UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
Lucid Concepts, Inc.
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(Name of Small Business Issuer in its Charter)
Florida 65-0509296
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(State or other jurisdiction of (I.R.S. Employer Identification no.)
incorporation or organization)
277 Royal Poinciana Way, Suite 192
Palm Beach, FL 33480
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (561) 659-6530
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered Each class to be registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value per share
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(Title of class)
Copies of Communications Sent to:
Donald F. Mintmire
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696 - Fax: (561) 659-5371
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PART I
Item 1. Description of Business
Business Development
Lucid Concepts, Inc. (the "Company") was organized on July 15, 1994,
under the laws of the State of Florida, having the stated purpose of engaging in
any lawful activities. The Company was formed with the contemplated purpose to
manufacture and market imported products from China in the United States and
elsewhere. The business concept and plan was based upon information obtained by
the incorporator several years before while working in China. The incorporator
was unable to obtain the cooperation and assistance of the Chinese and investors
to implement the proposed plan. After development of a business plan and efforts
to develop the business failed, all such efforts were abandoned.
The Company never engaged in an active trade or business throughout the
period from 1995 until just recently. On June 1, 1999, all of the issued and
outstanding shares of the common stock of the Company were acquired from
Xaio-Fei Davis, (5,000,000 shares of common stock) and Stacy Wolfgang (500,000
shares of common stock) its two (2) shareholders. At that time neither was an
officer or director of the Company. The shares were purchased from Mrs. Davis by
Mr. Kevin L. Bell, the principal of the Company. The shares were purchased from
Ms. Stacy Wolfgang on that same date by a group of investors which did not
include Mr. Bell. The original shareholders agreed to exchange the 5,500,000
issued and outstanding shares held by such shareholders to the new group of
investors in exchange for a commitment by the new group to arrange to pay the
costs of the continued operations of the corporation, and bringing its books and
records up to date. The Company additionally received gross proceeds in the
amount of $19,200 from the sale of a total of 480,000 shares of common stock,
$.001 par value per share (the "Common Stock"), in an offering conducted
pursuant to Section 3(b) and 4(2) of the Securities Act of 1933, as amended (the
"Act"), and Rules 505 and 506 of Regulation D promulgated thereunder. This
offering was made in the State of Georgia and the State of Florida. The Company
undertook the offering of shares of Common Stock on June 1, 1999.
The Company then began to consider and investigate potential business
opportunities. The Company is considered a development stage company and, due to
its status as a "shell" corporation, its principal business purpose is to locate
and consummate a merger or acquisition with a private entity. Because of the
Company's current status of having limited assets and no recent operating
history, in the event the Company does successfully acquire or merge with an
operating business opportunity, it is likely that the Company's present
shareholders will experience substantial dilution and there will be a probable
change in control of the Company.
On June 1, 1999, the Company also determined it should become active in
seeking potential operating businesses and business opportunities with the
intent to acquire or merge with such businesses.
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The Company is voluntarily filing its registration statement on Form
10-SB in order to make information concerning itself more readily available to
the public. Management believes that being a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), could provide
a prospective merger or acquisition candidate with additional information
concerning the Company. In addition, management believes that this might make
the Company more attractive to an operating business as a potential business
combination candidate. As a result of filing its registration statement, the
Company is obligated to file with the Commission certain interim and periodic
reports including an annual report containing audited financial statements.
Any target acquisition or merger candidate of the Company will become
subject to the same reporting requirements as the Company upon consummation of
any such business combination. Thus, in the event that the Company successfully
completes an acquisition or merger with another operating business, the
resulting combined business must provide audited financial statements for at
least the two most recent fiscal years, or in the event that the combined
operating business has been in business less than two years, audited financial
statements will be required from the period of inception of the target
acquisition or merger candidate.
The Company's principal executive offices are located at 277 Royal
Poinciana Way 192, Palm Beach, FL 33480 and its telephone number is (561)
659-6530.
Business of Issuer
The Company has no recent operating history and no representation is
made, nor is any intended, that the Company will be able to carry on future
business activities successfully. There can be no assurance that the Company
will have the ability to acquire or merge with an operating business, business
opportunity or property that will be of material value to the Company.
Management plans to investigate, research and, if justified, potentially
acquire or merge with one or more businesses or business opportunities. The
Company currently has no commitment or arrangement, written or oral, to
participate in any business opportunity and management cannot predict the nature
of any potential business opportunity it may ultimately consider. Management
will have broad discretion in its search for and negotiations with any potential
business or business opportunity.
Sources of Business Opportunities
The Company intends to use various sources in its search for potential
business opportunities including its officer and director, consultants, special
advisors, securities broker-dealers, venture capitalists, member of the
financial community and others who may present management with unsolicited
proposals. Because of the Company's limited capital, it may not be able to
retain on a fee basis professional firms specializing in business acquisitions
and reorganizations. The Company will most likely have to rely on outside
sources, not otherwise associated with the Company, that will accept their
compensation only after the Company has finalized a successful acquisition or
merger. The Company will rely upon the expertise and contacts of such persons,
will use notices
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in written publications and personal contacts to find merger and acquisition
candidates, the exact number of such contacts dependent upon the skill and
industriousness of the participants and the conditions of the marketplace. None
of the participants in the process will have any past business relationship with
management. To date the Company has not engaged nor entered into any definitive
agreements nor understandings regarding retention of any consultant to assist
the Company in its search for business opportunities, nor is management
presently in a position to actively seek or retain any prospective consultants
for these purposes.
The Company does not intend to restrict its search to any specific kind
of industry or business. The Company may investigate and ultimately acquire a
venture that is in its preliminary or development stage, is already in
operation, or in various stages of its corporate existence and development.
