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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
FORM 10-KSB
( X ) Annual Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934.
For the Year Ended December 31, 1999
( ) Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the transition period from __________ to __________.
Commission File Number:
ARBER HOLDINGS
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(Exact name of Registrant as specified in its Charter)
DELAWARE Pending
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(State of or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
18555 NE 14th Ave., Building "F" Ste. 611, North Miami Beach, FL 33179
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Address of Principle Executive Offices:
(305) 948-8077
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Registrant's telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.0001 Par Value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by 7 Section 13 or 15(d) of the Securities Exchange act of 1934
during the preceding 12 months (or for such other shorter period that the
registrant was required to file such reports), and (20 has been subject to such
filing requirements for the past 90 days. _X_ Yes ___No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by referencing Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. _X__
Issuer's revenues for the most recent fiscal year: NONE
The aggregate market value of the voting stock held by non-affiliates of the
registrant at December 31, 1999 was $0. Shares of common stock held by each
officer and director and by each person who owns more that 5% of the outstanding
common stock have been excluded in that such persons may be deemed to be
affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.
Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of April 13, 2000.
5,000,000 Common Shares
Documents Incorporated By Reference - NONE
Transitional small business disclosure format. ___ Yes _X_No
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Arber Holdings
FORM 10 - KSB
Table of Contents
PART I.
ITEM 1. Description of Business 2
ITEM 2. Properties 11
ITEM 3. Legal Proceedings 11
ITEM 4. Submission of Matters to a Vote of
Security Holders 11
PART II
ITEM 5. Market for the Common Equity and
Related Stockholder Matters 12
ITEM 6. Plan of Operation 12
ITEM 7. Financial Statements 17
ITEM 8. Changes In and Disagreements With
Accountants on Accounting and
Financial Disclosures 32
PART III
ITEM 9 Directors, Executive Officers,
Promoters and Control Persons;
Compliance with Section 16(a) of the
Exchange Act 32
ITEM 10 Executive Compensation 33
ITEM 11 Security Ownership of Certain
Beneficial Owners and Management 33
ITEM 12 Certain Relationships and Related
Transactions 34
ITEM 13 Exhibits, Financial Statement
Schedules and Reports on Form 8-K 35
Signatures 36
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PART I.
ITEM 1 - DESCRIPTION OF BUSINESS
Arber Holdings ("we, us, our") was incorporated under the laws of the
state of Delaware on November 8, 1999. We are considered to be in the
development stage as defined in Financial Accounting Standards Board Statement
No 7, and intend to effect a merger, exchange of capital stock, asset
acquisition or other business combination with a domestic or foreign private
business. Our planned principal operations have not commenced, therefore
accounting policies and procedures have not yet been established.
We will attempt to locate and negotiate with a business entity for the
combination of that target company with us. The combination will normally take
the form of a merger, stock-for-stock exchange or stock-for-assets exchange. In
most instances the target company will wish to structure the business
combination to be within the definition of a tax-free reorganization under
Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended.
We were formed to provide a method for a foreign or domestic private
company to become a reporting ("public") company with a class of registered
securities.
Risk Factors
Our business is subject to numerous risk factors, including the following:
WE HAVE NO OPERATING HISTORY NOR REVENUE AND MINIMAL ASSETS. We have had
no operating history nor any revenues or earnings from operations. We have no
significant assets or financial resources. We have operated at a loss to date
and will, in all likelihood, continue to sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. Joren LLC, our sole shareholder, has agreed to pay, without
repayment by us, all expenses incurred by us until a business combination
occurs.
WE HAVE ONLY ONE DIRECTOR AND ONE OFFICER. Our president and sole officer
is Alfred Arberman who is also our sole director and the controlling shareholder
of our sole shareholder. Because management consists of only one person, we do
not benefit from multiple judgements that a greater number of directors or
officers would provide and we will rely completely on the judgement of our sole
officer and director when selecting a target company. The decision to enter into
a business combination will likely be made without detailed feasibility studies,
independent analysis, market surveys or similar information which, if we had
more funds available to us, would be desirable. Mr. Arberman anticipates
devoting only a limited amount of time per month to the business. Mr. Arberman
has not entered into a written employment agreement with us and he is not
expected to do so. We have not obtained key man life insurance on Mr. Arberman.
The loss of the services of Mr. Arberman would adversely affect the development
of our business and our likelihood of continuing operations.
CONFLICTS OF INTEREST. Mr. Arberman, our president, participates in other
business ventures which may compete directly with us. Additional conflicts of
interest and non-arms length transactions may also arise in the future. We have
adopted a policy that we will not enter into a business combination with any
entity in which any member of management serves as an officer, director or
partner, or in which such person or such person's affiliates or associates hold
any ownership interest. The terms of business combination may include such terms
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as Mr. Arberman remaining a director or officer of the Company. The terms of a
business combination may provide for a payment by cash or otherwise to Arberman
for the purchase or retirement of all or part of his common stock of the Company
by a target company or for services rendered incident to or following a business
combination. Mr. Arberman would directly benefit from such employment or
payment. Such benefits may influence Mr. Arberman's choice of a target company.
