UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_________________to________________________
Commission file Number 0-26853
BF Acquisition Group V, Inc.
(Name of small business issuer in its charter)
Florida 65-0913588
-------- -----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
319 Clematis Street, Suite 812, West Palm Beach, Florida 33401
-------------------------------------------------------- -------
(Address of principal executive offices ) (Zip Code)
Issuer's telephone number, including area code,(561) 655-0665
--------------
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class Name of exchange on which registered
-------------------- --------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $0.001 Par Value
--------------------------------
(Title of Class)
<PAGE 2>
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes __X_ No____
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-K [X ]
State issuer's revenues for its most recent fiscal year..............$0.00
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act).
As of July 25, 2000, the aggregate market value of our common stock,
$0.001 par value, held by non-affiliates was approximately $4,750.00
(95,000 shares at $0.05, which is the last price which the registrant's
common equity was sold).
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date................
As of July 25, 2000, there were 795,000 shares of common stock, $0.001 par
value, issued and outstanding.
Transitimal Small Business Disclosure Format (check one)
Yes ________ No ___X_____
<PAGE 3>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
FORWARD-LOOKING STATEMENTS
This Report on Form 10-KSB contains statements that plan for
or anticipate the future. Forward-looking statements include statements
about the future of the "blank check" companies in general, statements about
our future business plans and strategies, and most other statements that are
not historical in nature. In this report, forward-looking statements are
generally identified by the words "anticipate", "plan", "believe", "expect",
"estimate", and the like. Because forward-looking statements involve future
risks and uncertainties, there are factors that could cause actual results
to differ materially from those expressed or implied. For example, a few of
the uncertainties that could affect the accuracy of forward-looking
statements include:
1. changes in general economic and business conditions
affecting "blank check" companies;
2. legal or policy developments that diminish the appeal
of our Company;
3. the level of demand for "blank check" companies; and
4. changes in our business strategies.
The Private Securities Litigation Reform Act of 1995, which provides a
"safe harbor" for similar statements by existing public companies, does not
apply to our Company.
(a) OUR BUSINESS DEVELOPMENT
We were organized as BF Acquisition Group V, Inc. under the
laws of the State of Florida on April 15, 1999, as a "shell" company which
conducts virtually no business operation, other than its efforts to seek
merger partners or acquisition candidates. We registered our Company's common
stock, par value $0.001 (the "Common Stock") pursuant to Securities and Exchange
Commission ("SEC") registration statement Form 10-SB on a voluntary
basis in order to create a reporting "shell" company, and on March 24, 2000
the SEC approved our Form 10-SB registration statement. We have a
shareholder base of approximately 9 shareholders and 795,000 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"). Unless the
context otherwise requires, all references to the "Company" "we" "our" and other
similar terms means BF Acquisition Group V, Inc., a Florida corporation.
(b) OUR PRESENT BUSINESS
We make reference to our entire Form 10-SB registration statement, as
amended, filed with the U.S. Securities and Exchange Commission on March 24,
2000, which contains information and a more comprehensive discussion of our
business and our industry which is not required to be contained in this Report
on Form 10-KSB.
<PAGE 4>
We are in our early developmental and promotional stages. We are a
"shell" company conducting virtually no business operation, other than our
efforts to seek merger partners or acquisition candidates. We do not engage in
any substantive commercial business or other business operations. Our executive
and business offices are located at 319 Clematis Street, Suite 812, West
Palm Beach, Florida 33401.
Our present officers and directors are our only employees, and they
devote approximately 5% of their time to our business. We have no full time
employees. We expect to use consultants, attorneys and accountants as
necessary, and do not anticipate a need to engage any full-time employees
while we are seeking and evaluating Target Businesses. Our need for
employees and their availability will be addressed in connection with the
decision whether or not to consummate a specific Business Combination.