Management cannot predict at this time the status or nature of any venture in
which the Company may participate. A potential venture might need additional
capital or merely desire to have its shares publicly traded. The most likely
scenario for a possible business arrangement would involve the acquisition of,
or merger with, an operating business that does not need additional capital, but
which merely desires to establish a public trading market for its shares.
Management believes that the Company could provide a potential public vehicle
for a private entity interested in becoming a publicly held corporation without
the time and expense typically associated with an initial public offering.
Evaluation
Once the Company has identified a particular entity as a potential
acquisition or merger candidate, management will seek to determine whether
acquisition or merger is warranted or whether further investigation is
necessary. Such determination will generally be based on management's knowledge
and experience, (limited solely to working history - See "Item 5. Directors,
Executive Officers, etc.") or with the assistance of outside advisors and
consultants evaluating the preliminary information available to them. Management
may elect to engage outside independent consultants to perform preliminary
analysis of potential business opportunities. However, because of the Company's
limited capital it may not have the necessary funds for a complete and
exhaustive investigation of any particular opportunity. Management will not
devote full time to finding a merger candidate, will continue to engage in
outside unrelated activities, and anticipates devoting no more than an average
of five (5) hours weekly to such undertaking. Outside unrelated activities
include furnishing electrical supplies, electrical contracting services, and
electrical engineering/computer services.
In evaluating such potential business opportunities, the Company will
consider, to the extent relevant to the specific opportunity, several factors
including potential benefits to the Company and its shareholders; working
capital, financial requirements and availability of additional financing;
history of operation, if any; nature of present and expected competition;
quality and experience of management; need for further research, development or
exploration; potential for growth and expansion; potential for profits; and
other factors deemed relevant to the specific opportunity.
Because the Company has not located or identified any specific business
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opportunity as of the date hereof, there are certain unidentified risks that
cannot be adequately expressed prior to the identification of a specific
business opportunity. There can be no assurance following consummation of any
acquisition or merger that the business venture will develop into a going
concern or, if the business is already operating, that it will continue to
operate successfully. Many of the potential business opportunities available to
the Company may involve new and untested products, processes or market
strategies which may not ultimately prove successful.
Form of Potential Acquisition or Merger
Presently the Company cannot predict the manner in which it might
participate in a prospective business opportunity. Each separate potential
opportunity will be reviewed and, upon the basis of that review, a suitable
legal structure or method of participation will be chosen. The particular manner
in which the Company participates in a specific business opportunity will depend
upon the nature of that opportunity, the respective needs and desires of the
Company and management of the opportunity, and the relative negotiating strength
of the parties involved. Actual participation in a business venture may take the
form of an asset purchase, lease, joint venture, license, partnership, stock
purchase, reorganization, merger or consolidation. The Company may act directly
or indirectly through an interest in a partnership, corporation, or other form
of organization, however, the Company does not intend to participate in
opportunities through the purchase of minority stock positions.
Because of the Company's current status and recent inactive status for
the prior four (4) years, and its concomitant lack of assets and relevant
operating history, it is likely that any potential merger or acquisition with
another operating business will require substantial dilution to the Company's
existing shareholders interests. There will probably be a change in control of
the Company, with the incoming owners of the targeted merger or acquisition
candidate taking over control of the Company. Management has not established any
guidelines as to the amount of control it will offer to prospective business
opportunity candidates, since this issue will depend to a large degree on the
economic strength and desirability of each candidate, and the corresponding
relative bargaining power of the parties. However, management will endeavor to
negotiate the best possible terms for the benefit of the Company's shareholders
as the case arises. Management may actively negotiate or otherwise consent to
the purchase of any portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition. In such an event, existing
shareholders may not be afforded an opportunity to approve or consent to any
particular stock buy-out transaction. However the terms of the sale of shares
held by present management of the Company will be extended equally to all other
current shareholders.
Management does not have any plans to borrow funds to compensate any
persons, consultants, or promoters in conjunction with its efforts to find and
acquire or merge with another business opportunity. Management does not have any
plans to borrow funds to pay compensation to any prospective business
opportunity, or shareholders, management, creditors, or other potential parties
to the acquisition or merger. In either case, it is unlikely that the Company
would be able to borrow significant funds for such purposes from any
conventional lending sources. In all probability, a public sale of the Company's
securities would also be unfeasible, and management
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does not contemplate any form of new public offering at this time. In the event
that the Company does need to raise capital, it would most likely have to rely
on the private sale of its securities. Such a private sale would be limited to
persons exempt under the Commissions's Regulation D or other rule, or provision
for exemption, if any applies. However, no private sales are contemplated by the
Company's management at this time. If a private sale of the Company's securities
is deemed appropriate in the future, management will endeavor to acquire funds
on the best terms available to the Company. However, there can be no assurance
that the Company will be able to obtain funding when and if needed, or that such
funding, if available, can be obtained on terms reasonable or acceptable to the
Company. The Company does not anticipate using Regulation S promulgated under
the Securities Act of 1933 to raise any funds any time within the next year,
subject only to its potential applicability after consummation of a merger or
acquisition.
