U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
Amendment No. 2
General form for registration of securities of small
business issuers Under Section 12(b) or (g) of the
Securities Exchange Act of 1934
Big Daddy's Auto Sales, Inc.
(Name of Small Business Issuer in its charter)
Florida
(State or other jurisdiction of incorporation or organization)
59-3567558
(I.R.S. Employer Identification No.)
1008 Royal Aberdeen Way, Orlando, Florida 32828
(Address of principal executive offices) (Zip Code)
(407) 650-0333
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act:
Securities to be registered under Section 12(g) of the Act: _X_
Title of each class to be so registered: Common Stock
<PAGE>
To simplify the language in this Registration Statement Big Daddy's Auto Sales,
Inc. is referred to herein as "the Company" or "We".
Part I
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Item 1. Description of Business.
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Business Development.
We were incorporated under the name Big Daddy's Auto Sales, Inc. on December 6,
1994. We initially intended to become involved in the business of automobile
sales, however we did not engage in any such business. We were an inactive
corporation from August 25, 1995, until we were reinstated with the State of
Florida on October 2, 1998.
We have not been involved in any bankruptcy, receivership or similar proceeding.
We have not been involved in any material reclassification, merger
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
Business of Issuer.
We are a development stage company and have had no operations. Other than
issuing shares to our shareholders, we have never commenced any operational
activities. As such, we have no specific products, services, or business.
We can be defined as a "shell" company whose sole purpose at this time is to
locate and consummate a merger or acquisition with an unidentified private
entity (hereinafter referred to as the "business opportunity"). Our name should
not be considered as an indication of the type of business opportunity that we
intend to attract.
We are registering a class of our securities on this Form 10-SB registration
statement on a voluntary basis. We have no obligation to file a Form 10-SB
registration statement pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We believe that by filing this Form 10-SB and
being obligated to file reports subject to Section 13 of the Exchange Act, we
can attract a business opportunity candidate. We believe a business opportunity
will involve a transaction with a corporation not requiring cash or assets, but
which desires to establish both a public market for its common stock and the
perceived advantages of status as an Exchange Act registered corporation. There
is no assurance that our assumption is correct.
We believe that there are several advantages in being an Exchange Act registered
company. Such advantages include the availability of public information about
the Company and the ability to raise capital and compensate employees through
stock option plans. Although non-reporting companies have the ability to raise
capital and to compensate their employees through stock option plans, reporting
companies may have an advantage in that investors as well as employees may be
more willing to invest or accept compensation in a company for which there is
public information readily available. Additionally, the recent change in the
National Association of Securities Dealers listing requirements, which require
all companies trading or seeking to trade on the Over-the-Counter Bulletin Board
to be registered with the Securities and Exchange Commission pursuant to section
12 of the Exchange Act, afford a business opportunity candidate the opportunity
to apply for listing on the Over-the-Counter Bulletin Board upon consummation of
a reverse acquisition into our Company.
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There are also disadvantages associated with being an Exchange Act registered
company including the expenses and time involved with ongoing compliance and the
loss of confidentiality of company information.
Competition.
We are and will continue to be a limited competitor in the business of seeking
business opportunities with private companies. We are a limited competitor
because there are a large number of established and well-financed entities,
including venture capital firms, which are active in mergers and acquisitions of
companies which may be desirable business opportunity candidates for us. Nearly
all such entities have significantly greater experience and financial resources,
technical expertise and managerial capabilities than we have. We will also
compete with initial public offerings, which would afford a business opportunity
candidate a way of becoming an Exchange Act registered company. As such,
business opportunity candidates may select the option of conducting an initial
public offering. We will also compete with numerous other shell corporations
that are indistinguishable from us. Consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business opportunity.
We have no patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts.
Government Regulation.
The proposed business activities described herein classify us as a "blank check"
company. Many states have enacted statutes, rules and regulations limiting the
sale of securities of "blank check" companies in their states. We do not intend
to undertake any offering of our securities, either debt or equity, until such
time as we have successfully implemented our business plan that we describe
herein.
Relevant thereto, James Bailey, the principal shareholder of the Company, has
expressed an intention not to sell his respective shares until we have
successfully completed a business opportunity, and we are no longer classified
as a "blank check" company.
Transferability of our shares of Common Stock is very limited because a
significant number of states have enacted regulations or "blue sky" laws
restricting or, in many instances, prohibiting the initial sale and subsequent
resale of securities of "blank check" companies, such as us, within that state.