We are 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 our Company to
become a reporting corporation under the Securities Exchange Act of 1934
("Exchange Act"). On July 27, 1999, we registered our common stock, par value
$0.001 (the "Common Stock") pursuant to a Form 10-SB registration statement on a
voluntary basis in order to create a reporting "shell" company. We have a
shareholder base of approximately 9 shareholders and 795,000 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"). Pursuant to
resolution of our board of directors, no Business Combination may occur prior to
the our Company obtaining the requisite audited financial statements
required pursuant to Form 8-K (or its equivalent) promulgated under the
Exchange Act.
As a shell corporation, we face special risks inherent in the
investigation, acquisition, or involvement in a new business opportunity.
Further, as a new or "start-up" company, we face all of the unforeseen
costs, expenses, problems, and difficulties related to new companies.
We intend 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 our
Company and our shareholders. We intend to seek opportunities demonstrating
the potential of long term growth as opposed to short term earnings. Our
efforts in identifying a prospective Target Business are expected to emphasize
businesses primarily located in the United States; however, we reserve the
right to acquire a Target Business located primarily elsewhere. While we may,
under certain circumstances, seek to effect Business Combinations with more
than one Target Business, as a result of our limited resources, we will, in all
likelihood, have the ability to effect only a single Business Combination. We
may effect a Business Combination with a Target Business which may be
financially unstable or in its early stages of development or growth. We will
not restrict our search to any specific business, industry or geographical
location, and we may participate in a business venture of virtually any kind
or nature. Our present management may become involved in the management of
the Target Business and/or may hire qualified but as yet unidentified
individuals to manage such Target Business. Presently, we have no plan,
proposal,
<PAGE 5>
agreement, understanding or arrangement to acquire or merge with any specific
business or company, and we have not identified any specific business or
company for investigation and evaluation.
We encounter intense competition from other entities having a
business objective similar to ours. 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 we do and we cannot assure that we will have the
ability to compete successfully. Our financial resources are limited in
comparison to those of many of our competitors. This inherent competitive
limitation could compel us to select certain less attractive acquisition
prospects. We cannot assure that such prospects will permit us to meet our
stated business objectives. We believe, however, that our status as a
reporting public entity could give us a competitive advantage over privately
held entities having a similar business objective similar to ours.
No trading market in our Common Stock 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 our Common Stock until such time as a Business Combination occurs with a
Target Business. We cannot assure that subsequent to such a Business Combination
that a trading market in our Common Stock will develop; especially in light of
the U.S. Securities and Exchange Commission's view that Rule 144 is not
available for resale transactions for securities issued by blank check
companies, and that the resale of such securities cannot occur without
registration under the Securities Act.
Our limited funds and lack of full-time management will likely make
it impracticable to conduct a complete and exhaustive investigation and
analysis of a Target Business before we commit our capital or other
resources thereto.
We cannot presently ascertain with any degree of certainty 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).
If we consummate a Business Combination with a Target Business which
operates in an industry which is regulated or licensed by federal, state or
local authorities, compliance with such regulations could be a time-consuming
and expensive process.
ITEM 2. PROPERTIES.
Our executive and business offices are located at 319 Clematis
Street, Suite 812, West Palm Beach, Florida 33401. We believe this office
space is adequate to serve our needs until such time as a Business
Combination occurs, and we expect to be able to utilize these offices,
pursuant to the terms described above, until such time as a Business
Combination occurs. See "Certain
<PAGE 6>
Relationships and Related Transactions".
ITEM 3. LEGAL PROCEEDINGS.
As of the date hereof, we are not a party to any material legal
proceedings, nor are we aware of any threatened litigation of a material nature.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of our security holders during
the fourth quarter of our fiscal year.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.
(a) 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 federal securities laws or the blue sky
laws of any state. We cannot guarantee that any trading market will develop in
our Common Stock at any time in the future; especially in light of the U.S.
