U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
BF Acquisition Group V, Inc.
(Name of Small Business Issuer in its charter)
Florida 65-0913586
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
319 Clematis Street, Suite 812, West Palm Beach, Florida 33401
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (561) 655-0665
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 is to be registered
Securities to be registered under Section 12(g) of the Act:
Common Stock, $0.001 Par Value
(Title of class)
(Title of class)
<PAGE> 2
INFORMATION REQUIRED IN REGISTRATION STATEMENT
DESCRIPTION OF BUSINESS.
GENERAL
BF Acquisition Group V, Inc. (the "Company"), was incorporated under the
laws of the State of Florida on April 15, 1999 and is in its early
developmental and promotional stages. The Company is a "shell" company
conducting virtually no business operation, other than its efforts to seek
merger partners or acquisition candidates. The Company does not engage in any
substantive commercial business or other business operations. The Company has
no full time employees and owns no real estate.
The Company is a corporate vehicle created to seek to effect a merger,
exchange of capital stock, asset acquisition or other similar business
combination (a "Business Combination") with an operating or development stage
business (the "Target Business") which desires to employ the Company to become
a reporting corporation under the Securities Exchange Act of 1934 ("Exchange
Act"). On April 15, 1999, the Company elected to register the Company's common
stock, par value $0.001 (the "Common Stock") pursuant to this Form 10-SB
registration statement on a voluntary basis in order to create a reporting
"shell" company. The Company has a shareholder base of approximately eight
shareholders and 747,500 shares of Common Stock outstanding, all of which are
restricted pursuant to Rule 144 of the Securities Act of 1933, as amended (the
"Securities Act"). See "Description of Securities". Pursuant to resolution
of the Company's board of directors, no Business Combination may occur prior
to the Company obtaining the requisite audited financial statements required
pursuant to Form 8-K (or its equivalent) promulgated under the Exchange Act.
Upon the effectiveness of this registration statement, the Company
intends to seek potential business opportunities and effectuate a Business
Combination with a Target Business with significant growth potential which, in
the opinion of management, could provide a profit to the Company and its
shareholders. The Company intends to seek opportunities demonstrating the
potential of long term growth as opposed to short term earnings. The
Company's efforts in identifying a prospective Target Business are expected to
emphasize businesses primarily located in the United States; however, the
Company reserves the right to acquire a Target Business located primarily
elsewhere. While the Company may, under certain circumstances, seek to effect
Business Combinations with more than one Target Business, as a result of its
limited resources, the Company will, in all likelihood, have the ability to
effect only a single Business Combination. The Company may effect a Business
Combination with a Target Business which may be financially unstable or in its
early stages of development or growth. The Company will not restrict its
search to any specific business, industry or geographical location, and the
Company may participate in a business venture of virtually any kind or nature.
Present management of the Company may become involved in management of the
Target Business and/or may hire qualified but as yet unidentified individuals
to manage such Target Business. Presently, the Company has no plan, proposal,
agreement, understanding or arrangement to acquire or merge with any specific
business or company, and the
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Company has not identified any specific business or company for investigation
and evaluation. The Company's officers and directors have previously been
involved in transactions involving mergers between an established company and a
shell corporation, and they have numerous contacts within the field of
corporate finance (See "Directors, Executive Officers, Promoters and Control
Persons - Other Blank Check Activities"). As a result, they have had
preliminary contacts with representatives of numerous companies concerning
the general possibility of a merger or acquisition with a shell company.
However, none of these preliminary contacts or discussions involved the
possibility of a Business Combination with the Company.
The discussion of the proposed business under this caption and throughout
this registration statement is purposefully general and is not meant to be
restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities.
"SHELL" CORPORATION
Background.
Since the Company conducts virtually no business operations, other than
its efforts to effectuate a Business Combination, the Company can be
characterized as a "shell" corporation. As a shell corporation, the Company
faces special risks inherent in the investigation, acquisition, or involvement
in a new business opportunity. Further, as a new or "start-up" company, the
Company faces all of the unforeseen costs, expenses, problems, and
difficulties related to new companies. The Company is dependent upon its
officers and directors and their efforts to effectuate a Business Combination.
Accordingly, the Company's shareholders will not have an opportunity to
evaluate the specific merits or risks of any one or more Business Combinations
and will have no control over the decision making relating to such. In the
event the Company loses the services of any of these officers or directors,
the Company could be adversely affected.
Due to the limited capital available to the Company, the consummation of
a Business Combination will likely involve the acquisition of, or merger or
consolidation with, a company that does not need substantial additional
capital but which desires to establish a public trading market for its shares,
while avoiding what it might deem to be the adverse consequences of
undertaking a public offering itself, such as the time delays and significant
expenses incurred to comply with the various federal and state securities laws
that regulate initial public offerings. A Target Business might desire, among
other reasons, to create a public market for their shares in order to enhance
liquidity for current shareholders, facilitate raising capital through the
public sale of securities of which a prior existence of a public market for
its securities exists, and/or acquire additional assets through the issuance
of securities rather than for cash.
No trading market in the Company's securities presently exists. In light
of the restrictions concerning shell companies contained in many state blue
sky laws and regulations, it is not likely that a trading market will be
created in the Company's securities until such time as a Business Combination
occurs with a Target Business. No assurances are given that subsequent to such
a
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Business Combination that a trading market in the Company's securities will
develop. Presently, all of the Company's outstanding securities, which
includes all shares of its Common Stock, are restricted pursuant to Rule 144
of the Securities Act of 1933, as amended (the "Securities Act"). So long as
all of the conditions of Rule 144 are met; in (i) November, 1999, 90,000
shares; (ii) April, 2000, 610,000 shares; (iii) May, 2000, 35,000 shares; and
(iv) June/July, 2000, 12,500 shares of Common Stock will be eligible for sale
under Rule 144, as currently in effect. No assurances are made; however, that
Rule 144 will be available at any time for any shareholder's shares. See
"Description of Securities".
The Company cannot estimate the time that it will take to effectuate a
Business Combination. It could be time consuming; possibly in excess of many
months or years. Additionally, no assurance can be made that the Company will
be able to effectuate a Business Combination on terms favorable to the
Company. The Company might identify and effectuate a Business Combination with
a Target Business which proves to be unsuccessful for any number of reasons,
many of which are due to the fact that the Target Business is not identified
at this time. If this occurs, the Company and its shareholders might not
realize any type of profit.
Unspecified Industry and Target Business.
The Company will seek to acquire a Target Business without limiting
itself to a particular industry. Most likely, the Target Business will be
primarily located in the United States, although the Company reserves the
right to acquire a Target Business primarily located outside the United
States. In seeking a Target Business, the Company will consider, without
limitation, businesses which (i) offer or provide services or develop,
manufacture or distribute goods in the United States or abroad, including,
without limitation, in the following areas: health care and health products,
educational services, environmental services, consumer-related products and
services (including amusement, entertainment and/or recreational services),
personal care services, voice and data information processing and transmission
and related technology development or (ii) is engaged in wholesale or retail
distribution. To date, the Company has not selected any particular industry or
any Target Business in which to concentrate its Business Combination efforts.
Accordingly, the Company is only able to make general disclosures concerning
the risks and hazzards of effectuating a Business Combination with a Target
Business since there is presently no current basis for the Company to evaluate
the possible merits or risks of the Target Business or the particular industry
in which the Company may ultimately operate. Any Target Business that is
selected will be required to have audited financial statements prior to the
commencement of a the Business Combination. To the extent the Company effects
a Business Combination with a financially unstable company or an entity in its
early stage of development or growth (including entities without established
records of sales or earnings), the Company will become subject to numerous
risks inherent in the business and operations of financially unstable and
early stage or potential emerging growth companies. In addition, to the extent
that the Company effects a Business Combination with a Target Business in an
industry characterized by a high level of risk, the Company will become
subject to the currently unascertainable risks of that industry. An extremely
high level of risk frequently characterizes certain industries which
experience rapid growth. Although management will endeavor to evaluate the
risks
<PAGE> 5
inherent in a particular industry or Target Business, there can be no
assurances that the Company will properly ascertain or assess all significant
risk factors.
Probable Lack of Business Diversification.
As a result of the limited resources of the Company, the Company, in all
likelihood, will have the ability to effect only a single Business
Combination. Accordingly, the prospects for the Company's success will be
entirely dependent upon the future performance of a single business. Unlike
certain entities that have the resources to consummate several Business
Combinations or entities operating in multiple industries or multiple segments
of a single industry, it is highly likely that the Company will not have the
resources to diversify its operations or benefit from the possible spreading
of risks or offsetting of losses. The Company's probable lack of
diversification could subject the Company to numerous economic, competitive
and regulatory developments, any or all of which may have a material adverse
impact upon the particular industry in which the Company may operate
subsequent to consummation of a Business Combination. The prospects for the
Company's success may become dependent upon the development or market
acceptance of a single or limited number of products, processes or services.
Accordingly, notwithstanding the possibility of management assistance to the
Target Business by the Company, there can be no assurance that the Target
Business will prove to be commercially viable.
Limited Ability to Evaluate Target Business' Management.
While the Company's ability to successfully effect a Business Combination
will be dependent upon certain key personnel, the future role of such
personnel in the Target Business cannot presently be stated with any
certainty. It is unlikely that any of the Company's key personnel will remain
associated in any operational capacity with the Company following a Business
Combination. Moreover, there can be no assurances that such personnel will
have any experience or knowledge relating to the operations of the particular
Target Business. Furthermore, although the Company intends to closely
scrutinize the management of a prospective Target Business in connection with
evaluating the desirability of effecting a Business Combination, there can be
no assurances that the Company's assessment of such management will prove to
be correct, especially since none of the Company's current key personnel are
professional business analysts. See "Directors, Executive Officers, Promoters
and Control Persons". Accordingly, the Company will be dependant, in some
significant respects, on the ability of the management of the Target Business
who are unidentifiable as of the date hereof. In addition, there can be no
assurances that such future management will have the necessary skills,
qualifications or abilities to manage a public company. The Company may also
seek to recruit additional managers to supplement the incumbent management of
the Target Business. There can be no assurances that the Company will have the
ability to recruit such additional managers, or that such additional managers
will have the requisite skill, knowledge or experience necessary or desirable
to enhance the incumbent management.
<PAGE> 6
Opportunity for Shareholder Evaluation or Approval of Business Combinations.
Non-affiliate shareholders of the Company will, in all likelihood,
neither receive nor otherwise have the opportunity to evaluate any financial
or other information which will be made available to the Company in connection
with selecting a potential Business Combination until after the Company has
entered into an agreement to effectuate a Business Combination. Such agreement
to effectuate a Business Combination, however, will be subject to shareholder
approval pursuant to applicable law. As a result, non-affiliate shareholders
of the Company will be almost entirely dependent on the judgment and
experience of management in connection with the selection and ultimate
consummation of a Business Combination. In addition, under Florida law, the
form of Business Combination could impact upon the availability of dissenters'
rights (i.e., the right to receive fair payment with respect to the Company's
Common Stock) to shareholders disapproving the proposed Business Combination.
Selection of a Target Business and Structuring of a Business Combination.
The Company's management anticipates that the selection of a Target
Business will be complex and risky because of competition for such business
opportunities among all segments of the financial community. The nature of the
Company's search for the acquisition of a Target Business requires maximum
flexibility inasmuch as the Company will be required to consider various
factors and circumstances which may preclude meaningful direct comparison
among the various business enterprises, products or services investigated.
Investors should recognize that the possible lack of diversification among the
Company's acquisitions may not permit the Company to offset potential losses
from one venture against profits from another. Management of the Company will
have virtually unrestricted flexibility in identifying and selecting a
prospective Target Business. In addition, in evaluating a prospective Target
Business, management will consider, among other factors, the following factors
which are not listed in any particular order:
- financial condition and results of operation of the Target
Business;
- growth potential and projected financial performance of the
Target Business and the industry in which it operates;
- experience and skill of management and availability of
additional personnel of the Target Business;
- capital requirements of the Target Business;
- the availability of a transaction exemption from registration
pursuant to the Securities Act for the Business Combination;
- the location of the Target Business;
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- competitive position of the Target Business;
- stage of development of the product, process or service of the
Target Business;
- degree of current or potential market acceptance of the
product, process or service of the Target Business;
- possible proprietary features and possible other protection of
the product, process or service of the Target Business;
- regulatory environment of the industry in which the Target
Business operates;
- costs associated with effecting the Business Combination; and
- equity interest in and possible management participation in
the Target Business.
The foregoing criteria are not intended to be exhaustive; any evaluation
relating to the merits of a particular Business Combination will be based, to
the extent relevant, on the above factors as well as other considerations
deemed relevant by management of the Company in connection with effecting a
Business Combination consistent with the Company's business objective. In many
instances, it is anticipated that the historical operations of a Target
Business may not necessarily be indicative of the potential for the future
because of the possible need to shift marketing approaches substantially,
expand significantly, change product emphasis, change or substantially augment
management, or make other changes. The Company will be dependent upon the
owners of a Target Business to identify any such problems which may exist and
to implement, or be primarily responsible for the implementation of, required
changes. Because the Company may engage in a Business Combination with a
newly organized firm or with a firm which is entering a new phase of growth,
the Company will incur further risks, because in many instances, management of
the Target Business will not have proven its abilities or effectiveness, the
eventual market for the products or services of the Target Business will
likely not be established, and the Target Business may not be profitable
subsequent to a Business Combination.
The Company's limited funds and the lack of full-time management will
likely make it impracticable to conduct a complete and exhaustive
investigation and analysis of a Target Business before the Company commits its
capital or other resources thereto. Management decisions, therefore, will
likely be made without detailed feasibility studies, independent analysis,
market surveys and the like which, if the Company had more funds available to
it, would be desirable. The Company will be particularly dependent in making
decisions upon information provided by the promoter, owner, sponsor, or others
associated with the business opportunity seeking the Company's participation.
In connection with its evaluation of a prospective Target Business, management
<PAGE> 8
anticipates that it will conduct a due diligence review which will encompass,
among other things, meetings with incumbent management and inspection of
facilities, as well as review of financial or other information which will be
made available to the Company. The time and costs required to select and
evaluate a Target Business (including conducting a due diligence review) and
to structure and consummate the Business Combination (including negotiating
relevant agreements and preparing requisite documents for filing pursuant to
applicable securities laws and state "blue sky" and corporation laws) cannot
presently be ascertained with any degree of certainty. The Company's
management intends to devote only a small portion of their time, approximately
5% to 10%, to the affairs of the Company and, accordingly, consummation of a
Business Combination may require a greater period of time than if the
Company's management devoted their full time to the Company's affairs.
