------
ENDING BALANCE, February 29, 2000 2,050,000 $ 0 $ 205 $ 59,895 $ (11,644)$ 48,456
============ =========== ========== ============ =============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
<TABLE>
<CAPTION>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Statements of Cash Flows
Period from
June 10, 1998 Period from
(Inception) June 10, 1998
Year Ended through (Inception)
February 29, February 28, through
2000 1999 February 29, 2000
---------------- --------------- -------------------
<S> <C> <C> <C>
CASH FLOWS FROM DEVELOPMENT ACTIVITIES:
Net loss $ (2,901) $ (8,743)$ (11,644)
Adjustments to reconcile net loss to net cash used for
development activities
Stock issued in lieu of cash - related parties 0 100 100
Change in assets and liabilities
Increase (decrease) in accrued expenses (3,500) 6,885 3,385
---------------- --------------- -------------------
Net cash used by development activities (6,401) (1,758) (8,159)
---------------- --------------- -------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 0 60,000 60,000
---------------- --------------- -------------------
Net cash provided by financing activities 0 60,000 60,000
---------------- --------------- -------------------
Net increase (decrease) in cash (6,401) 58,242 51,841
CASH, beginning of period 58,242 0 0
---------------- --------------- -------------------
CASH, end of period $ 51,841 $ 58,242 $ 51,841
================ =============== ===================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-6
<PAGE>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Principles
The Company BillyWeb Corp., f/k/a EZ Talk, Inc., is a Florida chartered
development stage corporation which conducts business from its
headquarters in West Palm Beach, Florida. The Company was incorporated
on June 10, 1998. On May 4, 2000, the Company changed its name to
BillyWeb Corp.
The Company has not yet engaged in its expected operations. The
Company's future operations will be to market a hands-free speaker
system for telephones to various consumer groups. Current activities
include raising additional equity and negotiating with potential key
personnel and facilities. There is no assurance that any benefit will
result from such activities.
The financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the financial
statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the
date of the statements of financial condition and operations for the
period then ended. Actual results may differ significantly from those
estimates.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Start-up costs Costs of start-up activities, including organization
costs, are expensed as incurred, in accordance with Statement of
Position (SOP) 98-5.
b) Net loss per share Basic is computed by dividing the net loss by the
weighted average number of common shares outstanding during the period.
(2) Stockholders' Equity The Company has authorized 50,000,000 shares of
$0.0001 par value common stock and 10,000,000 shares of $0.0001 par
value preferred stock. Rights and privileges of the preferred stock are
to be determined by the Board of Directors prior to issuance. The
Company had 2,050,000 shares of common stock issued and outstanding at
February 29, 2000. The Company, on June 10, 1998, issued 850,000 shares
to its president for the value of services rendered in connection with
the organization of the Company. On the same date, the Company issued
150,000 shares to its secretary/treasurer and director for the value of
consulting services rendered in connection with the organization of the
Company. On June 15, 1998, the Company issued 500,000 shares of common
stock at $0.01 per share for $5,000 in cash. On July 15, 1998, the
Company issued 500,000 shares of common stock at $0.01 per share for
$5,000. On September 15, 1998, the Company issued 50,000 shares of
common stock at $1.00 per share for $50,000 in cash. The Company has no
shares of preferred stock issued and outstanding at February 29, 2000.
(3) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax
and financial reporting purposes. The Company has net operating loss
carry- forwards for income tax purposes of approximately $11,600,
expiring at February 28, 2019 and 2020.
The amount recorded as deferred tax assets as of February 29, 2000 is
$1,750, which represents the amount of tax benefit of the loss
carryforward. The Company has established a valuation allowance against
this deferred tax asset, as the Company has no history of profitable
operations.
F-7
<PAGE>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Notes to Financial Statements
(4) Going Concern As shown in the accompanying financial statements, the
Company incurred a net loss of $11,600 for the period from June 10,
1998 (Inception) through February 29, 2000. The ability of the Company
to continue as a going concern is dependent upon commencing operations
and obtaining additional capital and financing. The financial
statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern. The Company is
currently seeking financing to allow it to begin its planned
operations.
(5) Related Parties During the formation of the Company, the president and
director received 850,000 shares and the secretary/treasurer and
director received 150,000 shares for consulting services. A complete
description is included in Note 2.
(6) Subsequent Events
a) Stockholders' Equity In April 2000, the Company issued 13,500 shares
of unrestricted common stock via an S-8 registration to counsel in
settlement of accrued legal fees amounting to $3,385. In May 2000, two
stockholders and former officers contributed 1,000,000 shares of common
stock back to the Company upon their resignations. In May 2000, the
Company completed a 16 for 1 forward split of its common stock. In May
2000, the Company issued 23,100,000 shares to acquire BillyWeb Corp.
[see Note 6(b)].
b) Significant Acquisition On May 15, 2000, the Company entered into
an agreement to acquire 100% of the issued and outstanding common
shares of BillyWeb Corp., (n/k/a Share Exchange Corp.), in exchange for
23,100,000 shares of common stock of the Company, in a reverse merger,
which will be accounted for as a recapitalization of BillyWeb Corp.
F-8
<PAGE>
Item 15. Financial Data Schedules and Exhibits and Reports on Form 8-K
Index to Exhibits
Exhibit No. Description
--------- -----------------------------------------
3(i).1 Articles of Incorporation of EZ Talk, Inc., (filed electronically
with original filing on June 10, 1999)
3(ii).1 Bylaws of EZ Talk, Inc. (filed electronically with original filing
on June 10, 1999)
27.1 * Financial Data Schedule
--------------------------------------------
* Included Herein
(1) Incorporated herein by reference to the Registration Statement on Form
10-SB of EZ TALK, INC. (File No. 0-26329), filed with the U.S. Securities
and Exchange Commission.
(b) No Reports on Form 8-K were filed during the last quarter of
the fiscal year ended February 29, 2000, covered by this
Annual Report on Form 10- KSB.
<PAGE>
SIGNATURES
--------
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Billy Web Corp.
f/k/a
EZ Talk, Inc.
(Registrant)
Date: June 14, 2000 By: /s/ Frederic Richard
---------------------------------------
Frederick Richard
President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date Signature Title
---- --------- ----
June 14, 2000 By: /s/ Frederic Richard
------------------------
Frederick Richard President
June 14, 2000 By: /s/ Alberto Afonso
-----------------------
Alberto Afonso Secretary & Treasurer
