U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Pinnacle Property Group, Inc.
(Name of Small Business Issuer in its charter)
Delaware 91-2026829
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2009 Iron Street
Bellingham, Washington 98225
(Address of principal executive office) (Zip Code)
Issuer's telephone number (360) 647-3170
Securities to be registered under Section 12(g) of the Act:
Common Shares
Charles Clayton
527 Marquette
Minneapolis, Minnesota 55402
(612) 338-3738
(Agent for Service)
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS
Pinnacle Property Group, Inc. was incorporated in the State of Delaware
on to engage in the real estate business on the internet.
Pinnacle Property Group, Inc. owns and operates a web site on the
Internet, the address is ezproperty.net. The web site is designed to facilitate
sales of real estate on the internet, both residential and commercial.
As a result it will be both a business to business (B2B) model and a
business to consumer (B2C) model.
The web site provides a means of selling or purchasing real estate, and
a place for service providers. It will have places on the web site for service
persons to advertise, such as painters, plumbers, electricians, gardeners,
landscapers and janitorial services.
In addition the web site will have advertisements for real estate
professionals such as bankers, mortgage brokers, escrow agencies, and insurance
agents.
ITEM 2. PLAN OF OPERATION
The Internet has created a new medium for advertising, marketing and
sales. The ezproperty.net hopes to offer a site that will have widespread
consumer brand appeal and recognition.
A person that desires to list a property on the site will pay an
initial listing fee of $49.99 for the image and description of the property to
be posted on the web site. When the sale is completed the person will pay a 1%
fee calculated on the consummated sale price.
Management will develop a database of service persons who will be
available for the clients for both pre sale and post sale work. The service
persons will include painters, plumbers, electricians, gardeners, landscapers
and janitorial services. They will pay a fee of $499.00 per year to be given
access to the buyers and sellers.
Management will also develop a database of service professionals, such
as banks, mortgage brokers, escrow agents and insurance agents who desire to be
a party to the property transfer and sale. They will pay a fee of $499.00 per
year to be given access to the buyers and sellers.
ITEM 3. DESCRIPTION OF PROPERTY
None
<PAGE>
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There are presently 4,665,000 shares of the company's common shares
outstanding. The following table sets forth the information as to the ownership
of each person who, as of this date, owns of record, or is known by the company
to own beneficially, more than five per cent of the company's common stock, and
the officers and directors of the company.
Shares of Percent of
Name Common Stock ownership
--------------------------------------------------------------------------------
Paul Hayward 1,055,000 22
10-1917 West 4th Avenue
Vancouver, BC
Directors and Officers 1,055,000 22%
as a group
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The executive officers and directors of the company, with a brief
description are as follows:
Name Position
---- --------
Paul Hayward President, Secretary, Director
Kali Palmer Director
Paul Hayward, Mr. Hayward is the President, Secretary and a Director of
the Company. From 1990 to 1994 he served as manager of Cityview Real Estate
Management Services, Ltd. of Vancouver, British Columbia. He is presently the
President of 5 Starliving Online, Inc. Mr. Hayward will work part time for the
Company until it is fully operational.
Kali Palmer, Ms Palmer is a Director. She worked for Facilicom
Educational Products in Austin, Texas from 1993 to 1998 in marketing. From 1999
to the present she has been a director of the company and in the real estate
portfolio business in Seattle, Washington.
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION
There are no officers or directors that received compensation in excess
of $60,000 or more during the last year.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
ITEM 8. LEGAL PROCEEDINGS
None
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company's common stock has not traded at this time.
There are 41 holders of the common stock of the Company. There have
never been any dividends, cash or otherwise, paid on the common shares of the
Company.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
Name Date Shares Cost
Paul Hayward 1,055,000 $16,400
Dilshand Maherali 100,000 $100
Mithoo Maherali 100,000 $100
Chantel Gibson 100,000 $100
Lena Loui 50,000 $50
Renee Grue 50,000 $50
Tyler Cox 50,000 $50
Joanne Loui 50,000 $50
Nicola Hayward 100,000 $100
Donna Loui 100,000 $100
Kelly Bellman 50,000 $50
Glen McNaughton 50,000 $50
George Sainas 100,000 $100
Kelly Brantner 100,000 $100
Dave Tsui 100,000 $100
Eileen Hayward 100,000 $100
John P. Bullen 100,000 $100
Demerka Ward 100,000 $100
<PAGE>
David Ginn 100,000 $100
Sean Trotter 100,000 $100
Chris Wong 100,000 $100
Trevor Morris 100,000 $100
Gerald Redman 100,000 $100
John Sveticic 100,000 $100
Kim Bullen 100,000 $100
Steven Bullen 100,000 $100
All of these shares were sold pursuant to a Private Placement
Memorandum to nonresidents of the United States. There was no underwriter, and
no commissions were paid on any of the sales.