However, each officer and director of the Company will devote such time as
they deem reasonably necessary, up to 100%, to carry out the business and
affairs of the Company, including the evaluation of potential Target
Businesses and the negotiation of a Business Combination and, as a result, the
amount of time devoted to the business and affairs of the Company may vary
significantly depending upon, among other things, whether the Company has
identified a Target Business or is engaged in active negotiation of a Business
Combination. Any costs incurred in connection with the identification and
evaluation of a prospective Target Business with which a Business Combination
is not ultimately consummated will result in a loss to the Company and reduce
the amount of capital available to otherwise complete a Business Combination
or for the resulting entity to utilize. In the event the Company depletes its
present cash reserves, the Company might be forced to cease operations and a
Business Combination might not occur.
The Company anticipates that it will locate and make contact with Target
Businesses primarily through the reputation and efforts of its management, who
will meet personally with existing management and key personnel, visit and
inspect material facilities, assets, products and services belonging to such
prospects, and undertake such further reasonable investigation as management
deems appropriate. The Company's management has a network of contacts in the
States of Florida, New York, California and Pennsylvania, and will most likely
concentrate its search efforts for a Target Business in those geographic
areas. Management does not intend to actively solicit or contact prospective
Targets directly. Rather, management believes that prospective Target
Businesses will be referred to the Company through management's network of
contacts. The officers and directors of the Company's primary businesses
include business and management consulting and a securities law practice. See
"Directors, Executive Officers, Promoters and Control Persons". As a result
of the field of their primary present occupations and reputations therein,
management believes that the Company will be made aware of numerous
unsolicited potential Target Businesses, since, this already occurs on an
almost weekly basis. Existing and potential clientele of the officers and
directors of the Company may be considered potential Target Businesses;
however, the Company will not engage in any discussions regarding the
possibility a Business Combination with the Company until after the effective
time of this registration statement. The Company also expects that many
prospective Target Businesses will be brought to its attention from various
other non-affiliated sources, including securities broker-dealers, investment
bankers, venture capitalists, bankers, and other members of the financial
community. The Company has neither the present intention, nor does the present
potential exist for the Company, to consummate a Business
<PAGE> 9
Combination with a Target Business in which the Company's management,
promoters, or their affiliates or associates directly or indirectly have a
pecuniary interest, although no existing corporate policies of the Company
would prevent this from occurring. The Company will not advertise or promote
itself in any financial or trade publications, or any other type of written
publications or other type of media, to seek potential Target Businesses.
Although there are no current plans to do so, the Company may engage the
services of professional firms that specialize in finding business acquisitions
and pay a finder's fee or other compensation. Since the Company has no
current plans to utilize any outside consultants or advisors to assist in
a Business Combination, no policies have been adopted regarding use of such
consultants or advisors, the criteria to be used in selecting such
consultants or advisors, the services to be provided, the term of service,
or regarding the total amount of fees that may be paid. However, because of
the limited resources of the Company, it is likely that any such fee the
Company agrees to pay would be paid in stock and not in cash. In no event
will the Company pay a finder's fee or commission to officers or directors
of the Company or any entity with which they are affiliated for such service.
Moreover, in no event shall the Company issue any of its securities to any
officer, director or promoter of the Company, or any of their respective
affiliates or associates, in connection with activities designed to locate a
Target Business.
As a general rule, Federal and state tax laws and regulations have a
significant impact upon the structuring of a Business Combination. The Company
will evaluate the possible tax consequences of any prospective Business
Combination and will endeavor to structure a Business Combination so as to
achieve the most favorable tax treatment to the Company, the Target Business
and their respective stockholders. There can be no assurance that the Internal
Revenue Service or relevant state tax authorities will ultimately assent to
the Company's tax treatment of a particular consummated Business Combination.
To the extent the Internal Revenue Service or any relevant state tax
authorities ultimately prevail in recharacterizing the tax treatment of a
Business Combination, there may be adverse tax consequences to the Company,
the Target Business and their respective stockholders. Tax considerations as
well as other relevant factors will be evaluated in determining the precise
structure of a particular Business Combination, which could be effected
through various forms of a merger, consolidation or stock or asset
acquisition.
Although the Company has no commitments as of the date of this
registration statement to issue any shares of Common Stock, preferred stock,
options or warrants, other than as described in this registration statement,
the Company will, in all likelihood, issue a substantial number of additional
shares in connection with the consummation of a Business Combination. To the
extent that such additional shares are issued, dilution to the interests of
the Company's stockholders will occur. Additionally, if a substantial number
of shares of Common Stock are issued in connection with the consummation of a
Business Combination, a change in control of the Company is likely to occur
which will likely affect, among other things, the Company's ability to utilize
net operating loss carry forwards, if any. Any such change in control may
also result in the resignation or removal of the Company's present officers
and directors. If there is a change in management, no assurance can be given
as to the experience or qualification of such persons, either in the operation
of the Company's activities or in the operation of the business, assets or
property being acquired. Management considers it likely that in order to
consummate a Business Combination, a change in
<PAGE> 10
control will occur; therefore, management anticipates offering a controlling
interest in the Company to a Target Business in order to effectuate a Business
Combination.
The officers and directors of the Company may actively negotiate for or
otherwise consent to the disposition of any portion of their Common Stock as a
condition to or in connection with a Business Combination. Therefore, it is
possible that the terms of any Business Combination will provide for the sale
of some shares of Common Stock held by management or affiliates of management.
It is likely that no other shareholder of the Company will be afforded the
right to sell their shares of Common Stock in connection with a Business
Combination pursuant to the same terms that such selling officers and
directors will be provided. See "Description of Business -Shell Corporation -
Conflicts of Interest".
Pursuant to Sections. 607.0901(5) and 607.0902(5) of the Florida Business
Corporation Act, the Company has inserted certain provisions in its articles
of incorporation which have the effect of removing the Company from the
purview of the affiliated transaction and control-share acquisition statutes
promulgated under Sections 607.0901 and 607.0902 of the Florida Business
Corporation Act and hence, the protections afforded by such statutes.
Section. 607.0901 of the Florida Business Corporation Act imposes
limitations on the exercise of corporate control, directly or indirectly, by a
beneficial owner of more than 10% of a corporation's outstanding voting stock
(an "interested shareholder"). The corporation's "disinterested directors" as
defined therein, or a supermajority of the corporation's shareholders (other
than the interested shareholder and related parties) are required to approve
certain business combinations and corporate transactions with the interested
shareholder or any entity or individual controlled by the interested
shareholder ("affiliated transaction"), unless certain statutory exemptions
apply, or the corporation has opted out of the affiliated transactions
statute. The stated purpose of the affiliated transactions statute is to
assure that Florida shareholders who do not tender their shares in a hostile
takeover offer receive a fair price for those shares in a second-step,
freeze-out transaction. By removing the Company from the purview of Florida's
affiliated transaction statute, the consideration received by selling
shareholders in a "second-step" transaction could be less than the
consideration received by the selling shareholders in the initial
transaction. See "Certain Relationships and Related Transactions".
Section. 607.0902 of the Florida Business Corporation Act denies
corporate control to an acquirer of control shares by extinguishing the voting
rights of shares of an "issuing public corporation", as defined therein,
acquired in a "control share acquisition", as defined therein. Voting rights
may be reinstated to the extent provided in a shareholders' resolution
approved by (1) each class or series entitled to vote separately on the
proposal by a majority of all votes entitled to be cast by such class or
series and (2) each class or series entitled to vote separately on the
proposal by a majority of all votes entitled to be cast by such class or
series, excluding all "interested shares" (ie., generally speaking, those
shares that may be voted by or at the direction of a person who made a
control-share acquisition or an officer or employee/director of the subject
"issuing public corporation"). The acquisition of shares is not directly
affected, only the voting rights attendant to
<PAGE> 11
control shares. Other shares of the same corporation that are owned or
acquired by the same person are not affected. The stated purpose of the
control share acquisitions statute is to protect Florida shareholders by
affording them an opportunity to decide whether a change in corporate control
is desirable. By removing the Company from the purview of Florida's control
- - -share acquisition statute, shares of an "issuing public corporation"
acquired pursuant to a control acquisition are not deemed to be "control
- - -share acquisitions", which, in the Company's case, effectively denies
non-management/affiliate shareholders an opportunity to approve or consent
to an acquirer's purchase of such management or affiliate's stock pursuant
to a Business Combination. See "Description of Business -- Shell Corporation
- - -- Conflicts of Interest" and "Certain Relationships and Related Transactions".
There are currently no limitations relating to the Company's ability to
borrow funds to increase the amount of capital available to the Company to
effect a Business Combination or otherwise finance the operations of the
Target Business. However, the Company's limited resources and lack of
operating history could make it difficult for the Company to borrow additional
funds from other sources. The amount and nature of any borrowings by the
Company will depend on numerous considerations, including the Company's
capital requirements, potential lenders' evaluation of the Company's ability
to meet debt service on borrowings and the then prevailing conditions in the
financial markets, as well as general economic conditions. The Company does
not have any arrangements with any bank or financial institution to secure
additional financing and there can be no assurance that such arrangements if
required or otherwise sought, would be available on terms commercially
acceptable or otherwise in the best interests of the Company. The inability of
the Company to borrow funds required to effect or facilitate a Business
Combination, or to provide funds for an additional infusion of capital into a
Target Business, may have a material adverse effect on the Company's financial
condition and future prospects, including the ability to effect a Business
Combination. To the extent that debt financing ultimately proves to be
available, any borrowings may subject the Company to various risks
traditionally associated with indebtedness, including the risks of interest
rate fluctuations and insufficiency of cash flow to pay principal and
interest. Furthermore, a Target Business may have already incurred debt
financing and, therefore, all the risks inherent thereto.
If securities of the Company are issued as part of an acquisition, such
securities are required to be issued either in reliance upon exemptions from
registration under applicable federal or state securities laws or registered
for public distribution. The Company intends to primarily target only those
companies where an exemption from registration would be available; however,
since the structure of the Business Combination has yet to be determined, no
assurances can be made that the Company will be able to rely on such
exemptions. Registration of securities typically requires significant costs
and time delays are typically encountered. In addition, the issuance of
additional securities and their potential sale in any trading market which
might develop in the Company's Common Stock, of which there is presently no
trading market and no assurances can be given that one will develop, could
depress the price of the Company's Common Stock in any market which may
develop in the Company's Common Stock. Further, such issuance of additional
securities of the Company would result in a decrease in the percentage
ownership of the Company's present
<PAGE> 12
shareholders.
Due to the Company's small size and limited amount of capital,
considerable business constraints could be imposed on the Company with respect
to its ability to raise additional capital if and when needed. Until such time
as any enterprise, product or service which the Company acquires generates
revenues sufficient to cover operating costs, it is conceivable that the
Company could find itself in a situation where it needs additional funds in
order to continue its operations. This need could arise at a time when the
Company is unable to borrow funds and when market acceptance for the sale of
additional shares of the Company's Common Stock does not exist.
Conflicts of Interest.
None of the Company's officers and directors are required to commit their
full time to the affairs of the Company and, accordingly, such persons may
have conflicts of interest in allocating management time among various
business activities. The officers and directors of the Company may engage in
other business activities similar and dissimilar to those engaged in by the
Company. To the extent that such persons engage in such other activities,
they will have possible conflicts of interest in diverting opportunities to
other companies, entities or persons with which they are or may be associated
or have an interest, rather than diverting such opportunities to the Company.
Presently, Mr. Bovi is the President of David M. Bovi, P.A., a private
practice securities law firm, and Mr. Colucci is a consultant with Harbor Town
Management Group, Inc., a privately held business management firm which
provides business and management consulting services. See "Directors,
Executive Officers, Promoters and Control Persons".
Further, the Company's officers and directors formed four other shell
corporations simultaneously with the formation of the Company, which have a
structure and a business plan identical to that of the Company. It is likely
that the Company's officers and directors will form additional shell
corporations in the future, with a business plan similar or identical to that
of the Company. The four other shell companies which were formed at the same
time as the Company have an identical structure and business plan as the
Company and do not currently create a conflict of interest with the Company
since they have the same shareholders. However, certain activities which may
be performed by such individuals in connection with their other business
affiliations may be deemed competitive with the business of the Company. See
"Directors, Executive Officers, Promoters and Control Persons". Also, certain
officers and directors of the Company may in the future become affiliated with
additional other entities, including registered shell corporations, which may
engage in business activities similar to those intended to be conducted by the
Company. Such potential conflicts of interest include, among other things,
time, effort and corporate opportunity involved in their participation in
other business transactions. As no policy has been established for the
resolution of such a conflict, the Company could be adversely affected should
such officers or directors choose to place their other business interests
before those of the Company. No assurance can be given that such potential
conflicts of interest will not cause the Company to lose potential
opportunities.
<PAGE> 13
In the course of their other business activities, including private
investment activities, the Company's officers and directors may become aware
of investment and business opportunities which may be appropriate for
presentation to the Company as well as the other entities with which they are
affiliated. Such persons may have conflicts of interest in determining to
which entity a particular business opportunity should be presented. In
general, officers and directors of corporations are required to present
certain business opportunities to such corporations. Accordingly, as a result
of multiple business affiliations, the Company's officers and directors may
have similar legal obligations relating to presenting certain business
opportunities to multiple entities. In addition, conflicts of interest may
arise in connection with evaluations of a particular business opportunity by
the board of directors with respect to the foregoing criteria. There can be no
assurances that any of the foregoing conflicts will be resolved in favor of
the Company. In order to minimize potential conflicts of interest which may
arise from multiple corporate affiliations, the Company shall not consider
Business Combinations with entities owned or controlled by officers,
directors, greater than 10% shareholders of the Company or any person who
directly or indirectly controls, is controlled by or is under common control
with the Company. The Company may consider Business Combinations with entities
owned or controlled by persons other than those persons described above. There
can be no assurances that any of the foregoing conflicts will be resolved in
favor of the Company.
The officers and directors of the Company may actively negotiate for or
otherwise consent to the disposition of any portion of their Common Stock as a
condition to or in connection with a Business Combination. Therefore, it is
possible that the terms of any Business Combination will provide for the sale
of some shares of Common Stock held by management or affiliates of management.
