SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 1
TO
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31,1999.
Commission File Number 000-28537
AMENDMENT NO. 1
TO
BIG FUN TOYS, INC.
-----------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-4737488
---------------------- -------------------
(State of organization) (I.R.S. Employer
Identification No.)
22147 PACIFIC COAST HIGHWAY, #4, MALIBU, CA 90265
-----------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code (310) 317-6939
Securities registered pursuant to Section 12(b) of the Act,
None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
Common Stock, $0.001 par value per share
<PAGE>
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [ ] No [ X ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [X]
Issuer's revenues for its most recent fiscal year. $0.00
The aggregate market value of the Common Stock held by non-affiliates of the
registrant, based on the average of the high and low prices of the Common Stock
on the OTC Bulletin Board on March 1, 2000, was $0.00. For purposes of this
computation, all officers, directors, and 5% beneficial owners of the registrant
(as indicated in Item 12) are deemed to be affiliates. Such determination should
not be deemed an admission that such directors, officers, or 5% beneficial
owners are, in fact, affiliates of the registrant.
Number of shares of Common Stock, $0.001 Par Value, outstanding at March 1,
2000, was 750,000.
Documents incorporated by reference: None
2
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TABLE OF CONTENTS - 1999 FORM 10-KSB REPORT
Page
Numbers
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PART I
Item 1. Business 4
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders 7
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 7
Item 6 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 7. Financial Statements 8
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 8
PART III
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act 9
Item 10. Executive Compensation 12
Item 11. Security Ownership of Certain Beneficial Owners
and Management 13
Item 12. Certain Relationships and Related Transactions 14
Item 13. Exhibits and Reports on Form 8-K 14
Signatures 15
3
<PAGE>
PART I
Item 1. Business
History
- -------
Big Fun Toys, Inc. ("Big Fun Toys" or the "Company") was incorporated May
9, 1997 under the laws of the State of Delaware. The Company sells toys,
children's books and other children's related retail items over the Internet.
Since its launch, the Company has been continuously expanding with more product
selection and children/women related content and features, in addition to the
forming of strategic partnerships. One such partnership under development is
with a portal site, which is one of the fastest growing sites on the Internet.
This will allow a symbiotic relationship providing the Company the use of 80
million page views per month where it will be featured as the premium
destination for toys and content and allowing both companies to form common
`communities' of content, chat room features, and other related links to enhance
and attract business to both sites. The Company will focus on developing other
strategic partnerships, as well, such as philanthropic partnerships with the Red
Cross, March of Dimes, or other children-related causes. It will donate a
certain percentage of its sales to one of these organizations and, in return, it
will be able to advertise this partnership.
E-commerce is growing at the phenomenal rate of over 60% annually as
projected, by Jupiter Communications. Over 16 million people were estimated to
do shopping online in 1998. The Internet is therefore a tremendous opportunity
for companies with the right mix of products, technology, marketing and
management.
The Company
- -----------
The Company is lead by an experienced management team with an average of
over 15 years industry experience including start-ups. The founders have funded
the start-up and initial launch with their own money. Current expansion is
limited by the internal funding available for marketing and promotion. Marketing
and promotion expenditures are directly related to the volume of anticipated
traffic on the Company's website.
The Company's business objective is to become the top "children's shopping
destination" on the Internet. The concept is to develop a site with integrated
retail content for children from age 1 to 14 years. This strategy consists in
becoming one of the major toys, games, children's books and related retail items
sites on the web. The Company intends to invest in the development of a complete
shopping site that is easy to use for buyers, has a large selection and highly
competitive prices. The initial online shipping site is fully developed and has
been operational since mid-October, 1998. The site launch was timed for
Halloween shopping.
4
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The management philosophy is to build a visionary company that is capable
of quickly responding to the dynamic nature of e-commerce. The Company is
committed to becoming the leading independent Internet site for the children's
non-clothing retail niche. For instance, the Company will carry seasonally hot
toys, computer and video games, music CDs, videos, collectible toys and licensed
sports jerseys. With additional funding growth rates of 300 to 600% are
possible.
The marketing strategy is to compete on price and selection with such
competitors as Etoys. The Company plans to create marketing partnerships and
alliances with portal site market leaders such as Netscape and MSN. Alliances
such as these cannot be established without a well-funded operation capable of
sales in three years of $50M.