In addition, many states, while not specifically prohibiting or restricting
securities of "blank check" companies, would not register our securities for
sale or resale in their states. Because of these regulations, we currently have
no plan to register any of our securities with any state. To ensure that no
state laws are violated through the resale of our securities, we will refuse to
register the transfer of any of our securities to residents of any state which
prohibits such resale if no exemption is available for such resale. We do not
anticipate that a secondary trading market for our securities will develop in
any state until after consummation of a business opportunity, if at all.
Although we will be subject to regulation under the Exchange Act, we believe we
will not be subject to regulation under the Investment Company Act of 1940,
insofar as we will not be engaged in the business of investing or trading in
securities.
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Federal and state tax consequences will likely be major considerations in any
business opportunity that we may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to the parties to the
transaction, pursuant to various federal and state tax provisions. We intend to
structure any business opportunity so as to minimize the federal and state tax
consequences to both ourselves and the target entity; however, there can be no
assurance that such business opportunity will meet the statutory requirements of
a tax-free reorganization or that the parties will obtain the intended tax-free
treatment upon a transfer of stock or assets. A non- qualifying reorganization
could result in the imposition of both federal and state taxes which may have an
adverse effect on both parties to the transaction.
Sections 13 and 15(d) of the Exchange Act, require companies subject thereto to
provide certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two or three years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by the owners of some business opportunities to prepare
such statements may preclude our consummation of an otherwise desirable business
opportunity. Business opportunity prospects that do not have or are unable to
obtain the required audited financial statements may not be appropriate for
consummation of a business opportunity with us as long as the reporting
requirements of the Exchange Act are applicable.
Market Research.
We have not conducted, nor have others made available to us, results of market
research indicating that market demand exists for the transactions contemplated
by us. Moreover, we do not have, and do not plan to have, and do not plan to
establish, a marketing organization. Even in the event a company is identified
for a business opportunity contemplated by us, there is no assurance we will be
successful in completing any such business opportunity.
Employees.
We currently have no full-time employees. There are no collective bargaining
agreements or employment agreements with James Bailey, our sole Officer and
Director. Mr. Bailey is involved in other full-time business activities. Mr.
Bailey participates in the running of the Company on a part-time basis as needed
without compensation. We do not plan to make any change in the number of
employees of the Company in order to evaluate business opportunities. The need
for additional employees and their availability will be addressed in connection
with our decision of whether or not to pursue a business opportunity.
Item 2. Plan of Operation.
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We have never had revenues from operations. We had no operating expenses from
1995 through 1997 due to our period of inactivity. Upon reinstatement in 1998,
operating expenses resumed. The losses accumulated since inception were incurred
for formation and reinstatement costs of the Company and operating expenses
since formation. We do not expect costs of this nature, with the exception of
the minimal operating expenses, to continue in the future, but there can be no
assurance that similar expenses will not be incurred.
In the next twelve months, we plan to seek out business opportunity candidates.
To date, we have not undertaken any efforts to locate business opportunity
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candidates. We believe that this plan of operations can be conducted through the
efforts of our current officer and will not require any additional funds. We
anticipate that business opportunities will be available to us through the
contacts of James Bailey. We anticipate that the investigation of specific
business opportunities and the negotiation, drafting and execution of relevant
agreements, and other instruments will be done by James Bailey or under his
direction. We plan to investigate, to the extent believed reasonable by us, such
potential business opportunities. Due to our limited experience in business
analysis, we may not discover or adequately evaluate adverse facts about a
potential business opportunity.
Inasmuch as we will have no funds available to us in our search for business
opportunities, we will not be able to expend significant funds on a complete and
exhaustive investigation of potential business opportunities. We anticipate that
we will incur nominal expenses in the implementation of our business plan
described herein. Because we have no capital with which to pay these expenses,
our present management, which consists only of James Bailey, has paid all
charges to date with his personal funds as capital contributions to the Company.
Our present management has no future obligation to provide us with future loans
or contributions. The failure of our management to provide loans or
contributions in the future could prevent our plan to seek out business
opportunities.
We have no particular business opportunity in mind and have not entered into any
negotiations regarding any business opportunity. None of our management,
affiliates or any promoters have engaged in any preliminary contact or
discussions with any representative of any other company regarding the
possibility of a business opportunity between us and such other company as of
the date of this registration statement. We will not restrict our search to any
specific business, industry, or geographical location, and we may participate in
a business opportunity of virtually any kind or nature. This discussion of the
proposed business is purposefully general and is not meant to be restrictive of
our virtually unlimited discretion to search for and enter into potential
business opportunities. We anticipate that we will be able to participate in
only one potential business opportunity because we have no assets and limited
financial resources.