Pursuant to Section. 607.0902(5) of the Florida Business Corporation Act, the
Company has inserted certain provisions in its articles of incorporation which
has the effect of removing the Company from the purview of the control-share
acquisition statute promulgated under Section 607.0902 of the Florida Business
Corporation Act, and hence, the protection afforded by such statute. Thus, it
is likely that no other shareholder of the Company will be afforded the right
to sell their shares of Common Stock in connection with a Business Combination
pursuant to the same terms that such selling officers, directors or affiliates
will be provided. Also, such shareholders will not be afforded an opportunity
to approve or consent to such management or affiliate's stock purchase. See
"Description of Business -Shell Corporation - Selection of a Target Business
and Structuring of a Business Combination". It is more likely than not that
any sale of securities by the Company's current stockholders to an acquisition
candidate would be at a price substantially higher than that originally paid
by such stockholders. Any payment to current stockholders in the context of
an acquisition involving the Company would be determined entirely by the
largely unforeseeable terms of a future agreement with an unidentified
business entity.
Investment Company Act and Other Regulation
The Company may participate in a Business Combination by purchasing,
trading or selling the securities of such Target Business. The Company does
not, however, intend to engage primarily
<PAGE> 14
in such activities. Specifically, the Company intends to conduct its
activities so as to avoid being classified as an "investment company" under
the Investment Company Act of 1940 (the "Investment Act"), and therefore
to avoid application of the costly and restrictive registration and other
provisions of the Investment Act, and the regulations promulgated thereunder.
The Company's plan of business may involve changes in its capital
structure, management, control and business, especially if it consummates a
Business Combination as discussed above. Each of these areas is regulated by
the Investment Act, in order to protect purchasers of investment company
securities. Since the Company will not register as an investment company,
stockholders will not be afforded these protections.
Any securities which the Company might acquire in exchange for its
Common Stock will be "restricted securities" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). If the Company
elects to resell such securities, such sale cannot proceed unless a
registration statement has been declared effective by the Securities and
Exchange Commission or an exemption from registration is available. Section
4(1) of the Securities Act, which exempts sales of securities not involving a
public distribution by persons other than the issuer, would in all likelihood
be available to permit a private sale. Although the Company's plan of
operation does not contemplate the resale of an acquired Target Business'
securities, if such a sale were to be necessary, the Company would be required
to comply with the provisions of the Securities Act to effect such resale.
An acquisition made by the Company may be in an industry which is
regulated or licensed by federal, state or local authorities. Compliance with
such regulations can be expected to be a time-consuming and expensive process.
Penny Stock Regulations - State Blue Sky restrictions - Restrictions on
Marketability.
The Securities and Exchange Commission (the "Commission") has adopted
regulations which generally define "penny stock" to be any equity security
that has a market price (as defined) less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exceptions. The
Company's securities may be covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited
investors (generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse). For transactions covered by
the rule, the broker-dealers must make a special suitability determination for
the purchase and receive the purchaser's written agreement of the transaction
prior to the sale. Consequently, the rule may affect the ability of
broker-dealers to sell the Company's securities and also may affect the
ability of shareholders of the Company to sell their shares of Common Stock in
the secondary market.
In addition, the Securities and Exchange Commission has adopted a number
of rules to regulate "penny stocks", which include Section 3(a)(51)(A) and
Rules 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-9 under the Securities
Exchange Act of 1934, as amended. Because the
<PAGE> 15
securities of the Company may constitute "penny stocks" within the meaning of
the rules, the rules would apply to the Company and to its securities. The
rules may further affect the ability of the Company's shareholders to sell
their shares in any public market which might develop.
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i)
control of the market for the security by one or a few broker-dealers that are
often related to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and misleading press
releases; (iii) "boiler room" practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons; (iv)
excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and (v) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with
consequent investor losses. The Company's management is aware of the abuses
that have occurred historically in the penny stock market. Although the
Company does not expect to be in a position to dictate the behavior of the
market or of broker-dealers who participate in the market, management will
strive within the confines of practical limitations to prevent the described
patterns from being established with respect to the Company's securities.
The Company has 50,000 shares of authorized Common Stock with 747,500
shares of Common Stock outstanding. See "Description of Securities." No
trading market in the Company's securities presently exists. In light of the
restrictions concerning shell companies contained in many state blue sky laws
and regulations, it is not likely that a trading market will be created in the
Company's securities until such time as a Business Combination occurs with a
Target Business. No assurances are given that subsequent to such a Business
Combination that a trading market in the Company's securities will develop.
Presently, all of the Company's outstanding securities, which includes all
shares of its Common Stock, are restricted pursuant to Rule 144 of the
Securities Act of 1933, as amended (the "Securities Act"). So long as all of
the conditions of Rule 144 are met; in (i) November, 1999, 90,000 shares; (ii)
April, 2000, 610,000 shares; (iii) May, 2000, 35,000 shares; and (iv)
June/July, 2000, 12,500 shares of Common Stock will be eligible for sale under
Rule 144, as currently in effect. No assurances are made; however, that Rule
144 will be available at any time for any shareholder's shares. See
"Description of Securities".
COMPETITION
The Company expects to encounter intense competition from other entities
having a business objective similar to that of the Company. Many of these
entities are well-established and have extensive experience in connection with
identifying and effecting Business Combinations directly or through
affiliates. Many of these competitors possess greater financial, marketing,
technical, personnel and other resources than the Company and there can be no
assurances that the Company will have the ability to compete successfully. The
Company's financial resources will be limited in comparison to those of many
of its competitors. This inherent competitive limitation could compel
<PAGE> 16
the Company to select certain less attractive Target Businesses for a Business
Combination. There can be no assurances that such Target Businesses will
permit the Company to meet its stated business objective. Management
believes, however, that the Company's status as a reporting public entity
could give the Company a competitive advantage over privately held entities
having a similar business objective to that of the Company in acquiring a
Target Business with significant growth potential on favorable terms.
UNCERTAINTY OF COMPETITIVE ENVIRONMENT OF TARGET BUSINESS
In the event that the Company succeeds in effecting a Business
Combination, the Company will, in all likelihood, become subject to intense
competition from competitors of the Target Business. In particular, certain
industries which experience rapid growth frequently attract an increasingly
larger number of competitors, including competitors with increasingly greater
financial, marketing, technical and other resources than the initial
competitors in the industry. The degree of competition characterizing the
industry of any prospective Target Business cannot presently be ascertained.
There can be no assurances that, subsequent to a Business Combination, the
Company will have the resources to compete effectively, especially to the
extent that the Target Business is in a high-growth industry.
FEDERAL SECURITIES LAWS COMPLIANCE
Under the Federal securities laws, companies reporting under the Exchange
Act must furnish stockholders certain information about significant
acquisitions, which information may require audited financial statements for a
Target Business with respect to one or more fiscal years, depending upon the
relative size of the acquisition. Consequently, the Company's policy is to
only effect a Business Combination with a Target Business that has available
the requisite audited financial statements. See "Description of
Securities--Securities Exchange Act of 1934."
FACILITIES
The executive and business office of the Company consists of office space
located at 319 Clematis Street, Suite 812, West Palm Beach, Florida 33401.
Pursuant to a written lease, the Company sub-leases this office space on a
month-to-month basis at below fair market value rates from David M. Bovi,
P.A., a corporation controlled by David M. Bovi, a shareholder and director of
the Company and the Company's chief executive officer. The Company believes
this office space is adequate to serve its needs until such time as a Business
Combination occurs. The Company expects to be able to utilize these offices,
pursuant to the terms described above, until such time as a Business
Combination occurs. See "Description of Property" and "Certain Relationships
and Related Transactions".
EMPLOYEES
As of the date of this Prospectus, the Company is in the development
stage and currently has
<PAGE> 17
no full time employees. Management of the Company expects to use
consultants, attorneys and accountants as necessary, and does not anticipate
a need to engage any full-time employees so long as it is seeking and
evaluating Target Businesses. The need for employees and their availability
willbe addressed in connection with the decision whether or not to acquire or
participate in a specific Business Combination.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATION
The Company is presently a development stage company conducting virtually
no business operation, other than its efforts to effect a Business Combination
with a Target Business which the Company considers to have significant growth
potential. To date, the Company has neither engaged in any operations nor
generated any revenue. It receives no cash flow. The Company will carry out
its plan of business as discussed above. See "Description of Business". The
Company cannot predict to what extent its liquidity and capital resources will
be diminished prior to the consummation of a Business Combination or whether
its capital will be further depleted by the operating losses (if any) of the
Target Business which the Company effectuates a Business Combination with.
Since inception, the Company has received a cash infusion of $3,500.
With the exception of certain other professional fees and costs related to a
Business Combination, the Company expects that it will incur minimal operating
costs and meet its cash requirements during the next 12 months. It is likely,
however, that a Business Combination might not occur during the next 12
months. In the event the Company depletes its present cash reserves prior to
the effectuation of a Business Combination, the Company may cease operations
and a Business Combination may not occur. No commitments of any kind to
provide additional funds have been made by management, other present
shareholders or any other third person. There are no agreements or
understandings of any kind with respect to any loans from officers or
directors of the Company on behalf of the Company. Accordingly, there can be
no assurance that any additional funds will be available to the Company to
allow it to cover its expenses. In the event the Company elects to raise
additional capital prior to the effectuation of a Business Combination, it
expects to do so through the private placement of restricted securities rather
than through a public offering. The Company does not currently contemplate
making a Regulation S offering.
Since inception, all of the Company's expenses, which approximated
$1,400, were paid pursuant to a $1,000 capital infusion made to the Company by
the Company's promoters in exchange for 510,000 shares of Common Stock and
$2,500 capital infusion made to the Company pursuant to the private sale of
12,500 shares of Common Stock. See "Recent Sales of Unregistered
Securities".
Since the Company's cash reserves are minimal, officers and director's of
the Company are compensated by the Company by issuances of stock in lieu of
cash. See "Executive Compensation". Presently, there are no arrangements or
anticipated arrangements to pay any type of additional compensation
<PAGE> 18
to any officer or director in the near future. Regardless of whether the
Company's cash assets prove to be inadequate to meet the Company's
operational needs, the Company might seek to compensate providers of services
by issuances of stock in lieu of cash. See "Certain Relationships and
Transactions".
DESCRIPTION OF PROPERTY.
The executive and business office of the Company consists of office space
located at 319 Clematis Street, Suite 812, West Palm Beach, Florida 33401.
Pursuant to a written lease, the Company sub-leases this office space on a
month-to-month basis at below fair market value rates from David M. Bovi,
P.A., a corporation controlled by David M. Bovi, a shareholder and director of
the Company and the Company's chief executive officer. The Company believes
this office space is adequate to serve its needs until such time as a Business
Combination occurs. The Company expects to be able to utilize these offices,
pursuant to the terms described above, until such time as a Business
Combination occurs.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of the date hereof, the names,
addresses, amount and nature of beneficial ownership and percent of such
ownership of each person or group known to the Company to be the beneficial
owner of more than five percent (5%) of Company's Common Stock:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial Ownership
<S> <C> <C>
David M. Bovi 400,000 53.5%
319 Clematis Street,
Suite 812
West Palm Beach,
Fl 33401
William R. Colucci 300,000 40.1%
120 S. Olive Avenue,
Suite 705
West Palm Beach,
Fl 33401
</TABLE>
The following table sets forth, as of the date hereof, the names,
addresses, amount and nature of beneficial ownership and percent of such
ownership of the Company's Common Stock of each of the officers and directors
of the Company, and the officers and directors of the Company as a group:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial Ownership
<S> <C> <C>
David M. Bovi 400,000 (D) 53.5%
319 Clematis Street,
Suite 812
<PAGE> 19
West Palm Beach, Fl 33401
William R. Colucci 300,000 (D) 40.1%
120 S. Olive Avenue,
Suite 705
West Palm Beach, Fl 33401
All Officers and Directors
as a Group (2 persons). 700,000 (D) 93.6%
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The current directors and executive officers of the Company are as
follows:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
David M. Bovi 32 Director, Chief
Executive Officer
William R. Colucci 60 Director, President,
Treasurer, Secretary
_________________________
</TABLE>
Mr. Bovi has served as a director and chief executive officer of the
Company since its inception in April of 1999. Mr. Bovi is also presently the
sole shareholder, officer and director of David M. Bovi, P.A., a private
practice law firm which concentrates its practice in representing public and
private entities with respect to corporate and securities law and merger and
acquisition transactions. He has held this position since April, 1996.
Additionally, Mr. Bovi is an officer and director of other shell companies
with the same business plan as the Company. See "Directors, Executive
Officers, Promoters and Control Persons - Other Blank Check Activities" and
"Description of Business- Shell Corporation - Conflicts of Interest". From
November 1995 to April 1996 he worked as a transactional corporate and
securities and mergers and acquisitions attorney at Communications/USA, a
privately held cellular paging services firm located in Palm Beach County,
Florida. During 1994 and 1995 he served as an associate attorney in the
corporate securities law department of the law firm of Robert C. Hackney and
Associates, Chartered, which served as of counsel to the law firm of Desantis
Gaskill & Hunston, Palm Beach County, Florida. Also, in 1994, he served as
an associate attorney in the corporate securities law department of the law
firm of Cohen Chernay et al., Palm Beach County, Florida. Mr. Bovi received
his LL.M. Degree (Masters Degree of Law) in Securities Regulation from
Georgetown University Law School in May, 1993, his Juris Doctor Degree from
St. Thomas University School of Law in May, 1992, and his Bachelor of Arts
Degree in Economics from the State University of New York at Buffalo in May,
1989. He has been a member in good standing of the Florida Bar since October,
1992.