Securities and Exchange Commission's view that Rule 144 is not available for
resale transactions for securities issued by blank check companies, and that
the resale of such securities cannot occur without registration under the
Securities Act. Further, 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.
We do not intend to 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.
(b) Holders
As of July 25, 2000, approximately 9 holders of record held our common
stock.
(c) Dividends
No cash dividends were declared or paid on our Common Stock since our
inception. No restrictions limit our ability to pay dividends on our Common
Stock. We do not expect to pay any dividends in the near future.
Recent Sales of Unregistered Securities
As of July 25, 2000, we have issued an aggregate of 795,000 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. Pursuant to the terms
of the Pre-incorporation Consultation and Subscription Agreement,
the cash consideration provided by such persons for 510,000 shares of Common
Stock totaled $1,000, or $0.00196 per share, and the services provided by
such persons for 190,000 shares of Common Stock were valued at $372.40, or
$0.00196 per share. The Company relied on Section 4(2) of the Securities
Act 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, and March, 2000, the Company issued an
aggegate of 60,000 shares to six non-accredited investors in exchange for $3,000
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.
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.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
This Annual Report on Form 10-K should be read in conjunction with our
audited financial statements attached as Appendix A (following Exhibits) and
included as part of this Form 10-KSB Report. This Annual Report on Form
10-KSB contains forward-looking statements. For this purpose, any statements
contained in it that are not statements of historical fact should be
regarded
<PAGE 8>
as forward looking statements. For example, the words "believes,"
"anticipates," "plans," and "expects" are intended to identify forward-
looking statements. There are a number of important factors that could
cause our Company's actual results to differ materially from those indicated
by such forward-looking statements.
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 $4,000.
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. David M. Bovi, P.A., the Company's
sub-lessor, has agreed to waive all of the Company's rent payments, if
necessary, in order to preserve the Company's cash reserves. See "Properties".
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 out of pocket expenses, which
approximated $2,918 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 $3,000 capital infusion made to the Company pursuant to the
private sale of 60,000 shares of Common Stock. Additionally, services to the
Company valued at $441 were paid pursuant to the issuance of 225,000 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
<PAGE 9>
compensation 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".
To date, we have not yet identified a Target Business to effectuate a
Business Combination with. Therefore, we are unable predict our cash
requirements subsequent to a Business Combination with the unidentified
Target Business. Subsequent to the occurrence of a Business Combination, we
may be required to raise capital through the sale or issuance of additional
securities in order to ensure that we can meet our operating costs for the
remainder of our fiscal year. No commitments of any kind to provide additional
funds to our Company subsequent to a Business Combination have been made
by management, other shareholders or any other third person. Accordingly, we
cannot assure that additional funds will be available to us to allow us to cover
our expenses subsequent to a Business Combination. If we cannot meet our
operating costs subsequent to a Business Combination, unless we can obtain
additional capital, we may cease operations.
ITEM 7. FINANCIAL STATEMENTS
Our Financial Statements of are attached as Appendix A (following
Exhibits) and included as part of this Form 10-KSB Report. A list of our
Financial Statements is provided in response to Item 13 of this Form 10-KSB
Report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
(a) Identity of our current directors and executive officers.
Name Age Position
------ ----- ---------
David M. Bovi 33 Director, Chief
Executive Officer
William R. Colucci 61 Director, President,
Treasurer, Secretary
(b) Business experience of directors and executive officers.
Mr. Bovi has served as a director and chief executive officer of the
Company since its
<PAGE 10>
inception in April of 1999. 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". 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. From 1993 to 1996
he worked as a transactional corporate and securities and mergers and
acquisitions attorney in the securities law departments of various law firms
and private companies. 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. 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". Mr. Colucci is also presently
a consultant with a privately held management firm known as Rhoades &
Associates, L.L.C., a Florida limited liability company, which provides
investment banking and business consulting services. From September 1997 to
December 1999, Mr. Colucci served as a director of Net Lnnx, Inc., a publicly
traded corporation which, in March, 1999, reorganized with PrintOnTheNet.Com,
Inc. which provides printing services on the Internet via e-commerce. Prior to
this reorganization, Net Lnnx, Inc. served as a "shell" corporation. 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
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.
