AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 28, 2000
Registration No. 333-43126
--------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Mobile Design Concepts, Inc.
(Exact name of small business issuer as specified in its charter)
--------------------------------------------
NEVADA 1531 87-0650219
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification
incorporation or Classification Number)
organization) Code Number)
6500 S. 400 W., Suite C, Salt Lake City, Utah 84107
(801) 266-2420
(Address and telephone number of Registrant's principal executive offices)
Same as Above
(Address of principal place of business or
intended principal place of business)
Steven N. Bednarik
6500 S. 400 W., Suite C, Salt Lake City, Utah 84107
(801) 266-2420
(Name, address and telephone number of agent for service)
copies to:
Mark N. Schneider, Esq.
Mark N. Schneider, A Professional Corporation
265 East 100 South, Suite 250
Salt Lake City, Utah 84111
Telephone: (801) 359-1984, ext. 7
Fax: (801) 359-1988
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
---------------------------- -------------------------- -------------------------- -------------------------- ---------------------
Title of each Dollar Proposed Proposed
class of amount maximum maximum Amount of
securities to be to be offering price aggregate registration
registered registered per unit(1) offering price(1) fee
---------------------------- -------------------------- -------------------------- -------------------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock $125,000 $0.25 $125,000 $33.00
---------------------------- -------------------------- -------------------------- -------------------------- ---------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(o) under the Securities Act of 1933.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Subject To Completion, Dated November 27, 2000
The information contained in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
500,000 Shares
Mobile Design Concepts, Inc.
Common Stock
$ 0.25 Per Share
--------------------------------------------------------------------------------
This is an initial public offering of shares of common stock of Mobile Design
Concepts, Inc. We are offering up to 500,000 shares of our common stock in this
offering. We are offering the stock directly with no requirement that any
minimum number of shares be sold. The offering will continue until the earlier
of the date all offered shares are sold or six months from the date of this
prospectus. The funds we receive from the sale of stock in this offering will
not be placed in escrow and will immediately be available to us for use in our
business. No broker-dealer is participating in this offering, and no sales
commissions will be paid to any person in connection with this offering.
An investment in our stock is extremely speculative and involves several
significant risks. You are cautioned not to invest unless you can afford the
loss of your entire investment. We urge you to read the "Risk Factors" section
of this prospectus beginning on page 3 and the rest of this prospectus before
making an investment decision.
Per Share Total
--------- -----
Public offering price........................... $0.25 $125,000
Commissions..................................... $0 $0
Proceeds to Mobile Design, before expenses...... $0.25 $125,000
--------------------------------------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is December [__], 2000.
<PAGE>
Table of Contents
Page
Prospectus Summary........................................................2
Risk Factors..............................................................3
Forward-Looking Statements................................................3
Market for Common Stock and Dividend Policy...............................4
Use of Proceeds...........................................................5
Dilution..................................................................5
Plan of Operation.........................................................6
Business..................................................................7
Management ...............................................................9
Executive Compensation....................................................10
Certain Relationships and Related Transactions............................10
Principal Stockholders....................................................11
Description of Capital Stock..............................................11
Plan of Distribution......................................................12
Where You Can Find Additional Information.................................13
Legal Matters.............................................................13
Experts...................................................................13
Financial Statements......................................................F-1
Prospectus Summary
Mobile Design Concepts, Inc.
We are a start-up company that plans to design and manufacture mobile kiosks for
use primarily as drive-through coffee and espresso units. Our kiosks are simple
structures approximately 120 square feet in size with one door, a drive-through
window, stucco exterior, and a pitched roof. Our kiosks will be self-contained
and will be movable from one location to another. Our kiosks will contain all
necessary plumbing and electrical equipment and will have external hook-ups for
connection to water and electrical sources at the site. We have completed the
design of our prototype kiosk and plan to complete its construction by December
15, 2000. We intend to sell or lease our kiosks to third parties who are engaged
or plan to engage in the drive-through sale of coffee, juice, and other
beverages.
Our Address
Our offices are located at 6500 South 400 West, Suite C, Salt Lake City, Utah
84107, and our telephone number is (801) 266-2420.
The Offering
Common stock outstanding before offering ..................... 4,500,000 shares
Common stock offered ......................................... 500,000 shares
Common stock to be outstanding after the offering............. 5,000,000 shares
2
<PAGE>
Risk Factors
An investment in our common stock is extremely speculative and involves
significant risks. You are cautioned not to purchase our stock unless you can
afford to lose your entire investment. You should carefully consider the
following risk factors before you decide to buy our common stock. You should
also carefully read and consider all the information we have included in this
prospectus before you decide to buy our common stock.
You may be unable to effectively evaluate our company for investment purposes
because we have not begun operations and our business model is unproven.
We were only recently incorporated in March 2000, have not commenced
our planned operations, and have not produced any earnings. We face all the
risks of a new business, and there can be no assurance we will be successful.
Our lack of an operating history makes it difficult to evaluate the risks and
uncertainties that we face. Our failure to address these risks and uncertainties
could cause our business results to suffer and result in the loss of all or part
of your investment.
We depend on our president and the loss of his services would have an adverse
effect on our business.
We are dependent on our president and sole employee to operate our
company, and the loss of this person would have an adverse impact on our
operations until such time as he could be replaced. We do not have an employment
agreement with our president, and we do not carry key man life insurance on his
life.
Because we arbitrarily established the offering price for the shares, there can
be no assurance that the offering price represents the fair market value of the
shares.
We arbitrarily established the offering price of our Shares in order
for us to raise a gross amount of approximately $125,000 in this offering. The
offering price bears no relationship to our assets, earnings, book value, or
other criteria of value. There can be no assurance that the offering price
represents the fair market value of the shares, that you will be able to sell
the shares in the future at a price that is at or above the offering price, or
that you will be able to sell the shares at all.
The concentration of ownership in our three current stockholders will limit your
ability to influence corporate matters.
Immediately following this offering, our three current stockholders,
including our president, will beneficially own 90% of our outstanding common
stock. These stockholders will able to determine the outcome of actions taken by
us that require stockholder approval. For example, these stockholders could
elect all of our directors and control the policies and practices of the
company.
