U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended April 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from to
Commission file Number: 0-3025-7
BY GEORGE HOLDING CORP.
(Name of small business issuer in its charter)
Georgia 98-0136772
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(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
2160-650 West Georgia, Vancouver, B.C. Canada V6B 4N7
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(Address of principal executive office including zip code)
(604) 687-1919
Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, no par value per share
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB. [X]
State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days. (See definition of affiliate in Rule 12b-2 of the
Exchange Act.) Not Applicable
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13, or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes No N/A X
DOCUMENTS INCORPORATED BY REFERENCE
None
ITEMS 1 & 2. DESCRIPTION OF THE BUSINESS AND THE
COMPANY'S PROPERTIES
A. The Company
By George Holding Corp. (the "Company") was organized under the
laws of the State of Georgia on April 23, 1992 under the name Kings
Glen Apartments of Georgia, Inc. On March 17, 2000 the Company
changed its name to By George Holding Corp.
In 1992 the Company acted as the general partner to a Limited
Partnership which acquired an apartment building in Atlanta, Georgia on
June 11, 1992. On June 12, 1995, the apartment building was sold and the
Limited Partnership was dissolved effective December 27, 1995. The
Company had no further activity until just recently when it changed its
corporate focus and is currently looking to acquire a corporate vehicle to
locate and acquire an operating business entity which management
believes is a suitable acquisition candidate (a "Target Company"). The
Company will not restrict its search to any specific business, industry or
geographical location.
The Company does not currently engage in any business activities
that provide any cash flow. The costs of identifying, investigating, and
analyzing business combinations will be paid with money in the
Company's treasury or loaned by management.
Although the Company was under no obligation to do so, it has
voluntarily filed this registration statement because it believes that it can
better facilitate its business goals if it were a "reporting issuer" under
the Securities Exchange Act of 1934 (the "Exchange Act").
PROPOSED BUSINESS
The Company will seek to locate an acquire a target company which
is the opinion of the Company's management (sometimes referred to as
the "Management") offers long term growth potential. The Company will
not restrict its search to any specific business, industry or geographical
location. The Company may seek to acquire a target company which has
just commenced operations, or which works to avail itself of the benefits
of being a "reporting issuer" in order to facilitate capital formation to
expand into new products or market.
There are certain perceived benefits to being a reporting company
with a class of publicly-traded securities. These are commonly thought
to include the following:
* the ability to use registered securities to make acquisitions of
assets or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital market.
A target company, if any, which may be interested in a business
combination with the Company may include the following:
* a company for which a primary purpose of becoming public is
the use of its securities for the acquisition of assets or
businesses;
* a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities on
terms acceptable to it;
* a company which wishes to become public with less dilution
of its common stock than would occur upon an underwriting;
* a company which believes that it will be able obtain
investment capital on more favorable terms after it has
become public;
* a foreign company which may wish an initial entry into the
United States securities market;
* a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a
qualified Employee Stock Option Plan;
* a company seeking one or more of the other perceived
benefits of becoming a public company.
There is no assurances that the Company will be able to effect an
acquisition of a target company. In addition, at this time, no specifics as
to an acquisition or as to the nature of the target company can be
provided.
RISK FACTORS
The Company's business is subject to numerous risk factors,
including the following:
Anticipated Change in Control and Management. Upon the successful
completion of the acquisition of a target company, the Company
anticipates that it will have to issue to the target company or its
shareholders some authorized but unissued common stock which, when
issued will comprise a majority of the Company's then issued and
outstanding shares of common stock. Therefore, the Company anticipates
that upon the closing of the acquisition of a target company, the
Company will no longer be controlled by the current shareholders. In
addition, existing management and directors may resign. The Company
cannot give any assurance that the experience or qualifications of new
management, as it relates to either in the operation of the Company's
activities or in the operation of the business, assets or property being
acquired, will be adequate for such purposes.
Conflict of Interest - Management's Fiduciary Duties. A conflict of
interest may arise between management's personal financial benefit and
management's fiduciary duty to you. The Company's director and two
officers are or may become officers, directors, controlling shareholders
and/or partners of other entities engaged in a variety of businesses.
Messers John Mackay and Rod Saunders are engaged in other business
activities. Accordingly, the amount of time they will devote to the
Company's business will only be about five (5) to ten (10) hours per
month. There exists potential conflicts of interest including allocation
of time between the Company and its representatives' other business
interests.
Experience of Management; Consultants. Although management has
general business experience, it has limited experience in effecting
business combinations and may not have any significant experience in
acquiring or operating certain business interests that the company might
choose to acquire. Management does not have, nor does it presently
intend to enter into, any contracts or agreements with any consultants or
advisors with respect to its proposed business activities. Consequently,
Management has not established the criteria that will be used to hire
independent consultants regarding their experience, the services to be
provided, the term of service, etc., and no assurance can be made that the
Company will be able to obtain such assistance on acceptable terms.
