U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Fiscal Year Ended: December 31, 1999
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from To
Commission file number 0-27737
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eSportbike.com.
(Name of small business issuer in its charter)
Nevada 77-0454856
- ------------------------------------ ---------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1500 West Georgia Street, Suite 980, Vancouver, B.C., Canada V6G 2Z6
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(Address of principal executive offices) (Zip code)
Morenci Corp., 9160 East Deer Trail, Tucson, AZ 85710
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(Former name and former address)
Issuer's telephone number (877) 834-0223
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Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act:
Common Stock, par value $.001
(Title of class)
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
Check if there is no disclosure of delinquent filers pursuant 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-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $ -0-
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As of May 5, 2000, there were 16,400,000 shares of the Registrant's
common stock, par value $0.001, issued and outstanding. The aggregate market
value of the Registrant's voting stock held by non-affiliates of the Registrant:
as of December 31, 1999 there has been no public trading in the common stock.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders; (2) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):
NONE
Transitional Small Business Disclosure Format (check one): Yes ; NO X
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TABLE OF CONTENTS
Item Number and Caption Page
PART I
Item 1. Description of Business.....................................4
Item 2. Description of Property.....................................7
Item 3. Legal Proceedings...........................................8
Item 4. Submission of Matters to a Vote of Security Holders.........8
PART II
Item 5. Market for Common Equity and Related Stockholder Matters....8
Item 6. Management's Discussion and Analysis or Plan of Operations..9
Item 7. Financial Statements.......................................11
Item 8. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure...................................11
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act..........11
Item 10. Executive Compensation.....................................14
Item 11. Security Ownership of Certain Beneficial Owners and
Management.................................................14
Item 12. Certain Relationships and Related Transactions.............14
Item 13. Exhibits and Reports on Form 8-K...........................15
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PART I
ITEM 1 DESCRIPTION OF BUSINESS
General
The Company intends to become an Internet destination providing
community, content and commerce for the sportbike and motorcycle enthusiast. The
eSportbike.com website is a location where individuals, can create their own
websites, publish pictures of their bikes, share information, communicate, shop
and discover meaningful, relevant content targeted to their specific interests.
The Company anticipates generating revenues from several sources,
including, sales of numerous product categories, sales of memberships to our
eSportbike.com "platinum Members Club", sales of advertising and sponsorships
and sales of third-party services.
The Company's common stock is traded on the National Association of
Security Dealers, Inc. (the "NASD's") OTC Bulletin Board Under the symbol
"MORN."
History
The Company has not engaged in any operations other than organizational
matters. Morenci Corp., a Nevada corporation (the "Company") was incorporated on
April 7, 1997, and was formed specifically to be a "clean public shell" and for
the purpose of either merging with or acquiring an operating company with
operating history and assets. The Company ceased all operating activities during
the period from October 29, 1996 to July 9, 1999 and was considered dormant. On
July 9, 1999, the Company obtained a Certificate of renewal from the State of
Nevada. Since July 9, 1999, the Company is in the development stage, and has not
commenced planned principal operations. Its authorized capital stock is
100,000,000 shares of common stock, par value $0.001 per share. On May 2, 2000
the name of the company was changed to eSportbike.com, Inc.
Launched in November 1998 as Sportbike Online
http://www.sportbikeonline.com the company has enjoyed over 1 million unique
visitors to date. The site is currently exhibiting 15% growth per month. The
Company plans to re-launch the site as eSportbike.com
http://www.esportbike.comin the first quarter of 2000. We expect to enjoy
significant growth after the re-launch as we execute on our plan to be the webs
largest community and e-commerce destination for the sport bike and motorcycle
enthusiast.
The executive offices of the Company are located at 1500 West Georgia Street,
Suite 980, Vancouver, B.C. Canada V6G 2Z6. Its telephone number is (877)
834-0223.
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OPERATING LOSSES
The Company has incurred net losses of approximately $4,000 and $100
for the fiscal years ended December 31, 1999 and December 31, 1998,
respectively. Such operating losses reflect developmental and other start-up
activities for 1999 and 1998. The Company expects to incur losses in the near
future until profitability is achieved. The Company's operations are subject to
numerous risks associated with establishing any new business, including
unforeseen expenses, delays and complications. There can be no assurance that
the Company will achieve or sustain profitable operations or that it will be
able to remain in business.