Our Certificate of Incorporation provides that we may indemnify our officers
and/or directors for liabilities, which can include liabilities arising under
the securities laws. Therefore, our assets of could be used or attached to
satisfy any liabilities subject to such indemnification. See "ITEM 5. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS--Conflicts of Interest."
OUR PROPOSED OPERATIONS ARE SPECULATIVE. The success of our proposed plan
of operation will depend to a great extent on the operations, financial
condition and management of the identified target company. While business
combinations with entities having established operating histories are preferred,
there can be no assurance that we will be successful in locating candidates
meeting such criteria. In the event we complete a business combination the
success of our operations will be dependent upon management of the target
company and numerous other factors beyond our control. There is no assurance
that we will identify a target company and consummate a business combination.
PURCHASE OF PENNY STOCKS CAN BE RISKY. In the event that a public market
develops for our securities following a business combination, such securities
may be classified as a penny stock depending upon their market price and the
manner in which they are traded. The Securities and Exchange Commission has
adopted Rule 15g-9 which establishes the definition of a "penny stock," for
purposes relevant to us, as any equity security that has a market price of less
than $5.00 per share or with an exercise price of less than $5.00 per share
whose securities are admitted to quotation but do not trade on the Nasdaq
SmallCap Market or on a national securities exchange. For any transaction
involving a penny stock, unless exempt, the rules require delivery of a document
to investors stating the risks, special suitability inquiry, regular reporting
and other requirements. Prices for penny stocks are often not available and
investors are often unable to sell such stock. Thus an investor may lose his
investment in a penny stock and consequently should be cautious of any purchase
of penny stocks.
THERE IS A SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. We are and will continue to be an insignificant participant in the
business of seeking mergers with and acquisitions of business entities. A large
number of established and well-financed entities, including venture capital
firms, are active in mergers and acquisitions of companies which may be merger
or acquisition target candidates for us. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than we do and, consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination. Moreover, we will also compete with numerous
other small public companies in seeking merger or acquisition candidates.
THERE IS NO AGREEMENT FOR A BUSINESS COMBINATION AND NO MINIMUM
REQUIREMENTS FOR BUSINESS COMBINATION. We have no current arrangement, agreement
or understanding with respect to engaging in a business combination with a
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specific entity. There can be no assurance that we will be successful in
identifying and evaluating suitable business opportunities or in concluding a
business combination. No particular industry or specific business within an
industry has been selected for a target company. We have not established a
specific length of operating history or a specified level of earnings, assets,
net worth or other criteria which we will require a target company to have
achieved, or without which we would not consider a business combination with
such business entity. Accordingly, we may enter into a business combination with
a business entity having no significant operating history, losses, limited or no
potential for immediate earnings, limited assets, negative net worth or other
negative characteristics. There is no assurance that we will be able to
negotiate a business combination on terms favorable to us.
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Pursuant to the
requirements of Section 13 of the Securities Exchange Act of 1934 (the "Exchange
Act"), we are required to provide certain information about significant
acquisitions including audited financial statements of the acquired company.
These audited financial statements must be furnished within 75 days following
the effective date of a business combination. Obtaining audited financial
statements are the economic responsibility of the target company. The additional
time and costs that may be incurred by some potential target companies to
prepare such financial statements may significantly delay or essentially
preclude consummation of an otherwise desirable acquisition by us. Acquisition
prospects that do not have or are unable to obtain the required audited
statements may not be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable. Notwithstanding a target
company's agreement to obtain audited financial statements within the required
time frame, such audited financials may not be available to us at the time of
effecting a business combination. In cases where audited financials are
unavailable, we will have to rely upon unaudited information that has not been
verified by outside auditors in making its decision to engage in a transaction
with the business entity. This risk increases the prospect that a business
combination with such a business entity might prove to be an unfavorable one for
us.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. We have neither
conducted, nor have others made available to us, market research indicating that
demand exists for the transactions contemplated by us. Even in the event demand
exists for a transaction of the type contemplated by us; there is no assurance
we will be successful in completing any such business combination.
REGULATION UNDER INVESTMENT COMPANY ACT. In the event we engage in
business combinations which result in us holding passive investment interests in
a number of entities, we could be subject to regulation under the Investment
Company Act of 1940. In such event, we would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. We have obtained no formal determination from the Securities
and Exchange Commission as to our status under the Investment Company Act of
1940 and, consequently, any violation of such Act could subject us to material
adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
involving the issuance of our common stock will, in all likelihood, result in
shareholders of a target company obtaining a controlling interest in the
Company. As a condition of the business combination agreement, Joren LLC., our
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sole shareholder, may agree to sell or transfer all or a portion of his common
stock so to provide the target company with all or majority control. The
resulting change in control of the Company will likely result in removal of our
present officer and director and a corresponding reduction in or elimination of
his participation in our future affairs.
POSSIBLE DILUTION OF VALUE OF SHARES UPON BUSINESS COMBINATION. A business
combination normally will involve the issuance of a significant number of
additional shares. Depending upon the value of the assets acquired in such
business combination, the per share value of our common stock may increase or
decrease, perhaps significantly.