Potential Future Rule 144 Sales. Of the 1000 shares of the Company's
Common Stock authorized, there are presently issued and outstanding 100
shares; of which 100 shares are restricted securities as that term is
defined under the Securities Act of 1933 (the "Securities Act"), and in
the future may, subject to the foregoing discussion, be sold in
compliance with Rule 144 of the Securities Act, or pursuant to a
Registration Statement filed under the Act. Rule 144 provides, in
essence, that a person holding restricted securities for a period of 1 year
may sell those securities in unsolicited brokerage transactions of in
transactions with a market maker, in an amount equal to 1% of our
outstanding common stock every 3 months. Additionally, Rule 144
requires that an issuer of securities make available if the issuer satisfies
the reporting requirements of Sections 13 or 15(d) of the Securities and
Exchange Act of 1934 or amended (the "ExchangeAct") and of Rule 15c2-
11 thereunder. Rule 144 also permits, under certain circumstances, that
sale of shares by a person who is not an affiliate of ours and who has
satisfied a 2 two year holding period without any quantity limitation and
whether or not there is adequate current public information available.
Investors should be aware that sales under Rule 144, or pursuant to a
registration statement filed under the Securities Act, may have a
depressive effect on the market price of our common stock in any market
that may develop for such shares.
Pursuant to a letter dated January 21, 2000 from the Securities and
Exchange Commission (the "Commission") to NASD Regulation, Inc. the
Commission has taken the position that, both before and after a business
combination, the promoters or affiliates of blank check companies, as
well as their transferees, are underwriters of the securities issued and
accordingly such securities can only be resold pursuant to a Registration
Statement filed under the Securities Act. Accordingly the aforementioned
shares may not be sold in compliance of Rule 144.
Possible Issuance of Additional Shares. The Company's Certificate of
Amendment of Certificate of Incorporation, authorizes the issuance of
1000 shares of common stock no par value. The Company's Board of
Directors has the power to issue any or all of such additional shares
without stockholder approval for such consideration as it deems.
Management presently anticipates that it may choose to issue a
substantial amount of the Company's shares in connection with the
acquisition of a target business.
Risks of Leverage. There are currently no limitations relating to the
Company's ability to borrow funds to increase the amount of capital
available to it to effect a business combination or otherwise finance the
operations of any Target Company. The amount and nature of any
borrowings by the Company will depend on numerous factors, including
the Company's capital requirements, the Company's perceived ability to
meet debt services on any such borrowings, and then-prevailing
conditions in the financial, if required or otherwise sought, will be
available on terms deemed to be commercially acceptable and in the best
interest of the Company's inability to borrow funds required to effect or
facilitate a business combination, or to provide funds for an additional
infusion of capital into a Target Company, may have a material adverse
affect on the Company's financial condition and future prospects.
Additionally, to the extent that debt financing ultimately proves to be
available, any borrowings may subject the Company to various risks
traditionally associated with incurring of indebtedness, including:
* if the Company's operating revenues after the acquisition
were to be insufficient to pay debt service, there would be a
risk of default and foreclosure on our assets.
* if a loan agreement containing covenants is breached without
a waiver or renegotiation of the terms of that covenant, then
the lender could have the right to accelerate the payment of
the indebtedness even if the Company has made all principal
and interest payments when due.
* if the interest rate on a loan fluctuated or the loan was
payable on demand, the Company would bear the risk of
variations in the interest rate or demand for payment.
* if the terms of a loan did not provide for amortization prior to
maturity of the full amount borrowed and the "balloon"
payment could not be refinanced at maturity on acceptable
terms, we might be required to seek additional financing and,
to the extent that additional financing is not available on
acceptable terms, to liquidate the Company's assets.
Possible Need for Additional Financing. The Company cannot
ascertain with any degree of certainty the capital requirements for an
particular Target Company inasmuch as the Company has not yet
identified any acquisition candidates. If the target company requires
additional financing, such additional financing (which, among other
forms, could be derived from the public or private offering of securities
or from the acquisition of debt through conventional bank financing),
may not be available, due to, among other things, the target company not
having sufficient:
* credit or operating history;
* income stream;
* profit level;
* asset base eligible to be collateralized; or
* market for its securities.
Since no specific business has been targeted for acquisition, it is not
possible to predict the specific reasons why conventional private or
public financing or conventional bank financing might not become
available. Although there are no agreements between the Company and
any of its officers and/or directors pursuant to which we may borrow and
such officers and/or directors are obligated to lend the Company monies,
there are no restrictions on our right to borrow money from officers and
directors. No stockholder approval is required in connection with any
such loan.