Forward-Looking Statements
This prospectus contains statements about the future, sometimes referred to as
"forward-looking" statements. Forward-looking statements are typically
identified by the use of the words "believe," "may," "will," "should," "expect,"
"anticipate," "estimate," "project," "propose," "plan," "intend," and similar
words and expressions. Statements that describe our future strategic plans,
goals, or objectives are also forward-looking statements. Any forward-looking
statements, including those regarding our or our management's current beliefs,
expectations, anticipations, estimations, projections, proposals, plans or
intentions, are not guarantees of future performance or results or events and
involve risks and uncertainties, such as those discussed below.
The forward-looking statements are based on present circumstances and on our
predictions respecting events that have not occurred, that may not occur, or
that may occur with different consequences and timing than those now
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<PAGE>
assumed or anticipated. Actual events or results may differ materially from
those discussed in the forward-looking statements as a result of various
factors, including the risk factors discussed above. These cautionary statements
are intended to be applicable to all related forward-looking statements wherever
they appear in this prospectus. Any forward-looking statements are made only as
of the date of this prospectus, and we assume no obligation to update
forward-looking statements to reflect subsequent events or circumstances.
Market for Common Stock and Dividend Policy
There is no trading market for our common stock, and no assurance can be given
that any trading market will develop in the future. We arbitrarily established
the offering price of our Shares in order for us to raise a gross amount of
$125,000 in this offering. The offering price bears no relationship to our
assets, earnings, book value, or other criteria of value. There can be no
assurance that the offering price represents the fair market value of the
shares, that you will be able to sell the shares in the future at a price that
is at or above the offering price, or that you will be able to sell the shares
at all.
As of the date of this prospectus, we have three stockholders of record. We have
never paid cash dividends on our common stock and do not anticipate that we will
pay dividends in the foreseeable future.
4
<PAGE>
Use Of Proceeds
We estimate that the net proceeds from the sale of all 500,000 shares of common
stock in this offering will be approximately $110,000 after deducting estimated
offering expenses of $15,000. For purposes of illustration only, if only 250,000
shares are sold in this offering, our net proceeds will be approximately
$47,500. There can be no assurance that all or any of the offered shares will be
sold.
We have a one-year commercial line of credit from our bank, which allows us to
borrow up to $20,606 at an interest rate of prime plus 2%, which is currently
11.5%. In addition, we paid a loan origination fee of $606 to establish the line
of credit. To date we have drawn $5,606 against the letter of credit for use in
the construction of our prototype and plan to use a portion of the offering
proceeds to repay this loan.
The following table illustrates our planned use of the offering proceeds
assuming all offered shares are sold and assuming only one-half the offered
shares are sold. If we sell less than all offered shares, we plan to complete
the construction of our prototype kiosk, engage in limited marketing activities
and construct up to three additional kiosks as our funds permit while retaining
adequate cash reserves to cover our estimated costs of operation for at least
twelve months.
<TABLE>
<CAPTION>
Assuming 500,000 Shares Sold Assuming 250,000 Shares Sold
---------------------------- ----------------------------
Proposed Use of Proceeds Amount % of Total Amount % of Total
------------------------ -------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Offering expenses $ 15,000 12.0% $ 15,000 24.0%
Pay off bank line of credit 5,000 4.0% 5,000 8.0%
Construct prototype 20,000 16.0% 20,000 32.0%
Construct other kiosks at 60,000 48.0% 0 -
estimated cost of $20,000 each
General and administrative 15,000 12.0% 15,000 24.0%
expenses for 12 months
Marketing expenses 5,000 4.0% 5,000 8.0%
Reserve for unforeseen expenses 5,000 4.0% 2,500 4.0%
----------- ------- ----------- -------
Total $125,000 100.0% $ 62,500 100.0%
</TABLE>
Until such time as the net offering proceeds are spent in the manner described
above, they will be invested in short-term investment grade, interest-bearing
securities or guaranteed obligations of the U.S. government.
Dilution
Our net tangible book value on September 30, 2000 was $3,100 or approximately
$0.001 per share. "Net tangible book value" is our total assets minus the sum of
our liabilities and intangible assets. "Net tangible book value per share" is
net tangible book value divided by the total number of shares outstanding before
the offering.
After giving effect to the sale of all 500,000 shares in this offering at an
offering price of $0.25 per share and the receipt of net proceeds in the assumed
amount of $110,000, our pro forma net tangible book value on September 30, 2000
would have been $113,100, or $0.023 per share.
5
<PAGE>
The following table illustrates the pro forma increase in net tangible book
value of $0.022 per share and the dilution (the difference between the offering
price per share and net tangible book value per share) to new investors,
assuming all offered shares are sold in the offering:
Public offering price per share....................... $0.25
Net tangible book value per share as of September
30, 2000............................................ $0.001
Increase in net tangible book value per share
attributable to the offering........................ $0.022
----------
Pro forma net tangible book value per share as of
September 30, 2000 after giving effect to the
offering............................................ $0.023
----------
Dilution per share to new investors in the offering... $0.227
==========
The following table shows the difference between existing stockholders and new
investors with respect to the number of shares purchased, the total
consideration paid, and the average price paid per share assuming all offered
shares are sold in the offering.
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
------------------------------------ ------------------------------------
Average Price
Number Percent Amount Percent Per Share
---------------------- ----------- ---------------------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Existing stockholders 4,500,000 90% $ 9,000 6.7% $0.002
New investors........ 500,000 10% $125,000 93.3% $0.250
---------------------- ----------- ---------------------- ------------ ------------------
Total........... 5,000,000 100% $134,000 100.0% $0.027
====================== =========== ====================== ============ ==================
</TABLE>
Plan of Operation
You should read the following discussion in conjunction with our financial
statements, which are included elsewhere in this prospectus. The following
information contains forward-looking statements.