TAXATION. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination we may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
both companies, pursuant to various federal and state tax provisions. We intend
to structure any business combination so as to minimize the federal and state
tax consequences to both us and the target company; however, there can be no
assurance that such business combination 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.
Search for a Target Company
We intend to enter into a business combination with a target company in
exchange for our securities. We have not engaged in any negotiations with any
specific entity regarding the possibility of a business combination with us. We
have entered into an agreement with Joren LLC., our sole shareholder, to
supervise the search for target companies as potential candidates for a business
combination. The agreement will continue until such time as we have effected a
business combination. Joren LLC., Inc. has agreed to pay all our expenses
without repayment until such time as a business combination is effected. Alfred
Arberman, who is our sole officer and director, is the sole officer and director
and controlling shareholder of Joren LLC.
Joren LLC. may only locate potential target companies for us and is
not authorized to enter into any agreement with a potential target company
binding us. Our agreement with Joren LLC. is not exclusive and Joren LLC.
has entered into agreements with other companies similar to us on similar
terms. Joren LLC. may provide assistance to target companies incident to
and following a business combination, and receive payment for such assistance
from a target company.
Joren LLC. owns 5,000,000 shares of our common stock for which it paid
$500, or $.0001, par value, per share. Joren LLC. has entered, and anticipates
that it will enter, into agreements with other consultants to assist it in
locating a target company and Joren LLC. may share its stock in the Company with
or grant options on such stock to such referring consultants and may make
payment to such consultants from its own resources. There is no minimum or
maximum amount of stock, options, or cash that we may grant or pay to such
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consultants. Joren LLC. is solely responsible for the costs and expenses of its
activities in seeking a potential target company, including any agreements with
consultants, and we have no obligation to pay any costs incurred or negotiated
by Joren LLC.
Joren LLC. anticipates that it may seek to locate a target company through
solicitation. Such solicitation may include newspaper or magazine
advertisements, mailings and other distributions to law firms, accounting firms,
investment bankers, financial advisors and similar persons, the use of one or
more World Wide Web sites and similar methods. No estimate can be made as to the
number of persons who may be contacted or solicited. To date Joren LLC. has not
utilized solicitation, does not anticipate that it will do so, and expects to
rely on referrals from consultants in the business and financial communities for
referrals of potential target companies.
Management of the Company
We have no full time employees. Alfred Arberman is our sole officer
and our sole director. Mr. Arberman is also the controlling shareholder of
Joren LLC., our sole shareholder. Mr. Arberman, as our president, has
agreed to allocate a portion of his time to our activities without
compensation. Potential conflicts may arise with respect to the limited time
commitment by Mr. Arberman and the potential demands of our activities.
The amount of time spent by Mr. Arberman on our activities is not
predictable. Such time may vary widely from an extensive amount when reviewing a
target company and effecting a business combination to an essentially quiet time
when activities of management focus elsewhere, or some amount in between. It is
impossible to predict, with any precision, the exact amount of time Mr. Arberman
will actually be required to spend to locate a suitable target company. Mr.
Arberman estimates that our business plan can be implemented by devoting
approximately 10 to 25 hours per month over the course of several months but
such figure cannot be stated with precision.
General Business Plan
Our purpose is to seek, investigate and, if such investigation warrants,
acquire an interest in a business entity which desires to seek the perceived
advantages of a corporation which has a class of securities registered under the
Exchange Act. We will not restrict our search to any specific business,
industry, or geographical location and we may participate in a business venture
of virtually any kind or nature. Management anticipates that it will be able to
participate in only one potential business venture because we have nominal
assets and limited financial resources. See PART F/S, "FINANCIAL STATEMENTS."
This lack of diversification should be considered a substantial risk to our
shareholders because it will not permit us to offset potential losses from one
venture against gains from another.
We may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes.
We anticipate that the selection of a business opportunity in which to
participate will be complex and extremely risky. Management believes (but has
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not conducted any research to confirm) that there are business entities seeking
the perceived benefits of a reporting corporation. 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, increasing the opportunity to use securities for
acquisitions, providing liquidity for shareholders and other factors. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and complex.
We have, and will continue to have, no capital with which to provide the
owners of business entities with any cash or other assets. However, management
believes we will be able to offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a reporting company
without incurring the cost and time required to conduct an initial public
offering. Management has not conducted market research and is not aware of
statistical data to support the perceived benefits of a business combination for
the owners of a target company.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, our officer and director, who is not a professional business
analyst. In analyzing prospective business opportunities, management may
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact our proposed activities; the potential for
growth or expansion; the potential for profit; the perceived public recognition
or acceptance of products, services, or trades; name identification; and other
relevant factors. This discussion of the proposed criteria is not meant to be
restrictive of our virtually unlimited discretion to search for and enter into
potential business opportunities.