Penny Stock Rules. Under Rule 15g-9, a broker or dealer may not sell
a "penny stock" (as defined in Rule 3a51-1) to or effect the purchase of a
penny stock by any person unless:
(1) such sale or purchase is exempt from Rule 15g-9; or
(2) prior to the transaction the broker or dealer has (a) approved
the person's account for transaction in penny stocks in
accordance with Rule 15g-9 and (b) received from the person
a written agreement to the transaction setting forth the
identity and quantity of the penny stock to be purchased.
The United States Securities and Exchange Commission (the
"Commission") adopted regulations that generally define a penny stock to
be any equity security other than a security excluded from such
definition by Rule 3a51-1. Such exemptions include, but are not limited
to (a) an equity security issued by an issuer that has (i) net tangible
assets of at least $2,000,000, if such issuer has been in continuous
operations for at least three years; (ii) net tangible assets of at least
$5,000,000, if such issuer has been in continuous operation for less than
three years; or (iii) average revenue of at least $6,000,000 for the
preceding three years; (b) except for purposes of Section 7(b) of the
Exchange Act and Rule 419, any security that has a price of $5.00 or
more; (c) and a security that is authorized or approved for authorization
upon notice of issuance for quotation on the National Association of
Securities ("NASD") Dealers Automated Quotation System ("NASDAQ").
It is likely that the Company's common stock will be subject to the
regulations on penny stocks; consequently, the market liquidity for our
common stock may be adversely affected by such regulations. This, in
turn, will affect shareholders ability to sell his shares following the
completion of an acquisition.
There is no current trading market for shares (the "Shares") of the
Company's common stock and there can be no assurance that a trading
market will develop, or, if such a trading market does develop, that it
will be sustained. The Shares, to the extent that a market develops for
the Shares at all, will likely appear in what is customarily known as the
"pink sheets" or on the NASD over-the-counter Bulletin Board (the
"OTCBB"), which may limit the marketability and liquidity of the
Shares.
To date, neither the Company nor anyone acting on behalf of the
Company has taken any affirmative steps to request or encourage any
broker/dealer to act as a market maker for our common stock. The
Company has had no discussions or understandings, with any "market
makers" regarding the participation of any such market maker in the
future trading market, if any, in the Company's common stock.
Management expects that discussions in this area will ultimately be
initiated by the management in office after completion of the acquisition
of a target company.
Risks Associated with Operations in Foreign Countries. The
Company's business plan is to seek to acquire a target company.
Management's discretion is unrestricted, and the Company may
participate in any business whatsoever that may in the opinion of
Management meet the Company's business objectives. The Company may
acquire a business outside the United States. The Company has not
limited the scope of its search to a particular region or country.
Accordingly, if the Company acquires a business located, or operating in
a foreign jurisdiction, the Company's operations may be adversely
affected to the extent of the existence of unstable economic, social
and/or political conditions in such foreign regions and countries.
No Recent Operating History or Revenue and Minimal Assets. The
Company has had no operating history nor any revenues or earnings from
operations since 1995. The Company has no significant assets or
financial resources. The Company will, in all likelihood, sustain
operating expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in the
Company incurring a net operating loss which will increase continuously
until the Company can consummate a business combination with a target
company. There is no assurance that the Company can identify such a
target company and consummate such a business combination.
Speculative Nature of the Company's Proposed Operations. The
success of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition and management of the
identified target company. While management will prefer business
combinations with entities having established operating histories, there
can be no assurance that the Company will be successful in locating
candidates meeting such criteria. In the event the Company completes a
business combination, of which there can be no assurance, the success of
the Company's operations will be dependent upon management of the
target company and numerous other factors beyond the Company's
control.
Scarcity of and Competition for Business Opportunities and
Combinations. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with and acquisitions of
business entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of companies which may be merger or acquisition target
candidates for the Company. Nearly all such entities have significantly
greater financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will be at
a competitive disadvantage in identifying possible business opportunities
and successfully completing a business combination. Moreover, the
Company will also compete with numerous other small public companies
in seeking merger or acquisition candidates.
No Agreement for Acquisition of a Target Company Combination.
The Company has no current arrangement, agreement or understanding
with respect to engaging in a merger with or acquisition of a specific
business entity. There can be no assurance that the Company will be
successful in identifying and evaluating suitable business opportunities
or in concluding a business combination. Management has not identified
any particular industry or specific business within an industry for
evaluation by the Company. There is no assurance that the Company will
be able to negotiate a business combination on terms favorable to the
Company. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net worth or
other criteria which it will require a target company to have achieved, or
without which the Company would not consider a business combination
with such business entity. Accordingly, the Company may enter into a
business combination with a business entity having no significant
operating history, losses, limited or no potential for immediate earnings,
limited assets, negative net worth or other negative characteristics.