OTHER BLANK CHECK ACTIVITIES
Each of the Company's officers, directors, and principal shareholders
hold similar officer, director and shareholder positions with a total of six
blank check companies (including the Company). The following table sets forth,
as of the date hereof, these companies' identities, amount and percentage of
beneficial ownership of each of the Company's officers, directors, and
principal shareholders in such companies, and the percentage of time they
intend to devote to these
<PAGE 11>
companies' affairs:
Percent of Time
Name, Filing Type Amount and Percentage Intended to Devote
SEC File Number of Beneficial Ownership To Company's Affairs
------------------ ------------------------ ----------------------
BF Acquisition Group I, Inc. 400,000 shrs.(50.31%)(1) 5%
Form 10-SB/12G 300,000 shrs. (37.73%)(2)
SEC File No. 0-26843
BF Acquisition Group II, Inc. 400,000 shrs.(50.31%)(1) 5%
Form 10-SB/12G 300,000 shrs. (37.73%)(2)
SEC File No. 0-26845
BF Acquisition Group III, Inc. 400,000 shrs. (50.31%)(1) 5%
Form 10-SB/12G 300,000 shrs. (37.73%)(2)
SEC File No. 0-26849
BF Acquisition Group IV, Inc. 400,000 shrs. (50.31%)(1) 5%
Form 10-SB/12G 300,000 shrs. (37.73%)(2)
SEC File No. 0-26851
BF Acquisition Group V, Inc. 400,000 shrs. (50.31%)(1) 5%
Form 10-SB/12G 300,000 shrs. (37.73%)(2)
SEC File No. 0-26853
Harbor Town Holding 9,115,625 shrs. (45.12%)(1) 5%
Group I, Inc. 1,810,541 shrs. (8.96%)(2)
Form 10-SB/12G
SEC File No. 0-23439
_______________________________
(1) Represents shares owned by Mr. Bovi.
(2) Represents shares owned by Mr. Colucci.
The Company and each of these other entities will be in competition
with each other for Target Businesses. Presently, no determination has been
made as to these companies' priority with respect to the order which these
companies will attempt to effectuate a Business Combination once they are
prepared to so.
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.
<PAGE 12>
Each director is elected until the next Annual Meeting of
shareholders and until his successor is qualified. 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
To the best of our knowledge, no officer, director and/or beneficial
owner of more than 10% of our common stock, failed to file reports as required
by Section 16(a) of the Exchange Act during the most recent fiscal year.
ITEM 10. EXECUTIVE COMPENSATION.
During the period covered by this report, None of our executive
officers received any type of salary or other compensation in connection
with their employment as such. We have not entered into any type of
employment agreement with any of our officers. The Company has no other
executive officers. Pursuant to Instruction (5) to Item 402(a)(2) of
Regulation S-B, no table or column is provided in this Item 6 to this
registration statement.
Neither Mr. Bovi nor Mr. Colucci are bound by an employment agreement
with the Company. As a result, either of them may terminate their
relationship with the Company at any time for any reason.
Compensation of Directors
During the fiscal year ending April 30, 2000, other than as described
herein, no other officer or director received any type of compensation from
our Company for serving as such. No arrangements are presently in place
regarding compensation to directors for their services as directors or for
committee participation or special assignments.
Employee Stock Option Plan
We have no stock option, retirement, pension, or profit-sharing
programs for the benefit of directors, officers or other employees, but our
Board of Directors may recommend adoption of one or more such programs in the
future.