Marketing Strategy
- ------------------
The marketing strategy encompasses a wide, integrated approach that
includes:
1. Search engine listings in major search engines such as Excite,
Infoseek, AltaVista, etc;
2. Listing in major directories such as Yahoo, Internet yellow pages,
and Internet shopping directories;
3. Banner advertising on high traffic, children's and working women's
related sites;
4. Media relations;
5. Co-operative promotions;
6. E-mail distribution lists;
7. Charitable tie-ins;
8. Incentives for visiting the site;
9. Print advertising;
10. Radio advertising;
5
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11. Talk show interviews; and,
12. Internet news outlets.
Marketing campaigns will use close relationships with high visibility,
child related causes and publications to propel the Company message. The "one
stop solution" for the busy parent or relative, saving him/her time and money
will be a strong theme.
A variety of tactics will be used to attract shopping to the site and to
maintain loyalty for revisiting. These include a Company Birthday Club, discount
for repeat purchases, special e-mail coupons, free gift wrapping on purchases
over a specified limit, The Pediatricians Corner with Q&A on children's health,
Kid's Cooking Corner, Kid's Book Corner and links to the Consumer Product Safety
Commission. Special promotions will be made with toy manufacturers of unique
items. The Company's branded items such as water bottles, printed T-shirts,
whistles, yo-yos, etc. will be sold and added as bonuses on selected purchases.
These programs are innovative for Internet children's sites. Several ideas
pioneered by the Company have been copied by others, such as give aways and
e-mail registration. The Company has many more ideas for innovative marketing.
Many of the tactics are not being used by any of the Company's competitors. In
the end, the success of the Company is dependent in large part to a broad
marketing effort to attract visitors to the site. The unique customer retention
programs will be the best on the Internet for children's sites.
Item 2. Properties
The Company's executive and administrative offices are located at 22147 Pacific
Coast Highway, #4, Malibu, California 90265. The Company pays no rent for use of
the office and does not believe that it will require any additional office space
in the foreseeable future in order to carry out its plan of operations described
herein.
6
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Item 3. Legal Proceedings
There are no pending legal proceedings to which the Company is a party or to
which any of the Company's assets or properties are subject.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The Company registered its common stock on a Form 10-SB Registration Statement
on a voluntary basis, which became effective February 17, 2000. The Company's
Common Stock is not presently traded on an established public trading market.
Following the filing on this Form 10, the Company anticipates that it will
submit its Common Stock for listing on the OTC Electronic Bulletin Board.
The approximate number of record holders of the Company's Common Stock as
of December 31, 1999 was 2, inclusive of those brokerage firms and/or clearing
houses holding the Company's common shares for their clientele (with each such
brokerage house and/or clearing house being considered as one holder). The
aggregate number of shares of Common Stock outstanding as of December 31, 1999
was 750,000.
The Company has not declared or paid any cash dividends on its Common Stock
and does not intend to declare any dividends in the foreseeable future. The
payment of dividends, if any, is within the discretion of the Board of Directors
and will depend on the Company's earnings, if any, its capital requirements and
financial condition, and such other factors as the Board of Directors may
consider. In addition, if the Company is able to negotiate new credit
facilities, such facilities may include restrictions on the Company's ability to
pay dividends.
RECENT SALES OF UNREGISTERED SECURITIES
In March 1999, the Company issued unregistered securities to the initial
shareholders of the Company resulting in the issuance and delivery of 100 shares
and 900 shares of the Company's Common Stock to PageOne Business Productions,
LLC ("PageOne"), and Appletree Investment Company, Ltd. ("Appletree"),
respectively. Such securities were issued for aggregate consideration totaling
$1,000 pursuant to the exemptions from registration provided under the Delaware
General Corporation Law and the exemption provided by Section 4(2) of the
Securities Act of 1933, as amended, for issuances of securities not involving
any public offering.
7
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Item 6 Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
- ---------------------
The following discussion and analysis below should be read in conjunction
with the financial statements, including the notes thereto, appearing elsewhere
in this Registration Statement. For the period since inception (May 9, 1997)
through December 31, 1999, during the Company's development stage, the Company
has a cash balance of $11.00, and has generated a net loss of ($1,369).
FINANCIAL CONDITION AND LIQUIDITY
- ---------------------------------
The Company has limited liquidity and has an ongoing need to finance its
activities. To date, the Company currently has funded these cash requirements by
offering and selling its Common Stock. The Company expects to fund its immediate
needs through private placements of its securities and may seek a suitable
business combination.
PLAN OF OPERATION
The Company has registered a dot.com name and has determined it can begin
conducting its business with limited financing that it has arranged.