Mr. Colucci has served as a director, president, secretary and treasurer
of the Company since its inception in April, 1999. Mr. Colucci is also a
director of Net Lnnx, Inc., a publicly
<PAGE> 20
traded corporation which, in March, 1999, reorganized with PrintOnTheNet.Com,
Inc. which provides printing services on the Internet via e-commerce. He
has held this position since September, 1997. Prior to this reorganization,
Net Lnnx, Inc. served as a "shell" corporation. Mr. Colucci is also presently
a consultant with a privately held management firm known as Harbor Town
Management Group, Inc., a Florida corporation, which provides business
consulting services. Additionally, Mr. Colucci is an officer and director of
other shell companies with the same business plan as the Company. See
"Directors, Executive Officers, Promoters and Control Persons - Other Blank
Check Activities" and "Description of Business- Shell Corporation - Conflicts
of Interest". From June 1996 to May 1997, Mr. Colucci served as Chief
Operating Officer and SEC Compliance officer for Physicians Laser Services,
Inc., a publicly traded Delaware corporation traded in the Over-the-counter
trading market. From April 1991 to May 1996, Mr. Colucci served as a senior
partner of Decision Dynamics, Inc., a private business and real estate
consulting firm. Prior to this, Mr. Colucci has served in senior management
positions, including president and CEO of various companies. These companies
included Bandak Corporation, a privately held jewelry and manufacturing
company, Inmont Corporation, a publicly traded, billion dollar a year,
chemical and paint manufacturing division of United Technologies, Inc., which
is traded on the New York Stock Exchange, and Butcher & Sherrerd, a privately
held securities brokerage firm based in Philadelphia, Pennsylvania. Mr Colucci
received his Bachelor of Science Degree in Economics from St. Joseph's
University in Philadelphia in 1964 and has successfully completed advanced
courses of study at Stanford University's Graduate School of Business for
executives of emerging growth companies.
There are no agreements or understandings for any officer or director to
resign at the request of another person, and none of the officers and
directors of the Company are acting on behalf of or will act at the discretion
of any other person. The initial promoters of the Company are David M. Bovi
and William R. Colucci. The Company had no other promoters.
Presently, the only persons who perform material operations on behalf of
the Company are the Company's present officers and directors. Until such time
as a Business Combination occurs, the officers and directors of the Company do
not expect any significant changes in the composition of the Company's
officers or board of directors. There are no arrangements, agreements or
understandings between non-management shareholders and management under which
non-management shareholders may directly or indirectly participate in or
influence the management of the Company's affairs.
OTHER BLANK CHECK ACTIVITIES
Each of the Company's officers, directors, and principal
shareholders hold identical officer, director and shareholder positions with
four other blank check companies which are concurrently filing similar Form
10-SB Registration Statements pursuant to the Exchange Act (i.e. Acquisition
Group I, Inc., BF Acquisition Group II, Inc., BF Acquisition Group III,
Inc., and BF Acquisition Group IV, Inc.), all of which are Florida
corporations. The Company and each of these other entities will be in
competition with each other for Target Businesses. See "Description of
Business - Shell Corporation - Conflicts of Interest".
<PAGE> 21
Additionally, the Company's officers, directors and principal
shareholders have been affiliated in the past with other shell companies as
described below:
Mr. Colucci serves as an officer and director of Net Lnnx, Inc., formerly
a publicly traded shell corporation ("Net Lnnx"). Net Lnnx was established in
1968 as a blank check company and in 1996 commenced operations in the cellular
paging and Internet access industries. Since these ventures proved to have
only limited success, Net Lnnx disposed of these business interest in January
of 1997 and once again became a shell corporation. In September, 1997, Mr.
Colucci was recruited as an officer and director of Net Lnnx to assist in the
implementation Net Lnnx's acquisition strategy. In March, 1999 Net Lnnx
reorganized with its now wholly owned subsidiary, PrintOnTheNet.Com, Inc.,
which provides printing services on the Internet via e-commerce. As of the
date of this registration statement, the average bid and asked price of Net
Lnnx equaled approximately $2.00 per share.
Mr. Bovi is a former director of, and Mr. Colucci is presently an
outside director of, Harbor Town Holding Group I, Inc. ("Harbor"), a shell
corporation which filed a Form 10-SB registration statement under the Exchange
Act in December, 1997. Harbor is controlled by an unrelated third party. As of
the date of this registration statement, Harbor remains a shell corporation
subject to its reporting obligations under the Exchange Act, and no public
trading market exists for its securities.
EXECUTIVE COMPENSATION.
Executive Compensation.
Long Term Compensation
Annual Compensation Awards Payouts
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h)
Other All
Name & Annual Restricted Securities Other
Posi- Year Salary Bonus Compen- Stock Underlying LTIP Compen-
tion ($) ($) sation Award(s) Options/ Payouts sation
($) ($) SARs(# ($) ($)
____________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David Since -0- -0- -0- 284.20(1) -0- -0- -0-
Bovi. Incep-
Director, tion
Chief 1999
Executive
Officer
</TABLE>
________________________________
(1) Represents 145,000 shares of Common Stock at $0.00196 per share.
Compensation of Directors
At inception, Mr. Colucci received 45,000 shares of Common Stock valued
at $88.20, or
<PAGE> 22
$0.00196 per share, which were issued for pre-incorporation services
rendered and for agreeing to serve as an officer and director of the Company.
See "Certain Relationships and Related Transactions". Other than as
described in this registration statement, no officer or director has received
any other remuneration. Until the Company effectuates a Business Combination,
it is not anticipated that any officer or director will receive additional
compensation from the Company other than reimbursement for out-of-pocket
expenses incurred on behalf of the Company. See "Certain Relationships and
Related Transactions". The Company has no stock option, retirement, pension,
or profit-sharing programs for the benefit of directors, officers or other
employees, but the board of directors may recommend adoption of one or more
such programs in the future.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On April 15, 1999, the Company adopted and agreed to be bound by the
terms of a Pre-incorporation Consultation and Subscription Agreement dated
April 10, 1999, between David M. Bovi and William R. Colucci pursuant to which
such persons agreed to provide cash, certain pre-incorporation services and to
take the steps necessary to organize the Company in return for the issuance to
them of Company securities. Accordingly, on April 15, 1999, the Company
issued such persons a total of 700,000 shares of Common Stock at $0.00196 per
share. The cash consideration provided by such persons pursuant to the terms
of the Pre-incorporation Consultation and Subscription Agreement totaled
$1,000, or $0.00196 per share, and the services provided by such persons
pursuant to the terms of the Pre-incorporation Consultation and Subscription
Agreement, were valued at $558.60, or $0.00196 per share.
Certificates evidencing the Common Stock issued by the Company to these
persons have all been stamped with a restrictive legend, and are subject to
stop transfer orders by the Company. For additional information concerning
restrictions that are imposed upon the securities held by current
stockholders, and the responsibilities of such stockholders to comply with
federal securities laws in the disposition of such Common Stock, See "Market
For Common Equity And Related Stockholder Matters".
No officer, director, promoter, or affiliate of the Company has or
proposes to have any direct or indirect material interest in any asset
proposed to be acquired by the Company through security holdings, contracts,
options, or otherwise.
The Company has adopted a policy whereby any consulting or finder's fee
that may be paid to a third party for consulting services to assist management
in evaluating a Target Business is to be paid in stock rather than in cash.
Any such issuance of stock would be made on an ad hoc basis. Accordingly, the
Company is unable to predict whether, or in what amount, such a stock issuance
might be made.
It is not currently anticipated that any other salary, consulting fee, or
finder's fee shall be paid to any of the Company's directors or executive
officers, or to any other affiliate of the Company except as described in this
registration statement. See "Executive Compensation".
<PAGE> 23
Pursuant to Sections. 607.0901(5) and 607.0902(5) of the Florida Business
Corporation Act, the Company has inserted certain provisions in its articles
of incorporation which has the effect of removing the Company from the purview
of the control-share acquisition and affiliated transaction statutes
promulgated under Sections 607.0901 and 607.0902 of the Florida Business
Corporation Act and hence, the protections afforded by such statutes.
Section. 607.0901 of the Florida Business Corporation Act imposes
limitations on the exercise of corporate control, directly or indirectly, by a
beneficial owner of more than 10% of a corporation's outstanding voting stock
(an "interested shareholder"). The corporation's "disinterested directors" as
defined therein, or a supermajority of the corporation's shareholders (other
than the interested shareholder and related parties) are required to approve
certain business combinations and corporate transactions with the interested
shareholder or any entity or individual controlled by the interested
shareholder ("affiliated transaction"), unless certain statutory exemptions
apply, or the corporation has opted out of the affiliated transactions
statute. The stated purpose of the affiliated transactions statute is to
assure that Florida shareholders who do not tender their shares in a hostile
takeover offer receive a fair price for those shares in a second-step,
freeze-out transaction. By removing the Company from the purview of Florida's
affiliated transaction statute, the consideration received by selling
shareholders in a "second-step" transaction could be less than the
consideration received by the selling shareholders in the initial
transaction. See "Description of Business -Shell Corporation - Conflicts of
Interest".
Section. 607.0902 of the Florida Business Corporation Act denies
corporate control to an acquirer of control shares by extinguishing the voting
rights of shares of an "issuing public corporation", as defined therein,
acquired in a "control share acquisition", as defined therein. Voting rights
may be reinstated to the extent provided in a shareholders' resolution
approved by (1) each class or series entitled to vote separately on the
proposal by a majority of all votes entitled to be cast by such class or
series and (2) each class or series entitled to vote separately on the
proposal by a majority of all votes entitled to be cast by such class or
series, excluding all "interested shares" (ie., generally speaking, those
shares that may be voted by or at the direction of a person who made a
control-share acquisition or an officer or employee/director of the subject
"issuing public corporation"). The acquisition of shares is not directly
affected, only the voting rights attendant to control shares. Other shares of
the same corporation that are owned or acquired by the same person are not
affected. The stated purpose of the control share acquisitions statute is to
protect Florida shareholders by affording them an opportunity to decide
whether a change in corporate control is desirable. By removing the Company
from the purview of Florida's control-share acquisition statute, shares of an
"issuing public corporation" acquired pursuant to a control acquisition are
not deemed to be "control-share acquisitions", which, in the Company's case,
effectively denies non-management/affiliate shareholders an opportunity to
approve or consent to an acquirer's purchase of such management or affiliate's
stock pursuant to a Business Combination. See "Description of Business -Shell
Corporation - Conflicts of Interest".
The executive and business office of the Company consists of office space
located at 319 Clematis Street, Suite 812, West Palm Beach, Florida 33401.
Pursuant to a written lease, the
<PAGE> 24
Company sub-leases this office space on a month-to-month basis at below fair
market value rates from David M. Bovi, P.A., a corporation controlled by David
M. Bovi, a shareholder and director of the Company and the Company's chief
executive officer. The Company believes this office space is adequate to serve
its needs until such time as a Business Combination occurs. The Company
expects to be able to utilize these offices, pursuant to the terms described
above, until such time as a Business Combination occurs. See "Description
of Property".
DESCRIPTION OF SECURITIES.
GENERAL
The Company is authorized to issue 50,000,000 shares of Common Stock,
$0.001 par value and 5,000,000 shares of Preferred Stock. As of the date of
this registration statement 747,500 shares of Common Stock are outstanding,
held of record by approximately eight shareholders. No shares of Preferred
Stock are outstanding. No other type of securities are authorized by the
Company at this time.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share
held of record on all matters to be voted on by shareholders. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of more than 50% of the shares voted for the election of
directors can elect all of the directors. By virtue of their ownership of more
than 50% of the outstanding Common Stock, the Company's officers and directors
can elect all of the directors of the Company. Florida law permits the holders
of the minimum number of shares necessary to take action at a meeting of
shareholders (normally a majority of the outstanding shares) to take action by
written consent without a meeting, provided notice is given within ten days to
all other shareholders. The holders of Common Stock are entitled to receive
dividends when, as and if declared by the board of directors out of funds
legally available therefor. In the event of liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to share
ratably in all assets remaining available for distribution to them after
payment of liabilities and after provision has been made for each class of
stock, if any, having preference over the Common Stock. Holders of shares of
Common Stock, as such, have no conversion, preemptive, redemption provisions
or other subscription rights. All of the outstanding shares of Common Stock
are fully paid and non-assessable.
DIVIDENDS
The Company has not paid any dividends on its Common Stock to date
and does not presently intend to pay cash dividends prior to the consummation
of a Business Combination. The payment of cash dividends in the future, if
any, will be contingent upon the Company's revenues and earnings, if any,
capital requirements and general financial condition subsequent to
consummation of a Business Combination. The payment of any dividends
subsequent to a Business Combination will be within the discretion of the
Company's then board of directors. It is the present intention of the
<PAGE> 25
board of directors to retain all earnings, if any, for use in the Company's
business operations and, accordingly, the board of directors does not
anticipate paying any cash dividends in the foreseeable future.
PREFERRED STOCK
The Company's Articles of Incorporation authorize the Company to issue
5,000,000 shares of Preferred Stock. The board of directors of the Company is
authorized to provide for the issuance of such Preferred Stock in classes or
series and, by filing the appropriate articles of amendment with the Secretary
of State of Florida, is authorized to establish the number of shares to be
included in each class or series and the preferences, limitations and relative
rights of each class or series, which may consist of a conversion feature
whereby such Preferred Stock may be convertible into Common Stock. This type
of preferred stock is commonly referred to as "blank check preferred stock".
As of the date of this registration statement, no shares of Preferred Stock
have been issued by the Company and no preferences, limitations and relative
rights have been assigned. The Company does not anticipate issuing any shares
of Preferred Stock until such time that a Business Combination is
effectuated.
SECURITIES EXCHANGE ACT OF 1934
By virtue of filing this registration statement, the Company is
making an application with the Commission to register its Common Stock under
the provisions of Section 12(g) of the Exchange Act. Such registration will
require the Company to comply with periodic reporting, proxy solicitations and
certain other requirements of the Exchange Act. If the Company seeks
shareholder approval of a Business Combination at such time as the Company's
securities are registered pursuant to Section 12(g) of the Exchange Act, the
Company's proxy solicitation materials required to be transmitted to
shareholders may be subject to prior review by the Securities and Exchange
Commission. Under the federal securities laws, public companies must furnish
certain information about significant acquisitions, which information may
require audited financial statements of an acquired company with respect to
one or more fiscal years, depending upon the relative size of the acquisition.
Consequently, if a prospective Target Business did not have available and was
unable to reasonably obtain the requisite audited financial statements, the
Company could, in the event of consummation of a Business Combination with
such company, be precluded from (i) any public financing of its own securities
for a period of as long as three years, as such financial statements would be
required to undertake registration of such securities for sale to the public;
and (ii) registration of its securities under the Exchange Act. As a result
these requirements, and in order to remain in compliance with the Company's
policy, Target Businesses will be required to possess the requisite audited
financial statements prior to the consummation of a Business Combination. See
"Description of Business - General" and "Market For Common Equity and Related
Stockholder Matters - Market Information".
In the event the Company's obligation to file periodic reports under the
Exchange Act is suspended, the Company presently intends to continue to file
such periodic reports on a voluntary
<PAGE> 26
basis.