FUTURE CAPITAL NEEDS AND UNCERTAINTY OF ADDITIONAL FUNDING
The Company was not in full operations during 1999 and 1998 and thus,
the revenues generated are not representative of those that will be generated
once the Company becomes fully operational. Revenues are not yet sufficient to
support the Company's operating expenses and are not expected to reach such
levels until the first or second quarter of 2001. Since the Company's formation,
it has funded its operations and capital expenditures primarily through private
placements of debt and equity securities. See "Recent Sales of Unregistered
Securities." The Company expects that it will be required to seek additional
financing in the future. There can be no assurance that such financing will be
available at all or available on terms acceptable to the Company.
GOVERNMENT REGULATION
The Company is subject to all pertinent Federal, State, and Local laws
governing its business. The Company is subject to licensing and regulation by a
number of authorities in its Province (State) or municipality. These may include
health, safety, and fire regulations. The Company's operations are also subject
to Federal and State minimum wage laws governing such matters as working
conditions and overtime.
RISK OF LOW-PRICED STOCKS
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act
of 1934 (the "Exchange Act") impose sales practice and disclosure requirements
on certain brokers and dealers who engage in certain transactions involving "a
penny stock."
Currently, the Company's Common Stock is considered a penny stock for
purposes of the Exchange Act. The additional sales practice and disclosure
requirements imposed on certain brokers and dealers could impede the sale of the
Company's Common Stock in the secondary market. In addition, the market
liquidity for the Company's securities may be severely adversely affected, with
concomitant adverse effects on the price of the Company's securities.
Under the penny stock regulations, a broker or dealer selling penny
stock to anyone other than an established customer or "accredited investor"
(generally, an individual with net worth in
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excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together
with his or her spouse) must make a special suitability determination for the
purchaser and must receive the purchaser's written consent to the transaction
prior to sale, unless the broker or dealer or the transaction is otherwise
exempt. In addition, the penny stock regulations require the broker or dealer to
deliver, prior to any transaction involving a penny stock, a disclosure schedule
prepared by the Securities and Exchange Commission (the "SEC") relating to the
penny stock market, unless the broker or dealer or the transaction is otherwise
exempt. A broker or dealer is also required to disclose commissions payable to
the broker or dealer and the registered representative and current quotations
for the Securities. In addition, a broker or dealer is required to send monthly
statements disclosing recent price information with respect to the penny stock
held in a customer's account and information with respect to the limited market
in penny stocks.
LACK OF TRADEMARK AND PATENT PROTECTION
The Company relies on a combination of trade secret, copyright and
trademark law, nondisclosure agreements and technical security measures to
protect its products. Notwithstanding these safeguards, it is possible for
competitors of the company to obtain its trade secrets and to imitate its
products. Furthermore, others may independently develop products similar or
superior to those developed or planned by the Company.
COMPETITION
The Company faces competition from a wide variety of sport bike
specific web sites, many of which have substantially greater financial,
marketing and technological resources than the Company.
The marketplace for Sport Bike specific web sites is still in its
infancy. Many of the web sites are not commercial, and the biggest commercial
sites are almost all strictly relying on advertisers and not e-commerce sales.
Several sites compete in this market, but no one has emerged as an industry
leader. We have identified competition in terms of specific content and
e-commerce applications that are relevant to our industry.
Content Sites - Sport Bike Information
Motorcycle Online http://www.motorcycle.com
The most successful motorcycle content site is Motorcycle Online, which has
established itself as the web's largest motorcycle site. Motorcycle Online has
information relating to all types of motorcycles with little emphasis on
sportbikes. Motorcycle Online was established in November 1994, making it one of
the oldest motorcycle sites. Motorcycle Online has been able to increase their
industry contacts to enable them to get loaner bikes from the major
manufacturers to use in street and track testing.
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2wf.comhttp://www.2wf.com
2wf.com is a Motorcycle e-zine established in February 1997. 2wf.com
has recently purchased an offline magazine, American Road Racing Magazine.
2wf.com features daily news, product reviews, classifieds, and bike mechanic
tips.
Motorcycle World http://www.motorcycleworld.com
Motorcycleworld.com was founded in July 1997. The site features a US dealer
database and model database.