Reporting Requirements May Delay or Preclude Acquisition. Section
13 of the Securities Exchange Act of 1934 (the "Exchange Act") requires
companies subject thereto to provide certain information about
significant acquisitions including certified financial statements for the
company acquired covering one or two years, depending on the relative
size of the acquisition. The time and additional costs that may be
incurred by some target companies to prepare such financial statements
may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by the Company. Acquisition prospects
that do not have or are unable to obtain the required audited statements
may not be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
Lack of Market Research or Marketing Organization. The Company
has neither conducted, nor have others made available to it, market
research indicating that demand exists for the transactions contemplated
by the Company. Even in the event demand exists for a merger or
acquisition of the type contemplated by the Company, there is no
assurance the Company will be successful in completing any such
business combination.
Lack of Diversification. The Company's proposed operations, even if
successful, will in all likelihood result in the Company engaging in a
business combination with only one business entity. Consequently, the
Company's activities will be limited to those engaged in by the business
entity which the Company merges with or acquires. The Company's
inability to diversify its activities into a number of areas may subject the
Company to economic fluctuations within a particular business or
industry and therefore increase the risks associated with the Company's
operations.
Regulation under Investment Company Act. Although the Company
will be subject to regulation under the Exchange Act, management
believes the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not be
engaged in the business of investing or trading in securities. In the
event the Company engages in business combinations which result in the
Company holding passive investment interests in a number of entities,
the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to
register as an investment company and could be expected to incur
significant registration and compliance costs. The Company has obtained
no formal determination from the Securities and Exchange Commission as
to the status of the Company under the Investment Company Act of 1940
and, consequently, any violation of such Act could subject the Company
to material adverse consequences.
Probable Change In Control and Management. A business
combination involving the issuance of the Company's common stock will,
in all likelihood, result in shareholders of a target company obtaining a
controlling interest in the Company. Any such business combination may
require shareholders of the Company to sell or transfer all or a portion of
the Company's common stock held by them. The resulting change in
control of the Company will likely result in removal of the present
officer and director of the Company and a corresponding reduction in or
elimination of his participation in the future affairs of the Company.
Taxation. Federal and state tax consequences will, in all likelihood, be
major considerations in any business combination the Company may
undertake. Currently, such transactions may be structured so as to result
in tax-free treatment to both companies, pursuant to various federal and
state tax provisions. The Company intends to structure any business
combination so as to minimize the federal and state tax consequences to
both the Company and the target company; however, there can be no
assurance that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain
the intended tax-free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both federal
and state taxes which may have an adverse effect on both parties to the
transaction.
ITEM 3. LEGAL PROCEEDINGS
The Company is not party to any pending legal proceedings and is not
aware of any contemplated legal proceedings to which it may be a party
or of which any of its properties may be subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
During the last quarter of the fiscal year ended April 30, 2000 no
matter was submitted to the vote of the Company's security holders,
through resolutions of proxies or otherwise.
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND
RELATED STOCKHOLDERS MATTERS
There is no trading market for the Company's Common Stock.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATION
This Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange
Act. All statements other than statements of historical facts included in
this Report, including, without limitation, the statements under
"Management's Discussion and Analysis or Plan of Operation" regarding
the Company's prospects and the Company's financial position are
forward-looking statements. Although the Company believes that the
expectations are reasonable and it can give no assurance that such
expectations are reasonable and it can give no assurance that such
expectations will prove to have been correct. Important factors that
could cause actual results to differ materially from the Company's
expectations ("Cautionary Statements") are disclosed in this Report,
including, without limitation, in conjunction with the forward-looking
statements included in this Report under "Risks Associated with the
Company's Business." All subsequent written and oral forward looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the Cautionary Statements.
Business Objectives
The Company's business plan is to seek to acquire or merge with
potential businesses that may, in the opinion of Management, warrant the
Company's involvement. Management's discretion is unrestricted, and
the Company may participate in any business whatsoever that may in the
opinion of Management meet the business objectives discussed herein.
The Company recognizes that as a result of its limited financial,
managerial or other resources, the number of suitable potential
businesses that may be available to it will be extremely limited. The
Company's principal business objective will be to seek long-term growth
potential in the business in which it participates rather than immediate,
short-term earnings. In seeking to attain its business objectives, the
Company will not restrict its search to any particular industry. Rather,
the Company may investigate businesses of essentially any kind or
nature, including but not limited to finance, high technology,
manufacturing, service, research and development, communications,
insurance, brokerage, transportation, and others. Management may also
seek to become involved with other development stage companies or
companies that could be categorized as "financially troubled." At the
present time, the Company has not chosen the particular area of business
in which it proposes to engage and has not conducted any market studies
with respect to any business, property or industry.