In the event of a successful acquisition or merger, a finder's fee, in
the form of cash or securities of the Company, may be paid to persons
instrumental in facilitating the transaction. The Company has not established
any criteria or limits for the determination of a finder's fee, although most
likely an appropriate finder's fee will be negotiated between the parties,
including the potential business opportunity candidate, based upon economic
considerations and reasonable value as estimated and mutually agreed upon at
that time. A finder's fee would only be payable upon completion of the proposed
acquisition or merger in the normal case, and management does not contemplate
any other arrangement at this time. Current management has not in the past used
any particular consultants, advisors or finders. Management has not actively
undertaken a search for, nor retention of, any finder's fee arrangement with any
person. It is possible that a potential merger or acquisition candidate would
have its own finder's fee arrangement, or other similar business brokerage or
investment banking arrangement, whereupon the terms may be governed by a
pre-existing contract; in such case, the Company may be limited in its ability
to affect the terms of compensation, but most likely the terms would be
disclosed and subject to approval pursuant to submission of the proposed
transaction to a vote of the Company's shareholders. Management cannot predict
any other terms of a finder's fee arrangement at this time. If such a fee
arrangement was proposed, independent management and directors would negotiate
the best terms available to the Company so as not to compromise the fiduciary
duties of the representative in the proposed transaction, and the Company would
require that the proposed arrangement would be submitted to the shareholders for
prior ratification in an appropriate manner.
Management does not contemplate that the Company would acquire or merge
with a business entity in which any officer or director of the Company has an
interest. Any such related party transaction, however remote, would be submitted
for approval by an independent quorum of the Board of Directors and the proposed
transaction would be submitted to the shareholders for prior ratification in an
appropriate manner. The Company's management has not had any contact,
discussions, or other understandings regarding any particular business
opportunity at this time, regardless of any potential conflict of interest
issues. Accordingly, the potential conflict of interest is merely a remote
theoretical possibility at this time.
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Possible Blank Check Company Status
While the Company may be deemed a "shell" company at this time, it does
not constitute a "blank check" company under pertinent securities law standards.
Accordingly, the Company is not subject to securities regulations imposed upon
companies deemed to be "blank check companies." If the Company were to file a
registration statement under Securities Act of 1933 and, at such time, priced
its shares at less than $5.00 per share and continued to have no specific
business plan, it would then be classified as a blank check company.
If in the future the Company were to become a blank check company,
adverse consequences could attach to the Company. Such consequences can include,
but are not limited to, time delays of the registration process, significant
expenses to be incurred in such an offering, loss of voting control to public
shareholders and the additional steps required to comply with various federal
and state laws enacted for the protection of investors, including so-called
"lock-up" agreements pending consummation of a merger or acquisition that would
take it out of blank check company status.
Many states (excluding Florida where the Company is incorporated) have
statutes, rules and regulations limiting the sale of securities of "blank check"
companies in their respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in the companies securities
or to undertake any offering of the Company's securities, either debt or equity,
until such time as the Company has successfully implemented its business plan
described herein. In the event the Company undertakes the filing of a
registration statement under circumstances that classifies it as a blank check
company the provisions of Rule 419 and other applicable provisions will be
complied with.
Rights of Shareholders
The Company amended its Articles of Incorporation on June 3, 1999, to
expressly provide that the Board of Directors is authorized to enter into on
behalf of the corporation and to bind the corporation without shareholder
approval, any and all acts approving the terms and conditions of a merger and/or
a share exchange, and shareholders affected thereby, shall not be entitled to
dissenters rights with respect thereto under any applicable statutory dissenters
rights provision. This provision expressly eliminates shareholder participation
in the merger and/or share exchange contemplated by the Company and expressly
eliminates any shareholders dissenters rights. The Company does not intend to
provide its shareholders with complete disclosure documentation including
audited finance statements concerning a target company and its business prior to
any mergers or acquisitions.
Competition
Because the Company has not identified any potential acquisition or
merger candidate, it is unable to evaluate the type and extent of its likely
competition. The Company is aware that there are several other public companies
with only nominal assets that are also searching for operating businesses and
other business opportunities as potential acquisition or merger candidates. The
Company will be in direct competition with these other public companies in its
search for business opportunities and, due to the Company's limited funds, it
may be difficult to successfully compete with these other companies.
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Employees
As of the date hereof, the Company does not have any employees and has
no plans for retaining employees until such time as the Company's business
warrants the expense, or until the Company successfully acquires or merges with
an operating business. The Company may find it necessary to periodically hire
part-time clerical help on an as-needed basis.
Facilities
The Company is currently using at no cost to the Company, as its
principal place of business offices of its legal counsel (provided at no cost),
located in Palm Beach, Florida. Although the Company has no written agreement
and pays no rent for the use of this facility, it is contemplated that at such
future time as an acquisition or merger transaction may be completed, the
Company will secure commercial office space from which it will conduct its
business. Until such an acquisition or merger, the Company lacks any basis for
determining the kinds of office space or other facilities necessary for its
future business. The Company has no current plans to secure such commercial
office space. It is also possible that a merger or acquisition candidate would
have adequate existing facilities upon completion of such a transaction, and the
Company's principal offices may be transferred to such existing facilities.
Industry Segments
No information is presented regarding industry segments. The Company is
presently a development stage company seeking a potential acquisition of or
merger with a yet to be identified business opportunity. Reference is made to
the statements of income included herein in response to part F/S of this Form
10-SB for a report of the Company's operating history for the past two fiscal
years.
Item 2. Management's Discussion and Analysis or Plan of Operation
The Company is considered a development stage company with limited
assets or capital, and with no operations or income since approximately 1995.
The costs and expenses associated with the preparation and filing of this
registration statement and other operations of the Company have been paid for by
a shareholder, specifically Kevin L. Bell (see Item 4, Security Ownership of
Certain Beneficial Owners and Management Kevin L. Bell is the controlling
shareholder). Mr. Bell has agreed to pay future costs associated with filing
future reports under Exchange Act of 1934 if the Company is unable to do so. It
is anticipated that the Company will require only nominal capital to maintain
the corporate viability of the Company and any additional needed funds will most
likely be provided by the Company's existing shareholders or its sole officer
and director in the immediate future. Current shareholders have not agreed upon
the terms and conditions of future financing and such undertaking will be
subject to future negotiations, except for the express commitment of Mr. Bell to
fund required 34 Act filings. Repayment of any such funding will also be subject
to such negotiations. However, unless the Company is able to facilitate an
acquisition of or merger with an operating business or is able to obtain
significant outside financing, there is substantial doubt about its ability to
continue as a going concern.