We are subject to all of the reporting requirements included in the
Exchange Act. Included in these requirements is our duty to file audited
financial statements as part of or within 60 days following the due date for
filing its Form 8-K which is required to be filed with the Securities and
Exchange Commission within 15 days following the completion of the business
combination. We intend to acquire or merge with a company for which audited
financial statements are available or for which it believes audited financial
statements can be obtained within the required period of time. We may reserve
the right in the documents for the business combination to void the transaction
if the audited financial statements are not timely available or if the audited
financial statements provided do not conform to the representations made by the
target company.
We will not restrict our search for any specific kind of business
entities, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
business life. It is impossible to predict at this time the status of any
business in which we may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which we may offer.
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Following a business combination we may benefit from the services of
others in regard to accounting, legal services, underwriting and corporate
public relations. If requested by a target company, management may recommend one
or more underwriters, financial advisors, accountants, public relations firms or
other consultants to provide such services.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to us
only on the condition that the services of a consultant or advisor be continued
after a merger or acquisition. Such preexisting agreements of target companies
for the continuation of the services of attorneys, accountants, advisors or
consultants could be a factor in the selection of a target company.
Terms of a Business Combination
In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. On the consummation of a
transaction, it is likely that our present management and shareholders will no
longer be in control. In addition, it is likely that our officer and director
will, as part of the terms of the acquisition transaction, resign and be
replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, we may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, it will be undertaken by the
surviving entity after we have entered into an agreement for a business
combination or has consummated a business combination and we are no longer
considered a blank check company. The issuance of additional securities and
their potential sale into any trading market which may develop in our securities
may depress the market value of our securities in the future if such a market
develops, of which there is no assurance.
While the terms of a business transaction to which we may be a party
cannot be predicted, it is expected that the parties to the business transaction
will desire to avoid the creation of a taxable event and thereby structure the
acquisition in a tax-free reorganization under Sections 351 or 368 of the
Internal Revenue Code of 1986, as amended.
With respect to negotiations with a target company, management expects to
focus on the percentage of the Company which target company shareholders would
acquire in exchange for their shareholdings in the target company. Depending
upon, among other things, the target company's assets and liabilities, our
shareholders will in all likelihood hold a substantially lesser percentage
ownership interest in the Company following any merger or acquisition. The
percentage of ownership may be subject to significant reduction in the event
that we acquire a target company with substantial assets. Any merger or
acquisition effected by us can be expected to have a significant dilutive effect
on the percentage of shares held by our shareholders at such time.
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We will participate in a business opportunity only after the negotiation
and execution of appropriate agreements. Although the terms of such agreements
cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing and will
include miscellaneous other terms.
Joren LLC. will pay all expenses in regard to its search for a suitable
target company. We do not anticipate expending funds for locating a target
company. Alfred Arberman, our officer and director, will provide his services
without charge or repayment by us. To date, Joren LLC. has incurred expenses on
our behalf aggregating approximately $299, including incorporation and
accounting expenses. We will not borrow any funds to make any payments to our
management, its affiliates or associates.
Our Board of Directors has passed a resolution which contains a policy
that we will not seek a business combination with any entity in which our
officer, director, shareholders or any affiliate or associate serves as an
officer or director or holds any ownership interest.
Undertakings and Understandings Required Of Target Companies
As part of a business combination agreement, we intend to obtain certain
representations and warranties from a target company as to its conduct following
the business combination. Such representations and warranties may include (i)
the agreement of the target company to make all necessary filings and to take
all other steps necessary to remain a reporting company under the Exchange Act
(ii) imposing certain restrictions on the timing and amount of the issuance of
additional free-trading stock, including stock registered on Form S-8 or issued
pursuant to Regulation S and (iii) giving assurances of ongoing compliance with
the Securities Act, the Exchange Act, the General Rules and Regulations of the
Securities and Exchange Commission, and other applicable laws, rules and
regulations.
A prospective target company should be aware that the market price and
volume of its securities, when and if listed for secondary trading, may depend
in great measure upon the willingness and efforts of successor management to
encourage interest in us within the United States financial community. We do not
have the market support of an underwriter that would normally follow a public
offering of its securities. Initial market makers are likely to simply post bid
and asked prices and are unlikely to take positions in our securities for their
own account or customers without active encouragement and a basis for doing so.
In addition, certain market makers may take short positions in our securities,
which may result in a significant pressure on their market price. We may
consider the ability and commitment of a target company to actively encourage
interest in its securities following a business combination in deciding whether
to enter into a transaction with such company.
A business combination with us separates the process of becoming a public
company from the raising of investment capital. As a result, a business
combination with us normally will not be a beneficial transaction for a target
company whose primary reason for becoming a public company is the immediate
infusion of capital. We may require assurances from the target company that it
has or that it has a reasonable belief that it will have sufficient sources of
capital to continue operations following the business combination. However, it
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is possible that a target company may give such assurances in error, or that the
basis for such belief may change as a result of circumstances beyond the control
of the target company.