Businesses that seek the Company's participation in their operations
may desire to do so to avoid what such businesses deem to be adverse
factors related to undertaking a public offering. Such factors include
substantial time requirements, market conditions, legal costs, conditions
or requirements imposed by Federal and state securities laws and possible
loss of voting control. In making an investment in the Company,
investors should recognize that the terms of their purchase of the
Company's securities may ultimately prove to be less favorable than if
such persons had invested in the securities of a specific business that was
undertaking its own public offering.
Evaluation Criteria
The analysis of potential business endeavors will be undertaken by or
under the supervision of Management, no member of which is a
professional business analyst. Management is comprised of individuals
of varying business experiences, and Management will rely on its own
business judgment in formulating decisions as to the types of businesses
that the Company may acquire or in which the Company may participate.
It is quite possible that Management will not have any business
experience or expertise in the type of business engaged in by the
company ultimately acquired. Management will seek to examine those
factors described herein when making a business decision; however, the
mention of such factors to be examined by Management with regard to its
determining the potential of a business endeavor should not be read as
implying any experience or expertise on behalf of Management as to the
business chosen. These factors are merely illustrative of the types of
factors that Management may consider in evaluating a potential
acquisition.
Management anticipates that the selection of a Target Company will be
complex and risky because of the competition for such business
opportunities among all segments of the financial community. The nature
of the Company's search for the acquisition of a Target Company requires
maximum flexibility inasmuch as the Company will be required to
consider various factors and divergent circumstances which may preclude
meaningful direct comparison among the various business enterprises,
products or services investigated. Investors should recognize that the
possible lack of diversification in relation to the Company's acquisition
may not permit the Company to offset potential losses from one venture
against profits from another. This should be considered a negative factor
affecting any decision to purchase the Shares. Management of the
Company will have virtually unrestricted flexibility in identifying and
selecting a prospective Target Company. Management may consider,
among other factors in evaluating a prospective Target Company and
determining the "fair market value" thereof, the following:
* the Target Company' net worth;
* the Target Company' total assets;
* the Target Company' cash flow;
* costs associated with effecting the Business Combination;
* equity interest in and possible management participation in the
Target Company;
* earnings and financial condition of the Target Company;
* growth potential of the Target Company and the industry in which
it operates;
* experience and skill of management and availability of additional
personnel of the Target Company;
* capital requirements of the Target Company;
* competitive position of the Target Company;
* stage of development of the product, process or service of the
Target Company;
* degree of current or potential market acceptance of the product,
process or service of the Target Company;
* possible proprietary features and possible other protection of the
product, process or service of the Target Company; and
* regulatory environment of the industry in which the Target
Company operates.
The foregoing criteria is not intended to be exhaustive or obligatory
any evaluation relating to the merits of a particular Business
Combination will be based, to the extent relevant, on the above factors as
well as other considerations deemed relevant by management in
connection with effecting a Business Combination consistent with the
Company's business objectives.
It is anticipated that locating and investigating specific business
proposals could take a considerable amount of time. The time and costs
required to select and evaluate a Target Company candidate (including
conducting a due diligence review) and to structure and consummate the
Business Combination (including negotiating relevant agreements and
preparing requisite documents for filing pursuant to applicable securities
laws and state corporate laws) cannot presently be ascertained with any
degree of certainty.
The Company anticipates that it will make contact with business
prospects primarily through the efforts of its officers, who will meet
personally with existing management and key personnel, visit and inspect
material facilities, assets, products and services belonging to such
prospects, and undertake such further reasonable investigation as
Management deems appropriate, to the extent of its limited financial
resources. The Company anticipates that certain Target Company
candidates may be brought to its attention from various unaffiliated
sources, including securities broker/dealers, investment bankers, venture
capitalists, bankers, other members of the financial community, and
affiliated sources. While the Company does not presently anticipate
engaging the services of professional firms that specialize in business
acquisitions on any formal basis, the Company may engage such firms in
the future, in which event the Company may pay a finder's fee or other
compensation.
To date, the Company has not selected any particular industry or any
Target Company in which to concentrate its Business Combination
efforts.
Daily Operations
The Company expects to use attorneys and accountants as necessary,
and does not anticipate a need to engage any full-time employees so long
as it is seeking and evaluating business opportunities. The need for
employees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in a specific Business
Acquisition.
Until an active business is commenced or acquired the Company will
have no employees or day- to-day operations. The Company is unable to
make any estimate as to the future number of employees which may be
necessary, if any, to work for the Company. If an existing business is
acquired it is possible that its existing staff would be hired by the
Company. At the present time it is the intention of Management to meet
or be in telephone contact at least once a week and more frequently if
needed to review business opportunities, evaluate potential acquisitions
and otherwise operate the affairs of the Company. Except for
reimbursement of reasonable expenses incurred on behalf of the
Company, Management will not be compensated for these services
rendered on behalf of the Company.