ITEM 11. 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:
<PAGE 13>
Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial Ownership
David M. Bovi 400,000 50.31%
319 Clematis Street, Suite 812
West Palm Beach, Fl 33401
William R. Colucci 300,000 37.73%
120 S. Olive Avenue, Suite 705
West Palm Beach, Fl 33401
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:
Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial Ownership
David M. Bovi 400,000 (D) 50.31%
319 Clematis Street, Suite 812
West Palm Beach, Fl 33401
William R. Colucci 300,000 (D) 37.73%
120 S. Olive Avenue, Suite 705
West Palm Beach, Fl 33401
All Officers and Directors
as a Group (2 persons). 700,000 (D) 88.05%
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Although our management has no current plans to cause the Company to
do so, our affiliates, officers and directors 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. Thus, it is
likely that none of our other shareholders 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. 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
<PAGE 14>
context of an acquisition involving our Company would be determined entirely by
the largely unforeseeable terms of a future agreement with an unidentified
business entity.
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.
Pursuant to Sections 607.0901(5) and 607.0902(5) of the Florida
Business Corporation Act, our Company has inserted certain provisions in our
articles of incorporation which have the effect of removing us 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.
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
<PAGE 15>
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.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
Exhibit No. Description of Exhibit Sequential Page No.
----------- ------------------------ ---------------------
(3) Charter and Bylaws.
3.1 Articles of Incorporation. **
3.2 Bylaws. **
(4) Instruments defining the rights of security holders.
4.1 Articles of Incorporation. **
4.2 Bylaws. **
(10) Material Contracts.
10.1 Pre-incorporation Agreement. **
10.2 Office Sub-Lease Agreement. **
(27) Financial Data Schedule.
27.1 Financial Data Schedule.
** Incorporated by reference to Registrant's Form 10-SB filed July 27, 1999.
(b) REPORTS ON FORM 8-K.
We filed no reports on Form 8-K during the last quarter of the year
ended April 30, 2000.
(c) FINANCIAL DATA SCHEDULE.
<PAGE 16>
APPENDIX A
FINANCIAL STATEMENTS.
The following Audited Financial Statements are filed as part of this
Form 10-KSB Report:
1. Balance Sheets as of April 30, 2000 and 1999.
2. Statements of Operations for the Year ended April 30, 2000
and the period April 15, 1999 (date of incorporation) through
April 30, 1999.
3. Statement of Changes in Stockholders' Equity for the Year
ended April 30, 2000 and the period April 15, 1999 (date of
incorporation) through April 30, 1999.
4. Statements of Cash Flows for the Year ended April 30, 2000
and the period April 15, 1999 (date of incorporation) through
April 30, 1999.
5. Notes to Financial Statements for the Year ended April 30,
2000 and the period April 15, 1999 (date of incorporation)
through April 30, 1999.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized:
BF ACQUISITION GROUP V, INC.
By: /s/ David M. Bovi
-----------------
David M. Bovi, Director
Chief Executive Officer
Date: July 27, 2000
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.
By: /s/ David M. Bovi
-----------------
David M. Bovi, Director
Chief Executive Officer
Date: July 27, 2000
By: /s/ William R. Colucci
----------------------
William R. Colucci, Director
President, Treasurer
Date: July 27, 2000
<PAGE 17>
BF ACQUISITION GROUP V, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
-------------------------------
Page
------
INDEPENDENT AUDITORS' REPORT F-2
----------------------------
FINANCIAL STATEMENTS
--------------------
Balance Sheets F-3
Statements of Operations F-4
Statement of Changes in Stockholders' Equity F-5
Statements of Cash Flows F-6
NOTES TO FINANCIAL STATEMENTS F-7 through F-9
-----------------------------
F-1
<PAGE 17>
INDEPENDENT AUDITORS' REPORT
------------------------------
To the Stockholders of
BF Acquisition Group V, Inc.
We have audited the accompanying balance sheets of BF Acquisition Group V,
Inc. (the "Company"), a development stage company, as of April 30, 2000 and
1999, and the related statements of operations, changes in stockholders'
equity, and cash flows for the year ended April 30, 2000 and 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 audits.