Item 7. Financial Statements
The financial statements and supplemental data required by this Item 7 follow
the index of financial statements appearing at Item 13 of this Form 10-KSB.
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
8
<PAGE>
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act
The names of the directors and executive officers of the Company, as well as
their respective ages and positions with the Company, are as follows:
Name Age Position
- ---- --- --------
George A. Todt 46 Chairman of the Board of Directors
James F. Walters 45 Vice President, Treasurer and Chief
Financial Officer
Mary Elizabeth Rowbottom 28 President and Secretary
GEORGE A. TODT has been the Chairman of the Company's Board of Directors
since its inception. Prior to founding the Company, Mr. Todt has been a managing
member of PageOne Business Productions, LLC, since March 1996. Mr. Todt's
experience over the past 15 years includes working with 10 start-up companies,
raising venture capital, and arranging strategic partnerships and initial public
offerings. He has researched, developed and implemented marketing and sales
training programs in several industries.
From 1990 to 1995, Mr. Todt was Chief Executive Officer of REPCO, a
start-up company based in St. Louis, Missouri, where his responsibilities
included product selection, market research and implementation, from large
contracts to small industrial products. REPCo's largest project included a
turn-key tire recycling plant built in Japan. Mr. Todt traveled extensively in
China, Japan, India, Russia and Europe, establishing manufacturing contracts,
marketing and distribution programs, and bidding on and managing government
contracts. Mr. Todt also has consulted internationally on technology exchanges
and rights.
From 1989 to 1991, Mr. Todt was an investor/director of FLEXWARE, an
accounting and networking software company located in Los Angeles, which was a
leader in the field of networking language for MAC, DOS, UNIX and DEC computers.
Mr. Todt assisted in obtaining financing, restructuring and establishing a
marketing strategy for FLEXWARE.
In June 1986, Mr. Todt began working full-time in sales with Todt
Industrial Supply, and in December 1986, he acquired the company and Todt Sheet
Metal Company (collectively, the "Todt Companies" in Cape Girardeau, Missouri).
From 1987 to 1990, Mr. Todt served as Chief Executive Officer of the Todt
Companies, reorganized the companies, implemented new marketing and sales
programs, automated accounting and developed the business into eight divisions,
four of which he created. Under Mr. Todt's leadership, the Todt Companies grew
from 29 to 130 employees, and annual sales grew from $2 million to $8 million.
9
<PAGE>
From 1985 to 1986, Mr. Todt served as Vice President of Administration at
HOH Water Technology, Los Angeles, California. As Vice President, he reorganized
the Company's structure, developed an engineering department, was responsible
for redesigning its product, developing a marketing plan and negotiating
strategic alliances with General Electric, Du Pont, and Mitsui. Eventually, he
succeeded in taking HOH public.
From 1979 to 1983, Mr. Todt was the founder and Managing Director of Todt &
Associates, a marketing and investment partnership in Malibu, California,
raising financing for several start-up companies and projects, developing mining
and refining equipment for the precious metal industry, and setting up a sales
and distribution network. In addition, Mr. Todt managed an international
precious metal arbitrage company and researched a book on precious metals which
spent 22 weeks on England's "best seller" list. Mr. Todt also designed,
coordinated and managed three hundred employees in the construction of a
$4,000,000 multi-purpose building.
JAMES F. WALTERS has served as the Vice President, Treasurer and Chief
Financial Officer of the Company since its inception. Mr. Walters joined Kellogg
& Andelson as an accountant in 1976, was elected a partner in 1980, was promoted
to Managing Partner in 1984, and elected Chairman of the Board of Kellogg &
Andelson Accountancy Corporation in 1995. As Chairman, Mr. Walters is currently
responsible for the overall management of the 80-person firm. Mr. Walters has
assisted the firm's clients in connection with the preparation of their initial
public offerings, private finance, merger, acquisition and restructuring
strategies. He continues to be an active consultant in the many phases of client
business operations, such as operational control systems, general management and
capital funding, servicing middle market companies in many different industries,
including aerospace, mail order, entertainment, high tech, retail,
import/export, graphic design, business management, plastics and publishing.
Mr. Walters previously served as a member of the Board of Directors of
Kistler Aerospace, a manufacturer of reusable rockets that deliver satellites
into orbit, and was instrumental in the initial financing of that company. Mr.