Office Facilities
The Company will maintain its business address at 2160-650 West
Georgia, Vancouver, B.C. Canada. Pursuant to an oral agreement, which
agreement may be terminated by either party on 30 days prior written
notice, the Company will use these offices on a rent free basis until such
time as it consummates a Business Combination
ITEM 7. FINANCIAL STATEMENTS
Index
Page
Independent Auditor's Report F-1
Balance Sheet as of April 30, 2000 F-2
Statements of Loss for the Years Ended
April 30, 1997, April 30, 1998, April 30, 1999 and April 30, 2000 F-3
Statements of Cash Flows for the Period from Inception and for the Years
Ended April 30, 1997, April 30, 1998, April 30, 1999 and April 30, 2000
F-4
Statements of Changes in Stockholders' Equity (Deficit) for the Year
Ended April 30, 1997, April 30, 1998, April 30, 1999 and April 30, 2000
F-5
Notes to Financial Statements F-6 - F-7
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS AND ACCOUNTING AND FINANCIAL
DISCLOSURE
Not Applicable
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT
Directors and Executive Officers
Set forth below is the name of each of the directors and officers
of the Company, all positions and offices with the Company held, the
period during which such person has never served as such, and the
business experience during at least the last five years:
Name Age Positions and Offices Held
John Mackay 50 President, and Director (since
inception)
Rod Saunders 40 Secretary and CFO (since
inception)
There are no agreements or understandings for the officer or
director to resign at the request of another person and the above-named
officers and director are not acting on behalf of nor will act at the
direction of any other person.
Mr. John Mackay is and since 1990 has been the President of Strand
Properties Corporation. Mr Mackay holds a Bachelor of Commerce degree
and a Bachelor of laws degree, both from the University of British
Columbia.
Mr. Rod Saunders is and since 1990 has been the Vice President,
Finance of Strand Properties Corporation. Mr Saunders holds a Bachelor
of Commerce degree from the University of British Columbia and is a
Certified Public Accountant and a member of the Delaware Society of
Certified Public Accountants.
ITEM 10. EXECUTIVE COMPENSATION
No officer or director presently receives a salary. Except as described
herein it is not anticipated that any director or officer will receive any
fee or salary pending consummation of a Business Combination.
However, directors and/or officers will receive expense reimbursement
for expenses reasonably incurred on behalf of the Company.
In addition, Mr. Mackay as a stockholder of the Company or his
affiliates may receive personal financial gain, by: (i) payment of
consulting fees, (ii) sales of affiliates' stock, and (iii) payments of
salaries. See "Risks Associated with the Company's Business."
However, no finders fees will be paid to an officer, director or principal
stockholder or their affiliates by virtue of their initiation of, or the
identification of a Target Company with which a Business Combination is
consummated.
Conflicts of Interest.
The Company's officers and directors expect to organize other
companies of a similar nature and with a similar purpose as the Company.
Consequently, there are potential inherent conflicts of interest in acting
as an officer and director of the Company. Insofar as the officers and
directors are engaged in other business activities, each will devote only a
minor amount of time to the Company's affairs. The Company does not
have a right of first refusal pertaining to opportunities that come to
management's attention insofar as such opportunities may relate to the
Company's proposed business operations.
A conflict may arise in the event that another blank check and/or
blind pool company (a "blind pool company") with which management is
affiliated is formed and actively seeks a target company. It is
anticipated that target companies will be located for the Company and
other blind pool companies in chronological order of the date of
formation of such blind pool companies or by lot. However, any blank
check companies that may be formed may differ from the Company in
certain items such as place of incorporation, number of shares and
shareholders, working capital, types of authorized securities, or other
items. It may be that a target company may be more suitable for or may
prefer a certain blind pool company formed after the Company. In such
case, a business combination might be negotiated on behalf of the more
suitable or preferred blind pool company regardless of date of formation
or choice by lot. Mr. Mackay will be responsible for seeking, evaluating,
negotiating and consummating a business combination with a target
company which may result in terms providing benefits to Mr. Mackay.
The Company may agree to pay finder's fees, as appropriate and
allowed, to unaffiliated persons who may bring a target company to the
Company where that reference results in a business combination. No
finder's fee of any kind will be paid by the Company to management or
promoters of the Company or to their affiliates. No loans of any type
have, or will be, made by the Company to management or promoters of
the Company or to any of their associates or affiliates.
Management has not adopted policies involving possible conflicts
of interest.