CERTAIN PROVISIONS OF THE COMPANY'S BYLAWS
The Company's bylaws provide, among other things, that (i) officers
and directors of the Company will be indemnified to the fullest extent
permitted under Florida law. See "Indemnification of Directors and Officers".
TRANSFER AGENT
The Company presently serves as its own transfer agent.
PART II
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION
No public trading market presently exists for the Company's Common Stock,
and there are no present plans, proposals, arrangements or understandings with
any person with regard to the development of any trading market in any of the
Company's securities. No shares of Common Stock have been registered for
resale under the blue sky laws of any state. The holders of shares of Common
Stock and persons who may desire to purchase shares of Common Stock in any
trading market that might develop in the future, should be aware that there
may be significant state blue-sky law restrictions upon the ability of
shareholders to sell their shares and of purchasers to purchase the shares of
Common Stock. Some jurisdictions may not allow the trading or resale of
blind-pool or "blank-check" securities under any circumstances. Accordingly,
shareholders should consider the secondary market for the Company's securities
to be a limited one.
It is likely that the Company will not develop any trading market in the
Company's Common Stock until such time as a Business Combination is
effectuated and the requisite audited financial statements required pursuant
to Form 8-K (or its equivalent) are filed with the SEC. No assurances are
made, however, that a trading market for the Company's Common Stock will ever
develop.
No shares of Common Stock of the Company are presently subject to
outstanding options or warrants to purchase, or securities convertible into,
common equity of the Company. However, the Company's Articles of
Incorporation authorize the Company to issue 5,000,000 shares of preferred
stock ("Preferred Stock"). The board of directors of the Company is authorized
to provide for the issuance of such Preferred Stock in classes or series and,
by filing the appropriate articles of amendment with the Secretary of State of
Florida, is authorized to establish the number of shares to be included in
each class or series and the preferences, limitations and relative rights of
each class or series, which may consist of a conversion feature whereby such
Preferred Stock may be convertible into Common Stock. This type of preferred
stock is commonly referred to as "blank
<PAGE> 27
check preferred stock". As of the date of this registration statement, no
shares of Preferred Stock have been issued by the Company and no preferences,
limitations and relative rights have been assigned. The Company does not
anticipate issuing any shares of Preferred Stock until such time that a
Business Combination is effectuated. See "Description of Securities -
Preferred Stock".
Approximately eight shareholders hold the Company's Common Stock. The
Company presently has 747,500 shares of Common Stock outstanding, and all such
shares are deemed to be "restricted securities," as that term is defined under
Rule 144 promulgated under the Securities Act, in that such shares were issued
in private transactions not involving a public offering. So long as all of
the conditions of Rule 144 are met; in (i) November, 1999, 90,000 shares; (ii)
April, 2000, 610,000 shares; (iii) May, 2000, 35,000 shares; and (iv)
June/July, 2000, 12,500 shares of Common Stock will be eligible for sale under
Rule 144, as currently in effect. No assurances are made; however, that Rule
144 will be available at any time for any shareholder's shares. See
"Description of Securities". The Company has not provided to any shareholder
registration rights to register under the Securities Act any shareholder's
shares for sale.
In general, under Rule 144, as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company (or persons whose shares are aggregated), who has beneficially
owned restricted shares of Common Stock for at least one year is entitled to
sell, within any three-month period, a number of shares that does not exceed
the greater of 1% of the total number of outstanding shares of the same class
or, if the Common Stock is traded on a national securities exchange or the
Nasdaq system, the average weekly trading volume during the four calendar
weeks preceding the sale. A person who has not been an affiliate of the
Company for at least the three months immediately preceding the sale and who
has beneficially owned restricted shares of Common Stock for at least two
years is entitled to sell such shares under Rule 144 without regard to any of
the limitations described above. No assurances are made; however, that Rule
144 will be available at any time for any shareholder's shares.
The Company has no present plans, proposals, arrangements,
understandings or intention of selling any amount of shares of Common Stock in
the public market subsequent to a Business Combination. Nevertheless, in the
event that substantial amounts of Common Stock are sold in the public market
subsequent to a Business Combination, such sales may adversely affect the
price for the sale of the Company's equity securities in any trading market
which may develop. No prediction can be made as to the effect, if any, that
market sales of restricted shares of Common Stock or the availability of such
shares for sale will have on the market prices prevailing from time to time.
DIVIDENDS
The Company has not paid any dividends on its Common Stock to date
and does not presently intend to pay cash dividends prior to the consummation
of a Business Combination. The payment of cash dividends in the future, if
any, will be contingent upon the Company's revenues and earnings, if any,
capital requirements and general financial condition subsequent to the
consummation of a Business Combination. The payment of any dividends
subsequent to a Business Combination will
<PAGE> 28
be within the discretion of the Company's then board of directors. It is the
present intention of the board of directors to retain all earnings, if any,
for use in the Company's business operations and, accordingly, the board of
directors does not anticipate paying any cash dividends in the foreseeable
future.
LEGAL PROCEEDINGS.
As of the date hereof, the Company is not a party to any material legal
proceedings, nor is it aware of any threatened litigation of a material
nature.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Not Applicable.
RECENT SALES OF UNREGISTERED SECURITIES.
As of the date of this registration statement, the Company has issued an
aggregate of 747,500 shares of Common Stock as follows:
On April 15, 1999, the Company adopted and agreed to be bound by the
terms of a Pre-incorporation Consultation and Subscription Agreement dated
April 10, 1999, between David M. Bovi and William R. Colucci pursuant to which
such persons agreed to provide cash, certain pre-incorporation services, serve
as an officer and director and to take the steps necessary to organize the
Company in return for the issuance to them of Company securities.
Accordingly, on April 15, 1999, the Company issued such persons a total of
700,000 shares of Common Stock at $0.00196 per share. The cash consideration
provided by such persons pursuant to the terms of the Pre-incorporation
Consultation and Subscription Agreement totaled $1,000, or $0.00196 per share,
and the services provided by such persons pursuant to the terms of the
Pre-incorporation Consultation and Subscription Agreement, were valued at
$558.60, or $0.00196 per share. The Company relied on Rule 701 of the
Securities Act with respect to 90,000 shares and Section 4(2) of the
Securities Act with respect to the remaining shares 610,000, since the
transaction did not involve any public offering.
On May 1, 1999, the Company issued 35,000 shares to one (1)
non-accredited person in exchange for $68.60 in administrative services to the
Company, or $0.00196 per share. This person was the only offeree in connection
with this transaction. The Company relied on Section 4(2) of the Securities
Act since the transaction did not involve any public offering.
During June and July, 1999, the Company issued 12,500 shares to five
non-accredited investors in exchange for $2,500 in cash, or $0.05 per share.
These persons were the only offerees in connection with this transaction. The
Company relied on Section 4(2) and Rule 505 of Regulation D of the Securities
Act since the transaction did not involve any public offering.
<PAGE> 29
No underwriters were utilized and no commissions or fees were paid with
respect to any of the above transactions. No other shares of Common Stock
have been issued by the Company in any other transaction.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's bylaws contain the broadest form of indemnification for its
officers and directors and former officers and directors permitted under
Florida law. The Company's bylaws generally provide that: The Company 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, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by, or
in the right of the Company) by reason of the fact that he is or was a
director, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a director, officer, employee or agent of any
other corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorney's fees), judgments, fines, amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, including any appeal thereof, if he acted in good
faith in a manner he reasonably believed to be in, or not opposed to the best
interests of the Company, and with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contenders or its equivalent
shall not create, of itself, a presumption that the person did not act in good
faith or in a manner which he reasonably believed to be in, or not opposed to,
the best interests of the Company or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
To the extent that a director, officer, employee or agent of the Company
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to above, or in any defense of any claim, issue or
matter therein, he shall be indemnified against expenses, including attorneys
fees, actually and reasonably incurred by him in connection therewith.
Any indemnification shall be made only if a determination is made that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct
set forth above. Such determination shall be made either (1) 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 (2) by the shareholders who
were not parties to such action, suit or proceeding. If neither of the above
determinations can occur because the board of directors consists of a sole
director or the Company is owned by a sole shareholder, then the sole director
or sole shareholder shall be allowed to make such determination.
Expenses incurred in defending any action, suit or proceeding may be paid
in advance of the final disposition of such action, suit or proceeding as
authorized in the manner provided above upon receipt of any undertaking 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 Company.
<PAGE> 30
The indemnification provided shall be in addition to the indemnification
rights provided pursuant to Chapter 607 of the Florida Statutes, and shall not
be deemed exclusive of any other rights to which any person seeking
indemnification may he entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in
such person's official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent of the Company and shall inure to the
benefit of the heirs, executors and administrators of such a person.
PART F/S
FINANCIAL STATEMENTS
<PAGE> F-1
BF ACQUISITION GROUP V, INC.
( A development stage company)
INDEX TO FINANCIAL STATEMENTS
Page
REPORT OF INDEPENDENT AUDITORS F-2
Balance Sheet F-3
Statement of Operations F-4
Statement of Changes in Stockholders' Equity F-5
Statement of Cash Flows F-6
NOTES TO FINANCIAL STATEMENTS F-7 through F-8
<PAGE> F-2
REPORT OF INDEPENDENT AUDITORS
To the Stockholders of
BF Acquisition Group V, Inc.
We have audited the accompanying balance sheet of BF Acquisition Group V,
Inc. (the "Company"), a development stage company, as of April 30, 1999,
and the related statements of operations, changes in stockholders' equity,
and cash flows for the period April 15, 1999 (date of incorporation) through
April 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 BF Acquisition Group V, Inc.
as of April 30, 1999, and the results of its operations and its cash flows
for the period April 15, 1999 (date of incorporation) through April 30, 1999
in conformity with generally accepted accounting principles.
By: /s/Ahearn, Jasco + Company, P.A.
AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants
Pompano Beach, Florida
May 20, 1999
<PAGE> F-3
BF ACQUISITION GROUP V, INC.
(A development stage company)
BALANCE SHEET
APRIL 30, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C>
CURRENT ASSET - Cash and cash equivalents $1,000
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY:
Preferred stock, no par value; 5,000,000 shares
authorized; none issued or outstanding $ -
Common stock, $.001 par value; 50,000,000 shares
authorized; 700,000 shares issued and outstanding 700
Additional paid-in capital 672
Deficit accumulated during the development stage (372)
Total $1,000
</TABLE>
<PAGE> F-4
BF Acquisition Group V, Inc.
(A development stage company)
STATEMENT OF OPERATIONS
FOR PERIOD APRIL 15, 1999 (date of incorporation) THROUGH APRIL 30, 1999
<TABLE>
<CAPTION>
<S> <C>
REVENUE $ --
GENERAL AND ADMINISTRATIVE EXPENSES 372
LOSS BEFORE INCOME TAX PROVISION (372)
PROVISION FOR INCOME TAXES --
NET LOSS $(372)
PER SHARE AMOUNTS:
Net loss per common share outstanding $(0.0005)
COMMON SHARES OUTSTANDING AT APRIL 30, 1999 700,000
</TABLE>
See notes to financial statements.
<PAGE> F-5
BF Acquisition Group V, Inc.
(A development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR PERIOD APRIL 15, 1999 (date of incorporation) THROUGH APRIL 30, 1999
<TABLE>
<CAPTION>
Deficit
Common Additional Accumulated
Stock, at Paid-in during the
par value Capital Development Stage Total
<S> <C> <C> <C> <C>
STOCKHOLDERS'
EQUITY
April 15, 1999 $ --- $ --- $ --- $ ---
Sale of 510,000
shares of common
stock 510 490 --- 1,000
Common stock issued
for services 190 182 372
Net loss for the initial
period ended
April 30, 1999 --- --- (372) (372)
STOCKHOLDERS'
EQUITY, April 30,
1999 $ 700 $ 672 $ (372) $1,000
</TABLE>
See notes to financial statements.
<PAGE> F-6
BF Acquisition Group V, Inc.
(A development stage company)
STATEMENT OF CASH FLOWS
FOR PERIOD APRIL 15, 1999 (date of incorporation) THROUGH APRIL 30, 1999
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(372)
Common stock issued for services 372
NET CASH USED IN OPERATING ACTIVITIES --
CASH FLOWS FROM FINANCING ACTIVITY:
Sale of common stock 1,000
NET INCREASE IN CASH AND CASH EQUIVALENTS,
1,000
CASH AND CASH EQUIVALENTS, beginning of period -0-
CASH AND CASH EQUIVALENTS, end of period $1,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ --
Cash paid for income taxes $ --
</TABLE>
See notes to financial statements.
<PAGE> F-7
BF Acquisition Group V, Inc.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR PERIOD APRIL 15, 1999 (date of incorporation) THROUGH APRIL 30, 1999
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
BF Acquisition Group V, Inc., (the "Company"), a development stage
company, was organized in Florida on April 15, 1999 as a "shell" company
which plans to look for suitable business partners or acquisition
candidates to merge with or acquire. Operations since incorporation have
consisted primarily of obtaining the initial capital contribution by the
founding shareholders and coordination of activities regarding the SEC
registration of the Company.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income Taxes
The Company accounts for income taxes in accordance with the
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes", which requires the recognition of deferred tax liabilities
and assets at currently enacted tax rates for the expected future tax
consequences of events that have been included in the financial statements
or tax returns. A valuation allowance is recognized to reduce the net
deferred tax asset to an amount that is more likely than not to be
realized. The tax provision shown on the accompanying statement of
operations is zero since the deferred tax asset generated from the net
operating loss is offset in its entirety by a valuation allowance.
Cash and Cash Equivalents
Cash and cash equivalents, if any, include all highly liquid debt
instruments with an original maturity of three months or less at the date
of purchase.
Earnings Per Common Share
The Company follows the provisions of SFAS No. 128, "Earnings Per
Share", which requires companies with complex capital structures or
common stock equivalents to present both basic and diluted earnings per
share ("EPS") on the face of the income statement. Basic EPS is
calculated as income available to common stockholders divided by the
weighted average number of common shares outstanding during the period.
Diluted EPS is calculated using the "if converted" method for
convertible securities and the treasury stock method for options and
warrants as previously prescribed by Accounting Principles Board Opinion
No. 15, "Earnings Per Share".
Statement of Comprehensive Income
A statement of comprehensive income has not been included, per SFAS
130, "Reporting Comprehensive Income", as the Company has no items of
other comprehensive income.