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In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management will
evaluate the possible effects of inflation on the Company as it relates to its
business and operations following a successful acquisition or merger.
Management plans may but do not currently provide for experts to secure
a successful acquisition or merger partner so that it will be able to continue
as a going concern. In the event such efforts are unsuccessful, contingent plans
have been arranged to provide that the current Director of the Company is to
fund required future filings under the 34 Act, and existing shareholders have
expressed an interest in additional funding if necessary to continue the Company
as a going concern.
Plan of Operation
During the next twelve months, the Company will actively seek out and
investigate possible business opportunities with the intent to acquire or merge
with one or more business ventures. In its search for business opportunities,
management will follow the procedures outlined in Item 1 above. Because the
Company has limited funds, it may be necessary for the sole officer and director
to either advance funds to the Company or to accrue expenses until such time as
a successful business consolidation can be made. The Company will not be a
condition that the target company must repay funds advanced by its officers and
directors. Management intends to hold expenses to a minimum and to obtain
services on a contingency basis when possible. Further, the Company's directors
will defer any compensation until such time as an acquisition or merger can be
accomplished and will strive to have the business opportunity provide their
remuneration. However, if the Company engages outside advisors or consultants in
its search for business opportunities, it may be necessary for the Company to
attempt to raise additional funds. As of the date hereof, the Company has not
made any arrangements or definitive agreements to use outside advisors or
consultants or to raise any capital. In the event the Company does need to raise
capital most likely the only method available to the Company would be the
private sale of its securities. Because of the nature of the Company as a
development stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a commercial or
private lender. There can be no assurance that the Company will able to obtain
additional funding when and if needed, or that such funding, if available, can
be obtained on terms acceptable to the Company.
The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is convinced that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
Item 3. Description of Property
The information required by this Item 3 is not applicable to this Form
10-SB due to the fact that the Company does not own or control any material
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property. There are no preliminary agreements or understandings with respect to
office facilities in the future.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, to the best knowledge of the
Company as of August 15, 1999, with respect to each person known by the Company
to own beneficially more than 5% of the Company's outstanding common stock, each
director of the Company and all directors and officers of the Company as a
group.
Name of Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
Kevin L. Bell 5,000,000 83.6%
499 Northside #505
Atlanta, GA 30309
All Executive Officers
and Directors
as a Group (one person) 5,000,000 83.6%
Item 5. Directors, Executive Officers, Promoters and Control Persons, Compliance
with Section 16(a) of the Exchange Act.
The director and executive officer of the Company and his respective age
is as follows:
Name Age Position
Kevin L. Bell 33 Director, President, Secretary and Treasurer
All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. The Company has not
compensated its directors for service on the Board of Directors or any committee
thereof. As of the date hereof, no director has accrued any expenses or
compensation. Officers are appointed annually by the Board of Directors and each
executive officer serves at the discretion of the Board of Directors. The
Company does not have any standing committees at this time.
No director, or officer, or promoter of the Company has, within the past
five years, filed any bankruptcy petition, been convicted in or been the subject
of any pending criminal proceedings, or is any such person the subject or any
order, judgment or decree involving the violation of any state or federal
securities laws.
The business experience of the person listed above during the past five
years is as follows:
Mr. Kevin L. Bell, 33 years old, has been a Director of the Company
since March 31, 1999.
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Mr. Bell served in the United States Navy from 1978 to 1986, during which time
he also attended Chicago's Community College in 1979. From 1984 to 1988 Mr. Bell
worked as an undercover private investigator, specializing in retail theft,
insurance fraud, and performed some work for the State Department in New York
City. While still in New York City, Mr. Bell worked for an electrical supply
house (Local 3 Electrical Union) until his relocation to the Atlanta, Georgia
area in 1989. There Mr. Bell worked as an electrician from 1989 to 1991 as well
as working for Dugan's (an Atlanta based restaurant) as an electrician until
1997. Also during 1990 to 1991 he worked as an in-house electrician for the
Georgia Baptist Medical Center. From 1997 to present Mr. Bell has worked for
Engineered Life Safety Systems as Vice President of Operations. Mr. Bell is also
the majority shareholder and Chief Executive Officer of It's Electric.com, Inc.,
a Florida corporation f/k/a Mathan, Inc. (based in Atlanta, Georgia), a start-up
company which furnishes electrical supplies and electrical contracting services.
Mr. Bell obtained a MCSE Certification (Microsoft Engineering Certified) and an
A+ certification (Microsoft Certified Hardware Technician).
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. Bell comprising all of the
Company's executive officers, directors and greater than 10% beneficial owners
of its common Stock, have complied with Section 16(a) filing requirements
applicable to them during the Company's most recent fiscal year.
Item 6. Executive Compensation
The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or directors. The
Company has not paid any salaries or other compensation to its officers,
directors or employees for the years ended 1994, 1995, 1996, 1997 and 1998, nor
at any time during 1999. Further, the Company has not entered into an employment
agreement with any of its officers, directors or any other persons and no such
agreements are anticipated in the immediate future. It is intended that the
Company's director will defer any compensation until such time as an acquisition
or merger can be accomplished and will strive to have the business opportunity
provide their remuneration. As of the date hereof, no person has accrued any
compensation from the Company.