Prior to completion of a business combination, we will generally require
that it be provided with written materials regarding the target company
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; an explanation of proprietary
products and services; evidence of existing patents, trademarks, or service
marks, or rights thereto; present and proposed forms of compensation to
management; a description of transactions between such company and its
affiliates during relevant periods; a description of present and required
facilities; an analysis of risks and competitive conditions; a financial plan of
operation and estimated capital requirements; audited financial statements, or
if they are not available, unaudited financial statements, together with
reasonable assurances that audited financial statements would be able to be
produced within a reasonable period of time not to exceed 75 days following
completion of a business combination; and other information deemed relevant.
Competition
We will remain an insignificant participant among the firms which engage
in the acquisition of business opportunities. There are many established venture
capital and financial concerns which have significantly greater financial and
personnel resources and technical expertise than us. In view of our combined
extremely limited financial resources and limited management availability, we
will continue to be at a significant competitive disadvantage compared to our
competitors.
ITEM 2 - PROPERTIES
We have no properties and at this time has no agreements to acquire any
properties. We currently use the offices of management at no cost to us.
Management has agreed to continue this arrangement until we complete an
acquisition or merger.
ITEM 3 - LEGAL PROCEEDINGS
NONE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
PART II.
IETM 5 - MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NONE
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ITEM 6 - MANAGEMENT'S DISSCUSSION AND ANALYSIS OR PLAN OF OPERATION
Our purpose is to seek, investigate and, if such investigation warrants,
acquire an interest in a business entity which desires to seek the perceived
advantages of a corporation which has a class of securities registered under the
Exchange Act. We will not restrict our search to any specific business,
industry, or geographical location and we may participate in a business venture
of virtually any kind or nature. Management anticipates that it will be able to
participate in only one potential business venture because we have nominal
assets and limited financial resources. See PART F/S, "FINANCIAL STATEMENTS."
This lack of diversification should be considered a substantial risk to our
shareholders because it will not permit us to offset potential losses from one
venture against gains from another.
We may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes.
We anticipate that the selection of a business opportunity in which to
participate will be complex and extremely risky. Management believes (but has
not conducted any research to confirm) that there are business entities seeking
the perceived benefits of a reporting corporation. 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, increasing the opportunity to use securities for
acquisitions, providing liquidity for shareholders and other factors. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and complex.
We have, and will continue to have, no capital with which to provide the
owners of business entities with any cash or other assets. However, management
believes we will be able to offer owners of acquisition candidates the
opportunity to acquire a controlling ownership interest in a reporting company
without incurring the cost and time required to conduct an initial public
offering. Management has not conducted market research and is not aware of
statistical data to support the perceived benefits of a business combination for
the owners of a target company.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, our officer and director, who is not a professional business
analyst. In analyzing prospective business opportunities, management may
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact our proposed activities; the potential for
growth or expansion; the potential for profit; the perceived public recognition
or acceptance of products, services, or trades; name identification; and other
relevant factors. This discussion of the proposed criteria is not meant to be
restrictive of our virtually unlimited discretion to search for and enter into
potential business opportunities.
12
<PAGE>
We are subject to all of the reporting requirements included in the
Exchange Act. Included in these requirements is our duty to file audited
financial statements as part of or within 60 days following the due date for
filing its Form 8-K which is required to be filed with the Securities and
Exchange Commission within 15 days following the completion of the business
combination. We intend to acquire or merge with a company for which audited
financial statements are available or for which it believes audited financial
statements can be obtained within the required period of time. We may reserve
the right in the documents for the business combination to void the transaction
if the audited financial statements are not timely available or if the audited
financial statements provided do not conform to the representations made by the
target company.
We will not restrict our search for any specific kind of business
entities, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
business life. It is impossible to predict at this time the status of any
business in which we may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which we may offer.
Following a business combination we may benefit from the services of
others in regard to accounting, legal services, underwriting and corporate
public relations. If requested by a target company, management may recommend one
or more underwriters, financial advisors, accountants, public relations firms or
other consultants to provide such services.
A potential target company may have an agreement with a consultant or
advisor providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target company may be presented to us
only on the condition that the services of a consultant or advisor be continued
after a merger or acquisition. Such preexisting agreements of target companies
for the continuation of the services of attorneys, accountants, advisors or
consultants could be a factor in the selection of a target company.
CAUTIONARY STATEMENT
This Form 10-KSB, press releases and certain information provided
periodically in writing or orally by the Corporation's officers or its agents
contain statements which constitute forward-looking statements within the
meaning of Section 27A of the Securities Act, as amended and Section 21E of the
Securities Exchange Act of 1934. The words expect, anticipate, believe, goal,
plan, intend, estimate and similar expressions and variations thereof if used
are intended to specifically identify forward-looking statements. Those
statements appear in a number of places in this Form 10-KSB and in other places,
particularly, Management's Discussion and Analysis of Financial Condition and
Results of Operations, and include statements regarding the intent, belief or
current expectations of the Corporation, its directors or its officers with
respect to, among other things: (i) the Corporation's liquidity and capital
resources; (ii) its financing opportunities and plans and (iii) its future
performance and operating results. Investors and prospective investors are
cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual results may
differ materially from those projected in the forward-looking statements as a
13
<PAGE>
result of various factors. The factors that might cause such differences
include, among others: (i) any material inability of the Corporation to
successfully identify, consummate and integrate the acquisition of finance
receivables at reasonable and anticipated costs, (ii) any material inability of
the Corporation to successfully develop its products; (iii) any adverse effect
or limitations caused by governmental regulations; (iv) any adverse effect on
the Corporation's continued positive cash flow and ability to obtain acceptable
financing in connection with its growth plans; (v) any increased competition in
business; (vi) any inability of the Corporation to successfully conduct its
business in new markets; and (vii) other risks including those identified in the
Corporation's filings with the SEC. The Corporation undertakes no obligation to
publicly update or revise the forward looking statements made in this Form
10-KSB, to reflect events or circumstances after the date of this Form 10-KSB or
to reflect the occurrence of unanticipated events.