<PAGE> F-8
BF ACQUISITION GROUP V, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD APRIL 15, 1999 (date of incorporation) THROUGH APRIL 30, 1999
NOTE 3 - LOSS PER COMMON SHARE
Net loss per common share outstanding, as shown on the statement of
operations, is based on the number of common shares outstanding at the
balance sheet date. Weighted average shares outstanding was not computed
since it would not be meaningful in the circumstances, as all shares
issued during the period from incorporation through April 30, 1999 were
for initial capital and were issued to just two individuals. Therefore,
the total shares outstanding at the end of the period was deemed to be the
most relevant number of shares to use for purposes of this disclosure.
For future periods, the Company will utilize the treasury stock
method for computing earnings per share, and will compute a weighted
average number of shares outstanding if additional shares of stock are
issued to new shareholders.
NOTE 4 - CAPITAL STOCK
Common Stock
The holders of the common stock are entitled to one vote per share
and have non-cumulative voting rights. The holders are also entitled to
receive dividends when, as, and if declared by the Board of Directors.
Additionally, the holders of the common stock do not have any preemptive
right to subscribe for, or purchase, any shares of any class of stock.
Preferred Stock
The Board of Directors of the Company is authorized to provide for
the issuance of the preferred stock in classes or series and, by filing
the appropriate articles of amendment with the Secretary of State of
Florida, is authorized to establish the number of shares to be included in
each class or series and the preferences, limitations and relative rights
of each class or series, which may include a conversion feature into
common stock. This type of preferred stock is commonly referred to as
"blank check preferred stock". As of May 20, 1999, no shares of
preferred stock have been issued and no preferences, limitations and
relative rights have been assigned.
NOTE 5 - RELATED PARTY TRANSACTIONS
Transactions with Shareholders
On April 15, 1999, the company issued 190,000 shares valued at $372
as consideration for services rendered by the two shareholders of the
Company for the formation of the Company. Of the 190,000 shares, 90,000
have been issued under Rule 701 adopted by the Securities and Exchange
Commission under the Securities Act of 1933, as amended.
Office Facilities
Office space is provided by a shareholder of the Company at no
charge.
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Not Applicable.
FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description of Exhibit Sequential Page No.
(2) Charter and Bylaws.
2.1 Articles of Incorporation.
2.2 Bylaws.
(3) Instruments defining the rights of security holders.
3.1 Articles of Incorporation. *
3.2 Bylaws. *
(6) Material Contracts.
6.1 Pre-incorporation Agreement.
6.2 Office Sub-Lease Agreement.
(27) Financial Data Schedule.
27.1 Financial Data Schedule.
* Incorporated by reference to Exhibit (2) herein.
SIGNATURES
Pursuant to the requirements with Section 12 of the Securities Exchange Act of
1934, the registrant duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
BF ACQUISITION GROUP V, INC.
Date: July 26, 1999 By:/s/ David M. Bovi
David M. Bovi,
Chief Executive Officer
<PAGE>
ARTICLES OF INCORPORATION
OF
BF ACQUISITION GROUP V, INC.
The undersigned incorporator, for the purpose of forming a corporation
under the Florida Business Corporation Act, hereby adopt(s) the following
Articles of Incorporation.
ARTICLE I. CORPORATE NAME.
The name of this corporation is BF Acquisition Group V, Inc.
ARTICLE II. PRINCIPAL OFFICE.
The principal place of business and mailing address of this corporation
are 319 Clematis Street, Suite 812, West Palm Beach, Florida 33401.
ARTICLE III. CAPITAL STOCK.
The number of shares of stock that this corporation is authorized to have
outstanding at any one time is:
1. 50,000,000 shares of Common Stock, $0.001 par value; and
2. 5,000,000 shares of Preferred Stock. The board of directors is
authorized to provide for the issuance of such Preferred Stock in classes and
series and, by filing the appropriate articles of amendment with the Secretary
of State of Florida, is authorized to establish the number of shares to be
included in each class and series and the preferences, limitations, and
relative rights of each class and series.
ARTICLE IV. - NO ANTI-TAKEOVER LAW GOVERNANCE
The corporation hereby elects that the following Florida Statutes shall
not apply to the corporation:
1. F.S. 607.0901, or any laws related thereto, governing affiliated
transactions; and
2. F.S. 607.0902, or any laws related thereto, governing control-share
acquisitions.
ARTICLE V. - DIRECTOR - CONFLICTS OF INTEREST
No contract or other transaction between the corporation and one or more
of its directors, or
<PAGE>
between the corporation and any other corporation, firm, association or other
entity in which one or more of the directors are directors or officers, or are
financially interested, shall be either void or voidable because of such
relationship or interest or because such director or directors are present at
the meeting of the board of directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction or because his
or her votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the board of directors, or a duly empowered committee thereof, which
authorizes, approves or ratifies the contract or transaction by a vote or
consent sufficient for such purpose without counting the vote or votes of such
interested director or directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board of directors, committee
or the shareholders.
A director of the corporation may transact business, borrow, lend, or
otherwise deal or contract with the corporation to the fullest extent and
subject only to the limitations and provisions of the laws of the State of
Florida and the laws of the United States.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the board of directors or a committee thereof
which authorizes, approves or ratifies such contract or transaction.
ARTICLE VI. - INDEMNIFICATION
The Corporation shall indemnify and shall advance expenses on behalf of
its officers and directors to the fullest extent permitted by law in existence
either now or hereafter.
ARTICLE VII. INITIAL REGISTERED AGENT AND OFFICE.
The name and address of the initial registered agent are David M. Bovi,
319 Clematis Street, Suite 812, West Palm Beach, Florida 33401.
ARTICLE VIII. INCORPORATORS.
The name and street address of the incorporator to these articles of
incorporation are David M. Bovi, 319 Clematis Street, Suite 812, West Palm
Beach, FL 33401.
The undersigned incorporator has executed these articles of incorporation
on April 14, 1999.
By: /s/ David M. Bovi
David M. Bovi, Incorporator
Acceptance of Registered Agent
Having been named to accept service of process for BF Acquisition Group
V, Inc., at the place designated in the articles of incorporation, the
undersigned is familiar with and accept the obligations of that position
pursuant to F.S. 607.0501(3)
By: /s/ David M. Bovi
David M. Bovi
Date: April 14, 1999
<PAGE>
BYLAWS INDEX
Page Number
ARTICLE I Offices
Section 1. Principal Office.........................................4
Section 2. Other Offices............................................4
ARTICLE II
Seal.....................................................4
ARTICLE III Meetings of Shareholders.................................4
Section 1. Place of Meeting.........................................4
Section 2. Annual Meeting...........................................4
Section 3. Special Meetings.........................................5
Section 4. Notice of Meetings.......................................5
Section 5. Action by Consent in Writing.............................5
Section 6. Quorum...................................................5
Section 7. Required Vote............................................5
Section 8. Voting and Proxies.......................................6
Section 9. Voting Lists.............................................6
Section 10. Record Date..............................................6
Section 11. Voting of Shares by
Certain Holders..........................................6
ARTICLE IV Board of Directors.......................................7
Section 1. Powers...................................................7
Section 2. Number...................................................7
Section 3. Election and Term of Office..............................7
Section 4. Vacancies................................................7
Section 5. Removal..................................................8
Section 6. Place of Meetings........................................8
Section 7. Regular Meetings.........................................8
Section 8. Special Meetings.........................................8
Section 9. Quorum...................................................8
Section 10. Compensation.............................................8
Section 11. Executive Committee......................................8
Section 12. Presence at Meetings.....................................9
Section 13. Written Consent..........................................9
ARTICLE V Officers.................................................9
<PAGE>
Section 1. Designation..............................................9
Section 2. Election.................................................9
Section 3. Subordinate Officers.....................................9
Section 4. Removal and Resignation..................................9
Section 5. Vacancies...............................................10
Section 6. Chairman of the Board...................................10
Section 7. Chief Executive Officer.................................10
Section 8. President...............................................10
Section 9. Vice Presidents.........................................10
Section 10. Secretary...............................................11
Section 11. Chief Financial Officer/Treasurer.......................11
Section 12. Compensation............................................12
ARTICLE VI Certificates of Stock...................................12
Section 1. Description.............................................12
Section 2. Lost Certificates.......................................12
Section 3. Preferences.............................................12
Section 4. Transfers of Stock......................................13
Section 5. Registered Shareholders.................................13
ARTICLE VII General Provisions......................................13
Section 1. Dividends...............................................13
Section 2. Checks..................................................13
Section 3. Fiscal Year.............................................13
Section 4. Execution of Deeds, Contracts and Other Documents.......13
ARTICLE VIII Amendment to Bylaws.....................................14
ARTICLE IX Indemnification.........................................14
Section 1. General.................................................14
Section 2. Expenses................................................14
Section 3. Standard of Conduct.....................................14
Section 4. Advance Expenses........................................15
Section 5. Benefit.................................................15
Section 6. Insurance...............................................15
Section 7. Affiliates..............................................15
Section 8. Survival................................................15
ARTICLE X Severability............................................16
<PAGE> 4
BYLAWS
OF
BF ACQUISITION GROUP V, INC.
ARTICLE I
Offices
SECTION 1. Principal Office. The principal office of the
Corporation shall be established and maintained as stated in the initial
registered address of the corporation in the Articles of Incorporation, until
such time as the Board of Directors determines otherwise.
SECTION 2. Other Offices. The Corporation may have other
offices, either within or without the State of Florida, at such place or
places as the Board of Directors may determine from time to time or the
business of the Corporation may require.
ARTICLE II
Seal
The Corporation shall have a corporate seal which shall be in circular
form and have inscribed thereon the name of the Corporation and the year of
its incorporation and may use the same by causing it or a facsimile thereof to
be impressed or affixed or in any other manner reproduced upon any paper or
document.
ARTICLE III
Meetings of Shareholders
SECTION 1. Place of Meeting. All meetings of the shareholders
shall be held at such place within or without the State of Florida as shall be
designated from time to time by the Board of Directors and stated in the
notice of such meeting or in a duly executed waiver of notice thereof.
SECTION 2. Annual Meetings. The annual meeting of the shareholders
of the Corporation shall be held on a date and at a time designated by the
Board of Directors. If the day fixed for the annual meeting shall be a legal
holiday in the State of Florida or the state or jurisdiction where the meeting
is to be held, such meeting shall be held on the next succeeding business
day. The purpose of the annual meeting of shareholders shall be to elect
directors and to transact such other business as may come before the meeting.
If the election of directors shall not be held on the day designated for the
annual meeting of the shareholders, or at any adjournment thereof, the Board
of Directors shall cause such election to be held at a special meeting of the
shareholders as soon thereafter as conveniently may be.
<PAGE> 5
SECTION 3. Special Meetings. Special meetings of the shareholders,
for any purpose or purposes, may be called by the Board of Directors or the
holders of not less than one-tenth (1/10) of all the shares entitled to vote
at the meeting, or the President. Business transacted at a special meeting
shall be confined to the purposes stated in the notice of the meeting.
SECTION 4. Notice of Meetings. Whenever shareholders are
required or authorized to take any action at a meeting, a notice of such
meeting, stating the place, day and hour of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called,
shall be delivered, not less than ten (10) nor more than sixty (60) days
before the date set for such meeting, either personally or by first-class
mail, by or at the direction of the Chief Executive Officer, President or
Secretary, or the persons calling the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail, addressed to the
shareholder, at his address as it appears on the stock transfer books of the
Corporation, with first-class postage prepaid thereon. Written waiver by a
shareholder of notice of a shareholders' meeting, signed by him whether before
or after the time stated thereon, shall be equivalent to the giving of such
notice.
SECTION 5. Action by Consent in Writing. Any action required
or permitted to be taken at any annual or special meeting of the shareholders
of this Corporation may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of all of the outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
SECTION 6. Quorum. The majority of the shares entitled to
vote there at, present or represented by proxy at any meeting, shall
constitute a quorum of the shareholders for the transaction of business except
as otherwise provided by statute or by the Articles of Incorporation. If,
however, such quorum shall not be present or represented at any meeting of the
shareholders, the shareholders entitled to vote there at, present in person or
represented by proxy, shall have power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted at the meeting as originally notified. If the
adjournment is for more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourn ed
meeting shall be given to each shareholder of record entitled to vote at the
meeting, subject to the provisions of Section 4 hereof. The shareholders
present at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave
less than a quorum.
SECTION 7. Required Vote. If a quorum is present at any
meeting, the affirmative vote of the majority of the shares represented at the
meeting and entitled to vote on the subject matter shall be the act of the
shareholders, unless the question is one for which, by express provision of
the law or of the Articles of Incorporation or these Bylaws, a different vote
is required, in which case
<PAGE> 6
such express provision shall govern and control the decision of such question.
SECTION 8. Voting and Proxies. Except as otherwise provided in
the Articles of Incorporation or by the terms of any outstanding series of
Preferred Stock of the Corporation, each shareholder shall be entitled at each
meeting and upon each proposal presented at such meeting to one vote in person
or by proxy for each share of voting stock recorded in his name on the books
of the Corporation on the record date fixed as below provided, or if no such
record date was fixed, on the day of the meeting. Every proxy must be signed
by the shareholder or his attorney in fact. No proxy shall be valid after the
expiration of eleven (11) months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
shareholder executing it, except as otherwise provided by law. If a proxy
expressly provides, any proxy-holder may appoint in writing a substitute to
act in his place.
SECTION 9. Voting Lists. The Secretary shall have charge of
the stock ledger and shall prepare and make, or cause to be prepared and made,
at least ten (10) days before every meeting of shareholders, a complete list
of the shareholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each shareholder and the number of shares
registered in the name of each shareholder. Such list shall be open to the
examination of any shareholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified , at the place where the meeting is to be held. The list also shall
be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any shareholder or proxy who is
present. The stock ledger shall be the only evidence as to who are the
shareholders entitled to examine the stock ledger, the list required by this
section or the books of the Corporation, or to vote in person or by proxy at
any meeting of shareholders.
SECTION 10. Record Date. In order that the Corporation may determine
the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board of Directors may fix
in advance, but shall not be required to, a record date which shall not be
more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action. A
determination of shareholders of record entitled to notice of or to vote at a
meeting of the shareholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
SECTION 11. Voting of Shares by Certain Holders. Shares outstanding
in the name of another corporation may be voted by such officer, agent or
proxy as the by-laws of such corporation may prescribe, or, in the absence of
such provision, as the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares
<PAGE> 7
standing in the name of a trustee may be voted by him, either in person or by
proxy, without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority to do so be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Treasury shares of this corporation's stock owned by another corporation,
the majority of the voting stock of which is owned or controlled by this
corporation, and shares of this corporation's stock held by a corporation in a
fiduciary capacity, shall not be voted, directly or indirectly, at any
meeting, and shall not be counted in determining the total number of
outstanding shares at any given time.
