U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10SB
Amendment #3
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
24 Hour Auction, 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>
GENERAL
The Company is filing this Form 10SB voluntarily for the purpose of
becoming a reporting company. The Company will file voluntary reports if its
obligation to file reports is terminated under the Securities Exchange Act of
1934.
ITEM 1. DESCRIPTION OF BUSINESS
24 Hour Auction, Inc. was incorporated in the State of Delaware on
September 21, 1999. The Company has generated no revenue at this time.
The Company operates under the name "Bidmonkey.com." The Company has
reserved the name and is in the process of building the web site of
bidmonkey.com. Mr. Maherali, the President of the Company, is a full time
employee of Apus Capital Corporation, though he has been spending approximately
25 hours per week on the development of the Company. When the web site is
completed he will devote more time to the business of the Company, and he
expects to devote full time to the Company when it is operational. In addition
the Company has used consultants in the development of the business.
The web site is to provide an auction site for both business to
business auctions and business to consumers as a means for businesses to dispose
of goods that it wants to sell to the general public in an auction setting.
Bidmonkey.com also intends to be local in its auctions through the
franchising of local web sites, beginning in North America, and then selling
them throughout the rest of the world. The Company is in the process of
developing its franchise agreement, however it is not completed. The Company has
sold no franchises at this time.
The reason for the local franchise web sites is to provide a market for
products that typically are sold close to home, such as a car or a motor home,
and will enable the buyer to personally look at the item before a purchase. The
affiliated network of auction web sites allows for branding to attract business
to the web site, while at the same time being a local destination for the person
seeking discounted goods available at auction.
A seller of merchandise will list the merchandise with Bidmonkey.com.
The seller may list a reserve price, which is a price below which he will not
sell the merchandise. All auction listings state that there is a reserve price,
but will not list what the reserve price is.
The software of the Company has a unique feature, the maximum bid
price, along with an automatic bid process. The bidder will indicate what the
maximum price he will pay for the merchandise, and the software will
automatically enter bids
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for the bidder. As an example: there is an item for sale on the auction site,
and the current bid is $100. The bidder will enter a maximum bid of $1,000, and
the software will enter a bid of $125. Shortly thereafter there is a bid of $500
entered on the item, and the software will then enter a bid of $525. This will
continue until the item is sold, and the bidder will be notified that he either
was successful or unsuccessful by e mail. This is an example only. The bidding
process may be done in any amounts and increments. This is a database function,
the parameters, the dollar amounts, may be set at any amounts and increased or
decreased accordingly.
The Company serves as listing agent and is not involved in the actual
transaction of goods and money between buyer and seller. The transaction of the
money and the goods are the sole responsibility of the buyer and seller. The
listing agreement provides that the buyer and the seller hold the Company
harmless from any liability.
There are many auction web sites on the Internet that will compete with
the site of the Company. Many of them are well established and attract many
visitors to the sites. Many of them are well financed and are able to spend
large amounts of money to advertise their web sites. Probably the largest and
best known is eBay. The Company will have a difficult time in competition with
such large and well financed competitors.
RISK FACTORS
Risk Factor - Going Concern. The independent auditor for the Company,
in its report, issued a "going concern" doubt in its letter. Stating that there
is a substantial doubt that the Company can continue, mostly based on the lack
of any revenue at this time.
Risk Factor - No Market for Shares. No Transfer of Shares. Prior to
this time there has been no public market for the Shares and there can be no
assurance that an active trading market will develop or be sustained.
Risk Factor - Limited Operating History. The Company recognizes that it
has a limited operating history by which an investor might judge its likelihood
of success or failure. Its business plan is based on certain assumptions without
the benefit of a lengthy operating history. At this time the Company has made no
sales, and has received no revenue.
Risk Factor - Competition. The Company expects to encounter competition
in its efforts to establish its business. Many of these entities may have
greater experience, resources and managerial capabilities than the Company and
will therefore be in a better position than the Company to compete.
Risk Factor - Need for Additional Capital. While the Company will be
budgeting towards the achievement of its goals, there can be no assurance that
the Company will be able to achieve its goals without additional capital. There
can be no assurance that the
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Company will be able to raise the additional capital it may be seeking. Even if
additional capital is obtained, there can be no assurance that the Company will
be able to achieve its goals with additional capital, or that any new capital,
if available, will be on terms favorable to the Company.
ITEM 2. PLAN OF OPERATION
The Internet has created a new medium for advertising, marketing and
sales. The Internet has also been a medium of the bargain hunter, seeing a way
to make purchases at below market prices.
The Company has two main sources of income.
First, the Company charges a fee to sellers of 1% of the sale price of
the things sold.