14
<PAGE>
ITEM 7 - FINANCIAL STATEMENTS
ARBER HOLDINGS
(A Development Stage Enterprise)
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
Independent Auditors' Report F-2
Financial Statements as of and for the period November 8,
1999 (date of incorporation) to December 31, 1999
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholder's Deficit F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
F-1
15
<PAGE>
[Letterhead of Kingery, Crouse & Hohl P.A.]
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of Arber Holdings:
We have audited the accompanying balance sheet of Arber Holdings (the
"Company"), a development stage enterprise, as of December 31, 1999 and the
related statements of operations, stockholder's deficit and cash flows for the
period November 8, 1999 (date of incorporation) 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates
made by management, as well as the overall financial statement presentation. We
believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
1999 and the results of its operations and its cash flows for the period
November 8, 1999 (date of incorporation) to December 31, 1999 in conformity with
generally accepted accounting principles.
Kingery, Crouse & Hohl P.A.
March 29, 2000
Tampa, FL
F-2
16
<PAGE>
Arber Holdings
(A Development Stage Enterprise)
BALANCE SHEET AS OF DECEMBER 31, 1999
- --------------------------------------------------------------------------
ASSETS - Cash $ 500
- ------
------------
TOTAL $ 500
============
LIABILITIES AND STOCKHOLDER'S DEFICIT
LIABILITIES - Accrued liabilities $ 1,500
------------
STOCKHOLDER'S DEFICIT:
Preferred stock - $.0001 par value: 5,000,000 shares
authorized; zero shares issued and outstanding 0
Common stock - $.0001 par value; 20,000,000 shares
authorized; 5,000,000 shares issued and outstanding 500
Additional paid-in capital 2,057
Deficit accumulated during the development stage (3,557)
------------
Total stockholder's deficit (1,000)
------------
TOTAL $ 500
============
- --------------------------------------------------------------------------------
See notes to financial statements
F-3
17
<PAGE>
Arber Holdings
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS FOR THE PERIOD NOVEMBER 8, 1999
(DATE OF INCORPORATION) TO DECEMBER 31, 1999
- --------------------------------------------------------------------------------
EXPENSES:
Organization costs $ 299
Professional fees 3,258
-----------
NET LOSS $ (3,557)
===========
BASIC AND DILUTED NET LOSS PER SHARE $ 0.00
===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,000,000
===========
- --------------------------------------------------------------------------------
See notes to financial statements
F-4
18
<PAGE>
Arber Holdings
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDER'S DEFICIT FOR THE PERIOD NOVEMBER 8, 1999
(DATE OF INCORPORATION) TO DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
During the
Common Stock Additional Development
Shares Par Paid-in Stage Total
Value Capital
---------- --------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Balances, November 8,
1999(date of
incorporation) 0 $ 0 $ 0 $ 0 $ 0 $
Issuance of common 5,000,000 500 500
stock
Contributed capital 2,057 2,057
Net loss for the
period, November 8,
1999 (date of
incorporation)
to December 31, 1999 (3,557) (3,557)
--------- ---------- ------------ ----------- -----------
Balances, December 31, 5,000,000 $ 500 $2,057 $ (3,557) $(1,000)
1999 ========= ========== ============ =========== ===========
</TABLE>
- -------------------------------------------------------------------------------
See notes to financial statements
F-5
19
<PAGE>
Arber Holdings
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS FOR THE PERIOD NOVEMBER 8, 1999 (DATE OF INCORPORATION)
TO DECEMBER 31, 1999
- --------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITES:
Net loss $ (3,557)
Adjustments to reconcile net loss to net cash
used by operating activities - increase in accrued
liabilities 1,500
-----------
NET CASH USED BY OPERATING ACTIVITIES (2,057)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 500
Capital contributions 2,057
-----------
CASH PROVIDED BY FINANCING ACTIVITIES 2,557
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 500
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 0
-----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 500
===========
TAXES PAID $ 0
===========
INTEREST PAID $ 0
===========
- ------------------------------------------------------------------------------
See notes to financial statements
F-6
20
<PAGE>
Arber Holdings
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
Arber Holdings ("we, us, our") was incorporated under the laws of the state of
Delaware on November 8, 1999. We are considered to be in the development stage
as defined in Financial Accounting Standards Board Statement No 7, and intend to
effect a merger, exchange of capital stock, asset acquisition or other business
combination with a domestic or foreign private business. Our planned principal
operations have not commenced, therefore accounting policies and procedures have
not yet been established.