Walters also serves as a member of the Board of Directors of California Fitnuts,
Inc., a start-up company which produces, through a patented process, nuts that
have 50% less fat. In addition, Mr. Walters has founded, owned and managed
companies in the commercial photography, corporate events, auto repair and
concrete molding industries.
Mr. Walters received an M.B.A. degree from Pepperdine University (Malibu,
California) in 1981, and a B.S. degree in Accounting from California State
University, Northridge (CSUN) in 1976.
10
<PAGE>
MARY ELIZABETH ROWBOTTOM has served as the Secretary of the Company since
inception and has been President since November 22, 1999. Ms. Rowbottom also has
worked at PageOne Business Productions since September 1996 serving as Vice
President since March 1997. From 1994 to 1996, Ms. Rowbottom served in various
capacities and, most recently, as a talent manager with HSI Productions, a
bi-coastal commercial film production company producing television commercials
and music videos, and serviced substantial advertising agency clients, including
Leo Burnett, DDB Needham and Bozell Worldwide. Prior thereto, Ms. Rowbottom was
an assistant to Merrill Lynch account representatives. Ms. Rowbottom received a
B.A. degree in Communications from the University of Wisconsin in 1993.
Directors of the Company are elected annually by the stockholders of the
Company to serve for a term of one year or until their successors are duly
elected and qualified. Officers serve at the pleasure of the Board of Directors
subject to any rights under employment agreements. All directors will receive
reimbursement of reasonable out-of-pocket expenses incurred in connection with
meetings of the Board. No other compensation is, or will be, paid to directors
for services rendered as directors. From the Company's inception to the date of
this filing, there have been no meetings of the Company's Board of Directors.
Other actions of the Company's Board of Directors were taken pursuant to
unanimous written consents. There are no family relationships between any
directors or officers of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, file reports of ownership
and changes in ownership with the Securities and Exchange Commission. The
Company was not subject to the reporting requirements of Section 16(a) during
fiscal 1999.
11
<PAGE>
Item 10. Executive Compensation
Consistent with our present policy, no director or executive officer of Big Fun
Toys receives compensation for services rendered to the company. However, such
persons are entitled to be reimbursed for expenses incurred by them in pursuit
of Big Fun Toys' business objectives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
- --------------------------------------------------------------------------------
The Company does not have any officer or director stock option plan. The
Company intends to incorporate one after a public offering. The Company does not
have an employee stock option plan. (ESOP). The Company intends to incorporate
one after a public offering.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- -------------------------------------
There were no option/SAR Grants in the last fiscal year.
COMPENSATION OF DIRECTORS
- ------------------------
The Company's directors serve without compensation.
12
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners
and Management
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of the date hereof by (i) each person
known by the Company to be the beneficial owner of more than five percent of its
Common Stock; (ii) each director; (iii) each executive officer listed in the
Summary Compensation Table in Item 6 of this Form 10; and (iv) all directors and
executive officers as a group. Unless otherwise indicted, each of the following
stockholders has sole voting and investment power with respect to the shares
beneficially owned, except to the extent that such authority is shared by
spouses under applicable law.
Amount of Percentage of
Name and Address of Beneficial Outstanding
Beneficial Owner Ownership Shares
- ---------------- --------- ------
Appletree Investment Co., Ltd. 750,000(1) 100%
C/o Anglo Irish Trust (I.O.M.)
69 Athol Street
Douglas, Isle of Man 1M1 1JE
PageOne Business Productions, LLC(1) 412,500 55%
860 Via de la Paz, Suite E-1
Pacific Palisades, CA 90272
George A. Todt 412,500(2) 55%
James F. Walters 412,500(2) 55%
Mary Elizabeth Rowbottom 412,500(2) 55%
All executive officers and directors as a 412,500(2) 55%
group (3 persons)
- -----------------------------
(1) Consists of 337,500 shares held of record by Appletree Investment Company,
Ltd., an Isle of Man corporation, and 412,500 shares held of record by Page One
Business Productions, LLC, a Delaware limited liability company, of which
Appletree is a managing member.
(2) Consists solely of 412,500 shares held of record by Page One Business
Productions, LLC, a Delaware limited liability company, of which Messrs. Todt
and Walters are managing members and Ms. Rowbottom is Vice President.
13
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Item 12. Certain Relationships and Related Transactions
In March 1999, the Company issued 100 shares of the Company's Common Stock
to PageOne, of which George Todt and James Walters are managing members and Ms.
Rowbottom is Vice President. Such securities were issued for $1.00 per share.