The registrant believes that all transactions were transactions not
involving any public offering within the meaning of Section 4(2) of the
Securities Act of 1933, since (a) each of the transactions involved the offering
of such securities to a substantially limited number of persons; (b) each person
took the securities as an investment for his own account and not with a view to
distribution; (c) each person had access to information equivalent to that which
would be included in a registration statement on the applicable form under the
Act; (d) each person had knowledge and experience in business and financial
matters to understand the merits and risk of the investment; therefore no
registration statement need be in effect prior to such issuances.
ITEM 11. DESCRIPTION OF SECURITIES
The company has authorized 80,000,000 shares of common stock, $.0001
par value, and 20,000,000 preferred stock, $.0001 par value. Each holder of
common stock has one vote per share on all matters voted upon by the
shareholders. Such voting rights are noncumulative so that shareholders holding
more than 50% of the outstanding shares of common stock are able to elect all
members of the Board of Directors. There are no preemptive rights or other
rights of subscription.
Each share of common stock is entitled to participate equally in
dividends as and when declared by the Board of Directors of the company out of
funds legally available, and is entitled to participate equally in the
distribution of assets in the event of liquidation. All shares, when issued and
fully paid, are nonassessable and are not subject to redemption or conversion
and have no conversion rights.
The preferred shares have not been designated any preferences.
Risk Factor - Penny Stock Regulation. Broker-dealer practices in
connection with transactions in "penny stocks" are regulated by certain penny
stock rules adopted by the Securities and Exchange Commission. Penny stock
generally are equity securities with a price of less than $5.00 (other than
securities registered on
<PAGE>
certain national securities exchanges or quoted on the Nasdaq system, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system). The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the risks in the penny stock market. The
broker-dealer must also provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules generally require that prior to a transaction in a penny
stock the broker-dealer make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the purchaser's
written agreement to the transaction. These disclosure requirements may have the
effect of reducing the level of trading activity in the secondary market for a
stock that becomes subject to the penny stock rules. If the Company's securities
become subject to the penny stock rules, investors in this offering may find it
more difficult to sell their securities.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware Statutes, contain an extensive indemnification provision which
requires mandatory indemnification by a corporation of any officer, director and
affiliated person who was or is a party, or who is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was a member, director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a member, director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys' fees, and
against judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted,
or failed to act, in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In some instances a court must approve such indemnification.
ITEM 13. FINANCIAL STATEMENTS
Please see the attached Financial Statements.
<PAGE>
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) Please see the attached Financial Statements
(b) Exhibits:
3. Articles of Incorporation and bylaws
27. Financial Data Schedule
<PAGE>
================================================================================
PINNACLE PROPERTY GROUP, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
MAY 31, 2000
WILLIAMS & WEBSTER PS
CERTIFIED PUBLIC ACCOUNTANTS
BANK OF AMERICA FINANCIAL CENTER
W 601 RIVERSIDE, SUITE 1940
SPOKANE, WA 99201
(509) 838-5111
================================================================================
<PAGE>
PINNACLE PROPERTY GROUP, INC.
TABLE OF CONTENTS
May 31, 2000
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance Sheets 2
Statements of Operations 3
Statement of Stockholders' Equity 4
Statements of Cash Flows 5
NOTES TO FINANCIAL STATEMENTS 6
<PAGE>
[LOGO] WILLIAMS & WEBSTER, P.S. LETTERHEAD
Board of Directors
Pinnacle Property Group, Inc.