Second, the Company sells franchises to local persons that sponsor a
local Bidmonkey.com page for products that are geographically sensitive. The fee
for the local person is $4,999, and a royalty fee of 1% of its sales. The
proposed franchise is for a specific geographic area, with a term of 5 years,
renewable for an additional 5 years, with no additional fee, but the royalty fee
of 1% of its sales remains.
Management of the Company is of the opinion that the current cash will
be sufficient for the next three to four months during the development of the
web site, and that it will need an additional $100,000 at that time. The Company
has not determined how it will raise the additional money at this time, or
whether it will be through equity or debt. The Company feels that this
additional money will be enough for the next twelve months.
The Company does not anticipate any expenditures for research and
development. The Company has no plans for the purchase of plant or significant
equipment. There are no plans for a significant change in the number of
employees, though there will be some employees when the site is operational.
The Company has not generated any revenue at this time, and the Company
has no franchisees at this time. The web site is nearing completion, and the
Company hopes to generate revenues as soon as it is complete. Management is
hopeful that revenues will begin toward the end of the second quarter of this
year.
ITEM 3. DESCRIPTION OF PROPERTY
The Company leases office space from Apus Capital Corporation. The
lease is for one year from October 1, 1999 to September 30, 2000 at a monthly
rental of $250
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per month. The office space is approximately 400 square feet, and includes
telephone, fax and secretarial services.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There are presently 3,660,000 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
-----------------------------------------------------------------------
Nazir Maherali 800,000 22%
31550 South Fraser Way
Abbotsford, Canada
Directors and Officers 800,000 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
---- --------
Nazir Maherali President, Secretary, Director
Kali Palmer Director
Nazir Maherali, Mr. Maherali is the President, Secretary and a Director
of the Company. From 1994 to the present he has been a Manager of Apus Capital
Corporation. Apus Capital Corporation is in the business of consulting to
internet based companies, his duties include compiling sales material,
organization of data and data entry.
Kali Palmer, Ms Palmer is a Director. She worked for Facilicom
Educational
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Products in Austin, Texas from 1993 to 1998 in marketing. From 1998 to the
present she has been a director of the company and in the real estate business
in Seattle, Washington.
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
The Company leases office space from Apus Capital Corporation, a
company that the President of the Company works for. The lease is for one year
from October 1, 1999 to September 30, 2000 at a monthly rental of $250 per
month. Management feels that the lease is no less favorable than it would have
from an unrelated party.
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 38 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
Nazir Maherali 9/99 800,000 $800.00
Dilsahald Maherali 10/99 75,000 $75.00
Mithoo Maherali 10/99 75,000 $75.00
Chantal Gibson 10/99 75,000 $75.00
Dale Everendon 10/99 75,000 $75.00
Karim Virani 10/99 75,000 $75.00
Mark Nelson 10/99 75,000 $75.00
Barry Wilding 11/99 75,000 $75.00
Shelley Lockhart 10/99 75,000 $75.00
Brent Dawes 10/99 75,000 $75.00
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Tamara Clark 10/99 75,000 $75.00
Son T Luc 10/99 75,000 $75.00
Kent Leung 10/99 75,000 $75.00
Kieu Chung 10/99 75,000 $75.00
George Sainas 10/99 75,000 $75.00
Kelly Brantner 10/99 75,000 $75.00
Dave Tsui 10/99 75,000 $75.00
Eileen Hayward 10/99 100,000 $100.00
John P. Bullen 10/99 100,000 $100.00
Demerka Ward 11/99 75,000 $75.00
David Ginn 11/99 75,000 $75.00
Sean Trotter 10/99 75,000 $75.00
Chris Wong 10/99 75,000 $75.00
Trevor Morris 10/99 75,000 $75.00
Gerald Redman 10/99 75,000 $75.00
Mary Doquiation 10/99 75,000 $75.00
Elaine Luc 10/99 75,000 $75.00
Brent Wilde 10/99 75,000 $75.00
Mark Bailey 10/99 75,000 $75.00
Lena Loui 11/99 50,000 $50.00
Renee Grue 11/99 50,000 $50.00
Tyler Cox 11/99 50,000 $50.00
Joanne Loui 10/99 50,000 $50.00
Nicola Hayward 10/99 100,000 $100.00
Kelly Bellman 11/99 50,000 $50.00
Glen McNaughton 11/99 50,000 $50,00
Donna Loui 11/99 150,000 $150.00
Paul Hayward 11/99 160,000 $16,000.00
All sales were pursuant to a Private Placement Memorandum that provided
full disclosure. All sales were to acquaintances of management, and their
friends. All sales were to persons who live outside the United States. There was
no underwriter on the sales of any of the securities, 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.
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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 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
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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.
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
10.1 Lease
10.2 Conditions of Listing
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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: 6/5/00 24 Hour Auction, Inc.