To date, we have not developed any criteria for the selection of business
opportunities, and we may not develop such criteria in the future. We will seek
to expand through consummation of a business opportunity which is not currently
identified and which entails risks that you will not have a basis to evaluate.
We may seek to expand our operations by acquiring companies in businesses that
we believe will complement or enhance our business. We cannot assure you that we
will be able to ultimately effect any business opportunity, successfully
integrate any business into our operations or otherwise successfully develop our
operations. We have not established any minimum criteria for any business
opportunity, and our management may have complete discretion in determining the
terms of any business opportunity. Consequently, there is no basis for you to
evaluate the specific merits or risks of any potential business opportunity that
we may undertake.
In the future, we do not plan to develop criteria for the selection of potential
business opportunities. As such, we anticipate that James Bailey, our President
and sole Director will investigate, to the extent believed necessary by him, the
business opportunity.
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Due to general economic conditions, rapid technological advances being made in
some industries and shortages of available capital, we believe that there are
numerous firms seeking the perceived benefits of a fully reporting public
company. Such perceived benefits may include facilitating or improving the terms
on which additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all shareholders
and other factors.
Potentially, available business opportunities may arise in many different
industries and at various stages of development, all of which make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex. We do not and will not have capital to provide the owners
of business opportunities with any significant cash or other assets. However, we
believe that we can offer owners of business opportunity candidates the chance
to acquire a controlling ownership interest in a publicly-held, registered
company without incurring the cost and time required to become a fully reporting
company or to conduct an initial public offering. The owners of the business
opportunities will, however, incur significant legal and accounting costs in
connection with acquisition of a business opportunity, including the costs of
preparing Form 8-Ks, 10-Ks or 10-KSBs, agreements and related reports and
documents. The Exchange Act specifically requires that any business opportunity
candidate comply with all applicable reporting requirements, which include
providing audited financial statements to be included within the numerous
filings required to comply with the Exchange Act. Nevertheless, we have not
conducted market research and are not aware of statistical data which would
support the perceived benefits for the owners of a business opportunity.
We believe that there is a demand by non-public corporations for shell
corporations that are publicly-held registered companies. We believe that demand
for shells has increased dramatically since the Securities and Exchange
Commission imposed burdensome requirements on "blank check" companies pursuant
to Rule 419 of Regulation C. We believe that the foregoing regulation has
substantially decreased, the number of "blank check" offerings filed with the
Commission and, as a result, has stimulated an increased demand for shell
corporations. We have made the foregoing assumption, but there is no assurance
that the same is accurate or correct and accordingly, no assurance can be made
that we will be successful in locating a business opportunity.
Prior to making a decision regarding a business opportunity, we plan to request
that we be provided with written materials regarding the business opportunity
containing such items as a description of products, services and company
history; management resumes; financial information; available projections with
related assumptions upon which they are based; evidence of existing patents,
trademarks or service marks or rights thereto; present and proposed forms of
compensation to management; a description of transactions between the
prospective entity and its affiliates during relevant periods; a description of
present and required facilities; an analysis of risk and competitive conditions;
and other information deemed relevant.
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Upon the consummation of a business opportunity, we anticipate that our present
management and shareholders will no longer be in control of the Company. In
addition, our Director may, as part of the terms of the acquisition transaction,
sell his stock in the Company or resign and be replaced by new directors without
a vote of our shareholders. We do not plan to raise any capital at the present
time, by private placement, public offerings, pursuant to Regulation S
promulgated under the Act, as amended, or by any means whatsoever. Further,
there are no plans, proposals, arrangements or understandings with respect to
the sale or issuance of additional securities prior to the location of a
business opportunity.
We anticipate that any securities issued as a result of our consummation of a
business opportunity will be issued in reliance upon an exemption from
registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of our transaction, we may agree
to register all or a part of such securities immediately after the business
opportunity is consummated or at specified times thereafter. If such
registration occurs, of which there can be no assurance, it will be undertaken
by the surviving entity after we have successfully consummated a business
opportunity and we are no longer considered a "shell" company. Until such time
as this occurs, we will not attempt to register any additional securities. The
issuance of substantial additional securities and their potential sale into any
trading market which may develop in our securities may have a depressive effect
on the value of our securities in the future, if such a market develops, of
which there is no assurance. The completion of any business opportunity may
result in a significant issuance of shares and substantial dilution to our
present stockholders.