Our plan of operation is to use our existing capital together with the proceeds
from this offering to complete construction of our prototype kiosk and to
construct up to three additional kiosks for sale or lease to third parties. As
of September 30, 2000, we had net cash on hand of $5,481 and current liabilities
of $2,381. In addition, we have established a one-year $20,606 revolving line of
credit with our bank that bears interest at the rate of prime plus 2%, for a
current rate of 11.5%. To date we have drawn $5,606 against the line of credit
in connection with the construction of our prototype kiosk. We plan to repay all
amounts advanced to us under the line of credit with the proceeds from this
offering.
We estimate our general and administrative expenses during the next twelve
months to be approximately $15,000, including rent, office, legal, and
accounting expenses. We estimate the cost of constructing our prototype kiosk at
$20,000 to $25,000, and the cost of constructing additional kiosks to be
somewhat lower as the construction process becomes more uniform and design
problems have been resolved. If all shares in this offering are sold, we will
proceed with the construction plan outlined above, subject to indications of
interest from prospective operators. We anticipate that our prototype will be
completed by December 15, 2000 and that additional kiosks will be completed
sequentially based on demand with a total construction time of approximately 45
days. If less than all offered shares are sold, we will reduce our construction
budget as appropriate and may attempt to finance the construction of additional
kiosks using a purchase contract or lease with the potential operator as
security for a loan.
We plan to generate revenue from the lease and sale of our kiosks to third
parties. We plan to initially lease our kiosks for a monthly rental of from
$12,000 to $15,000 per year under a lease with a term of three years that may be
renewed on an annual basis after the initial three-year term. We believe that an
operator at a good location will continue to rent the kiosk for its useful life,
which we estimate at ten to fifteen years. We also plan to sell kiosks at
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<PAGE>
prices ranging from $40,000 to $65,000, depending on the design features and
equipment included in the particular unit. Our proposed lease rates and sales
prices will be subject to adjustment based on demand, changes in our cost
structure and competitive conditions prevailing in our industry.
We anticipate that the proceeds from the sale of the offering together with our
current assets and bank line of credit will be sufficient to permit us to
implement our business plan and conduct our operations for a period of at least
twelve months.
Business
General
Our company was recently incorporated under the laws of Nevada on March 10,
2000. In connection with our organization, we sold 4,500,000 shares of our
common stock to three persons, including our president, for $9,000 in cash.
We are a start-up company that plans to design and manufacture mobile kiosks for
use as drive-through beverage units. Our kiosks will be simple, prefabricated
structures designed to be moved from location to location. We have completed the
design of our initial prototype kiosk and plan to complete its construction by
December 15, 2000. We intend to sell or lease our kiosks to third parties who
are engaged or plan to engage in the drive-through sale of coffee, espresso,
juice, or other beverages.
Our Mobile Beverage Kiosks
Our kiosks have been designed as simple structures approximately 120 square feet
in size with the following general characteristics and specifications.
o Stucco exterior walls for low maintenance and durability. The stucco will
be available in a variety of colors with each operator selecting the color
for its kiosk.
o Steep pitch, standing seam metal roof available in a variety of colors to
coordinate with the color of the stucco exterior. The color coating will be
a powder coat with a baked enamel finish carrying a 25-year manufacturer's
warranty. Rain gutters will run along the edge of the entire roofline.
o Gable awnings with color graphics on each side of the kiosk, with awning
lights mounted underneath to illuminate the graphics after sunset.
o Interior walls will be insulated and easily washable high-gloss FRP panels
from floor to ceiling. The floor will be of a durable industrial composite
vinyl with matching baseboards for ease in sweeping and cleaning.
o One insulated steel door and one or two sliding drive-through windows with
double pane glass. Windows will be located on all sides of the kiosk to
maximize natural lighting to the interior and enable customers to watch the
preparation of their beverages.
o Stainless steel serving shelves for each drive-through window
o Illuminated billboard menus for each drive-through window allowing
customers to select their beverages before arriving at the window and
allowing the operator to maximize the flow of traffic.
o One wall-mounted air conditioning and heating unit near the door of each
kiosk. Each kiosk will contain floor, wall, and ceiling insulation designed
to provide a stable interior temperature.
o Three-compartment stainless steel sink with faucets and smaller stainless
steel hand-washing sink.
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o One built-in stainless steel zero-clearance forced-air refrigerator, with
an option of adding a second refrigerator.
o One 25-gallon hot water heater. Supply water will be stored in a 32-gallon
fresh water polyethylene tank, and wastewater will be held in a 38-gallon
gray water polyethylene tank pending disposal.
o Fully automatic water pump and filtration systems, with enclosed insulated
water pipes.
o 110/220 volt, 200-amp electric service with GFI protected outlets and
dedicated circuits for power to the computer and cash register. The units
will also be wired for telephone service with two jack outlets and will
include wiring for an optional security system.
o Interior storage will include lockable under counter storage cabinets and
built in modular shelving systems that can be moved and reconfigured for
easy cleaning and variable size supply placement. The kiosks will also be
supplied with overhead shelving for immediate access to rapidly moving
retail products.
We will also offer to provide all beverage equipment such as espresso machines,
coffee brewers and grinders, icemakers, blenders, and storage and service
containers in accordance with the operator's specifications. We may purchase
some of these items of equipment from Meridian Coffee, an affiliate of our
president.
Construction of Kiosks
Each kiosk will be built to specification with the operator's input. We will
employ a third party contractor to build and deliver to our office the basic
wooden structure. Once on our premises, licensed plumbers and electricians will
perform the necessary interior plumbing and electrical work under the
supervision of our president. We will also hire independent contractors to
perform the finish work, and we will install the necessary fixtures and
equipment. We believe that having the structure on-site will enable us to
oversee work being performed by third parties, provide us with maximum
flexibility in implementing any final changes the operator deems necessary, and
provide us with a model for demonstration to potential buyers. We believe there
are numerous sources of the raw materials and skilled and unskilled labor
required to construct the kiosks and that we will not be dependent on any single
supplier or group of suppliers.