Item 7. Certain Relationships and Related Transactions
On December 1, 1998, Mr. Kevin L. Bell acquired from the principal
controlling shareholder, Xaio-Fei Davis, a total of 5,000,000 shares of Common
Stock of the Company in exchange for a total cash payment of $1,000.00.
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In addition Mr. Bell has paid for the cost and expenses associated with
the filing of this Form 10-SB and other operations of the Company.
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 for acquisitions.
During the Company's last two fiscal years, there have not been any
other transactions between the Company and any officer, director, nominee for
election as director, or any shareholder owning greater than five percent (5%)
of the Company's outstanding shares, nor any member of the above referenced
individuals' immediate family.
Kevin L. Bell may be deemed to be a "promoter" of the Company as that
term is defined under the Rules and Regulations promulgated under the Act.
Item 8. Description of Securities
Common Stock
The Company is authorized to issue 50,000,000 shares of common stock,
par value $.001, of which 5,980,000 shares are issued and outstanding as of the
date hereof. All shares of common stock have equal rights and privileges with
respect to voting, liquidation and dividend rights. Each share of Common Stock
entitles the holder thereof to (i) one non-cumulative vote for each share held
of record on all matters submitted to a vote of the stockholders; (ii) to
participate equally and to receive any and all such dividends as may be declared
by the Board of Directors out of funds legally available therefor; and (iii) to
participate pro rata in any distribution of assets available for distribution
upon liquidation of the Company. Stockholders of the Company have no pre-emptive
rights to acquire additional shares of Common Stock or any other securities. The
Common Stock is not subject to redemption and carries no subscription or
conversion rights. All outstanding shares of common stock are fully paid and
non-assessable.
Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or more
series as may be determined by the Board of Directors. The Company is authorized
to issue 10,000,000 shares of preferred stock, no par value. The voting powers
and preferences, the relative rights of each such series and the qualifications,
limitations and restrictions thereof shall be established by the Board of
Directors, except that no holder of Preferred Stock shall have preemptive
rights. At the present time no terms, conditions, limitations or preferences
have been established. The Company has no shares of Preferred Stock outstanding,
and the Board of Directors has no plan to issue any shares of preferred Stock
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for the foreseeable future unless the issuance thereof shall be in the best
interests of the Company.
Certain Provision of Florida Law
Section 607.0902 of the Florida Business Corporation Act prohibits the
voting of shares in a publicly-held Florida corporation that are acquired in a
"control share acquisition" unless the holders of a majority of the
corporation's voting shares (exclusive of shares held by officers of the
corporation, inside directors or the acquiring party) approve the granting of
voting rights as to the shares acquired in the control share acquisition or
unless the acquisition is approved by the corporation's board of directors,
unless the corporation's articles of incorporation or bylaws specifically state
that this section does not apply. A "control share acquisition" is defined as an
acquisition that immediately thereafter entitles the acquiring party to vote in
the election of directors within each of the following ranges of voting power;
(i) one-fifth or more, but less than one-third of such voting power; (ii)
one-third or ore, but less than a majority of such voting power; and, (iii) more
than a majority of such voting power. The Amended Articles of Incorporation of
the Company specifically state that Section 607.0902 does not apply to
control-share acquisitions of shares of the Company.
Part II
Item 1. Market For Common Equity and Other Shareholder Matters.
No shares of the Company's common stock have previously been registered
with the Securities and Exchange Commission (the "Commission") or any state
securities agency or authority. The Company intends to make application to the
NASD for the Company's shares to be quoted on the OTC Bulletin Board. The
application to the NASD will be made during the Commission comment period for
this Form 10-SB or immediately thereafter. The Company's application to the NASD
will consist of current corporate information, financial statements and other
documents as required by Rule 15c211 of the Securities Exchange Act of 1934, as
amended. Inclusion on the OTC Bulletin Board permits price quotation for the
Company's shares to be published by such service.
The Company is not aware of any existing trading market for its common
stock. The Company's common stock has never traded in a public market. There are
no plans, proposals, arrangements or understandings with any person(s) with
regard to the development of a trading market in any of the Company's
securities.
If and when the Company's common stock is traded in the over-the-counter
market, most likely the shares will be subject to the provisions of Section
15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the
Exchange Act"), commonly referred to as the "penny stock" rule. Section 15(g)
sets forth certain requirements for transactions in penny stocks and Rule
15g9(d)(1) incorporates the definition of penny stock as that used in Rule
3a51-1 of the Exchange Act.
13
<PAGE>
The Commission generally defines penny stock to be any equity security
that has a market price less than $5.00 per share, subject to certain
exceptions. Rule 3a51-1 provides that any equity security is considered to be a
penny stock unless that security is: registered and traded on a national
securities exchange meeting specified criteria set by the Commission; authorized
for quotation on The NASDAQ Stock Market; issued by a registered investment
company; excluded from the definition on the basis of price (at least $5.00 per
share) or the issuer's net tangible assets; or exempted from the definition by
the Commission. If the Company's shares are deemed to be a penny stock, trading
in the shares will be subject to additional sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors, generally persons with assets in excess of $1,000,000
or annual income exceeding $200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
the monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker dealers to
trade and/or maintain a market in the Company's common stock and may affect the
ability of shareholders to sell their shares.
As of August 15, 1999, there were 24 holders of record of the Company's
common stock.
As of the date hereof, the Company has issued and outstanding 5,980,000
shares of common stock. Of this total, 500,000 shares may be sold or otherwise
transferred without restriction pursuant to the terms of Rule 144 ("Rule 144")
of the Securities Act of 1933, as amended (the "Act") since such shares were
originally issued in transactions more than five (5) years ago. 5,000,000 such
shares remain restricted under Rule 144 since such shares are held by an
affiliate. The remaining 480,000 shares were issued subject to Rule 144 and may
not be sold and/or transferred without further registration under the Act or
pursuant to an applicable exemption..