E-Commerce Sites - Sport Bike
Motorcycle Superstore http://www.motorcycle-superstore.com
The main online motorcycle accessory dealer is Motorcycle USA's Motorcycle
Superstore. The site sells inventory from Beaverton Honda-Yamaha, a motorcycle
dealership based in Portland, Oregon. Motorcycle Superstore has placed ads in
Sport Rider Magazine, Speed Vision's web site and Yahoo. Motorcycle Superstore
is also running an affiliate program with Commission Junction. Motorcycle
Superstore has recently added shipping to Canada. The Motorcycle Superstore
domain was established in June 1997.
Imotorcyclestore.com http://www.imotorcyclestore.com
Imotorcyclestore.com was founded in September 1999. Imotorcyclestore.com sells a
variety of motorcycle accessories and primarily advertises on 2wf.com.
EMPLOYEES
As of May 5, 2000, the Company had two employees none of whom are
represented by a labor union.
ITEM 2 DESCRIPTION OF PROPERTY
Since 1997 all administrative activities of the Company have been
conducted by corporate officers from either their home or business offices.
Currently, there are no outstanding debts owed by the Company for the use of
these facilities and there are no commitments for future use of the facilities.
At December 31, 1999, the company had a working agreement with the
Company president
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to use 600 square feet of office space, telephones and secretarial services
supplied on a gratis basis.
ITEM 3 LEGAL PROCEEDINGS
Not Applicable.
ITEM 4 SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
No matters were subject to a vote of security holders during the year
1999.
PART II
ITEM 5 MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company's Common Stock is traded on the NASD's OTC Bulletin Board
under the symbol "ESPB." The following table presents the high and low bid
quotations for the Common Stock as reported by the NASD for each quarter during
the last two years. Such prices reflect inter- dealer quotations without
adjustments for retail markup, markdown or commission, and do not necessarily
represent actual transactions.
As of December 31, 1999, to managements' knowledge there had been no trading.
1998: High Low
First Quarter - -
Second Quarter - -
Third Quarter - -
Fourth Quarter - -
1999:
First Quarter - -
Second Quarter - -
Third Quarter - -
Fourth Quarter - -
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DIVIDENDS
The Company has never declared or paid any cash dividends. It is the
present policy of the Company to retain earnings to finance the growth and
development of the business and, therefore, the Company does not anticipate
paying dividends on its Common Stock in the foreseeable future.
The number of shareholders of record of the Company's Common Stock as
of May 5, 2000 was approximately 29.
RECENT SALES OF UNREGISTERED SECURITIES
There have been no sales of the Company's securities. As noted above, in
connection with organizing the Company, on April 18, 1997, persons consisting of
its officers, directors, and other individuals were issued a total of 1,000
shares of Common Stock at a value of $.001 per share. On May 6, 1999, those
outstanding shares were forward split 1,000 to 1, resulting in a total of
1,000,000 shares outstanding.
On February 23, 2000, Mr. Daniel L. Hodges returned 800,000 shares to the
treasury and the shares were canceled, resulting in 200,000 remaining shares
outstanding.
On February 23, 2000 the Company declared a forward split 27 to 1, resulting in
a total of 5,400,000 shares outstanding.
ITEM 6 MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS
Plan of Operations - The Company was organized for the purpose of creating a
corporate vehicle to seek, investigate and, if such investigation warrants,
acquire an interest in one or more business opportunities presented to it by
persons or firms who or which desire to seek perceived advantages of a publicly
held corporation.
The Company may incur significant post-merger or acquisition
registration costs in the event management wishes to register a portion of their
shares for subsequent sale. The Company will also incur significant legal and
accounting costs in connection with the acquisition including the costs of
preparing post- effective amendments, Forms 8-K, agreements and related reports
and documents.
The Company will not have sufficient funds (unless it is able to raise
funds in a private placement) to undertake any significant development,
marketing and manufacturing of the products acquired. Accordingly, following the
acquisition, the Company will, in all likelihood, be required to either seek
debt or equity financing or obtain funding from third parties, in exchange for
which
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the Company may be required to give up a substantial portion of its interest in
the acquired product. There is no assurance that the Company will be able either
to obtain additional financing or interest third parties in providing funding
for the further development, marketing and manufacturing of any products
acquired.