We do not plan to make any changes in the number of employees of the Company.
We are aware of the issues associated with the programming code in existing
computer systems as the year 2000 approaches ("Y2K problem"). The Y2K problem is
the result of computer programs being written using two digits rather that four
to define the applicable year. As a result, computer programs that have time
sensitive software may recognize a date using "00" to designate the year as 1900
rather than 2000. This could result in systems failure or miscalculation causing
disruption of operations. We do not currently have any business operations and,
as such, do not directly face any Y2K compliance issues. We do not and may not
know the Y2K compliance status of any potential business opportunities, but we
believe that there will be no material adverse impact upon us if a business
opportunity is not Y2K compliant. It is not possible to be certain that all
aspects of the Y2K problem affecting us, including those related to the efforts
of any future customers, suppliers, or other third parties, will be fully
resolved.
Item 3. Description of Property.
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We currently have no material assets, and we do not own or lease any real or
personal property. We currently operate without charge out of space donated by
the Company's President, and sole Director, James Bailey, at 1008 Royal Aberdeen
Way, Orlando, Florida 32828. We believe that this space is sufficient for us at
this time. We have indicated a capital contribution of $50 per month of activity
for the donation of such space on our financial statements.
We have are no preliminary agreements or understandings with respect to the
office facility subsequent to the completion of a business opportunity. Upon
closure of a business opportunity, we plan to relocate our office to that of the
business opportunity candidate.
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We have no policy with respect to investments in real estate or interests in
real estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
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As of June 24, 1999 there were 1,000,000 shares of our common stock, $0.001 par
value outstanding. The following tabulates holdings of our shares of common
stock by each person who, as of June 24, 1999, holds of record or is known by
management to own beneficially more than 5.0% of the common shares and, in
addition, by all of our directors and officers individually and as a group. Each
named beneficial owner has sole voting and investment power with respect to the
shares set forth opposite his name.
Security Ownership of Beneficial Owners(1)(2):
Title of Class Name & Address Amount Nature Percent
- -------------- -------------- ------ ------ -------
Common Stock James Herbert Bailey 975,000 Direct 97.5%
1008 Royal Aberdeen Way
Orlando, Florida 32828
Security Ownership of Management(2):
Title of Class Name & Address Amount Nature Percent
- -------------- -------------- ------ ------ -------
Common Stock James Herbert Bailey 975,000 Direct 97.5%
1008 Royal Aberdeen Way
Orlando, Florida 32828
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise. Unless otherwise indicated, each person indicated
above has sole power to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable unity property laws.
(2) This table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above table and subject to community
property laws where applicable, we believe that each shareholder named in the
above table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
Change of Control.
There are currently no arrangements that would result in a change of control of
the Company. A business opportunity involving the issuance of our common shares
will, in all likelihood, result in shareholders of a private company obtaining a
controlling interest in our Company. Any such business opportunity may require
our management to sell or transfer all or a portion of our common shares held by
him, or resign as a member of our Board of Directors. The resulting change in
control of the Company could result in the removal of our present management and
a corresponding reduction or elimination of their participation in the future
affairs of the Company.
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Item 5. Directors, Executive Officers, Promoters and Control Persons.
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James Bailey, 37 years of age, is our sole Officer and Director. Mr. Bailey has
served as our President/Secretary/Treasurer and Director since June 5, 1995 and
his terms expire on January 15, 2000.
From June of 1985 to February 1991 and again from May of 1991 through June of
1997, Mr. Bailey worked as an investment banker. Since 1997, he has served as
President of Capital Leasing, Inc., a company whose primary business is
equipment leasing. Mr. Bailey graduated from St. Cloud State University in 1984
and holds no directorships in any reporting companies. Further, Mr. Bailey is
affiliated with one other blank check company.
We currently have no significant employees, and we do not anticipate hiring any
in the future. There are no family relationships among directors, executive
officers, or nominees for such positions. In the last five years, no director,
executive officer, promoter or control person of the Company has been involved
in any legal proceedings material to the evaluation of the ability or integrity
of any of the aforementioned persons.
Item 6. Executive Compensation.
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<TABLE>
<CAPTION>
Name Position Year Salary Bonus Other Stock Options L/TIP All Other
- ---- -------- ---- ------ ----- ----- ----- ------- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
James Bailey,President 1999 0 0 0 0 0 0 0 0
1998 0 0 0 0 0 0 0 0
</TABLE>
Item 7. Certain Relationships and Related Transactions.