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that it will pay
cash dividends or make distributions in the foreseeable future. The Company
currently intends to retain and reinvest future earnings, if any, to finance its
operations.
Public Quotation of Stock
The Company has not as of this date, but intends to request in the
immediate future a broker-dealer who has not been identified at this time, to
act as a market maker for the Company's securities. Thus far the Company has not
14
<PAGE>
requested a market maker to submit the Company's Form 10-SB to the National
Association of Securities Dealers and to serve as a market maker for the
Company's Common Stock. The Company anticipates that other market makers may be
requested to participate at a later date. The Company will not use consultants
to obtain market makers. There have been no preliminary discussions between the
Company, or anyone acting on its behalf, and any market maker regarding the
future trading market for the Company. It is anticipated that the market maker
will be contacted prior to an acquisition or merger and only by management of
the Company.
Item 2. Legal Proceedings
The Company is currently not a party to any pending legal proceedings and
no such action by, or to the best of its knowledge, against the Company has been
threatened. The Company was inactive from late 1995 through the date of this
Form 10-SB.
Item 3. Changes in and Disagreements with Accountants
Item 3 is not applicable to this Form 10-SB.
Item 4. Recent Sales of Unregistered Securities
The Company received a total of $19,200.00 ($0.04 per share) from the
sale of a total of 480,000 shares of common stock, $.001 par value per share
(the "Common Stock"), in a self- underwritten offering conducted pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and Rules
505 and 506 of Regulation D promulgated thereunder. This offering was made in
the State of Georgia and the State of Florida to a total of 24 individuals
investors. The Company undertook the offering of shares of Common Stock on June
1, 1999, and did not pay any underwriting discounts or commissions. The Company
claimed the exemption from registration in connection with each of the offerings
under Sections 3(b) and 4(2) of the Act and Rules 505 and 506 promulgated
thereunder, Section 10-5-9(13) of the Georgia Code and Section 517.061(11) of
the Florida Code.
The facts relied upon the by the Company to make the federal exemption
available include the following: (i) the aggregate offering price for the
offering of the shares of Common Stock did not exceed $5,000,000, less the
aggregate offering price for all securities sold within the twelve months before
the start of and during the offering of the shares in reliance on any exemption
under Section 3(b) of, or in violation of Section 5(a) of the Act; (ii) no
general solicitation or advertising was conducted by the Company in connection
with the offering of any of the shares; (iii) there were no more than 35
purchasers from the Issuer in the offering; (iv) the purchasers were all
accredited investors and the books and records of the Company were available and
reviewed by each investor; and, (v) the required number of manually executed
originals and true copies of Form D were duly and timely filed with the U.S.
Securities and Exchange Commission.
The facts relied upon to make the Georgia Exemption available include
the following: (i) the aggregate number of persons purchasing the Company's
stock during the 12 month period ending on the date of issuance did not exceed
15
<PAGE>
fifteen (15) persons; (ii) neither the offer nor the sale of any of the shares
was accomplished by a public solicitation or advertisement; (iii) each
certificate contains a legend stating "These securities have been issued or sold
in reliance of paragraph (13) of Code Section 10-5-9 of the Georgia Securities
Act of 1973 and may not be sold or transferred except in a transaction which is
exempt under such act or pursuant to an effective registration under such act";
and (iv) each purchaser executed a statement to the effect that the securities
purchased have been purchased for investment purposes. Offerings made pursuant
to this section of the Georgia Securities Act have no requirement for an
offering memorandum or disclosure document.
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of the Company or, by reason of their business or
financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the transaction; (iv) each
purchaser represented that he was purchasing for his own account and not with a
view to or for sale in connection with any distribution of the shares; and (v)
prior to sale, each purchaser had reasonable access to or was furnished all
material books and records of the Company, all material contracts and documents
relating to the proposed transaction, and had an opportunity to question the
executive officers of the Company. Pursuant to Rule 3E-500.005, in offerings
made under Section 517.061(11) of the Florida Statutes, an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or given reasonable access to full and fair disclosure of material
information. An issuer is deemed to be satisfied if such purchaser or his
representative has been given access to all material books and records of the
issuer; all material contracts and documents relating to the proposed
transaction; and an opportunity to question the appropriate executive officer.
In the regard, Mr. Bell supplied such information and was available for such
questioning.
Item 5. Indemnification of Directors and Officers
Article XI of the Company's Amended Articles of Incorporation contains
provisions providing for the indemnification of directors and officers of the
Company as follows:
(a) The corporation shall indemnify any person who was or is a party, or
is threatened to be made a party, of any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is otherwise serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, has no reasonable cause to believe his conduct is unlawful. The
termination of any action, suit or proceeding, by judgment, order, settlement,
conviction upon a plea of nolo contendere or its equivalent, shall not of itself
16
<PAGE>
create a presumption that the person did not act in good faith in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe the action was unlawful.
(b) The corporation shall indemnify any person who was or is a party, or
is threatened to be made a party, to any threatened, pending or completed action
or suit by or in the right of the corporation, to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit, if he acted in good faith and in a manner he
reasonably believed to be in, or not, opposed to, the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation, unless, and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability, but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnification for such expenses
which such court deems proper.
(c) To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (a) and (b) of this Article,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under Section (a) or (b) of this Article (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the officer, director
and employee or agent is proper in the circumstances, because he has met the
applicable standard of conduct set forth in Section (a) or (b) of this Article.