NOTE B - USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements. The
reported amounts of revenues and expenses during the reporting period may be
affected by the estimates management is required to make. Actual results could
differ from those estimates.
NOTE C - RELATED PARTY TRANSACTIONS
No value has been ascribed to services provided by our stockholder in the
accompanying statement of operations. The value of these services was not
significant during the period November 8, 1999 (date of incorporation) to
December 31, 1999. In addition, the stockholder has agreed to pay corporate,
organizational and other costs incurred by us and provide the following services
at no cost to us until a business combination is effected:
1. Preparation and filings of required documents with the Securities and
Exchange Commission.
2. Location and review of potential target companies.
F-7
21
<PAGE>
NOTE D - INCOME TAXES
During the period November 8, 1999 (date of incorporation) to December 31, 1999,
we recognized losses for both financial and tax reporting purposes. Accordingly,
no deferred taxes have been provided for in the accompanying statement of
operations.
At December 31, 1999, we had a net operating loss carryforward of approximately
$3,557 for income tax purposes. This carryforward is available to offset future
taxable income through the period ended December 31, 2019. The deferred income
tax asset arising from this net operating loss carryforward is not recorded in
the accompanying balance sheet because we established a valuation allowance to
fully reserve such asset as its realization did not meet the required asset
recognition standard established by SFAS 109.
NOTE E - LOSS PER SHARE
We compute net loss per share in accordance with SFAS No. 128 "Earnings per
Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98").
Under the provisions of SFAS No. 128 and SAB 98, basic net loss per share is
computed by dividing the net loss available to common stockholders for the
period by the weighted average number of common shares outstanding during the
period. Diluted net loss per share is computed by dividing the net loss for the
period by the number of common and common equivalent shares outstanding during
the period. There were no common equivalent shares outstanding as of December
31, 1999.
- ------------------------------------------------------------------------------
F-8
22
<PAGE>
ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
NONE
ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Company has one Director and Officer as follows:
Name Age Positions and Offices Held
Alfred Arberman 54 President, Secretary, Director
There are no agreements or understandings for the officer or director to
resign at the request of another person and the above-named officer and director
is not acting on behalf of nor will act at the direction of any other person.
Set forth below is the name of our director and officer, all positions and
offices held, the period during which he has served as such, and the business
experience during at least the last five years:
Alfred Arberman has served as President, Chief Executive Officer and a
member of our board of directors since November 8, 1999. From July 1999
until October 1999, Mr. Arberman served as production manager of Richlace
Inc., a textile manufacturing firm. From August 1998 until July 1999, Mr.
Arberman was an independent textile manufacturing consultant. From July 1974
until August 1998, Mr. Arberman served as the Vice President of
Manufacturing of Westchester Lace, Inc., a textile manufacturing firm.
PREVIOUS BLANK CHECK COMPANIES
Management has not been involved in any previous blank check offerings.
CURRENT BLANK CHECK COMPANIES
Alfred Arberman, our President, is currently involved with other blank
check companies, and is involved in creating additional companies similar to
this one. The initial business purpose of each of these companies was or is to
engage in a business combination with an unidentified company or companies and
each were or will be classified as a blank check company until completion of a
business combination.
Target companies will be located for us and other identical blank check
companies in chronological order of the date of formation of such blank check
companies or, in the case of blank check companies formed on the same date,
23
<PAGE>
alphabetically. However, certain blank check companies may differ from us in
certain items such as place of incorporation, number of shares and shareholders,
working capital, types of authorized securities, preference of a certain blank
check company name by management of the target company, or other items. It may
be that a target company may be more suitable for or may prefer a certain blank
check company formed after us. In such case, a business combination might be
negotiated on behalf of the more suitable or preferred blank check company
regardless of date of formation.
Mr. Arberman is the President, sole director and a beneficial shareholder
of Aguay Corporation, Arber Holdings, Argen Corporation, Entina Corporation,
Renjo Corporation and Urag Corporation. Each of these companies has filed a
registration statement on Form 10-SB under the Exchange Act, which became
effective January 15, 2000. The initial business purpose of each of these
companies is to engage in a merger or acquisition with an unidentified company
or companies and each will be classified as a blank check company until
completion of a business acquisition.
RECENT TRANSACTIONS BY BLANK CHECK COMPANIES
None.
CONFLICTS OF INTEREST
Alfred Arberman, our sole officer and director, has organized and expects
to organize other companies of a similar nature and with a similar purpose as
us. Consequently, there are potential inherent conflicts of interest in acting
as an officer and director of the Company. In addition, insofar as Mr. Arberman
is engaged in other business activities, he may devote only a portion of his
time to our affairs.