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Because we have no capital with which to pay expenses associated with our plan
to consummate a business opportunity, James Bailey, our sole officer and
director, has paid all charges to date with his personal funds as capital
contributions to the Company. We have not and do not intend to enter into any
transactions with our management or any nominees for such positions. We have not
and do not intend to enter into any transactions with beneficial owners of the
Company. We are not a subsidiary of any parent company. Since inception, we have
not entered into any transactions with promoters.
Our management is involved in other business activities and may, in the future
become involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in selecting
between our business and their other business interests. We have not and do not
intend in the future to formulate a policy for the resolution of such conflicts.
Item 8. Description of Securities.
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Qualification.
The following statements constitute brief summaries of the material terms of our
Articles of Incorporation and Bylaws, as amended.
Common Stock.
Our amended Articles of Incorporation authorize us to issue up to 50,000,000
Common Shares, $0.001 par value per common share. As of June of 1999, there are
1,000,000 shares of our common stock outstanding. We are not authorized to issue
preferred stock.
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Liquidation Rights.
Upon our liquidation or dissolution, each outstanding Common Share will be
entitled to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
We do not have limitations or restrictions upon the rights of our Board of
Directors to declare dividends, and we may pay dividends on our shares of stock
in cash, property, or our own shares, except when we are insolvent or when the
payment thereof would render us insolvent subject to the provisions of the
Florida Statutes. We have not paid dividends to date, and we do not anticipate
that we will pay any dividends in the foreseeable future.
Voting Rights.
Holders of our Common Shares are entitled to cast one vote for each share held
of record at all shareholders meetings for all purposes.
Other Rights.
Common Shares are not redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or purchase additional Common Shares
in the event of a subsequent offering.
There are no other material rights of the common or preferred shareholders not
included herein. There is no provision in our charter or by-laws that would
delay, defer or prevent a change in control of us. We have not issued debt
securities.
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Part II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
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Other Shareholder Matters.
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There is no established public trading market for our securities. Our common
stock cleared its request for an unpriced quotation on the National Quotation
Bureau Pink Sheets on February 17, 1999. There has been no bid or ask for the
securities, since they were initially quoted on the pink sheets. None of our
common stock is subject to outstanding options or warrants to purchase shares of
the Company.
There are 975,000 shares of the common stock of the Company held by James
Bailey, an affiliate, and 25,000 shares of our common stock held by
non-affiliates. All of these securities are restricted securities as defined
under Rule 144 of the Securities Act and may only be sold under Rule 144 or
otherwise under an effective registration statement or an exemption from
registration, if available. Rule 144 generally provides that a person who has
satisfied a one year holding period for the restricted securities and is not an
affiliate of the Company may sell such securities subject to the Rule 144
provisions. Under Rule 144, directors, executive officers, and persons or
entities they control or who control them may sell shares that have satisfied
the one year holding period for the restricted securities in an amount limited
to, in any three-month period, the greater of 1% of our outstanding shares of
common stock or the average of the weekly trading volume in our common stock
during the four calendar weeks preceding a sale. Consequently, the 975,000
shares held by James Bailey are restricted securities that may not be freely
tradable and are subject to volume limitations.
All sales under Rule 144 must also be made without violating the manner-of-sale
provisions, notice requirements, and the availability of public information
about our Company. A sale of shares by security holders, whether under Rule 144
or otherwise, may have a depressing effect upon the price of our common stock in
any market that might develop.
Blue Sky Considerations.
The laws of some states prohibit the resale of securities issued by blank check
or shell corporations. We are considered a "blank check" or "shell" corporation
for the purpose of state securities laws. Accordingly, it is possible that our
current shareholders may be unable to resell their securities in other states.
Additionally, because each state has a series of exempt securities predicated
upon the particular facts of each transaction, it is not possible to determine
if a proposed transaction by an existing shareholder would violate the
securities laws of any particular state. In the event an existing shareholder or
broker/dealer resells our securities in a state where such resale is prohibited,
we believe that the seller thereof may be liable criminally or civilly under
that particular state's laws. Our existing shareholders should exercise caution
in the resale of their shares of common stock in light of the foregoing.
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Penny Stock Considerations.
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Our shares will likely be subject to such penny stock rules,
and our shareholders will, in all likelihood, find it difficult to sell their
securities.