Item 13. Exhibits and Reports on Form 8-K
(a)(1) The following financial statements are contained on Pages F-1
through F-8:
REPORT OF INDEPENDENT AUDITOR, WEINBERG & COMPANY, P.A.,
CERTIFIED PUBLIC ACCOUNTANTS DATED APRIL 6, 2000.
BALANCE SHEET AS OF DECEMBER 31, 1999
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE PERIOD FROM MAY 9, 1997 (INCEPTION) TO DECEMBER 31, 1999
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY FOR THE PERIOD
FROM MAY 9, 1997 (INCEPTION) TO DECEMBER 31, 1999
STATEMENTS OF CASH FLOW FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE PERIOD FROM MAY 9, 1997 (INCEPTION) TO DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS
(a)(3) Exhibits
The following exhibits are filed with this report.
3.1.1 Amended and Restated Articles of Incorporation of Registrant
(incorporated herein by reference to the Company's Registration
Statement on Form 10-SB 12(g), File No. 000-28537)
3.2.1 ByLaws of Registrant (incorporated herein by reference to the
Company's Registration Statement on Form 10-SB 12(g), File No.
000-28537)
27.1 Financial Data Schedule *
* Previously filed
(b) Reports on Form 8-K
None
14
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AUDITOR'S REPORT
To the Board of Directors of:
Big Fun Toys, Inc.
We have audited the accompanying balance sheet of Big Fun Toys, Inc. (a
development stage company) as of December 31, 1999 and the related statements of
operations, changes in stockholders' deficiency and cash flows for the year then
ended and for the period from May 9, 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Big Fun Toys, Inc. (a development
stage company) as of December 31, 1999, and the results of its operations and
its cash flows for the year then ended and for the period from May 9, 1997
(inception) to December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company is a development stage company without
operations and has had accumulated operating losses of $1,369 since inception
and a working capital deficiency of $359. These factors raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
April 6, 2000
F-1
<PAGE>
BIG FUN TOYS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999
3
ASSETS
CURRENT ASSETS
Cash $ 11
-------
TOTAL ASSETS $ 11
=======
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Loan payable to principal stockholder $ 370
-------
STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.001 par value, 8,000,000 shares
authorized, none issued and outstanding -
Common stock, $0.001 par value, 100,000,000 shares
authorized, 750,000 issued and outstanding 750
Additional paid-in capital 260
Accumulated deficit during development stage (1,369)
-------
TOTAL STOCKHOLDERS' DEFICIENCY (359)
-------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 11
=======
See accompanying notes to financial statements
F-2
<PAGE>
BIG FUN TOYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
May 9, 1997
(Inception)
Year Ended to
December December
31, 1999 31, 1999
---------- ---------
REVENUES $ - $ -
--------- ---------
EXPENSES
Accounting fees 500 500
Bank charges 120 120
Consulting fees - 10
Legal fees 500 500
Taxes 239 239
--------- ---------
NET LOSS $ (1,359) $ (1,369)
========= =========
Net loss per share - basic and diluted $ (.002) $ (.002)
========= =========
Weighted average number of shares
outstanding during the period -
basic and diluted 650,342 478,930
========= =========
See accompanying notes to financial statements
F-3
<PAGE>
<TABLE>
BIG FUN TOYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM MAY 9, 1997 (INCEPTION) TO DECEMBER 31, 1999
<CAPTION>
Accumulated
Common Stock Additional During
--------------------- Paid-In Development
Shares Amount Capital Stage Total
--------- --------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C>
Common stock issued for services 375,000 $ 375 $ $ - $ 10
Net loss for the year ended - - - (10) (10)
December 31, 1997
------- ------- ------- ------- -------
Balance, December 31, 1997 375,000 375 (365) (10) -
------- ------- ------- ------- -------
Balance, December 31, 1998 375,000 375 (365) (10) -
Common stock issued for cash 375,000 375 625 - 1,000
Net loss for the year ended December 31,
1999 - - - (1,359) (1,359)
------- ------- ------- ------- -------
Balance, December 31, 1999 750,000 $ 750 $ 260 $(1,369) $ (359)
======= ======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE>
BIG FUN TOYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
May 9,
For the Year 1997
Ended (Inception)
December To December
31, 1999 31, 1999
---------- -----------
Cash flows from operating activities
Net loss $(1,359) $(1,369)
Adjustments to reconcile net loss to net
cash used in operating activities:
Common stock issued for services - 10
------- -------
Net cash used in operating activities (1,359) (1,359)
------- -------
Cash flows from financing activities
Proceeds from issuance of common stock 1,000 1,000
Loan proceeds from principal stockholder 370 370
------- -------
Net cash provided by financing activities 1,370 1,370
------- -------
NET INCREASE IN CASH 11 11
CASH AND CASH EQUIVALENTS - BEGINNING - -
------- -------
CASH AND CASH EQUIVALENTS - ENDING $ 11 $ 11
======= =======
See accompanying notes to financial statements
F-5
<PAGE>
BIG FUN TOYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ------- ------------------------------------------
(A) Organization and Description of Business
Big Fun Toys, Inc. (a development stage company) (the "Company") was
incorporated in the State of Delaware on May 9, 1997 to engage in an
internet-based business. At December 31, 1999, the Company had not yet
commenced any revenue-generating operations, and all activity to date
relates to the Company's formation, proposed fund raising and business
plan development.