The e-commerce industry is an intensely competitive one, where brand
recognition, quality of site content, merchandise selection, convenience, price,
and service are critical factors. The Company has many established competitors,
ranging from similar local single unit operations to large multi-national
operations. Some of these competitors have substantially greater financial
resources and may be established or indeed become established in areas where the
Company operates. The industry may be affected by changes in customer tastes,
economic, and demographic trends. Factors such as inflation, increased supplies
costs and the availability of suitable employees may adversely affect the
entertainment industry in general and the Company in particular. In view of the
Company's limited financial resources and management availability, the Company
will continue to be at a significant competitive disadvantage vis-a-vis the
Company's competitors.
Results of Operations - From April 7, 1997 to July 9, 1999 the Company was an
inactive corporation. From July 9, 1999 the Company was a development stage
company and had not begun principal operations. Accordingly, comparisons with
prior periods are not meaningful.
LIQUIDITY AND CAPITAL RESOURCES
The Company has met its capital requirements through the sale of its
Common Stock .
Since the Company's re-activation in July 9, 1999, the Company's
principal capital requirements have been the funding of the development of the
Company.
After the completion of its expansion plans, the Company expects future
development and expansion will be financed through cash flow from operations and
other forms of financing such as the sale of additional equity and debt
securities, capital leases and other credit facilities. There are no assurances
that such financing will be available on terms acceptable or favorable to the
Company.
Government Regulations - The Company is subject to all pertinent Federal, State,
and Local laws governing its business. The Company is subject to licensing and
regulation by a number of authorities in its Province (State) or municipality.
These may include health, safety, and fire regulations. The Company's operations
are also subject to Federal and State minimum wage laws governing such matters
as working conditions and overtime.
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ITEM 7 FINANCIAL STATEMENTS
The financial statements of the Company and supplementary data are
included beginning immediately following the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Company
and its accountants on any matter of accounting principles, practices or
financial statements disclosure.
PART III
ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
Executive Officers and Directors
The members of the Board of Directors of the Company serve until the next annual
meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. The following table
sets forth the name, age, and position of each executive officer and director of
the Company:
<TABLE>
<S> <C> <C> <C>
Director's Name Age Office Term Expires
Daniel Hodges 43 Sole Officer & Director resigned February 23, 2000
Robert E. McLauchlan 43 CEO & Director next annual meeting
Kent D. Courtice 27 President & Director next annual meeting
W. Scott Marshall 41 Director next annual meeting
</TABLE>
Daniel Hodges has been sole Director, President, Chief Financial
Officer and Secretary of the Company since his appointment on October 29, 1996.
Mr. Hodges has been president and director of Solomon Consulting Corp. which
specializes in corporate and securities consulting since 1995. He has owned and
operated an industrial manufacturing company, "APRI, Inc." since 1998. He is
currently on the board of directors of two charitable organizations as well as
over 10 for-profit
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corporations. Within the past year, several companies that maintain a
public trading status have had Mr. Hodges as a director including: Avartarra.com
(symbol: AVAR), Landstar, Inc. (LDSR), and Hyaton Company, Inc. (HYTN). Mr.
Hodges received his B.S. from Thomas A. Edison State College in Trenton, New
Jersey. He is also a graduate of the U.S. Air Force Undergraduate Pilot Training
program and is currently the rank of Captain as an officer in the Air National
Guard.
On February 23, 2000 Mr. Hodges resigned as the sole officer and
director of the Company. Prior to his resignation, Mr Hodges appointed Robert
Eyre McLachlan, William Scott Marshall and Kent Douglas Courtice as directors.
Mr. McLachlan is the CEO and Secretary and Mr. Courtice is the President.
Mr. McLauchlan is co-founder, and Chief Executive Officer, and member of the
Board of Directors of the Company. Most recently, from 1997 to 1999, Bob
McLauchlan was VP of Internet Business Development for QSound Labs (NASDAQ:
QSND). During his three years with QSound, Mr. McLauchlan maintained ownership
of the company's Internet products, distribution, and marketing operations. The
company released 10 new products during Mr. McLauchlan's tenure, all of which
were sold online. In pursuit of distribution for QSound's products, Mr.