Such determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the affirmative vote of the holders of
a majority of the shares of stock entitled to vote and represented at a meeting
called for purpose.
(e) Expenses (including attorneys' fees) incurred in defending a civil
or criminal action, suit or proceeding may be paid by the corporation in advance
of the final disposition or such action, suit or proceeding, as authorized in
Section (d) of this Article, upon receipt of an understanding by or on behalf of
the director, officer, employee or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
(f) The Board of Directors may exercise the corporation's power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the corporation, or is or was serving
17
<PAGE>
at the request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under this Article.
(g) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under these Amended Articles of Incorporation, the Bylaws, agreements,
vote of the shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office and shall continue as to person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the heirs
and personal representative of such a person.
Transfer Agent
The Company is serving as its own transfer agent until it becomes
eligible for quotation with NASD.
PART F/S
Financial Statements and Supplementary Data
The Company's financial statements for the years ended
__________________, has been examined to the extent indicated in their reports
by Dorra, Shaw, & Dugan, independent certified accountants, and have been
prepared in accordance with generally accepted accounting principles and
pursuant to Regulation S-B as promulgated by the Securities and Exchange
Commission and are included herein, on Page F-1 hereof in response to Part F/S
of this Form 10-SB.
18
<PAGE>
LUCID CONCEPTS, INC.
TABLE OF CONTENTS
Page
Independent Auditors' Report....................................... F-1
Balance Sheet...................................................... F-2
Statement of Operations and Accumulated Deficit.................... F-3
Statement of Changes in Stockholders' Equity....................... F-4
Statement of Cash Flows............................................ F-5
Notes to Financial Statements...................................... F-6
19
<PAGE>
Dorra Shaw & Dugan
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Lucid Concepts, Inc.
Palm Beach, Florida
We have audited the accompanying balance sheet of Lucid Concepts, Inc. (a
Florida corporation and a development stage company) as of June 30, 1999, and
the related statements of operations, accumulated deficit, cash flows and
changes in stockholders' equity for the period June 1, 1999 to June 30, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lucid Concepts, Inc. as of June
30, 1999 and the results of its operations and its cash flows and changes in
stockholders' equity for the period from June 1, 1999 to June 30, 1999 in
conformity with generally accepted accounting principles.
Audited statements of operations, cash flows and stockholders' equity for the
two years ended May 31, 1999 as required by item 310 of regulation S-B are not
provided because the company was dormant.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company has incurred net losses since its inception. The Company's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. Management's plan regarding those matters also are
described in Note D. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Dorra, Shaw & Dugan
- ------------------------------------
Certified Public Accountants
August 18, 1999
F-1
270 South County Road, Palm Beach, FL 33480
Telephone (561) 822-9955 Fax (561) 822-9955
Website: dsd-cpa.com
<PAGE>
<TABLE>
<CAPTION>
LUCID CONCEPTS, INC.
( A Development Stage Company)
BALANCE SHEET
June 30, 1999
- ---------------------------------------------------------------- ------------
ASSETS
<S> <C>
Current Assets:
Cash $ 19,200
- --- ------------------------------------------------------------ ------------
TOTAL CURRENT ASSETS 19,200
- ---------------------------------------------------------------- ------------
$ 19,200
- --- ------------------------------------------------------------ ------------
LIABILITIES
Current Liabilities:
Accrued expenses $ 6,350
- --- ------------------------------------------------------------ ------------
TOTAL CURRENT LIABILITIES 6,350
- ---------------------------------------------------------------- ------------
6,350
- --- ------------------------------------------------------------ ------------
STOCKHOLDERS' EQUITY
Common stock - $.001 par value - 50,000,000 shares authorized
5,980,000 shares issued and outstanding 5,980
Preferred stock - No par value - 10,000,000 shares authorized
No shares issued or outstanding -
Additional paid-in-capital 18,720
Accumulated deficit (11,850)
- --- ------------------------------------------------------------ ------------
TOTAL STOCKHOLDERS' EQUITY 12,850
- ---------------------------------------------------------------- ------------
$ 19,200
- --- ------------------------------------------------------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-2
<PAGE>
<TABLE>
<CAPTION>
LUCID CONCEPTS, INC.
( A Development Stage Company)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
For the period June 1, 1999 to June 30, 1999
- ----------------------------------------------------- ---------- --------------
<S> <C> <C>
Revenues $ -
- ----------------------------------------------------- ---------- ---------------
Operating expenses:
Professional fees $ 5,000
Organization costs 1,350 6,350
- ----------------------------------------------------- ---------- ---------------
Loss before income taxes (6,350)
Income taxes -
- ----------------------------------------------------- ---------- ---------------
Net loss (6,350)
Accumulated deficit - June 1, 1999 (5,500)
- ----------------------------------------------------- ---------- ---------------
Accumulated deficit - June 30, 1999 $ (11,850)
- ----------------------------------------------------- ---------- ---------------
Net loss per share $ (0.002)
- ----------------------------------------------------- ---------- ---------------
Weighted average shares of common stock $ 5,980,000
- ----------------------------------------------------- ---------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
<TABLE>
<CAPTION>
LUCID CONCEPTS,
INC.