There are no binding guidelines or procedures for resolving
potential conflicts of interest. Failure by Management to resolve
conflicts of interest in favor of the Company could result in liability of
Management to the Company. However, any attempt by shareholders to
enforce a liability of Management to the Company would most likely be
prohibitively expensive and time consuming.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's common stock as of December 31,
1996 and as adjusted to reflect the sale of the Shares by: (i) each person
who is known by the Company to own beneficially more than five percent
(5%) of the Company's outstanding common stock, (ii) each of the
Company's officers and directors, and (iii) all directors and officers of
the Company as a group.
NAME AND SHARES OF ATTRIBUTED APPROXIMATE
ADDRESS OF COMMON BENEFICIAL PERCENTAGE
BENEFICIAL STOCK OWNERSHIP OWNED
OWNER BENEFICIALLY
OWNED
Strand Inc. 100 John 100%
2160-650 West Mackay and
Georgia Street, John Cassils
Vancouver, B.C.
Canada V6B 4N7
Officers and 100 John 100%
Directors Mackay as
as a Group to 50%
(1 person)
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
None
ITEM 13. EXHIBITS AND REPORTS ON 8K
(a) Exhibits
None
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
SIGNATURE
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this Annual Report on Form 10-KSB to be signed on
its behalf by the undersigned, thereunto duly authorized.
By George Holding Corp.
(Registrant)
Dated: November 14, 2000 By: /s/ John Mackay
------------------------
John Mackay, President
F1
Russell & Co.
AUDITORS' REPORT TO THE DIRECTORS OF:
BY GEORGE HOLDING CORP.
(Formerly Kings Glen Apartments of Georgia, Inc.)
(A Georgia Corporation)
(A development stage company)
We have audited the balance sheet of By George Holding Corp. as at April
30, 2000 and April 30, 1999 and the statements of loss and shareholders'
equity (deficit) and cash flows for the years ended April 30, 2000, April
30, 1999, April 30, 1998 and April 30, 1997. 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 an audit to
obtain reasonable assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at April 30, 2000and
April 30, 1999 and the results of its operations and its cash flows for the
years ended April 30, 2000, April 30, 1999, April 30, 1998 and April 30,
1997 in accordance with accounting principles generally accepted in the
United States.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to
the financial statements, the Company's negative working capital and
deficit raises substantial doubt about its ability to continue as a going
concern. The financial statements do not contain any adjustments that
might result from the outcome of this uncertainty.
Chartered Accountant
West Vancouver, B.C.
Canada.
November 10, 2000 /s/"Russell & Co."
415 Gordon Ave., West Vancouver, B.C., V7T 1P4
Telephone: (604) 913-0405 - Fax: (604) 913-0406
F2
BY GEORGE HOLDING CORP.
(Formerly Kings Glen Apartments of Georgia, Inc)
(A Georgia Corporation)
(A development stage company)
Balance Sheet
as at April 30, 2000 and April 30, 1999
(U.S. DOLLARS)
April 30, April 30,
2000 1999
Assets
Current
Cash $ 356 $ 4,356
-------------------------------------------------------------------
Total Assets $ 356 $ 4,356
=======================================================================
Liabilities
Current liabilities
Accounts payable $ 1,931 $ -
-----------------------------------------------------------------
Due to affiliated companies 256 -
-----------------------------------------------------------------
Total Liabilities 2,187 -
-----------------------------------------------------------------------
Shareholders' equity (deficit)
Share Capital
Authorized:
10,000 common shares no par value
Issued and outstanding
100 common shares no par value at April 30, 2000
April 30, 1999 and April 30, 1998
100 100
-----------------------------------------------------------------------
Accumulated Retained Earnings (Deficit) (1,931) 4,256
(1,831) 4,256
-----------------------------------------------------------------------
$ 356 $ 4,256
=======================================================================
CONTINUING OPERATIONS (NOTE 1)
F3
BY GEORGE HOLDING CORP.
(Formerly Kings Glen Apartments of Georgia, Inc.)
(A Georgia Corporation)
(A development stage company)
Statement of Loss
For the year ended April 30, 2000
and the years ended April 30, 1999, April 30, 1998 and April 30, 1997
(U.S. DOLLARS)
April 30, April 30, April 30, April 30
2000 1999 1998 1997
Expenses
Legal, accounting and office $6,187 $ 12 $ 12 $ 1,113
-----------------------------------------------------------------------
Net earnings (loss) for the period $(6,187) $ (12) $ (12) $(1,113)
=============================================================================
Basic and diluted loss per share $(61.87) $ (0.12) $(0.12) $(11.13)
-----------------------------------------------------------------------------
Weighted average shares Outstanding 100 100 100 100
-----------------------------------------------------------------------------
F4
BY GEORGE HOLDING CORP.