The Company's ability to commence revenue-generating operations is
contingent upon its ability to implement its business plan and raise
the additional capital it will require through the issuance of equity
securities, debt securities, bank borrowings or a combination thereof.
(B) Use of Estimates
In preparing financial statements in conformity with generally
accepted accounting principles, management is required 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 and revenues and
expenses during the reported period. Actual results could differ from
those estimates.
(C) Cash and Cash Equivalents
For purposes of the cash flow statements, the Company considers all
highly liquid investments with original maturities of three months or
less at time of purchase to be cash equivalents.
(D) Income Taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109.
"Accounting for Income Taxes" ("Statement No.109"). Under Statement
No. 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
There were no current or deferred income tax expenses or benefits due
to the Company not having any material operations for the year ended
December 31, 1999.
F-6
<PAGE>
BIG FUN TOYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
- ------- ------------------------------------------
(E) Loss Per Share
Net loss per common share for the year ended December 31, 1999 and for
the period from May 9, 1997 (inception) to December 31, 1999 is
computed based upon the weighted average common shares outstanding as
defined by Financial Accounting Standards No. 128 "Earnings Per
Share". There were no common stock equivalents outstanding at December
31, 1999.
NOTE 2 LOAN PAYABLE TO PRINCIPAL STOCKHOLDER
The loan payable to principal stockholder is a non-interest-bearing
loan payable to PageOne Business Productions, LLC. The amount is due
and payable on demand.
NOTE 3 STOCKHOLDERS' DEFICIENCY
The Company was originally authorized to issue 2,000 shares of common
stock at no par value. The Company issued 900 and 1,100 shares to
AppleTree Investment Company, Ltd. and PageOne Business Productions,
LLC, respectively.
Management subsequently filed an amendment to the articles of
incorporation with the State of Delaware, which increased the number
of authorized common shares to 100,000,000, effected a 375 to 1 split
of the 2,000 previously issued common shares and created 8,000,000
authorized shares of preferred stock, of which the issuance, rights
and other terms are to be determined by the Company's Board of
Directors. In addition, the par value of the common stock was changed
to $0.001 per share and the par value of the new preferred stock was
set at $0.001 per share.
The financial statements at December 31, 1999 give retroactive effect
to common stock split, new authorized share amounts, and par values
enumerated in the amended certificate of incorporation. During 1999,
375,000 shares of common stock were issued for proceeds of $1,000. No
preferred shares have been issued as of December 31, 1999.
F-7
<PAGE>
BIG FUN TOYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 4 GOING CONCERN
As reflected in the accompanying financial statements, the Company has
had accumulated losses of $1,369 since inception, a working capital
deficiency of $359 and has not generated any revenues since it does
not yet have an operating business. The ability of the Company to
continue as a going concern is dependent on the Company's ability to
raise additional capital and implement its business plan. The
financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
The Company intends to implement its business plan and is seeking
funding through the private placement of its equity or debt securities
or may seek a combination with another company already engaged in its
proposed business. Management believes that actions presently being
taken provide the opportunity for the Company to continue as a going
concern.
F-8
<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.
BIG FUN TOYS, INC.
Amendment No. 1 /s/ Mary Elizabeth Rowbottom
April 17, 20000 By: ----------------------------
Mary Elizabeth Rowbottom
President
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Signature Title Date
/s/ George A. Todt Director April 13, 2000
/s/ Mary Elizabeth Rowbottom President April 13, 2000
/s/ James Walters Vice President, Treasurer April 13, 2000
15