No market exists for our securities and there is no assurance that a regular
trading market will develop, or if developed will be sustained. A shareholder,
in all likelihood, therefore, will not be able to resell the securities referred
to herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept our securities as pledged collateral for loans
unless a regular trading market develops. There are no plans, proposals,
arrangements or understandings with any person in regard to the development of a
trading market in any of our securities.
As of the date of this registration, we had twenty-six (26) holders of record of
our common stock. We currently have one class of common stock outstanding.
We have not paid any dividends since our incorporation. There are no
restrictions that limit our ability to pay dividends, but we do not anticipate
paying dividends in the near future.
Item 2. Legal Proceedings.
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We are not a party to any pending legal proceeding, and we are not aware of any
contemplated legal proceeding by a governmental authority involving the Company.
Item 3. Changes in and Disagreements with Accountants.
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During the two most recent fiscal years and the subsequent interim period, the
Company has had no disagreement, resignation or dismissal of the principal
independent accountant for the Company. The accountant for the Company at this
time is James Scheifley of James Scheifley & Associates.
Item 4. Recent Sales of Unregistered Securities.
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The following sets forth information relating to all of our previous sales of
securities which were not registered under the Securities Act of 1933. On June
5,1995, we issued 4,875 shares of our common stock to James Bailey for services
rendered in the formation of the Company and gifted 5 shares of our common stock
to each of twenty-five (25) other persons. The 5,000 aforementioned securities
were issued under an exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended. On September 15, 1998, we forward-split our
common stock 200:1 resulting in 1,000,000 shares of our common stock being
issued and outstanding.
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We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any securities.
Item 5. Indemnification of Directors and Officers.
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Our Articles of Incorporation provide that, to the fullest extent permitted by
law, none of our directors or officers shall be personally liable to us or our
shareholders for damages for breach of any duty owed to us or our shareholders.
Florida law provides that a director shall have no personal liability for any
statement, vote, decision or failure to act, regarding corporate management or
policy by a director, unless the director breached or failed to perform the
duties of a director. A company may also protect its officers and directors from
expenses associated with litigation arising from or related to their duties,
except for violations of criminal law, transactions involving improper benefit
or willful misconduct. In addition, we shall have the power, by our by-laws or
in any resolution of our stockholders or directors, to undertake to indemnify
the officers and directors of ours against any contingency or peril as may be
determined to be in our best interest and in conjunction therewith, to procure,
at our expense, policies of insurance.
At this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of any of our controlling
persons, directors or officers which would affect his or her liability in that
capacity.
Page 13
<PAGE>
Item 15(a) Financial Statements
-------------------------------
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Big Daddy's Auto Sales, Inc.
We have audited the balance sheet of Big Daddy's Auto Sales, Inc. as of December
31, 1998 and the related statements of operations, changes in stockholders'
equity, and cash flows for each of the years in the two year period ended
December 31, 1998 and for the period from inception to December 31, 1998. 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 Big Daddy's Auto Sales, Inc. as of
December 31, 1998 and the results of its operations and cash flows for each of
the years in the two year period ended December 31, 1998 and for the period from
inception to December 31, 1998, in conformity with generally accepted accounting
principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
June 26, 1999
Page 14
<PAGE>
<TABLE>
<CAPTION>
BIG DADDY'S AUTO SALES, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
12/31 06/30
1998 1999
---------------------
CURRENT ASSETS: (Unaudited)
<S> <C> <C>
TOTAL CURRENT ASSETS $ 0 $ 0
TOTAL ASSETS $ 0 $ 0
---------------------
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
TOTAL CURRENT LIABILITIES $ 0 $ 0
---------------------
STOCKHOLDERS EQUITY:
Common stock, $0.001 par value
Authorized 50,000,000 shares
1,000,000 shares issued &
Outstanding $ 1,000 $ 1,000
Additional paid in Capital $ 5,844 $ 6,144
Unpaid Stock Subscriptions $ 0 $ 0
(Deficit) Accumulated during
development stage $(6,844) $(7,144)
---------------------
$ 0 $ 0
---------------------
$ 0 $ 0
---------------------
</TABLE>
See accompanying notes to financial statements.