We conducted our audits 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BF Acquisition Group V, Inc.
as of April 30, 2000 and 1999, and the results of its operations and its cash
flows for the year ended April 30, 2000 and the period April 15, 1999 (date of
incorporation) through April 30, 1999 in conformity with generally accepted
accounting principles.
/s/ Ahearn, Jasco + Company, P.A.
__________________________________________
AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants
Pompano Beach, Florida
May 19, 2000
F-2
<PAGE 18>
BF ACQUISITION GROUP V, INC.
(A Development stage company)
BALANCE SHEETS
AS OF APRIL 30, 2000 AND 1999
2000 1999
--------- ---------
ASSETS
--------
CURRENT ASSET - Cash and cash equivalents $ 1,082 $ 1,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------
ACCRUED EXPENSES $ 650 $ -
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, no par value; 5,000,000
authorized; none issued or outstanding: - -
Common stock, $.001 par value; 50,000,000
authorized; shares issued and outstanding:
795,000 in 2000 and 700,000 in 1999 795 700
Additional paid-in capital 3,646 672
Deficit accumulated during the development stage (4,009) (372)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 432 1,000
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDER' EQUITY $ 1,082 $1,000
========= ==========
See notes to financial statements.
F-3
<PAGE 19>
BF ACQUISITION GROUP V, INC.
(A development stage company)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 2000
AND THE PERIOD APRIL 15, 1999 (date of
incorporation) THROUGH APRIL 30, 2000
2000 1999
----------- ---------
REVENUE $ - $ -
GENERAL AND ADMINISTRATIVE EXPENSES 3,637 372
----------- ----------
LOSS BEFORE INCOME TAX PROVISION (3,637) (372)
PROVISION FOR INCOME TAXES - -
NET LOSS $ (3,637) $ (372)
=========== ===========
LOSS PER COMMON SHARE:
Basic and diluted $ (0.0047) $ (0.0005)
========== ===========
Weighted average common shares 775,685 700,000
outstanding ========== ===========
See notes to financial statements.
F-4
<PAGE 20>
BF ACQUISITION GROUP V, INC.
(A development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED APRIL 30, 2000
AND THE PERIOD APRIL 15, 1999 (date of incorporation)
THROUGH APRIL 30, 1999
DEFICIT
ACCUMULATED
COMMON ADDITIONAL during the
STOCK,at Paid-in Development
par value Capital Stage Total
---------- --------- ------------ --------
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
Sale of 60,000 shares of
common stock 60 2,940 - 3,000
Common stock issued for
services 35 34 69
Net loss for the fiscal
year ended April 30, 2000 - - (3,637) (3,637)
--------- ---------- ---------- ----------
STOCKHOLDERS' EQUITY,
April 30, 2000 $ 795 $ 3,646 $ (4,009) $ 432
========= ========== ========== ==========
See notes to finanical statments.
F-5
<PAGE 21>
BF ACQUISITION GROUP V, INC.
(A development stage company)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED APRIL 30, 2000
AND THE PERIOD APRIL 15, 1999 (DATE OF INCORPORATION)
THROUGH APRIL 30, 1999
2000 1999
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,637) $ (372)
Adjustments to reconcile net loss to
net cash used in operating activities:
Common stock issued for services 69 372
Changes in liabilities:
Increase in accrued expenses 650 -
--------- --------
NET CASH USED IN OPERATING ACTIVITIES (2,918) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 3,000 1,000
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 82 1,000
CASH AND CASH EQUIVALENTS, beginning of period 1,000 -
-------- --------
CASH AND CASH EQUIVALENTS, end of period $ 1,082 $ 1,000
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ - $ -
======== ========
Cash paid for income taxes $ - $ -
======== ========
See notes to financial statements.