Bellingham, Washington
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Pinnacle Property Group,
Inc., (a development stage enterprise), as of May 31, 2000 and February 29,
2000, and the related statements of operations, stockholders' equity and cash
flows for the three month period ended May 31, 2000, for the period August 17,
1999 (inception) to February 29, 2000, and for the period August 17, 1999
(inception) to May 31, 2000. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pinnacle Property Group, Inc.,
as of May 31, 2000 and February 29, 2000, and the results of its operations and
its cash flows for the three month period ended May 31, 2000, for the period
August 17, 1999 (inception) to February 29, 2000, and for the period August 17,
1999 (inception) to May 31, 2000, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. As discussed in Note 2, the Company has been in the
development stage since its inception on August 17, 1999. Realization of a major
portion of the assets is dependent upon the Company's ability to meet its future
financing requirements, and the success of future operations. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans regarding those matters also are described in Note
2. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
CERTIFIED PUBLIC ACCOUNTANTS
Spokane, Washington
June 21, 2000
<PAGE>
PINNACLE PROPERTY GROUP, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
<TABLE>
<CAPTION>
May 31, February 29,
2000 2000
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 13,691 $ 18,374
Prepaid expenses -- 1,500
------------ ------------
Total Current Assets 13,691 19,874
------------ ------------
TOTAL ASSETS $ 13,691 $ 19,874
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 150 $ --
------------ ------------
Total Current Liabilities 150 --
------------ ------------
COMMITMENTS AND CONTINGENCIES -- --
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, 20,000,000 shares authorized, $0.0001 par value;
no shares issued and outstanding -- --
Common stock, 80,000,000 shares authorized, $0.0001 par value;
4,655,000 shares issued and outstanding 465 465
Additional paid-in-capital 19,535 19,535
Deficit accumulated during the development stage (6,459) (126)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 13,541 19,874
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 13,691 $ 19,874
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PINNACLE PROPERTY GROUP, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
From From
August 17, August 17,
Three 1999 1999
Months (Inception) (Inception)
Ended to to
May 31, February 29, May 31,
2000 2000 2000
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES $ -- $ -- $ --
------------ ------------ ------------
EXPENSES
Filing fees -- 56 56
Accounting and legal 6,000 -- 6,000
Web site expense 136 -- 136
Stock transfer agent expenses 150 -- 150
Office expense 47 70 117
------------ ------------ ------------
TOTAL EXPENSES 6,333 126 6,459
------------ ------------ ------------
LOSS FROM OPERATIONS (6,333) (126) (6,459)
INCOME TAXES -- -- --
------------ ------------ ------------
NET LOSS $ (6,333) $ (126) $ (6,459)
============ ============ ============
NET LOSS PER COMMON SHARE, BASIC AND DILUTED $ nil $ nil $ nil
============ ============ ============
WEIGHTED AVERAGE NUMBER OF BASIC AND
DILUTED COMMON STOCK SHARES OUTSTANDING 4,655,000 4,655,000 4,655,000
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PINNACLE PROPERTY GROUP, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Common Stock Accumulated
---------------------------- Additional During the Total
Number Paid-In Development Stockholders'
of Shares Amount Capital Stage Equity
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock
from private placement for
cash at $.001 per share 4,500,000 $ 450 $ 4,050 $ -- $ 4,500
Issuance of common stock
from private placement for
cash at $.10 per share 155,000 15 15,485 -- 15,500
Loss for period ending,
February 29, 2000 -- -- -- (126) (126)
------------ ------------ ------------ ------------ ------------
Balance, February 29, 2000 4,655,000 465 19,535 (126) 19,874
Loss for quarter ending,
May 31, 2000 -- -- -- (6,333) (6,333)
------------ ------------ ------------ ------------ ------------
Balance, May 31, 2000 4,655,000 $ 465 $ 19,535 $ (6,459) $ 13,541
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PINNACLE PROPERTY GROUP, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
From From
August 17, August 17,
Three 1999 1999
Months (Inception) (Inception)
Ended to to
May 31, February 29, May 31,
2000 2000 2000
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (6,333) $ (126) $ (6,459)
Adjustments to reconcile net loss
to net cash used by operating activities:
(Increase) decrease in prepaid expenses 1,500 (1,500) --
Increase in accounts payable 150 -- 150
------------ ------------ ------------
Net cash (used) in operating activities (4,683) (1,626) (6,309)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES -- -- --
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock -- 20,000 20,000
------------ ------------ ------------
Net cash provided by financing activities -- 20,000 20,000
------------ ------------ ------------
Change in cash (4,683) 18,374 13,691
Cash, beginning of period 18,374 -- --
------------ ------------ ------------
Cash, end of period $ 13,691 $ 18,374 $ 13,691
============ ============ ============
Supplemental disclosures:
Interest paid $ -- $ -- $ --
============ ============ ============
Income taxes paid $ -- $ -- $ --
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PINNACLE PROPERTY GROUP, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Pinnacle Property Group, Inc. (hereinafter "the Company") was incorporated on
August 17, 1999 under the laws of the State of Delaware for the purpose of
assisting private sellers to sell commercial real estate over the internet. The
Company maintains offices in Bellingham, Washington and in Vancouver, British
Columbia. The Company's fiscal year end is the last calendar day of February.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of the Company is presented to
assist in understanding the financial statements. The financial statements and
notes are representations of the Company's management which is responsible for
their integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
Development Stage Activities
The Company has been in the development stage since its formation in August 1999
and has not yet realized any revenues from its planned operations. The Company
is presently in the process of building its website, which will be used to
assist private sellers of commercial real estate via the internet.