ARTICLE IV
Board of Directors
SECTION 1. Powers. The business of the Corporation shall be
managed and its corporate powers shall be exercised by its Board of Directors,
except as otherwise provided by statute or by the Articles of Incorporation.
SECTION 2. Number. Until changed by resolution of the Directors
at any time and from time to time, the Board at any time, shall consist of at
least One (1) director but no more than Five (5) directors.
SECTION 3. Election and Term of Office. Directors shall be elected
at the annual meeting of shareholders, except as provided in Sections 4 and 5
of this Article. At each meeting of shareholders for the election of
directors at which a quorum is present, the persons receiving the greatest
number of votes, up to the number of directors to be elected, shall be the
directors. Each director shall hold office until the next succeeding annual
meeting, or until his successor is elected and qualified, or until his earlier
resignation by written notice to the Secretary of the Corporation, or until
his removal from office.
SECTION 4. Vacancies. Any vacancy occurring in the Board of
Directors, including any vacancy created by reason of an increase in the
number of directors, may be filled by the affirmative vote of a majority of
the directors then in office, though less than a quorum of the Board of
Directors. A director elected to fill a vacancy shall be elected until the
next annual meeting of the shareholders. If there are no directors in office,
then any officer or any shareholder or an executor, administrator, trustee or
guardian of a shareholder or other fiduciary entrusted with like
responsibility for the person or estate of a shareholder, may call a special
meeting of shareholders for the purpose of electing a new Board of Directors.
<PAGE> 8
SECTION 5. Removal. At a special meeting of the shareholders,
duly called expressly for that purpose as provided in these Bylaws, any
director or directors, by the affirmative vote of the holders of a majority of
all the shares of stock outstanding and entitled to vote for the election of
directors, may be removed from office, either with or without cause, and the
remaining directors, in the manner provided in these Bylaws, shall fill any
vacancy or vacancies created by such a removal.
SECTION 6. Place of Meetings. Meetings of the Board of Directors
of the Corporation, regular or special, may be held either within or without
the State of Florida.
SECTION 7. Regular Meetings. The Board of Directors shall hold a
regular meeting each year immediately after the annual meeting of the
shareholders at the place where such meeting of the shareholders was held for
the purpose of election of officers and for the consideration of any other
business that may be properly brought before the meeting. No notice of any
kind to either old or new members of the Board of Directors for such regular
meeting shall be necessary.
SECTION 8. Special Meetings. Special meetings of the Board of
Directors may be called by any one (1) director, the Chairman of the Board or
the President or Secretary on two (2) days' written notice to each director,
either personally or by mail or by telegram. Notice of any special meeting of
the Board of Directors need not be given to any director who signs a waiver of
notice either before or after the meeting. Attendance by a director at a
special meeting shall constitute a waiver of notice of such special meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because such special meeting is not
lawfully convened.
SECTION 9. Quorum. A majority of all the directors shall
constitute a quorum for the transaction of business. The affirmative vote of
the majority of directors present at a meeting where a quorum is present shall
be the act of the Board of Directors. If a quorum shall not be present at any
meeting of the Board of Directors a majority of the directors present there at
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
SECTION 10. Compensation. The Board of Directors shall have the
authority to fix the compensation of directors, and the directors may be paid
their expenses, if any, for attendance at each meeting of the Board of
Directors. No such payment shall preclude any director from servicing the
corporation in any other capacity and receiving compensation therefrom.
Directors may set their own compensation for service as officers as well as
for service as directors.
SECTION 11. Executive Committee. The Board, by resolution passed by a
majority of the whole Board, may designate from among its members an executive
committee and one or more other committees, which committees, to the extent
provided in such resolution, shall have and exercise any or all of the
authority of the Board of Directors, except that no such committee shall have
the authority to approve or recommend to the shareholders actions or proposals
required by law
<PAGE> 9
to be approved by the shareholders, designate candidates for the office of
director, fill vacancies on the Board of Directors or any committee thereof,
amend the Bylaws, authorize or approve the re-acquisition of shares unless
pursuant to a general formula or method specified by the Board of Directors,
or authorize or approve the issuance or sale of, or any contract to issue or
sell,, shares or designate the terms of a series of a class of shares, unless
pursuant to a general formula or method specified by the Board of Directors,
within specifications authorized by law.
SECTION 12. Presence at Meetings. Members of the Board of Directors
or an executive committee shall be deemed present in person at a meeting of
such Board or committee if a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other is used.
SECTION 13. Written Consent. Any action of the Board of Directors or
of any committee thereof, which is required or permitted to be taken at a
regular or special meeting, may be taken without a meeting if consent in
writing, setting forth the action so to be taken, signed by all of the members
of the Board of Directors or of the committee, as the case may be, is in the
minutes of the proceedings of the Board of Directors or committee.
ARTICLE V
Officers
SECTION 1. Designation. The Corporation shall have a Chief Executive
Officer, President, Secretary and a Chief Financial Officer/Treasurer, each
of whom shall be elected by the Board of Directors. The Corporation also may
have, at the discretion of the Board of Directors, a Chairman of the Board and
one or more Vice Presidents (however titled). Assistant Secretaries and
Assistant Chief Financial Officers/Treasurers, and such other officers as may
be appointed in accordance with the provisions of Section 3 of this Article.
One person may hold two or more offices.
SECTION 2. Election. The officers of the Corporation, except such
officers as may be elected in accordance with the provisions of Section 3 or
Section 5 of this Article, shall be elected annually by the Board of
Directors, and each shall hold his office until he shall resign or shall be
removed or otherwise disqualified to serve, or his successor shall be elected
and qualified. Officers shall be elected by the affirmative vote of the
majority of directors present at a meeting where a quorum is present.
SECTION 3. Subordinate Officers. The Board of Directors may
elect such other officers as the business of the Corporation may require, each
of whom shall hold office for such period, have such authority and perform
such duties as are provided in these Bylaws or as the Board of Directors may
determine from time to time.
SECTION 4. Removal and Resignation. Any officer may be removed,
either with
<PAGE> 10
or without cause, by the affirmative vote of the majority of directors present
at any meeting where a quorum is present, or, except in the case of an officer
chosen by the Board of Directors, by any officer upon whom such power of
removal may be conferred by the Board of Directors. Such removal shall be
without prejudice to the contract rights, if any, of the persons so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
Any officer may resign at any time by giving written notice to the Board
of Directors, or to the Chairman of the Board, if one shall have been elected,
or the Chief Executive Officer, President or Secretary of the Corporation.
Any such resignation shall take effect at the date of the receipt of such
notice or at any later time specified therein, and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled by
the Board of Directors for the unexpired portion of the term.
SECTION 6. Chairman of the Board. The Chairman of the Board, if
there shall be such an officer, if present, shall preside at all meetings of
the Board of Directors and exercise and perform such other powers and duties
as may from time to time be assigned to him by the Board of Directors or
prescribed by these Bylaws.
SECTION 7. Chief Executive Officer. The Chief Executive Officer
shall be the Chairman, who shall have management powers of the corporation.
His duties shall include but not be limited to administration of the
corporation, presiding over shareholder meetings, general supervision of the
policies of the corporation as well as general management. The Chairman shall
execute contracts, mortgages, loans, and bonds under the seal of the
corporation. The Chairman shall have such other duties and powers as
determined by the Board of Directors by resolution. He shall preside at all
meetings of the shareholders, and in the absence of the Chairman of the Board,
shall preside at all meetings of the Board of Directors. He shall be
ex-officio a member of all the standing committees, if any, and shall have
such other powers and duties as may be prescribed by the Board of Directors or
these Bylaws.
SECTION 8. President. The President, subject to the control of
the Chief Executive officer and the Board of Directors, shall have general
supervision, direction and control of the business and affairs of the
Corporation. He shall execute deeds, bonds, mortgages and other instruments
on behalf of the Corporation, except where required or permitted by law to be
signed and executed otherwise and except where the signing and execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the Corporation. He shall have such other powers and
duties as may be prescribed by the Chief Executive Officer and/or the Board of
Directors or these Bylaws.
SECTION 9. Vice Presidents. The Vice Presidents, if any, shall
have such powers and perform such duties as may be prescribed from time to
time for them respectively by the Chairman of the Board, the Chief Executive
Officer, the President, the Board of Directors or these
<PAGE> 11
Bylaws. In the absence of the President or in the event of his death,
inability or refusal to act, the first elected Vice President or a designated
Vice President shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President.
SECTION 10. Secretary. The Secretary shall: (a) keep, or cause to
be kept, a book of minutes at the registered or principal office, or such
other place as the Board of Directors may order, of all meetings of directors
and shareholders, with the time and place of holding, whether regular or
special, and if special, how authorized, the notice thereof given, the names
of those present at directors, meetings, the number of shares present or
represented at shareholders, meetings and the proceedings thereof; (b) give,
or cause to be given, notice of all the meetings of the shareholders and of
the Board of Directors required by these Bylaws or by law to be given; (c) be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; (d) keep
a register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholder; (e) sign with the President,,
certificates for shares of the corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have general
charge of the stock transfer books of the corporation; and (g) in general
perform all duties incident to the office of Secretary and such other duties
as from time to time may be assigned to him by the Chief Executive Officer,
the President or by the Board of Directors. The Assistant Secretaries shall
have the powers of the Secretary, as may be assigned to them by the Board of
Directors and perform such other duties as may be prescribed by the Board of
Directors or these Bylaws.
SECTION 11. Chief Financial Officer. The Chief Financial
Officer/Treasurer, if any, shall keep and maintain, or cause to be kept and
maintained, adequate and correct accounts of the properties and business
transactions of the Corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, surplus and shares. Any
surplus, including earned surplus, paid-in surplus and surplus arising from a
reduction of stated capital, shall be classified according to source and shown
in a separate account. The books of account shall be open at all reasonable
times to inspection by any director.
The Chief Financial Officer/Treasurer shall deposit all monies and other
valuables in the name and to the credit of the Corporation with such
depositories as may be designated by the Board of Directors. He shall
disburse the funds of the Corporation, shall render to the Chief Executive
Officer, the President and any director, whenever requested, an account of all
his transactions as Chief Financial Officer/Treasurer and of the financial
condition of the Corporation, and shall have such other powers and perform
such other duties as may be prescribed by the Board of Directors or these
Bylaws. As required by the Board of Directors, the Chief Financial
Officer/Treasurer shall give a bond for the faithful discharge of his duties
in such sum and with such surety or sureties as the Board of Directors shall
determine. The Assistant Chief Financial Officers/Treasurers shall have the
powers of the Chief Financial Officer/Treasurer, as may be assigned to them by
the Board of Directors.
<PAGE> 12
SECTION 12. Compensation. The compensation of the officers and
agents of the Corporation shall be fixed from time to time by the Board of
Directors, or by such officer or officers as said Board shall direct, and no
officer shall be prevented from receiving such compensation by reason of the
fact that he is or was a director of the Corporation.
ARTICLE VI
Certificates of Stock
SECTION 1. Description. Every shareholder shall be entitled to
have for each kind, class or series of stock held a certificate certifying the
number of shares thereof held of record by him. All certificates for shares
shall be consecutively numbered by class or otherwise identified.
Certificates shall be signed by the President or a Vice President and the
Secretary or an Assistant Secretary, and may be sealed with the seal of the
Corporation. The seal may be a facsimile, engraved or printed. Where such
certificate is signed by a transfer agent or a registrar other than the
Corporation itself, the signature of any of those officers named herein may be
by facsimile. In case any officer who signed, or whose facsimile signature
has been used on, any certificate shall cease to be such officer for any
reason before the certificate has been delivered by the Corporation, such
certificate may nevertheless be adopted by the Corporation and issued and
delivered as though the person who signed it or whose facsimile signature has
been used thereon had not ceased to be such officer.
SECTION 2. Lost Certificates. The Corporation may issue a new
certificate of stock in the place of any certificate theretofore issued by it,
alleged to have been lost, stolen or destroyed. The Corporation may require
the owner of the lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond sufficient to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.
SECTION 3. Preferences. If the Corporation shall be authorized
to issue more than one class of stock or more than one series of any class,
the distinguishing characteristics of each class or series, including
designations, the relative rights and preferences or limitations as regards
dividend rates, redemption rights, conversion privileges, voting powers or
restrictions or qualifications of voting powers, or such other distinguishing
characteristics as shall be stated either in the Articles of Incorporation or
in the resolution or resolutions providing for the issue of such stock adopted
by the Board of Directors or a duly constituted executive committee shall be
set forth in full on the face or back of the certificate which the Corporation
shall issue to represent such kind, class or series of stock, provided that,
in lieu of the foregoing requirements, said provisions may be either (a)
summarized on the f ace or back of the certificate, or (b) incorporated by
reference made on the face or back of the certificate where such reference
states that a copy of said provisions, certified by an officer of the
Corporation, will be furnished by the Corporation or its transfer agent,
without cost, to and upon request of the certificate holder.
<PAGE> 13
SECTION 4. Transfers of Stock. Upon surrender to the
Corporation or the transfer agent of the Corporation of a certificate for
shares duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, it shall be the duty of this Corporation
to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
SECTION 5. Registered Shareholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such owner, and to
hold liable for calls, to the extent permitted by law, a person registered on
its books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to interest in such shares on the part of any other
person, regardless of whether it shall have express or other notice thereof,
except as otherwise provided by law.
ARTICLE VII
General Provisions
SECTION 1. Dividends. The Board of Directors, at any regular or
special meeting thereof, subject to any restrictions contained in the Articles
of Incorporation, may declare and pay dividends upon the shares of its capital
stock in cash, property or its own shares, except when the Corporation is
insolvent or when the payment thereof would render the Corporation insolvent.
SECTION 2. Checks. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may designate from time to time.
SECTION 3. Fiscal Year. The fiscal year of the Corporation
shall end on the 30th day of April.
SECTION 4. Execution of Deeds, Contracts and Other Documents.