Our Relationship with Meridian
We have a relationship with Meridian Coffee Company, an affiliate of our
president, which is a coffee wholesaler providing coffee and beverage products
to retail coffee outlets in the Salt Lake City Metropolitan Area. We believe
Meridian may introduce us to certain of its customers who may be interested in
expanding their businesses by establishing new or additional drive-through
coffee outlets. We believe the addition of new locations will benefit Meridian
because it will most likely provide coffee and coffee products for the new
locations of its existing customers, and it will benefit us because we will
generate revenue from the sale or lease of the kiosks. We may also purchase
certain fixtures or equipment for use in our kiosks from Meridian. If we do, the
prices we pay Meridian for such items will be no less favorable to us than the
lowest prices charged by Meridian for such items to its other customers. We have
not entered into any agreement with Meridian with regard to the introduction of
customers or sale of equipment.
Competition
We will be competing with numerous general-purpose carpentry and construction
companies who have the capability to construct structures of almost any
configuration. However, we are not aware of any direct competitors in our area
who construct mobile kiosks specifically for use as drive-through beverage
units. There are other companies engaged in the construction of mobile beverage
kiosks, such as Mountain Manufacturing in Montana, but we are not aware of any
direct competitors in our local market. There can be no assurance that an
established manufacturing company with superior financial resources and
expertise to those of our company will not enter the market and begin competing
with us directly.
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<PAGE>
Employees and Consultants
We have only one employee, our president, and we are dependent on his continued
service to implement our business plan. The loss of our president would have a
material adverse impact on our business, and there is no assurance that we could
locate a qualified replacement. We have not entered into an employment agreement
with our president, and we do not carry "key man" life insurance on the life of
our president.
Offices and Facilities
Our offices are located at 6500 S. 400 W, Suite C, Salt Lake City, Utah 84107,
in space we share with Meridian Coffee Company, an affiliate of our president.
The space consists of 1,000 square feet of space, of which approximately 500
square feet are office space and 500 square feet are warehouse and storage
space. From the formation of our company until July 31, 2000, we used this space
free of charge. Commencing November 1, 2000, we began subletting an undivided
share of the office space from Meridian under an oral agreement for a monthly
rental of $100 plus our share of expenses incurred for paper, copies, long
distance telephone charges and similar items.
Legal Proceedings
We are not a party to any material legal proceedings, and to our knowledge, no
such legal proceedings have been threatened against us.
Management
As indicated in the following table, Nikk Bednarik (full name Steven N.
Bednarik), holds the offices of president, secretary and treasurer and is the
only member of our board of directors. The term of office for each officer
position is for one year or until his or her successor is duly elected and
qualified by the board of directors. The term of office for a director is for
one year or until his or her successor is duly elected and qualified by the
stockholders.
Term
Of
Name Age Office Positions Held
---- --- ------ --------------
Nikk Bednarik 31 2001 President, Secretary, Treasurer and Director
------------------------
Certain biographical information with respect to Mr. Bednarik is set forth
below.
Nikk Bednarik, age 31, has been a director and a vice president of Meridian
Coffee Company since he co-founded the company in 1992. Meridian Coffee is a
coffee wholesaler that provides an assortment of roasted coffees and coffee
beans, tea and other beverage products to retail coffee outlets and other
businesses and organizations in the Salt Lake City Metropolitan Area. Mr.
Bednarik's full name is Steven N. Bednarik.
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<PAGE>
Executive Compensation
Historical Compensation
We have not paid any compensation to Mr. Bednarik, our sole officer, director,
and employee, since the date of our incorporation in March 2000. We have not
granted Mr. Bednarik any stock options, stock awards, or other forms of equity
compensation. We do not provide Mr. Bednarik with medical insurance or other
similar employee benefits.
Future Compensation
We will not compensate Mr. Bednarik for his efforts in designing and
constructing our prototype mobile beverage kiosk. However, we will compensate
him for his efforts in constructing future kiosks as follows: (i) we will pay
him for actual work performed by him in connection with the kiosk construction
at rates comparable to those we would pay an unrelated third party performing
the same services for us; and (ii) we will pay him a commission equal to ten
percent (10%) of the sales price of any kiosks we sell and 10% of the effective
sales price of any kiosks we lease, with commissions on leased kiosks being paid
over the term of the particular lease. We will also reimburse Mr. Bednarik for
reasonable costs and expenses incurred by him in connection with our business.
We may pay additional compensation to Mr. Bednarik in the future if justified
based on the growth of our business and the time Mr. Bednarik is required to
devote to our business.
We have not entered into an employment agreement with Mr. Bednarik.
Certain Relationships and Related Transactions
Unless otherwise indicated, the terms of the following transactions between
related parties were not determined as a result of arm's length negotiations.
Sale of Stock at Organization
In April, 2000, in connection with our organization, we sold 4,500,000 shares of
common stock to three people, including our president, for $9,000 in cash.
Shared Office Space with Meridian Coffee
Our offices are located in space we share with Meridian Coffee Company, an
affiliate of our president. Commencing November 1, 2000, we agreed to sublet an
undivided share of the office space from Meridian under an oral agreement for a
monthly rental of $100 plus our share of expenses incurred for paper, copies,
long distance telephone charges, and similar items.
Relationship with Meridian
We have a relationship with Meridian Coffee Company, an affiliate of our
president, which is a coffee wholesaler providing coffee and beverage products
to retail coffee outlets in the Salt Lake City Metropolitan Area. We may
purchase espresso and coffee related equipment for use in our kiosks from
Meridian. If we do, the prices we pay Meridian for such items will be no less
favorable to us than the lowest prices charged by Meridian for such items to its
other customers. We have not entered into any agreement with Meridian with
respect to the sale of equipment.
Indemnification
Our articles of incorporation provide that our directors shall have no personal
liability to our company or our stockholders for damages for breaches of their
fiduciary duties as directors or officers, except for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law, or the
payment of certain unlawful distributions. In addition, Section 78.037 of the
Nevada corporation law, Article VIII of our articles of incorporation, and
Article VIII of our bylaws provide for indemnification of our directors and
officers in a variety of circumstances, which may include liabilities under the
Securities Act of 1933, as amended. Insofar as
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indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers, and controlling persons pursuant to the
foregoing provisions, we have been informed that in the opinion of the
Securities and Exchange Commission such indemnification is contrary to public
policy as expressed in the Securities Act and, therefore, is unenforceable.