Page 15
<PAGE>
<TABLE>
<CAPTION>
BIG DADDY'S AUTO SALES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Years Ended December 31, 1998 and 1997
Six Months Ended June 30, 1999
Six Months Year Year Inception Inception
Ended Ended Ended to to
6/30/99 12/31/98 12/31/97 12/31/98 6/30/99
(unaudited) (unaudited)
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating Expenses
Consulting Services $ 0 $ 0 $ 0 $ 5,000 $ 5,000
Corporate Reinstatement Fee $ 0 $ 1,244 $ 0 $ 1,244 $ 1,244
Administrative Expenses $ 300 $ 600 $ 0 $ 600 $ 900
(Loss from Operations)
and Net (loss) $ (300) $ (1,844) $ 0 $ (6,844) $ (7,144)
----------------------------------------------------------------
Per Share Information:
Basic & Diluted (loss)
per common share $ 0 $ 0 $ 0 $ 0 $ 0
----------------------------------------------------------------
Weighted average
number of common
shares outstanding 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
----------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
Page 16
<PAGE>
<TABLE>
<CAPTION>
BIG DADDY'S AUTO SALES, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period From Inception (December 6, 1994) to December 31, 1998
Deficit
Additional Accumulated:
Common Stock Paid-in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C>
Shares issued for
services on 6/15/95
at $.005 per share 1,000,000 $ 1,000 $ 4,000 $ 0 $ 5,000
Net loss for the
Period ended 12/31/95 $ 0 $ 0 $ 0 $ (5,000) $(5,000)
----------------------------------------------------------------------------
Balance 12/31/95
Through 1997 1,000,000 $ 1,000 $ 4,000 $ (5,000) $ 0
Contribution of Capital
by major shareholder $ 1,844 $ 1,844
Net (loss) for year
ended 12/31/98 $ 0 $ 0 $ 0 $ (1,844) $(1,844)
----------------------------------------------------------------------------
Balance, 12/31/98 1,000,000 $ 1,000 $ 5,844 $ (6,844) $ 0
-------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
Page 17
<PAGE>
<TABLE>
<CAPTION>
BIG DADDY'S AUTO SALES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1998 and 1997
Six Months Ended June 30, 1999
Six Months Year Year Inception Inception
Ended Ended Ended to to
6/30/99 12/31/98 12/31/97 12/31/98 6/30/99
----------------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Net Income (Loss) $ (300) $ (1,844) $ 0 $ (6,844) $ (7,144)
Adjustments to reconcile net
income to net cash by
operating activities:
Services provided as capital
contribution $ 300 $ 1,844 $ 0 $ 6,844 $ 7,144
----------------------------------------------------------------------
Total Adjustments $ 300 $ 1,844 $ 0 $ 6,844 $ 7,144
----------------------------------------------------------------------
Net cash provided by
operating activities $ 0 $ 0 $ 0 $ 0 $ 0
Increase (decrease)in cash $ 0 $ 0 $ 0 $ 0 $ 0
Cash & Cash Equivalents
beginning of period $ 0 $ 0 $ 0 $ 0 $ 0
----------------------------------------------------------------------
Cash & Cash Equivalents
end of period $ 0 $ 0 $ 0 $ 0 $ 0
----------------------------------------------------------------------
Supplemental Information:
Cash paid for Interest $ 0 $ 0 $ 0 $ 0 $ 0
Cash paid for Income Taxes $ 0 $ 0 $ 0 $ 0 $ 0
</TABLE>
See accompanying notes to financial statements.
Page 18
<PAGE>
Big Daddy's Auto Sales, Inc.
Notes to Financial Statements
December 31, 1998
Note 1. Organization and Summary of Significant Accounting Policies.
-----------------------------------------------------------
The Company was incorporated in Florida on December 6, 1994. The Company is in
its development stage and to date its activities have been limited to
organization and capital formation.
Loss per share:
Basic Earnings per Share ("EPS") is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common stock
shares outstanding during the year plus potential dilutive instruments such as
stock options and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company's common stock at the average market price during
the period. Loss per share is unchanged on a diluted basis since the Company has
no potentially dilutive securities outstanding.
Cash:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
Estimates:
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates
The Company does not hold or issue financial instruments for trading purposes
nor does it hold or issue interest rate or leveraged derivative financial
instruments
Stock-based Compensation
The Company adopted Statement of Financial Accounting Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's first
quarter of 1996. Upon adoption of FAS 123, the Company continued to measure
compensation expense for its stock-based employee compensation plans using the
intrinsic value method prescribed by APB No. 25, Accounting for Stock Issued to
Employees. The Company did not pay any stock based compensation during any
period presented.
Page 19
<PAGE>
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines for all
items that are to be recognized under accounting standards as components of
comprehensive income to be reported in the financial statements. The statement
is effective for all periods beginning after December 15, 1997 and
reclassification financial statements for earlier periods will be required for
comparative purposes. To date, the Company has not engaged in transactions which
would result in any significant difference between its reported net loss and
comprehensive net loss as defined in the statement.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1 provides
authoritative guidance on when internal-use software costs should be capitalized
and when these costs should be expensed as incurred.