McLauchlan forged relationships with many leading Internet companies and Web
sites. Specifically, the company sold its products through Real Networks,
broadcast.com, MP3.com, Spinner.com and others. One product in particular, iQFX,
is currently the most successful third party software package on Real Networks'
Web site, in terms of sales. In fact, sales of iQFX represents almost 7% of Real
Networks gross revenue year to date.
At QSound, Mr. McLauchlan developed and implemented many unique and successful
online sales and marketing campaigns. In so doing, he determined that the most
cost-effective means by which to sell products online is to employ affiliate
marketing techniques. Under Mr. McLauchlan's direction, QSound developed
proprietary software for managing the company's affiliate marketing programs. In
fact, this software is soon to be unveiled as the stand-alone solution for a new
company called AffiliateDirect. As a recognized expert in the field of Affiliate
Marketing, Mr. McLauchlan has had numerous speaking engagements including
Affiliate Solutions 99 and Web Marketing 99 in Orlando, Florida.
Prior to joining QSound Labs, Mr. McLauchlan was President of Calgary based
business consulting firm, The Barron Group. From 1987 to1995 Mr. McLauchlan
founded and operated insurance services company, Citiclaims. Citiclaims was sold
in 1994, in the proceeding years Citiclaims had grown to 70 employees with
offices in seven Canadian markets with annual revenues exceeding $12.0 million.
Mr. McLauchlan had successfully started and operated three businesses before
Citiclaims.
Kent D. Courtice is the co-founder, President, and member of the Board of
Directors of the Company. Kent Courtice, an avid motorcyclist, founded Sportbike
Online, the predecessor of eSportbike.com, November 1998.
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Mr. Courtice is a member of the Board of Directors of Rendezview.com
(CDNX: CGU), an Internet video conferencing company.
W. Scott Marshall has been in the investment and finance industry for 14 years
and has been an Officer and Director of numerous public companies over the past
five years.
Since 1995, Mr. Marshall has been the President and Managing Director of Asset
Information Management, Inc.("AIM"), a venture capital firm specializing in
public relations, investor relations and small-cap fund raising. For the past
three years Mr. Marshall and AIM have focused on high- tech and internet
start-up companies.
Conflicts of Interest
Certain conflicts of interest existed at December 31, 1999 and may continue to
exist between the Company and its officers and directors due to the fact that
each has other business interests to which he devotes his primary attention.
Each officer and director may continue to do so notwithstanding the fact that
management time should be devoted to the business of the Company.
Certain conflicts of interest may exist between the Company and its management,
and conflicts may develop in the future. The Company has not established
policies or procedures for the resolution of current or potential conflicts of
interests between the Company, its officers and directors or affiliated
entities. There can be no assurance that management will resolve all conflicts
of interest in favor of the Company, and failure by management to conduct the
Company's business in the Company's best interest may result in liability to the
management. The officers and directors are accountable to the Company as
fiduciaries, which means that they are required to exercise good faith and
integrity in handling the Company's affairs. Shareholders who believe that the
Company has been harmed by failure of an officer or director to appropriately
resolve any conflict of interest may, subject to applicable rule of civil
procedure, be able to bring a class action or derivative suit to enforce their
rights and the Company's rights.
Board Meetings and Committees
The Directors and Officers will not receive remuneration from the
Company until a subsequent offering has been successfully completed, or cash
flow from operating permits, all in the discretion of the Board of Directors.
Directors may be paid their expenses, if any, of attendance at such meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the Corporation in any other
capacity and receiving compensation therefor. No compensation has been paid to
the Directors. The Board of Directors may designate from among its members an
executive committee and one or more other committees. No such committees have
been appointed.
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Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer, beneficial owner of more than 10% of any class of equity securities of
the Company or any other person known to be subject to Section 16 of the
Exchange Act of 1934, as amended, failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act for the last fiscal year.
ITEM 10 EXECUTIVE COMPENSATION
None of the executive officer's salary and bonus exceeded $100,000
during any of the Company's last two fiscal years.
ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
AND MANAGEMENT
Principal Shareholders
The table below sets forth information as to each person owning of
record or who was known by the Company to own beneficially more than 5% of the
16,400,000 shares of issued and outstanding Common Stock of the Company as of
May 5, 2000 and information as to the ownership of the Company's Stock by each
of its directors and executive officers and by the directors and executive
officers as a group. Except as otherwise indicated, all shares are owned
directly, and the persons named in the table have sole voting and investment
power with respect to shares shown as beneficially owned by them.
<TABLE>
<S> <C> <C> <C>
Name and Address
of Beneficial Owners / Nature of Shares
Directors Ownership Owned Percent
- --------------------------------------------------------------------------------------------
Robert Eyre McLachlan common stock 5,000,000 30.49%
Kent Douglas Courtice common stock 5,000,000 30.49%
William Scott Marshall common stock - -
All Executive Officers
and Directors as a Group
(3 persons) common stock 10,000,000 60.98%
</TABLE>
The address of all three stockholders is care of the Company.
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with organizing the Company, on April 18, 1997, persons
consisting of its officers, directors, and other individuals were issued a total
of 1,000 shares of Common Stock at a value of $.001 per share. On May 6, 1999,
the outstanding shares were forward split 1,000 to 1, resulting in a total of
1,000,000 shares outstanding. On February 23, 2000, Mr. Daniel L. Hodges
returned 800,000 shares to the treasury and the shares were canceled, resulting
in 200,000 remaining shares outstanding. On February 23, 2000 the outstanding
shares were forward split 27 to 1 resulting in a total of 5,400,000 shares
outstanding. Under Rule 405 promulgated under the Securities Act of 1933, Mr.
Hodges may be deemed to be a promoter of the Company. No other persons are known
to Management that would be deemed to be promoters.
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report.
1. Financial Statements Page
Report of Robison, Hill & Co., Independent Certified Public Accountants.....F-1
Balance Sheets as of December 31, 1999, and 1998............................F-2
Statements of Operations for the years ended
December 31, 1999, and 1998............................................F-4
Statement of Stockholders' Equity for the years ended
December 31, 1999, and 1998............................................F-5
Statements of Cash Flows for the years ended
December 31, 1999, and 1998............................................F-9
Notes to Financial Statements..............................................F-11
2. Financial Statement Schedules
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The following financial statement schedules required by Regulation S-X
are included herein.
All schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
3. Exhibits
The following exhibits are included as part of this report:
Exhibit
Number Title of Document
3.1 Articles of Incorporation (1)
3.2 Amended Articles of Incorporation (1)
3.3 Bylaws (1)
27.1 Financial Data Schedule
(1) Incorporated by reference to the Registrant's registration statement
on Form 10-SB filed on October 20, 1999.
(b) Reports on Form 8-K filed.
No reports on Form 8-K were filed during the prior quarter.
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SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.
eSportbike.com, Inc.
Dated: May 10, 2000 By /S/ Robert Eyre McLachlan
---------------------------------
Robert Eyre McLachlan
C.E.O., Secretary, Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 10th day of May 2000.
Signatures Title
/S/ Robert Eyre McLachlan
Robert Eyre McLachlan C.E.O., Chairman, Secretary, Director
(Principal Executive Officer)
/S/ Kent Douglas Courtice
Kent Douglas Courtice President, Director
(Principal Financial and Accounting
Officer)
/S/ William Scott Marshall
William Scott Marshall Director
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INDEPENDENT AUDITOR'S REPORT
ESPORTBIKE.COM.INC.
(formerly Morenci Corp.)
(A Development Stage Company)
We have audited the accompanying balance sheets of ESPORTBIKE.COM.INC.
(formerly Morenci Corp.) (a development stage company) as of December 31,1999
and 1998, and the related statements of operations and cash flows for the two
years ended December 31, 1999 and the statement of stockholders' equity from
April 7, 1997 (inception) to December 31, 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 ESPORTBIKE.COM.INC.
(formerly Morenci Corp.) (a development stage company) as of December 31, 1999
and 1998, and the results of its operations and its cash flows for the two years
ended December 31, 1999 in conformity with generally accepted accounting
principles.
Respectfully submitted
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
April 20, 2000
F - 1
<PAGE>
ESPORTBIKE.COM.INC.
-------------------
(formerly Morenci Corp.)