Principal Stockholders
The following table sets forth as of the date of this prospectus the name,
address, and stock holdings of each person who owns of record, or was known by
us to own beneficially, 5% or more of our outstanding common stock, and the
stock holdings of Nikk Bednarik, our sole director and officer.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Percentage of
Title of Class Beneficial Owner (1) Amount Ownership
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Stockholders
Common Stock Steven K. Bednarik(2) 750,000 16.7%
215 South State Street, #750
Salt Lake City, UT 84111
Common Stock Lynn Dixon 1,250,000 27.8%
311 S. State Street
Salt Lake City, UT 84111
Officers and Directors
Common Stock Nikk Bednarik(2) 2,500,000 55.6%
Common Stock All Executive Officers
and Directors as a
Group (1 person) -------------
2,500,000 55.6%
-------------
---------------------
</TABLE>
(1) Except as otherwise noted, all shares are owned beneficially and of record,
and the record stockholder has sole voting, investment, and dispositive
power over the shares owned by him.
(2) Steven K. Bednarik is the father of Nikk Bednarik (full name Steven N.
Bednarik).
Description of Capital Stock
We are authorized to issue 50,000,000 shares of common stock, $0.001 par value,
and 5,000,000 shares of preferred stock, $0.001 par value. The following
summary description is qualified by reference to the detailed provisions of our
articles of incorporation and bylaws, copies of which have been filed as
exhibits to the registration statement in which this prospectus is included.
Common Stock
As of the date of this prospectus, we have 4,500,000 shares of common stock
issued and outstanding, which are held by three stockholders. The holders of
common stock are entitled to one vote per share on each matter submitted to a
vote at any meeting of stockholders. Holders of common stock do not have
cumulative voting rights, and therefore, a majority of the outstanding shares
voting at a meeting of stockholders is able to elect the entire board of
directors,
11
<PAGE>
and if they do so, minority stockholders would not be able to elect any members
to the board of directors. Our bylaws provide that a majority of our issued and
outstanding shares constitutes a quorum for stockholders' meetings.
Our stockholders have no preemptive rights to acquire additional shares of
common stock or other securities. Our common stock is not subject to redemption
and carries no subscription or conversion rights. In the event of liquidation of
our company, the shares of our common stock are entitled to share equally in
corporate assets after satisfaction of all liabilities and the payment of any
liquidation preferences.
The holders of our common stock are entitled to receive such dividends as the
board of directors may from time to time declare out of funds legally available
for the payment of dividends. We have not paid any dividends in the past and do
not anticipate that we will pay dividends in the foreseeable future. In certain
cases, common stockholders may not receive dividends, if and when declared by
the board of directors, until we have satisfied our obligations to any preferred
stockholders.
The board of directors has authority to authorize the offer and sale of
additional securities without the vote of or notice to existing stockholders,
and it is likely that additional securities will be issued to provide future
financing. The issuance of additional securities could dilute the percentage
interest and per share book value of existing stockholders, including persons
purchasing common stock in this offering.
Preferred Stock
Under our articles of incorporation, our board of directors is authorized,
without stockholder action, to issue preferred stock in one or more series and
to fix the number of shares and rights, preferences and limitations of each
series. Among the specific matters that may be determined by the board of
directors are the dividend rate, the redemption price, if any, conversion
rights, if any, the amount payable in the event of any voluntary liquidation or
dissolution of our company, and voting rights, if any.
Future Sales of Securities
We previously issued 4,500,000 shares of our stock to three people in
connection with our organization in March 2000. None of such shares has been
registered under the Securities Act of 1933, however, once those shares have
been held for in excess of one year, they may be available for resale from time
to time by means of ordinary brokerage transactions in the open market pursuant
to Rule 144 under the Securities Act of 1933, subject to the requirements and
limitations imposed by Rule 144. The possibility of such resales under Rule 144
may have a depressive effect on the market price for our stock in any market
that may develop in the future.
Plan of Distribution
We are offering up to 500,000 shares of our common stock in this offering. We
are offering the stock directly without any requirement that a minimum number of
shares be sold. The stock will be offered and sold by our president who will
mail copies of this prospectus to potential investors and respond by telephone
or in person to questions raised by potential investors. The offering will
continue until the earlier of the date all offered shares are sold or six months
from the date of this prospectus. The funds received from the sale of stock in
this offering will not be placed in escrow and will immediately be available to
us for use in our business in the manner described in "Use of Proceeds." No
broker-dealer is participating in this offering, and no sales commissions will
be paid to any person in connection with this offering.
There is currently no trading market for our common stock, and there can be no
assurance that any trading market will develop in the future.
Where You Can Find Additional Information
We have filed with the Securities and Exchange Commission a registration
statement on Form SB-2 under the Securities Act for the common stock sold in
this offering. This prospectus does not include all of the information
12
<PAGE>
contained in the registration statement and the accompanying exhibits and
schedules. For further information about our common stock and us, we refer you
to the registration statement and the accompanying exhibits and schedules.
Statements contained in this prospectus regarding the contents of any document
to which we refer are not necessarily complete. In each instance, reference is
made to the copy of the document filed as an exhibit to the registration
statement, and each statement is qualified in all respects by that reference.
Copies of the registration statement and the accompanying exhibits and schedules
may be obtained at prescribed rates or inspected without charge at the public
reference facilities maintained by the Securities and Exchange Commission at
room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Securities and Exchange Commission located at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain information
on the operation of the Public Reference Room by calling the Securities and
Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission
maintains a Web site that contains reports, proxy, and information statements
and other information regarding registrants that file electronically with the
Securities and Exchange Commission. The address of the site is
http://www.sec.gov.
Commencing with the date of this prospectus, we will file periodic reports with
the Commission pursuant to Sections 13 and 15(d) of the Securities Exchange Act
of 1934, including reports on Forms 10-QSB, 10-KSB and 8-K. These reports may be
examined and copies of them may be obtained at the public reference facilities
of the Securities and Exchange Commission at the locations described above.