Except as otherwise provided by the Articles of Incorporation and the Board of
Directors, all deeds and mortgages made by the Corporation and all other
written contracts and agreements to which the Corporation shall be a party may
be executed on behalf of the Corporation by the Chairman of the Board, if one
shall have been elected, the Chief Executive Officer, the President or one or
more Vice Presidents, if any shall have been elected, and may be attested to
and the corporate seal affixed thereto by the Secretary or Assistant
Secretary. The Board of Directors may authorize the execution of deeds,
mortgages and all other written contracts and agreements to which the
Corporation may be a party by such other officers, assistant officers or
agents, as may be selected by the said Chairman of the Board, Chief Executive
Officer, or President from time to time and with such limitations and
restrictions as said authorization may prescribe.
<PAGE> 14
ARTICLE VIII
Amendment to Bylaws
These Bylaws may be altered, amended, repealed or added to by the vote of
a majority of the Board of Directors present at any regular meeting of the
said Board, or at a special meeting of the directors called for that purpose,
provided a quorum of the directors is present at such meeting, unless reserved
to the shareholders by the Articles of Incorporation. These Bylaws, and any
amendments thereto, and new Bylaws added by the directors, may be amended,
altered or repealed by the shareholders and the shareholders may prescribe in
any Bylaw made by them that such Bylaw shall not be altered, amended or
repealed by the Board of Directors.
ARTICLE IX
Indemnification
SECTION 1. General. 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, 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 or was serving at the request of
the Corporation as a director, officer, employee or agent of any other
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorney's fees), judgments, fines, amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, including any appeal thereof, if he acted 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 no reasonable cause to believe that his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contenders or its equivalent
shall not create, of itself, a presumption that the person did not act in good
faith or in a manner which he reasonably believed to be in, or not opposed to,
the best interests of the Corporation or, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 2. Expenses. 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 Section
1 above, or in any defense of any claim, issue or matter therein, he shall be
indemnified against expenses, including attorneys fees, actually and
reasonably incurred by him in connection therewith.
SECTION 3. Standard of Conduct. Any indemnification shall be
made hereunder only if a determination is made that indemnification of the
director, officer, employee or agent is proper in the circumstances because
such person has met the applicable standard of conduct set forth in Section 1
above. Such determination shall be made either (1) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit or
<PAGE> 15
proceeding, or (2) by the shareholders who were not parties to such action,
suit or proceeding. If neither of the above determinations can occur because
the Board of Directors consists of a sole director or the Corporation is owned
by a sole shareholder, then the sole director or sole shareholder shall be
allowed to make such determination.
SECTION 4. Advance Expenses. Expenses incurred in defending any
action, suit or proceeding may be paid in advance of the final disposition of
such action, suit or proceeding as authorized in the manner provided in
Section 3 above upon receipt of any undertaking 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.
SECTION 5. Benefit. The indemnification provided by this
Article shall be in addition to the indemnification rights provided pursuant
to Chapter 607 of the Florida Statutes, and shall not be deemed exclusive of
any other rights to which any person seeking indemnification may he entitled
under any bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to
action in another capacity while holding such office, and shall continue as to
a person who has ceased to be a director, officer, employee or agent of the
Corporation and shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 6. Insurance. The Corporation shall be empowered 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
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against 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 the
provisions of this Article.
SECTION 7. Affiliates. For the purposes of this Article,
references to "the Corporation" include all constituent corporations absorbed
in a consolidation or merger, as well as the resulting or surviving
corporation, so that any person who is or was a director, officer, employee or
agent of such a constituent corporation or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
shall stand in the same position under the provisions of this Article with
respect to the resulting or surviving corporation as he would if he had served
the resulting or surviving corporation in the same capacity.
SECTION 8. Survival. Upon the death of any person having a right
to indemnification under this Article, such right shall inure to his heirs and
legal representatives. In addition, such heirs and legal representatives
shall be entitled to indemnification, under the terms of this Article, against
all expenses (including attorney's fees, judgments, fines and amounts paid in
settlement) imposed upon or reasonably incurred by them in connection with any
claim, action, suit or proceeding described in the foregoing Section 1 on
account of such deceased person.
<PAGE> 16
ARTICLE X
Severability
The provisions of these Bylaws shall be separable each from any and all
other provisions of these Bylaws, and if any such provision shall be adjudged
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereof, or the powers granted to this Corporation
by the Articles of Incorporation or Bylaws.
Adopted this 15th day of April, 1999.
By: /s/ David M. Bovi
David M. Bovi,
Chief Executive Officer
(CORPORATE SEAL)
<PAGE>
PRE-INCORPORATION SUBSCRIPTION AGREEMENT
THIS PRE-INCORPORATION SUBSCRIPTION AGREEMENT ("Agreement") is made and
entered into this 10th day of April, 1999, by and between David M. Bovi and
William R. Colucci.
WHEREAS, the parties desire to form a corporation pursuant to the laws
of the State of Florida, under the name of BF Acquisition Group V, Inc.
(the "Company"), and register a class of its securities with the U.S.
Securities and Exchange Commission under the Securites Exchange Act of 1934,
in order to serve as a corporate vehicle seeking to effect a merger, exchange
of capital stock, asset acquisition or other similar business combination with
an operating or development stage business which desires to employ the Company
to become a reporting corporation under the Securities Exchange Act of 1934.
WHEREAS, the parties desire to subscribe for the acquisition of stock to
be issued upon formation of the Company, and have mutually agreed that the
consideration for the issuance of such shares shall be cash; pre-incorporation
services; and director and officer services with respect to assisting the
Company with respect to its capital structure and business plan, all as
described below.
NOW, THEREFORE, in consideration of the forgoing, and in consideration of
the mutual covenants and promises hereinafter set forth, it is agreed as
follows:
1. Agreement to Form Corporation. The undersigned parties hereby
agree to form a corporation pursuant to the laws of the State of
Florida, under the name of BF Acquisition Group V, Inc. (the
"Company"). The corporation shall be formed for the purpose of
registering a class of its securities with the U.S. Securities
and Exchange Commission under the Securities Exchange Act of 1934,
and serving as a corporate vehicle seeking to effect a merger,
exchange of capital stock, asset acquisition or other similar
business combination with an operating or development stage
business which desires to employ the Company to become a reporting
corporation under the Securities Exchange Act of 1934.
2. Pre-incorporation Services. By execution of this Agreement, each
of the undersigned hereby agrees to provide such services as may
be necessary or appropriate prior to the incorporation of the
Company, for purposes of determining the feasibility of, and
completing, the Company's business plan, including, but not
limited to, determining the Company's capital needs, establishing
an appropriate capital structure, investigating the likelihood
of finding a suitable merger or acquisition target, reviewing
applicable legal and regulatory restrictions imposed by the
Securities and Exchange Commission, the National Association of
Securiies Dealers, and other governmental or regulatory
organizations, and the like.
3. Agreement to Serve as Incorporator. By execution of this
Agreement, David M. Bovi hereby agrees to serve as incorporator
of the Company and to provide services in conjunction with its
incorporation and in conjuction with the preparation of all
necessary organizational documents, including, but not limited to,
articles of incorporation, bylaws, subscription agreements,
organizational meeting minutes, and the like.
4. Agreement to Serve as Officers and Directors. By execution of
this Agreement, David M. Bovi and William R. Colucci hereby
agree to serve as officers and directors of the Company following
its incorporation, and in that capacity, to assume responsibility
for implementation of the Company's business plan.
5. Cash Consideration. The undersigned each agree to purchase and
subscribe for the number of shares of the Company at the price
set opposite their name below, and to deliver to the Company the
purchase price for such shares prior to April 30, 1999.
Number of Price per Total
Name Shares Share Purchase Price
David M. Bovi 255,000 shares $0.00196 $500.00
William R. Colucci 255,000 shares $0.00196 $500.00
Total 510,000 shares $1,000.00
6. Service Consideration. As consideration for the services
described herein, upon formation of the Company, the undersigned
shall cause the Company to issue and deliver to each of the
parties hereto, and each of the parties hereto hereby agrees to
accept the following as full consideration for the services
rendered:
Description of
Name Securities Value
David M. Bovi 145,000 shares (1) $284.20
William R. Colucci 45,000 shares (2) $ 88.20
Total 190,000 shares $ 372.40
________________________
(1) 45,000 which are offered pursuant to Rule 701.
(2) All of which are offered pursuant to Rule 701.
The agreed upon fair market value of the shares for purposes of this
Agreement is $0.00196 per share. Accordingly, upon issuance such shares
shall be valued on the books of the Company at $0.00196 per share.
7. Exemption from Registion. The parties hereto intend and agree that
this Agreement shall serve as a written compensation contract which,
upon formation of the Company, satisfies the requirements of Rule
701 shall be applicable to the issuance of all such eligible shares
described in Section 6 above up to the maximum amount of shares
which may be offered and sold in reliance on Rule 701, and all such
other securites issued pursuant to Section 5 and 6 of this
Agreement, shall be exempt from registration in reliance on Sections
3(a)(11) and 4(2) of the Act.
8. Representations and Acknowledgments. The parties hereto make the
following representations and acknowledgements:
(a) The shares have not been registered under the Securities Act
of 1933, as amended (the "Act"), or under any State Blue
Sky or securities laws and only the Company can register
such securities under the Act or under applicable State
Blue Sky or securities laws.
(b) Upon issuance, the shares shall constitute "restricted
"securities" as that term is defined in Rule 144 under
the Act.
(c) Following issuance, the shares may not be sold or
transferred for value without registration under the
Securities Act of 1933, as amended, or under applicable
state blue sky or securities law, or in the absence of an
opinion of counsel acceptable to the Company that such
registration is not required under such Act or Acts.
(d) Following the Company's formation and the issuance of the
shares, the Company may, from time to time, make stop
transfer notations in the Company's records to assure
compliance with the Act and any applicable state blue
sky or securities laws.
(e) In accordance with the foregoing restrictions, the parties
agree that a legend sustantially to the effect of the
following may be placed upon all certificates representing
the shares:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER OTHER
SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHICATED UNLESS (i) THEY SHALL HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE
SECURITIES ACT, OR (ii) THE COMPANY SHALL HAVE BEEN
FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY TO
COUNSEL FOR THE COMPANY, THAT REGISTRATION
IS NOT REQUIRED UNDER ANY OF SUCH ACTS."
(f) Upon issuance, the parties hereto are acquiring the shares
solely for their own account and not on behalf of any other
person.
(g) Upon issuance, the parties hereto are acquiring the shares
for investment purposes and not with the present intent of
reselling or otherwise distributing the shares.
(h) By execution of this Agreement, the parties hereto agree to
execute and deliver to the Company, following its formation,
any document, or do any other act or thing, which the
Company may reasonably request in connection with the
acquisition of the shares.
9. Assignment. None of the parties hereto, or their heirs, executors,
representatives or assigns shall sell, assign, create a security
interest in, pledge, or otherwise transfer or encumber the shares
to be issured hereunder without the express prior written consent
of each of the other parties hereto.
10. Florida Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Florida.
11. Binding Effect. This Agreement shall inure to the benefit of, and
be binding upon the parties, and their respective heirs, executors,
representatives and permitted assigns.
12. Entire Agreement. This Agreement supersedes all agreements previously
made between the parties relating to its subject matter. There are no
other understandings or agreements between the parties.
IN WITNESS WHEREOF, this Pre-incorporation Subscription Agreement regarding
BF Acquisition Group V, Inc., has been executed as of the day and year first
above written.
/s/ David M. Bovi
David M. Bovi
/s/ William R. Colucci
William R. Colucci
<PAGE>
SUBLEASE OF BUSINESS SPACE
THIS SUBLEASE is entered into this 1st day of May, 1999, by and between
David M. Bovi, P.A., a Florida professional corporation (the "Sublessor")
whose principal address is 319 Clematis Street, Suite 812, West Palm Beach,
Florida, 33401 and BF Acquisition Group V, Inc., a Florida corporation (the
"Sublessee") whose principal address is 319 Clematis Street, Suite 812, West
Palm Beach, Florida, 33401.
WHEREAS, on March 31, 1999, Sublessor as lessee, entered into a lease
(the "Master Lease") with Comeau Limited Partnership ("Master Lessor"), with
respect to the Property located at 319 Clematis Street, Suite 812, West Palm
Beach, Florida, 33401 (the "Property").
WHEREAS Sublessor has the right to sublease portions of the Property and
desires to Sublease the portion of Property described in Section II herein
(the "Premises") to Sublessee:
NOW, THEREFORE, in consideration of the Promises set forth herein, it is
hereby agreed by and between the parties hereto as follows:
Section I
Demise and Use
Sublessor leases to Sublessee and Sublessee leases from Sublessor, the
Premises, for any lawful use.
Section II
Description of Space
The Premises consists of an aggregate of 1,206 square feet which consists
of all common areas, offices, reception area, conference room, and library
located within the Property.
Section III
Rent
Sublessee agrees to pay Sublessor as rent for the Premises $150.00 per
month, payable on the first day of each calendar month of the term of this
Sublease. Sublessor and Sublessee agree that such rental payments represent
below fair market value for the Premises.
Section IV
Term of Sublease
Sublessor does hereby sublease the Premises to Sublessee on a
month-to-month basis commencing on May 1, 1999.
<PAGE>
Section V
Address For Payments and Notices
Rent payments and notices to Sublessor shall be mailed or delivered to
the address set forth on the first page of this Sublease, unless Sublessor
advises Sublessee differently in writing.
Section VI
Entire Agreement
This Sublease sets forth all the promises, agreements, conditions, and
understandings between Sublessor and Sublessee relative to the Property and
Premises. There are no other promises, agreements, conditions, or
understandings, either oral or written, between them. No subsequent
alteration, amendment, change, or addition to this Sublease will be binding on
Sublessor or Sublessee unless in writing and signed by them and made a part of
this Sublease by direct reference.
Section VII
Representatives Bound Hereby
The terms of this Sublease will be binding on the respective successors,
representatives, and assigns of the parties hereto.
IN WITNESS WHEREOF, Sublessor and Sublessee have duly executed this
Sublease as of the date first written above.
WITNESSES:
DAVID M. BOVI, P.A.
SUBLESSOR
By: /s/ David M. Bovi
David M. Bovi, President
_________________________
BF ACQUISITION GROUP V, INC.,
_________________________ SUBLEASEE
By: /s/ William R. Colucci
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED APRIL 30, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> APR-15-1999
<PERIOD-END> APR-30-1999
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
5,000,000
<COMMON> 50,000,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (372)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (372)
<EPS-BASIC> (0.001)
<EPS-DILUTED> (0.001)
</TABLE>