Effective in 1998, the Company adopted SOP 98-1, however the Company has not
incurred costs to date which would require evaluation in accordance with the
SOP.
Effective December 31, 1998, the Company adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information ("SFAS 131"). SFAS 131
superseded SFAS No. 14, Financial Reporting for Segments of a Business
Enterprise. SFAS 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. SFAS 131 also establishes
standards for related disclosures about products and services, geographic areas,
and major customers.
The adoption of SFAS 131 did not affect results of operations or financial
position. To date, the Company has not operated in any business activity.
Effective December 31, 1998, the Company adopted the provisions of SFAS No. 132,
Employers' Disclosures about Pensions and Other Post-retirement Benefits ("SFAS
132"). SFAS 132 supersedes the disclosure requirements in SFAS No. 87,
Employers' Accounting for Pensions, and SFAS No. 106, Employers' Accounting for
Post-retirement Benefits Other Than Pensions. The overall objective of SFAS 132
is to improve and standardize disclosures about pensions and other
post-retirement benefits and to make the required information more
understandable. The adoption of SFAS 132 did not affect results of operations or
financial position.
The Company has not initiated benefit plans to date which would require
disclosure under the statement.
Page 20
<PAGE>
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), which
is required to be adopted in years beginning after June 15, 1999. SFAS 133 will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. The Company has not yet
determined what the effect of SFAS 133 will be on earnings and the financial
position of the Company, however it believes that it has not to date engaged in
significant transactions encompassed by the statement.
Note 2. Stockholders' Equity.
On June 5, 1996 the Company issued 1,000,000 shares of its common stock to its
founders in exchange for services valued at $5,000. During October 1998, the
Company's principal shareholder paid expenses of the Company amounting to $1,244
to reinstate the Company in the State of Florida. Additionally, the officer
provides office services to the Company which were valued at $600 for the year
ended December 31, 1998. No such costs were provided for in periods prior to the
year ended December 31, 1998 as the Company was dormant. The stockholder does
not expect repayment of the expenses paid and the Company has recorded the
expenses as a contribution to its capital by the shareholder.
Note 3. Related Party Transactions.
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer of the Company. The fair
value of such costs have been estimated to be approximately $50 per month and
have been reflected in the accompanying financial statements. The officers and
directors of the Company are involved in other business activities and may
become involved in other business activities in the future. Such business
activities may conflict with the activities of the Company. The Company has not
formulated a policy for the resolution of any such conflicts that may arise.
Page 21
<PAGE>
Note 4. Interim Financial Statements
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions incorporated in Regulation 10-SB of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments and accruals) considered necessary for a fair
presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's financial
statements for the year ended December 31, 1998.
Basic loss per share was computed using the weighted average number of common
shares outstanding.
Page 22
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
/s/ James Bailey
--- ------------
By: James Bailey
Title: President
Date: September 10, 1999
Page 23
<PAGE>
Item 15(b) Exhibits
-------------------
INDEX TO EXHIBITS
- -----------------
Exhibit 1 Underwriting Agreement(1)
Exhibit 2 Plan of Acquisition, Reorganization, Arrangement,
Liquidation, Etc.(1)
Exhibit 3 Articles of Incorporation(1)
By-laws (as amended)(1)
Exhibit 4 Instruments Defining the Rights of Security Holders
Share Certificate(2)
Exhibit 5 Voting Trust Agreement(1)
Exhibit 6 Material Contracts(1)
Exhibit 7 Letter on Accountant Change(1)
Exhibit 8 Information on Subsidiaries(1)
Exhibit 9 Power of Attorney(1)
1 Previously filed
2 Filed herewith
EXHIBIT 4
BIG DADDY'S AUTO SALES, INC.
A FLORIDA CORPORATION
Number Shares
021 *5*
AUTHORIZED COMMON STOCK: 6,500 SHARES
PAR VALUE: $1.00
THIS CERTIFIES THAT STEVEN PARR
is hereby issued *5* fully paid and non-assessable
Shares of Common Stock of the above named Corporation transferable only on the
books of the Corporation by the holder hereof in person or by duly authorized
Attorney upon surrender of this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has authorized this Certificate to be
signed by its duly authorized officers on 5th day of June A.D. 1995.
/s/ James Bailey /s/ James Bailey
- ------------------- ---------------------
President Secretary