( A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY
For the period June 1, 1999 to June 30, 1999
- ------------------------------------------------------------------------------- -------------------------
Additional
Number of Preferred Common Paid - In Accumulated
Shares Stock Stock Capital Deficit Total
------------ --------- -------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Beginning balance:
July 5, 1994 - Services $ 5,500,000 $ - $ 5,500 $ - $ 5,500
Issuance of Common Stock:
June 1, 1999 480,000 - 480 18,720 - 19,200
- -
Accumulated deficit - - - - (11,850) (11,850)
- --------------------------------------------- --------- --------- ---------- ----------- ------------
$ 5,980,000 $ - $ 5,980 $ 18,720 $ (11,850) $ 12,850
- --------------------------------------------- --------- --------- ---------- ----------- ------------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
<TABLE>
<CAPTION>
LUCID CONCEPTS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the period June 1, 1999 to June 30, 1999
- --------------------------------------------------------------------------------
<S> <C>
Operating Activities:
Net loss $ (6,350)
Adjustments to reconcile net loss to net cash
used by operating activities:
Increase in:
Accrued expenses 6,350
- --- --------- ------------------------------------------------------- ---------
Net cash provided by operating activities -
- --------------------------------------------------------------------- ---------
Financing activities:
Issuance of Common Stock 19,200
- --- ----------------------------------------------------------------- ---------
Net cash provided by financing activities 19,200
- --------------------------------------------------------------------- ---------
Net increase in cash 19,200
- --------------------------------------------------------------------- ---------
Cash - June 30, 1999 $ 19,200
- --------------------------------------------------------------------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
LUCID CONCEPTS, INC.
Notes to Financial Statements
Note A - Summary of Significant Accounting Policies:
Organization
Lucid Concepts, Inc. (a development stage company) is a Florida Corporation
organized July 5, 1994 to manufacture and market imported products from China in
the U.S. and elsewhere. The Company failed in its attempt to implement its
initial business plan and during June 1995 abandoned its efforts. The Company
had no operations for the period prior to June 1, 1999. There were no
transactions from July 1994 to June 1, 1999 that affect the balances reflected
in the financial statements as of June 30, 1999. In addition, audited statements
of operations, cash flows and stockholders' equity for the two years ended May
31, 1999 as required by item 310 of regulation S-B are not provided because the
company was dormant.
The Company has a new business plan, which was adopted on or about June 1, 1999,
which is to engage in seeking potential operating businesses and business
opportunities with the intent to acquire or merge with such businesses. The
assets of the Company will be used for its expenses of operation to implement
this plan.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a May 31 year end.
Start - Up Costs
Start - up and organization costs are being expensed as incurred.
Loss Per Share
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Note B - Stockholders' Equity:
On July 5, 1994, the Company issued 5,500,000 shares of common stock, in lieu of
cash, for the fair market value of services rendered by its initial
shareholders. On or about June 1, 1999, third parties purchased the shares from
the initial shareholders. Subsequently, third parties purchased at $0.05 per
share, 480,000 shares of the common stock of the Company in a private placement
pursuant to Regulation D of the SEC. The $5,000 in professional fees includes
the costs and expenses
F-6
<PAGE>
LUCID CONCEPTS, INC.
Notes to Financial Statements
Note B - Stockholders' Equity (Cont'd):
(including legal fees) associated with the preparation and filing of the
registration statement. Included in professional fees are $4,000 in auditing and
accounting fees. At June 30, 1999, the Company had authorized 50,000,000 shares
of $.001 par value common stock and had 5,980,000 shares of common stock issued
and outstanding. In addition, the Company authorized 10,000,000 shares of
preferred stock with the specific terms; conditions, limitations and preferences
to be determined by the Board of Directors. None of the preferred stock was
issued and outstanding as of June 30, 1999.
Note C - Income Taxes:
The Company has a net operating loss carry forward of $6,350 that may be offset
against future taxable income. If not used, the carry forward will expire in
2019.
The amount recorded as deferred tax assets, cumulative as of June 30,1999 is
$1,000, which represents the amounts of tax benefits of loss carry-forwards. The
Company has established a valuation allowance for this deferred tax asset of
$1,000, as the Company has no history of profitable operations.
Note D - Going Concern:
The Company's financial statements are prepared using generally accepted
accounting principles applied to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has incurred losses from its inception through June 30,
1999. It has not established revenues sufficient to cover operating costs and to
allow it to continue as a going concern. Management plans currently provide for
experts to secure a successful acquisition or merger partner so that it will be
able to continue as a going concern. In the event such efforts are unsuccessful,
contingent plans have been arranged to provide that the current Director of the
Company is to fund required future filings under the 34 Act, and existing
shareholders have expressed an interest in additional funding if necessary to
continue the Company as a going concern.
F-7
<PAGE>
PART III
Item 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
3(i).1 Articles of Incorporation filed March 16, 1995 (Filed with
original 10SB on 8/24/99)
3(i).2 Articles of Amendment filed January 20, 1999 (Filed with original
10SB on 8/24/99)
3(ii).1 By-laws (Filed with original 10SB on 8/24/99)
27 Financial Data Schedule
Item 2. Description of Exhibits
See Item 1 above.
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,
there unto duly authorized.
Lucid Concepts, Inc.
(Registrant)
Date: October 6, 1999 BY: /s/ KEVIN L. BELL
-----------------
Kevin L. Bell,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
October 6, 1999 BY:/s/ KEVIN L. BELL Director, President,
-------------------- Secretary, Treasurer
Kevin L. Bell
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001088664
<NAME> Lucid Concepts, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Currency
<S> <C>
<PERIOD-TYPE> 1-mo
<FISCAL-YEAR-END> May-31-1999
<PERIOD-START> Jun-1-1999
<PERIOD-END> Jun-30-1999
<EXCHANGE-RATE> 1
<CASH> 19,200
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,200
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,200
<CURRENT-LIABILITIES> 6,350
<BONDS> 0
0
0
<COMMON> 5,980
<OTHER-SE> 12,850
<TOTAL-LIABILITY-AND-EQUITY> 19,200
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,350
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,350)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,350)
<EPS-BASIC> (0.002)
<EPS-DILUTED> 0
</TABLE>