(Formerly Kings Glen Apartments of Georgia, Inc.)
(A Georgia Corporation)
(A development stage company)
Statement of Cash Flow
For the year ended April 30, 2000
and years ended April 30, 1999, April 30, 1998 and April 30, 1997
(U.S. DOLLARS)
April 30, April 30, April 30, April 30
2000 1999 1998 1997
Cash provided by (used in)
Operations
Net Loss for period $(6,187) $ (12) $ (12) $(1,113)
-----------------------------------------------------------------------------
(6,187) (12) (12) (1,113)
Net change in non-cash working
capital balances
Increase in accounts payable 1,931 - - -
Due to affiliated companies 256 - - -
-----------------------------------------------------------------------------
Net cash used in
operating activities (4,000) (12) (12) (1,113)
Change in cash for period (4,000) (12) (12) (1,113)
Cash, beginning of period 4,356 4,368 4,380 5,493
-----------------------------------------------------------------------------
Cash, end of period $ 356 $ 4,356 $ 4,368 $ 4,380
=============================================================================
F5
BY GEORGE HOLDING CORP.
(Formerly Kings Glen Apartments of Georgia, Inc.)
(A Georgia Corporation)
(A development stage company)
Statement of Shareholders' Equity (Deficit)
For the year ended April 30, 2000
and years ended April 30, 1999, April 30, 1998 and April 30, 1997
(U.S. DOLLARS)
Common shares Total
Shares Amount Earning (Deficit) Equity(Deficit)
------------------------------------------------------------------------------
Balance April 30, 1996 100 $ 100 $ 5,393 $ 5,493
Net loss - - (1,113) (1,113)
------------------------------------------------------------------------------
Balance at April 30, 1997 100 100 4,280 4,380
Net loss - - (12) (12)
------------------------------------------------------------------------------
Balance at April 30, 1998 100 100 4,268 4,368
Net loss - - (12) (12)
------------------------------------------------------------------------------
Balance at April 30, 1999 100 100 4,256 4,356
Net loss - - (6,187) (6,187)
------------------------------------------------------------------------------
Balance at April 30, 2000 100 $ 100 $(1,931) $ (1,831)
==============================================================================
F6
BY GEORGE HOLDING CORP.
(Formerly Kings Glen Apartments of Georgia, Inc.)
(A Georgia Corporation)
(A development stage company)
Notes to Financial Statements
April 30, 1999
(U.S. DOLLARS)
1. Continuing operations
By George Holding Corp. (formerly Kings Glen Apartments of
Georgia, Inc.) was incorporated on November 17, 1992 in the State
of Georgia, U.S.A.
The Company has negative working capital and a deficit. The
ability for the Company to continue as a going concern is dependent
upon its ability to obtain adequate financing to reach profitable
levels of operations. It is not possible to predict whether financing
efforts will be successful or if the Company will attain profitable
levels of operations.
2. Summary of significant accounting policies
These financial statements have been prepared in accordance with
generally accepted accounting principles in the United States and
reflect the following significant accounting principles:
a. Estimates and assumptions
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
b. Earnings (loss) per common share
In February, 1997, the Financial Accounting Standards Board
issued Statement No. 128, Earnings Per Share (SFAS 128),
which established new standards for computing and presenting
earnings per share effective for fiscal years ending after
December 15, 1997. With SFAS 128, primary earnings per
share is replaced by basic earnings per share, which is
computed by dividing income available to common
shareholders by the weighted average number of shares
outstanding for the period. In addition, SFAS 128 requires
the presentation of diluted earnings per share, which includes
the potential dilution that could occur if dilutive securities
were exercised or converted into common stock. The
computation of diluted EPS does not assume the conversion or
exercise of securities if their effect is anti-dilutive. Common
equivalent shares consist of the common shares issuable upon
the conversion of the convertible loan notes and special
warrants (using the
F7
if-converted method) and incremental shares issuable upon the
exercise of stock options and share purchase warrants ( using
the treasury stock method).
c. Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits in
banks and highly liquid investments with an original maturity
of three months or less.
3. Related Party Transactions
The accounting and office expenses are paid to an affiliated
company.
4. Income taxes
The Company has a net operating loss which may give rise to future tax
benefits of approximately $1,931. To the extent not used, net
operating loss carryforwards expire in the year 2013. Income taxes are
accounted for in accordance with Statement of Financial Accounting
Stantdards No.109 (SFAS 109). Under this method, deferred income
taxes are determined on based on differences between the tax basis of
assets and liabilities and their financial reporting amounts at each year
end, and are measured based on enacted tax rates and laws that will be
in effect when the differences are expected to reverse. Valuation
allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to be realized. No provision for income
taxes is included in the statement due to its immaterial amount.