These reports may also be accessed from the Commission's Web site at
http://www.sec.gov. Copies of the periodic reports we file with the Commission
will be provided to our stockholders without charge upon request to: Nikk
Bednarik, President, Mobile Design Concepts, Inc., 6500 S. 400 W., Suite C, Salt
Lake City, Utah 84107.
Legal Matters
Certain legal matters with regard to the validity under the Nevada Revised
Statutes of the common stock to be sold in this offering have been passed upon
for us by Mark N. Schneider, a Professional Corporation.
Experts
The financial statements as of April 30, 2000 included in this prospectus have
been audited by Pritchett, Siler & Hardy, independent certified public
accountants, to the extent and for the periods set forth in their report
included in this prospectus, and are included herein in reliance upon such
report given upon the authority of said firm as experts in auditing and
accounting.
13
<PAGE>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
CONTENTS
PAGE
Audited Financial Statements
-- Independent Auditors' Report F-2
-- Balance Sheet, April 30, 2000 F-3
-- Statement of Operations, for the period from
inception on March 10, 2000 through April 30, 2000 F-4
-- Statement of Stockholders' Equity, from
inception on March 10, 2000 through April 30, 2000 F-5
-- Statement of Cash Flows, for the period from
inception March 10, 2000 through April 30, 2000 F-6
-- Notes to Financial Statements F-7/9
Unaudited Financial Statements
-- Unaudited Balance Sheet, September 30, 2000 F-10
-- Unaudited Statement of Operations, for the
period from inception on March 10, 2000
through September 30, 2000 F-11
-- Unaudited Statement of Stockholders' Equity,
from inception on March 10, 2000 through
September 30, 2000 F-12
-- Unaudited Statement of Cash Flows, for the
period from inception March 10, 2000 through
September 30, 2000 F-13
-- Notes to Unaudited Financial Statements F-14/16
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
MOBILE DESIGN CONCEPTS, INC.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Mobile Design Concepts, Inc.
[a development stage company] at April 30, 2000 and the related statement of
operations, stockholders' equity and cash flows for the period from inception on
March 10, 2000 through April 30, 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the financial position of Mobile Design Concepts, Inc. [a
development stage company] as of April 30, 2000 and the results of its
operations and its cash flows for the period from inception on March 10, 2000
through April 30, 2000 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that Mobile
Design Concepts, Inc. will continue as a going concern. As discussed in Note 5
to the financial statements, Mobile Design Concepts, Inc. was only recently
formed and has not yet been successful in establishing profitable operations,
raising substantial doubt about its ability to continue as a going concern.
Management's plans in regards to these matters are also described in Note 5. The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
/s/ PRITCHETT, SILER & HARDY, P.C.
PRITCHETT, SILER & HARDY, P.C.
May 30, 2000
Salt Lake City, Utah
F-2
<PAGE>
<TABLE>
<CAPTION>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
BALANCE SHEET
ASSETS
April 30,
2000
------------------
<S> <C>
CURRENT ASSETS:
Cash in bank $ 8,468
------------------
Total Current Assets 8,468
------------------
$ 8,468
------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - related party $ 45
------------------
Total Current Liabilities 45
------------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
1,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
4,500,000 shares issued and
outstanding 4,500
Capital in excess of par value 4,500
Deficit accumulated during the
development stage (577)
------------------
Total Stockholders' Equity 8,423
------------------
$ 8,468
------------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-3
<PAGE>
<TABLE>
<CAPTION>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
STATEMENT OF OPERATIONS
From Inception
on March 10,
2000 Through
April 30,
2000
--------------
<S> <C>
REVENUE $ -
EXPENSES:
General and Administrative 577
--------------
LOSS BEFORE INCOME TAXES (577)
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
--------------
NET LOSS $ (577)
==============
LOSS PER COMMON SHARE $ (.00)
==============
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-4
<PAGE>
<TABLE>
<CAPTION>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MARCH 10, 2000
THROUGH APRIL 30, 2000
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
------------------------ ------------------------ Excess of Development
Shares Amount Shares Amount Par Value Stage
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, March 10,
2000 - $ - - $ - $ - $ -
Issuance of 4,500,000
shares common stock for
cash at $.002 per share,
April 4, 2000 - - 4,500,000 4,500 4,500 -
Net loss for the period ended
April 30, 2000 - - - - - (577)
----------- ------------ ------------ ------------ ------------ ------------
BALANCE, April 30,
2000 - $ - 4,500,000 $ 4,500 $ 4,500 $ (577)
=========== ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-5
<PAGE>
<TABLE>
<CAPTION>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
NET INCREASE IN CASH
From Inception
on March 10,
2000 Through
April 30,
2000
--------------
<S> <C>
Cash Flows Provided by Operating Activities:
Net loss $ (577)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in assets and liabilities:
Increase in accounts payable 45
--------------
Net Cash Provided by Operating Activities (532)
--------------
Cash Flows Provided by Investing Activities -
--------------
Net Cash Provided by Investing Activities -
--------------
Cash Flows Provided by Financing Activities:
Proceeds from issuance of common stock 9,000
--------------
Net Cash Provided by Financing Activities 9,000
--------------
Net Increase in Cash 8,468
Cash at Beginning of Period -
--------------
Cash at End of Period $ 8,468
--------------
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the period ended April 30, 2000:
None
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-6
<PAGE>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Mobile Design Concepts, Inc. (the Company) was organized
under the laws of the State of Nevada on March 10, 2000. The Company plans
to design and manufacture mobile kiosks and other structures. The Company
has not yet commenced planned principal operations and is considered a
development stage company as defined in SFAS No. 7. The Company has, at the
present time, not paid any dividends and any dividends that may be paid in
the future will depend upon the financial requirements of the Company and
other relevant factors.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share". [See Note 6]
Cash and Cash Equivalents - For purposes of the statement of cash flows,
the Company considers all highly liquid debt investments purchased with a
maturity of three months or less to be cash equivalents.