A conflict may arise in the event that another blank check company with
which Mr. Arberman is affiliated also actively seeks a target company. It is
anticipated that target companies will be located for us and other blank check
companies in chronological order of the date of formation of such blank check
companies or, in the case of blank check companies formed on the same date,
alphabetically. However, other blank check companies may differ from us in
certain items such as place of incorporation, number of shares and shareholders,
working capital, types of authorized securities, or other items. It may be that
a target company may be more suitable for or may prefer a certain blank check
company formed after us. In such case, a business combination might be
negotiated on behalf of the more suitable or preferred blank check company
regardless of date of formation.
Mr. Arberman intends to devote as much time to our activities as required.
However, should such a conflict arise, there is no assurance that Mr. Arberman
would not attend to other matters prior to those of the Company. Mr. Arberman
estimates that our business plan can be implemented in theory by devoting
approximately 10 to 25 hours per month over the course of several months but
such figure cannot be stated with precision.
Mr. Arberman is the President, Director and controlling shareholder of
Joren LLC., a Delaware LLC, which owns 5,000,000 shares of the Company's
common stock. At the time of a business combination, some or all of the
shares of common stock owned by Joren LLC. may be purchased by the target
company or retired by the Company. The amount of common stock sold or
continued to be owned by Joren LLC. cannot be determined at this time.
24
<PAGE>
The terms of business combination may include such terms as Mr. Arberman
remaining a director or officer of the Company. The terms of a business
combination may provide for a payment by cash or otherwise to Joren LLC., for
the purchase or retirement of all or part of its common stock of the Company by
a target company or for services rendered incident to or following a business
combination. Mr. Arberman would directly benefit from such employment or
payment. Such benefits may influence Mr. Arberman's choice of a target company.
However, Mr. Arberman's beneficial and economic interest in all blank check
companies with which he is currently involved is identical.
We will not enter into a business combination, or acquire any assets of
any kind for our securities, in which our management, affiliates or associates
have any interest, direct or indirect.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of interest in
favor of the Company could result in liability of management to the Company.
INVESTMENT COMPANY ACT OF 1940
Although we will be subject to regulation under the Securities Act of 1933
and the Securities Exchange Act of 1934, management believes 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. In
the event we engage in business combinations which result in our holding passive
investment interests in a number of entities we could be subject to regulation
under the Investment Company Act of 1940. In such event, we would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. We have obtained no formal determination from
the Securities and Exchange Commission as to our status under the Investment
Company Act of 1940. Any violation of such Act would subject us to material
adverse consequences.
ITEM 10 - EXECUTIVE COMPENSATION.
Our officer and director does not receive any compensation for his
services rendered to us, has not received such compensation in the past, and is
not accruing any compensation pursuant to any agreement with us. However, our
officer and director anticipates receiving benefits as a beneficial shareholder
of the Company, as the officer and director and controlling shareholder of Arber
Holdings. See "ITEM 9. Directors, Executive Officers, Promoters And Control
Persons - Conflicts of Interest".
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by us for the benefit of
our employees.
25
<PAGE>
ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth each person known by us to be the
beneficial owner of five percent or more of our Common Stock, all directors
individually and all directors and officers of the Company as a group. Except as
noted, each person has sole voting and investment power with respect to the
shares shown.
Name and Address Amount of Beneficial Percentage
of Beneficial Owner Ownership of Class
Joren LLC.(1) 5,000,000 100%
18555 NE 14th Ave.
Building "F" Ste. 611
North Miami Beach, Florida 33179
Alfred Arberman (2) 5,000,000 100%
18555 NE 14th Ave.
Building "F" Ste. 611
North Miami Beach, Florida 33179
All Executive Officers and
Directors as a Group (1 Person) 5,000,000 100%
(1) Mr. Arberman is the controlling shareholder and sole director and
officer of Joren LLC. Joren LLC. has agreed to provide certain assistance
to us in locating potential target companies, and to pay all of our costs
until a business combination, without reimbursement. See "PLAN OF OPERATIONS
General Business Plan".
(2) As the controlling shareholder, sole director and officer of Joren
LLC., Mr. Arberman is deemed to be the beneficial owner of the common stock
of the Company owned by Joren LLC.
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
We have issued a total of 5,000,000 shares of Common Stock to the
following persons for a total of $500 in cash:
Name Number of Total Shares Consideration
Joren LLC. 5,000,000 $500
Mr. Arberman is the sole director, controlling shareholder and
president of Joren LLC. With respect to the sales made to Joren LLC., we
relied upon Section 4(2) of the Securities Act of 1933, as amended (the
"Securities Act") and Rule 506 promulgated thereunder.
26
<PAGE>
ITEM 13-EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORMS 8-K
Exhibits - None.
- --------
Financial Statement Schedules - None.
- -----------------------------
Reports on Form 8-K - None.
27
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ARBER HOLDINGS
By: ____________________________________________________
Chief Executive Officer
Dated: April 13, 2000
In accordance with Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dated indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
- ---------------- Director, Chief Accounting April 13, 2000
Officer
28
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 500
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 500
<CURRENT-LIABILITIES> 1,500
<BONDS> 0
0
0
<COMMON> 500
<OTHER-SE> (1,000)
<TOTAL-LIABILITY-AND-EQUITY> 500
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3,557
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,557)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,557)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,557)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