____/s/ Nazir Maherali________________________
Nazir Maherali, President, Secretary Director
____/s/ Kali Palmer___________________________
Kali Palmer, Director
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24 HR AUCTION INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
WILLIAMS & WEBSTER PS
CERTIFIED PUBLIC ACCOUNTANTS
BANK OF AMERICA FINANCIAL CENTER
W 601 RIVERSIDE, SUITE 1940
SPOKANE, WA 99201
(509) 838-5111
<PAGE>
24 HR AUCTION INC.
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Consolidated Balance Sheet 2
Consolidated Statement of Operations 3
Consolidated Statement of Stockholders' Equity 4
Consolidated Statement of Cash Flows 5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 6
<PAGE>
To the Board of Directors
24 Hr Auction Inc.
Bellingham, Washington
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying consolidated balance sheet of 24 Hr Auction
Inc. (a development stage company) as of February 29, 2000, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the period then ended. 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 estimated 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 24 Hr Auction Inc. as of
February 29, 2000, and the results of its operations and its cash flows for the
period then ended in conformity with generally accepted accounting principles.
As discussed in Note 2, the Company has been in the development stage since its
inception and has no revenues. 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 are described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Williams & Webster, P.S.
CERTIFIED PUBLIC ACCOUNTANTS
May 31, 2000
<PAGE>
24 HR AUCTION INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
February 29,
2000
------------
<S> <C>
A S S E T S
CURRENT ASSETS
Cash $ 9,790
------------
Total Current Assets 9,790
------------
PROPERTY PLANT AND EQUIPMENT
Web site costs 3,007
Less: accumulated depreciation (222)
------------
Total Property, Plant and Equipment 2,785
------------
TOTAL ASSETS $ 12,575
============
L I A B I L I T I E S & S T O C K H O L D E R S ' E Q U I T Y
CURRENT LIABILITIES
Accounts payable $ 2,238
Related party payables 1,250
------------
Total Current Liabilities 3,488
------------
COMMITMENTS AND CONTINGENCIES --
------------
STOCKHOLDERS' EQUITY
Preferred stock, 20,000,000 shares authorized,
$.0001 par value; 0 shares issued and outstanding --
Common stock, 80,000,000 shares authorized,
$.0001 par value; 3,660,000 shares
issued and outstanding 366
Additional paid-in capital 19,134
DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE (10,413)
------------
Total Stockholders' Equity 9,087
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,575
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
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24 HR AUCTION INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
February 29,
2000
------------
<S> <C>
REVENUES $ --
------------
OPERATING EXPENSES
Lease expense 1,250
Fees 362
Professional expense 6,500
Organizational expense 2,000
Depreciation 222
Office supplies 79
------------
Total Operating Expenses 10,413
------------
NET LOSS FROM OPERATIONS (10,413)
INCOME TAXES --
------------
NET LOSS $ (10,413)
============
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ NIL
============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING,
BASIC AND DILUTED 3,660,000
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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24 HR AUCTION INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Common Stock Accumulated
------------ During Total
Number Additional Development Stockholders'
of Shares Amount Paid-in Capital Stage Equity
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Issuance of common stock in September 1999
for cash at an average of $.005 per share 3,660,000 $ 366 $ 19,134 $ -- $ 19,500
Loss for period ending February 29, 2000 -- -- (10,413) (10,413)
--------- --------- --------- --------- ---------
Balance at February 29, 2000 3,660,000 $ 366 $ 19,134 $ (10,413) $ 9,087
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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24 HR AUCTION INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
February 29,
2000
------------
<S> <C>
Cash flows from operating activities:
Net loss $ (10,413)
Depreciation 222
Increase in accounts payable 2,238
Increase in related parties payable 1,250
------------
Net cash used in operating activities (6,703)
------------
Cash flows from investing activities:
Purchase of web site (3,007)
------------
Net cash used in investing activities (3,007)
------------
Cash flows from financing activities:
Issuance of stock 19,500
------------
Net cash provided by financing activities 19,500
------------
Net increase in cash 9,790
Cash, beginning of period --
------------
Cash, end of period $ 9,790
============
SUPPLEMENTAL DISCLOSURES:
Interest expense $ --
============
Income taxes $ --
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
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24 HR AUCTION INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 2000
9
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
24 Hr Auction Inc. (herein after "the Company"), was incorporated in September,
1999 under the laws of the State of Delaware primarily for the purpose of
auctioning goods and services via the internet. As of February 29, 2000, the
Company's principal office is located Bellingham, Washington.
In November 1999, the Company formed its subsidiary, Bidmonkey.com.
Bidmonkey.com is expected to auction goods and services that are geographically
targeted. 24 Hr Auction Inc. and Bidmonkey.com were in the development stage
and, at February 29, 2000, had not realized any significant revenues from its
planned operations.