Organization Costs - Organization costs, which reflect amounts expended to
organize the Company, amounted to $545 and were expensed during the period
ended April 30, 2000.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosures of contingent assets and
liabilities at the date of the financial statements, and the reported
amount of revenues and expenses during the reported period. Actual results
could differ from those estimated.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards (SFAS) No. 132, "Employer's Disclosure about Pensions and Other
Postretirement Benefits", SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", SFAS No. 134, "Accounting for
Mortgage-Backed Securities...", SFAS No. 135, "Rescission of FASB Statement
No. 75 and Technical Corrections", SFAS No. 136, "Transfers of Assets to a
not for profit organization or charitable trust that raises or holds
contributions for others", and SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities - deferral of the effective date of FASB
statement No. 133 ( an amendment of FASB Statement No. 133.)," were
recently issued. SFAS No. 132, 133, 134, 135, 136 and 137 have no current
applicability to the Company or their effect on the financial statements
would not have been significant.
NOTE 2 - CAPITAL STOCK
Preferred Stock - The Company has authorized 1,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and
to be issued in such series as determined by the Board of Directors. No
shares are issued and outstanding at April 30, 2000.
Common Stock - During April of 2000, in connection with its organization,
the Company issued 4,500,000 shares of its previously authorized, but
unissued common stock for cash. The shares were issued for $9,000 (or $.002
per share).
F-7
<PAGE>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards. The Company has available at
April 30, 2000 an operating loss carryforwards of approximately $500 which
may be applied against future taxable income and which expires in various
years through 2020.
The amount of an ultimate realization of the benefits from the operating
loss carryforwards for income tax purposes is dependent, in part, upon the
tax laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards the
Company has established a valuation allowance equal to the amount of the
loss carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax asset is
approximately $190 as of April 30, 2000, with an offsetting valuation
allowance at April 30, 2000 of the same amount. The change in the valuation
allowance for the period ended April 30, 2000 is approximately $190.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of April 30, 2000, the Company has not paid
any compensation to any officer or director of the Company.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his/her
offices as a mailing address, as needed, at no expense to the Company.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. However, the Company was only recently
formed and has not yet been successful in establishing profitable
operations. These factors raise substantial doubt about the ability of the
Company to continue as a going concern. In this regard, management is
proposing to raise any necessary additional funds not provided by
operations through additional sales of its common stock. There is no
assurance that the Company will be successful in raising this additional
capital or achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
F-8
<PAGE>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
From Inception
on March 10,
2000 Through
April 30,
2000
----------
Loss from continuing operations
available to common shareholders
(numerator) $ (577)
==============
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 2,416,667
==============
F-9
<PAGE>
<TABLE>
<CAPTION>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
BALANCE SHEET
[Unaudited]
ASSETS
September 30,
2000
------------------
CURRENT ASSETS:
<S> <C>
Cash in bank $ 5,481
------------------
Total Current Assets 5,481
------------------
$ 5,481
------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - related party $ 45
Accounts payable - trade 1,730
Line of credit 606
------------------
Total Current Liabilities 2,381
------------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
1,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
4,500,000 shares issued and
outstanding 4,500
Capital in excess of par value 4,500
Deficit accumulated during the
development stage (5,900)
------------------
Total Stockholders' Equity 3,100
------------------
$ 5,481
------------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-10
<PAGE>
<TABLE>
<CAPTION>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
[Unaudited]
STATEMENT OF OPERATIONS
From Inception
on March 10,
2000 Through
September 30,
2000
--------------
<S> <C>
REVENUE $ -
EXPENSES:
General and Administrative 5,900
--------------
LOSS BEFORE INCOME TAXES (5,900)
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
--------------
NET LOSS $ (5,900)
==============
LOSS PER COMMON SHARE $ (.00)
==============
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-11
<PAGE>
<TABLE>
<CAPTION>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON MARCH 10, 2000
THROUGH SEPTEMBER 30, 2000
[Unaudited]
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
------------------------ ------------------------ Excess of Development
Shares Amount Shares Amount Par Value Stage
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, March 10,
2000 - $ - - $ - $ - $ -
Issuance of 4,500,000
shares common stock for
cash at $.002 per share,
April 4, 2000 - - 4,500,000 4,500 4,500 -
Net loss for the period ended
September 30, 2000 - - - - - (5,900)
---------- ------------ ----------- ------------ ------------ ------------
BALANCE, September 30,
2000 - $ - 4,500,000 $ 4,500 $ 4,500 $ (5,900)
========== ============ =========== ============ ============ ============
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-12
<PAGE>
<TABLE>
<CAPTION>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
STATEMENT OF CASH FLOWS
[Unaudited]
From Inception
on March 10,
2000 Through
September 30,
2000
--------------
Cash Flows From Operating Activities:
<S> <C>
Net loss $ (5,900)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in assets and liabilities:
Increase in accounts payable - related party 45
Increase in accounts payable - trade 1,730
--------------
Net Cash (Used) by Operating Activities (4,125)
--------------
Cash Flows From Investing Activities -
--------------
Net Cash Provided by Investing Activities -
--------------
Cash Flows From Financing Activities:
Proceeds from issuance of common stock 9,000
Increase in line of credit 606
--------------
Net Cash Provided by Financing Activities 9,606
--------------
Net Increase in Cash 5,481
Cash at Beginning of Period -
--------------
Cash at End of Period $ 5,481
--------------
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the period ended September 30, 2000:
None
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-13
<PAGE>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Mobile Design Concepts, Inc. (the Company) was organized
under the laws of the State of Nevada on March 10, 2000. The Company plans
to design and manufacture mobile kiosks and other structures. The Company
has not yet commenced planned principal operations and is considered a
development stage company as defined in SFAS No. 7. The Company has, at the
present time, not paid any dividends and any dividends that may be paid in
the future will depend upon the financial requirements of the Company and
other relevant factors. The Company's fiscal year-end is December 31.
Loss Per Share - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share". [See Note 6]
Cash and Cash Equivalents - For purposes of the statement of cash flows,
the Company considers all highly liquid debt investments purchased with a
maturity of three months or less to be cash equivalents.