(A Development Stage Company)
<TABLE>
<CAPTION>
BALANCE SHEETS
December 31,
-------------------------------------
1999 1998
----------------- -----------------
<S> <C> <C>
Assets - Receivable from Shareholders $ 6,677 $ 8,212
================= =================
Liabilities - Accounts Payable $ 2,751 $ 200
----------------- -----------------
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 5,400,000 shares at December 31,
1999 and 1998 5,400 5,400
Paid-In Capital 3,812 3,812
Retained Deficit (1,200) (1,200)
Deficit Accumulated During the
Development Stage (4,086)
Foreign Currency Translation Adjustment - -
----------------- -----------------
Total Stockholders' Equity 3,926 8,012
----------------- -----------------
Total Liabilities and
Stockholders' Equity $ 6,677 $ 8,212
================= =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 2
<PAGE>
ESPORTBIKE.COM.INC.
-------------------
(formerly Morenci Corp.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Cumulative
since July 9,
1999
inception
For the year ended of
December 31, development
-------------------------------------
1999 1998 stage
<S> <C> <C> <C>
Revenues: $ - $ - $ -
Expenses: 4,086 100 4,086
------------------ ----------------- -----------------
Net Loss $ (4,086) $ (100) $ (4,086)
================== ================= =================
Basic & Diluted loss per share $ - $ -
================== =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 3
<PAGE>
ESPORTBIKE.COM.INC.
(formerly Morenci Corp.)
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
SINCE APRIL 7, 1997 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Since July 9,
1999
Inception of
Common Stock Paid-In Retained Development
Shares Par Value Capital Deficit Stage
---------------- ------------- ------------ ------------- ----------------
<S> <C> <C> <C> <C> <C>
Balance at April 7, 1997
(inception) - $ - $ - $ - $ -
April 18, 1997 Issuance of Stock
for Services and payment
of Accounts payable 1,000 1,000 - - -
Net Loss - - - (1,000) -
---------------- ------------- ------------ ------------- ----------------
Balance at December 31, 1996
As originally reported 1,000 1,000 - (1,000) -
Retroactive adjustment for 1,000
to 1 stock split May 6, 1999 999,000 - - - -
Retroactive adjustment for
return of 800,000 shares February
23, 2000 and contributed capital (800,000) (800) 9,012
Retroactive adjustment for 27 to 1
stock split February 23, 2000 5,200,000 5,200 (5,200) - -
---------------- ------------- ------------ ------------- ----------------
Restated balance January 1, 1997 5,400,000 5,400 3,812 (1,000) -
Net Loss - - - (100) -
---------------- ------------- ------------ ------------- ----------------
Balance at December 31, 1997 5,400,000 5,400 3,812 (1,100) -
Net Loss - - - (100) -
---------------- ------------- ------------ ------------- ----------------
Balance at December 31, 1998 5,400,000 5,400 3,812 (1,200) -
Net Loss - - - - (4,086)
---------------- ------------- ------------ ------------- ----------------
Balance at December 31, 1999 5,400,000 $ 5,400 $ 3,812 $ (1,200) $ (4,086)
================ ============= ============ ============= ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 4
<PAGE>
ESPORTBIKE.COM.INC.
(formerly Morenci Corp.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
Since July 9,
1999
For the years ended Inception of
December 31, Development
----------------------------
1999 1998 Stage
------------- ------------- -----------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S> <C> <C> <C> <C>
Net Loss $ (4,086) $ (100) $ (4,086)
Decrease in Receivable from Shareholder 1,535 - 1,535
Increase (Decrease) in Accounts Payable 2,551 100 2,551
------------- ------------- -----------------
Net Cash Used in operating activities - - -
------------- ------------- -----------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by
investing activities - - -
------------- ------------- -----------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Capital contributed by shareholder - - -
------------- ------------- -----------------
Net Cash Provided by
Financing Activities - - -
------------- ------------- -----------------
Net (Decrease) Increase in
Cash and Cash Equivalents - - -
Cash and Cash Equivalents
at Beginning of Period - - -
------------- ------------- -----------------
Cash and Cash Equivalents
at End of Period $ - $ - $ -
============= ============= =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ - $ -
Franchise and income taxes $ 250 $ - $ 250
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: None
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 5
<PAGE>
ESPORTBIKE.COM.INC.