Use of Estimates
The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
regarding certain types of assets, liabilities, revenues, and expenses. Such
estimates primarily relate to unsettled transactions and events as of the date
of the financial statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.
Derivative Instruments
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This new standard establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for
6
<PAGE>
PINNACLE PROPERTY GROUP, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derivative Instruments (continued)
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the consolidated balance sheet and measure those
instruments at fair value.
At May 31, 2000, the Company has not engaged in any transactions that would be
considered derivative instruments or hedging activities.
Revenue Recognition
The Company will recognize revenue from internet-based programs when funds are
earned, measurable and recognizable.
Provision for Taxes
At May 31, 2000, the Company had a net operating loss of approximately $6,000.
No provision for taxes or tax benefit has been reported in the financial
statements, as there is not a measurable means of assessing future profits or
losses.
Basic and Diluted Loss Per Share
Loss per share was computed by dividing the net loss by the weighted average
number of shares outstanding during the period. The weighted average number of
shares was calculated by taking the number of shares outstanding and weighting
them by the amount of time that they were outstanding. Basic and diluted loss
per share was the same, as there were no common stock equivalents outstanding.
Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has an
accumulated net loss of $6,459 for the period August 17, 1999 (inception) to May
31, 2000 and had no sales. The future of the Company is dependent upon
successful and profitable operations from its internet commerce enterprise. The
Company is presently in the process of building its website, which will be used
to assist private sellers of commercial real estate via the internet. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
Management plans to seek additional capital through a private placement and
public offering of its common stock. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classification of liabilities that might be necessary
in the event the Company cannot continue in existence.
7
<PAGE>
PINNACLE PROPERTY GROUP, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2000
NOTE 3 - CASH
The Company maintains cash balances in a Canadian financial institution.
Although these funds are valued in US dollars, they are not insured.
NOTE 4 - PREPAID EXPENSES
At February 29, 2000, the Company prepaid $1,500 for professional services. The
total amount was expensed during the three months ended May 31, 2000.
NOTE 5 - COMMON STOCK
On September 1, 1999, 4,500,000 shares of common stock were sold through a
private placement at a price of $0.001 per share. The offering was made pursuant
to exemptions afforded by Sections (4)2 or 3(b) of the Securities Act of 1933
and Rule 504 of Regulation D. On February 9, 2000, an additional 155,000 shares
of common stock were sold through a similar private placement at a price of
$0.10 per share. The private placements raised $4,500 and $15,500, respectively.
All proceeds from both offerings will be used for general corporate purposes. Of
the total shares issued, 1,055,000 shares were issued to officers and directors
of the Company.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
The Company is engaged in internet-based commerce. At present, the Company is
unaware of any pending litigation or of any specific past or prospective
matters, which could impair its ability to proceed in the marketplace.
NOTE 7 - RELATED PARTIES
The Company occupies office space provided by Mr. Paul Hayward, its president,
at no charge. The value of this space is not considered materially significant
for financial reporting purposes.
8
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: July 12, 2000 Pinnacle Property Group, Inc.
/s/
-------------------------------------------
Paul Hayward, President, Secretary Director
/s/
-------------------------------------------
Kali Palmer, Director