The Company serves as a holding company for its subsidiary's operations. THE
SUBSIDIARY IS NOT CONSIDERED A FRANCHISE. THE COMPANY HAS NO PLANS OF
FRANCHISING ITS OPERATIONS. References herein to the Company include the Company
and it subsidiary, unless the context otherwise requires.
The Company's fiscal year end is August 31.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in
understanding the Company's 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.
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.
Development Stage Activities
The Company has been in the development stage since its formation on September
21, 1999. It is primarily engaged in auctioning goods and services via the
internet.
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NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany transactions and balances have
been eliminated in consolidation.
Concentration of Risk
The Company maintains its cash accounts in one commercial bank in Vancouver,
British Columbia, Canada. The Company's cash account is a business checking
account maintained in U.S. dollars, which totaled $9,790 as of February 29,
2000. This account is not insured.
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 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 February 29, 2000, the Company has not engaged in any transactions that would
be considered derivative instruments or hedging activities.
Impaired Asset Policy
In March 1995, the Financial Accounting Standards Board issued a statement
titled "Accounting for Impairment of Long-lived Assets." In complying with this
standard, the Company reviews its long-lived assets quarterly to determine if
any events or changes in circumstances have transpired which indicate that the
carrying value of its assets may not be recoverable. The Company does not
believe any additional adjustments are needed to the carrying value of its
assets at February 29, 2000.
Basic and Diluted Loss Per Share
Net 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 were the same, as there were no common stock equivalents outstanding.
Revenue Recognition
Revenues and cost of revenues are recognized when services and products are
furnished or delivered. AT FEBRUARY 29, 2000, NO REVENUES WERE REALIZED OR
RECOGNIZED BY THE COMPANY OR ITS SUBSIDIARY.
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NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ORGANIZATION EXPENSES
THE COMPANY HAS RECOGNIZED AND EXPENSED $2,000 IN ORGANIZATIONAL EXPENSES FOR
THE PERIOD ENDED FEBRUARY 29, 2000.
Income Taxes
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.
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 GENERATED NO
REVENUES SINCE INCEPTION. The Company recorded a loss and an accumulated deficit
of $10,413 for the period ended February 29, 2000. The Company, being a
developmental stage enterprise, is currently putting technology in place which
will, if successful, mitigate these factors which raise substantial doubt about
the Company's ability to continue as a going concern. 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 has established plans designed to increase the sales of the Company's
products and services. MANAGEMENT INTENDS TO SEEK NEW CAPITAL FROM NEW EQUITY
SECURITIES ISSUANCES THAT WILL PROVIDE FUNDS NEEDED TO INCREASE LIQUIDITY, FUND
INTERNAL GROWTH AND FULLY IMPLEMENT ITS BUSINESS PLAN.
Year 2000
The Company, like other firms, could be adversely affected if the computer
systems used by it, its suppliers or customers do not properly process and
calculate date-related information and data from the period surrounding and
including January 1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices such as
production equipment.
The Company has not purchased any software or hardware. When the Company does
purchase software and hardware it will determine at that time if there could be
any adverse effects to the Company's operations regarding Year 2000 issues.
Management also believes that Year 2000 issues should not adversely affect the
ability of its clients and customers to conduct business with the Company and as
of February 29, 2000 the Company has not experienced any significant problems.
Any costs associated with Year 2000 compliance will be expensed when incurred.
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NOTE 3 - PROPERTY AND EQUIPMENT
The Company has capitalized the costs to build its web site and is depreciating
those costs over three years using the straight-line method. In the future the
company will determine impairment of those assets by comparing the estimated
undiscounted future cash flows to their respective carrying amounts.
Depreciation expense for the period ended February 29, 2000 was $222.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company is the lessor of office space and computers under an operating lease
for $250 per month expiring in September 2000. The space and computers are
leased from a related party. At February 29, 2000, $1,250 in rent expense was
unpaid and accrued as related party payables. NO ADDITIONAL SERVICES OR PROPERTY
HAVE BEEN RECEIVED FROM RELATED PARTIES AT FEBRUARY 29, 2000.
NOTE 5--COMMON AND PREFERRED STOCK
Upon incorporation, the Company authorized the issuance of 20,000,000 shares of
preferred stock at a par value of $0.0001 per share, of which there are no
shares outstanding.
Upon incorporation, the Company authorized the issuance of 80,000,000 shares of
common stock at a par value of $0.0001 per share, of which 3,660,000 shares are
outstanding under Regulation D, Rule 504. Holders of shares of common stock are
entitled to one vote for each share on all matters to be voted on by the
stockholders, but have no cumulative voting rights. Holders of shares of common
stock are entitled to share ratably in dividends, if any, as may be declared by
the Board of Directors in its discretion, from funds legally available. The
Company has not authorized any convertible stock, warrants or options as of
February 29, 2000.
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