-------------------
(formerly Morenci Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
THE YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for ESPORTBIKE.COM.INC.(formerly
Morenci Corp.) is presented to assist in understanding the Company's financial
statements. The accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on
April 7, 1997. The Company ceased all operating activities during the period
from April 7, 1997 to July 9, 1999 and was considered dormant. On July 9, 1999,
the Company obtained a Certificate of renewal from the State of Nevada. Since
July 9, 1999, the Company is in the development stage, and has not commenced
planned principal operations.
Nature of Business
The company has no products or services as of December 31, 1999. The
Company was organized as a vehicle to seek merger or acquisition candidates. The
Company intends to acquire interests in various business opportunities, which in
the opinion of management will provide a profit to the Company
Cash and Cash Equivalents
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 to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required 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.
F - 6
<PAGE>
ESPORTBIKE.COM.INC.
-------------------
(formerly Morenci Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Loss per Share
The reconciliations of the numerators and denominators of the basic
loss per share computations are as follows:
<TABLE>
<CAPTION>
Per-Share
Income Shares Amount
------ ------ ------
(Numerator) (Denominator)
For the year ended December 31, 1999
<S> <C> <C> <C>
Basic Loss per Share
Loss to common shareholders $ (4,086) 5,400,000 $ -
================== =================== ==================
For the year ended December 31, 1998
Basic Loss per Share
Loss to common shareholders $ (100) 5,400,000 $ -
================== =================== ==================
</TABLE>
The effect of outstanding common stock equivalents would be
anti-dilutive for December 31, 1999 and 1998 and are thus not considered.
Foreign Currency Translation
The functional currency of the Company is Canadian dollars. Balance
sheet accounts are translated to U.S. dollars at the current exchange rate as of
the balance sheet date. Income statement items are translated at average
exchange rates during the period. The resulting translation adjustment is
recorded as a separate component of stockholders' equity.
Reclassification
Certain reclassifications have been made in the 1999 and 1998 financial
statements to conform with the December 31, 1999 presentation.
F - 7
<PAGE>
ESPORTBIKE.COM.INC.
-------------------
(formerly Morenci Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(Continued)
NOTE 2 - INCOME TAXES
As of December 31, 1999, the Company had a net operating loss
carryforward for income tax reporting purposes of approximately $4,000 that may
be offset against future taxable income through 2011. Current tax laws limit the
amount of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation allowance of the
same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS
As of December 31, 1999 all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use of
these facilities and there are no commitments for future use of the facilities.
NOTE 5 - STOCK SPLIT
On May 6, 1999 the Board of Directors authorized 1,000 to 1 stock
split, changed the authorized number of shares to 100,000,000 shares and the par
value to $.001 for the Company's common stock. As a result of the split, 999,000
shares were issued.
On February 23, 2000 the Board of Directors authorized the acceptance
of 800,000 shares of restricted common stock returned to the Company by and on
behalf of Mr. Daniel L. Hodges, formerly the sole Officer and Director of the
Company. The 800,000 shares were canceled immediately upon receipt. Also on
February 23, 2000 the Board of Directors authorized a 27 to 1 stock split. As a
result of this split the Company issued 5,200,000 shares of common stock. All
references in the accompanying financial statements to the number of common
shares and per-share amounts for 1999 and 1998 have been restated to reflect the
stock split and cancellation of shares.
F - 8
<PAGE>
ESPORTBIKE.COM.INC.
-------------------
(formerly Morenci Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(Continued)
NOTE 6 - SUBSEQUENT EVENTS
On March 2, 2000 the Company entered into an agreement whereby the
Company in a reverse merger, purchased the assets of, and changed its name to,
esportbike.com. The purchase price was $10,000 CDN ($6,793 US) and the
assumption of liabilities in the amount of $113,000 US. The Company has not yet
performed a detailed evaluation and appraisal of the fair market value of the
net assets purchased in order to allocate the purchase price among the assets
purchased.
F - 9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET OF eSportbike.com,Inc. AS OF DECEMBER 31, 1999 AND THE RELATED
STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE YEAR THEN ENDED AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7
<CURRENT-LIABILITIES> 3
<BONDS> 0
0
0
<COMMON> 5
<OTHER-SE> (1)
<TOTAL-LIABILITY-AND-EQUITY> 7
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (4)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