F-6
<PAGE 22>
BF ACQUISITION GROUP V, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED APRIL 30, 2000
AND THE 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 initial capital
contributions by the insiders 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 provisions as shown on the accompanying
statements of operations is zero since the deferred tax assets generated
from the net operating losses are offset in their entirety by valuation
allowances.
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.
FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
Cash and accrued expenses are recorded in the financial
statements at cost, which approximates fair market value because of the
short-term maturity of those instruments.
EARNINGS PER COMMON SHARE
-------------------------
Earnings per share is calculated in accordance with 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 statement of
operations. 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."
<PAGE 23>
BF ACQUISITION GROUP V, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED APRIL 30, 2000
AND THE PERIOD APRIL 15, 1999 (DATE OF INCORPORATION)
THROUGH APRIL 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
----------------------------------------------------------------
COMPREHENSIVE INCOME
---------------------
In accordance with SFAS No. 130, "Reporting Comprehensive
Income" the Company is required to report its comprehensive income. Other
comprehensive income refers to revenue, expenses, gains, and losses
that under accounting principles generally accepted in the United
States are included in comprehensive income but are excluded from net
income, as these amounts are recorded directly as and adjustment to
stockholders' equity. A statement of comprehensive income is not presented
since the Company had no items of other comprehensive income.
Comprehensive income is the same as net income for all periods presented
herein.
SEGMENT INFORMATION
---------------------
The Company adopted SFAS No. 131, "Disclosure about Segments
of an Enterprise and Related Information," effective April 30, 1999.
SFAS No. 131 establishes standards for the way that public companies report
selected information about operating segments in annual and interim
financial reports to shareholders. It also establishes standards for
related disclosures about an enterprise's business segments, products,
services, geographic areas and major customers. The Company operates its
business as a single segment. As a result, no additional disclosure was
required.
RECENT ACCOUNTING STANDARDS
---------------------------
In June 1999, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities-Deferral of FASB Statement No. 133." SFAS No. 137 defers for
one year the effective date of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 will now apply to all
fiscal quarters of all fiscal years beginning after June 15, 2000. SFAS
No. 133 will require the Company to recognize all derivatives on the
balance sheet as either assets or liabilities measured at fair value.
Derivatives that are not hedges must be adjusted to fair value through
income. The Company will adopt SFAS No. 133 effective for the year ending
April 30, 2002. The Company has not yet determined the impact SFAS No. 133
will have on its financial position or results of operations when such
statement is adopted.
NOTE 3 - LOSS PER COMMON SHARE
--------------------------------
Net loss per common share outstanding for the period April
15, 1999 (date of incorporation) through April 30, 1999, as shown on the
statements 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.
F-8
<PAGE 24>
BF ACQUISITION GROUP V, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED APRIL 30, 2000
AND THE PERIOD APRIL 15, 1999 (DATE OF INCORPORATION)
THROUGH APRIL 30, 1999
NOTE 3 - LOSS PER COMMON SHARE (continued)
-------------------------------------------
For the fiscal year ended April 30, 2000, basic and
diluted weighted average common shares include only common shares
outstanding since there were no common share equivalents.
A reconciliation of the number of common shares shown as
outstanding in the financial statements with the number of shares used in
the computation of weighted average common shares outstanding is follows:
2000 1999
--------- ----------
Common shares outstanding at April 30th 795,000 700,000
Effect of weighting (19,315) -
--------- ----------
Weighted average common shares outstanding 775,685 700,000
========= ==========
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 19, 2000, no
shares of preferred stock have been issued and no preferences,
limitations or relative rights have been assigned.
NOTE 5 - RELATED PARTY TRANSACTIONS
-------------------------------------
On April 15, 1999, the company issued 190,000 shares valued
at $372 as consideration for services rendered by the two founding
shareholders of the Company for the formation of the Company.
The Company sub-leases office space on a month-to-month basis
for a nominal fee from a shareholder/executive officer of the Company.