Organization Costs - Organization costs, which reflect amounts expended to
organize the Company, amounted to $545 and were expensed during the period
ended April 30, 2000.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosures of contingent assets and
liabilities at the date of the financial statements, and the reported
amount of revenues and expenses during the reported period. Actual results
could differ from those estimated.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards (SFAS) No. 136, "Transfers of Assets to a not for profit
organization or charitable trust that raises or holds contributions for
others", and SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities - deferral of the effective date of FASB statement No.
133 ( an amendment of FASB Statement No. 133.)," were recently issued. SFAS
No. 136 and 137 have no current applicability to the Company or their
effect on the financial statements would not have been significant.
NOTE 2 - LINE OF CREDIT
The Company has entered into a line of credit arrangement with a bank. The
line provides for borrowings up to $20,606 with a variable interest rate
that is 2% above the bank's prime rate. The initial rate is 11.5% per
annum. The line of credit matures on August 1, 2000. At September 30, 2000
the outstanding balance on the line of credit was $606.
NOTE 3 - CAPITAL STOCK
Preferred Stock - The Company has authorized 1,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and
to be issued in such series as determined by the Board of Directors. No
shares are issued and outstanding at September 30, 2000.
Common Stock - During April of 2000, in connection with its organization,
the Company issued 4,500,000 shares of its previously authorized, but
unissued common stock for cash. The shares were issued for $9,000 (or $.002
per share).
F-14
<PAGE>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB
109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards. The Company has available at
September 30, 2000 an operating loss carryforwards of approximately $5,900
which may be applied against future taxable income and which expires in
various years through 2020.
The amount of an ultimate realization of the benefits from the operating
loss carryforwards for income tax purposes is dependent, in part, upon the
tax laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards the
Company has established a valuation allowance equal to the amount of the
loss carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax asset is
approximately $2,000 as of September 30, 2000, with an offsetting valuation
allowance at September 30, 2000 of the same amount. The change in the
valuation allowance for the period ended September 30, 2000 is
approximately $2,000.
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - As of September 30, 2000, the Company has not
paid any compensation to any officer or director of the Company.
Office Space - The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his/her
offices as a mailing address, as needed, at no expense to the Company.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. However, the Company was only recently
formed and has not yet been successful in establishing profitable
operations. These factors raise substantial doubt about the ability of the
Company to continue as a going concern. In this regard, management is
proposing to raise any necessary additional funds not provided by
operations through additional sales of its common stock. There is no
assurance that the Company will be successful in raising this additional
capital or achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
F-15
<PAGE>
MOBILE DESIGN CONCEPTS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 7 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
From Inception
on March 10,
2000 Through
September 30,
2000
--------------
Loss from continuing operations
available to common shareholders
(numerator) $ (5,900)
==============
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 3,979,167
==============
Fully diluted earnings per share was not present at September 30, 2000 as
the Company has no common stock equivalents.
F-16
<PAGE>
No person is authorized to give any
information or to represent anything not
contained in this prospectus. You must
not rely on any unauthorized information
or representations. This prospectus is
an offer to sell only the shares offered
hereby, and only under circumstances and
in jurisdictions where it is lawful to
do so. The information contained in this
prospectus is current only as of its
date.
500,000 Shares
Mobile Design Concepts, Inc.
Common Stock
Until [90 days after the date of this
prospectus], all dealers that effect
transactions in these securities,
whether or not participating in this
offering, may be required to deliver a
prospectus. This is in addition to the
dealers' obligation to deliver a
prospectus when acting as underwriters
and with respect to their unsold
allotments or subscriptions.
<PAGE>
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses payable by us in
connection with the offering (excluding underwriting discounts and commissions):
Nature of Expense Amount
----------------- ------
SEC registration fees..................................... $ 33
Transfer agent's and registrar's fees and expenses........ 1000
Accounting fees and expenses.............................. 2,500
Legal fees and expenses................................... 10,000
Printing and engraving expenses........................... 500
Blue sky fees and expenses................................ 500
Miscellaneous............................................. 467
Total............................................ $ 15,000
============
Item 14. Indemnification of Directors and Officers
Our articles of incorporation provide that our directors shall have no personal
liability to our company or our stockholders for damages for breaches of their
fiduciary duties as directors or officers, except for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law, or the
payment of certain unlawful distributions. In addition, Section 78.037 of the
Nevada corporation law, Article VIII of our articles of incorporation, and
Article VIII of our bylaws provide for indemnification of our directors and
officers in a variety of circumstances, which may include liabilities under the
Securities Act of 1933, as amended.
Item 15. Recent Sales of Unregistered Securities
Since its incorporation on March 10, 2000, the Registrant has issued and sold
the following unregistered securities:
In connection with its organization in April, 2000, the registrant sold
4,500,000 shares of common stock to three investors, including its
president, for $9,000 in cash. The foregoing issuances and sales of
common stock were effected in reliance upon the exemption from
registration provided by Section 4(2) under the Securities Act of 1933,
as amended. The registrant did not employ any general solicitation or
advertising in connection with the transactions, each of the purchasers
signed a customary investment representation letter, and the
certificates for the shares were stamped with a customary restricted
stock legend.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
<TABLE>
<CAPTION>
SEC
Exhibit Reference
Number Number Title of Document Location
------------ -------------- ---------------------------------------------------------------- -------------------
Item 3. Articles of Incorporation and Bylaws
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3.01 3 Articles of Incorporation Filed Previously
3.02 3 Bylaws Filed Previously
Item 4. Instruments Defining the Rights of Security Holders
--------------------------------------------------------------------------------------------
4.01 4 Specimen Stock Certificate Filed Previously
Item 5. Opinion re: Legality
--------------------------------------------------------------------------------------------
5.01 5 Opinion and Consent of Mark N. Schneider, A Professional Filed Previously
Corporation
Item 23 Consents of Experts and Counsel
--------------------------------------------------------------------------------------------
23.1 23 Consent of Pritchett, Siler & Hardy, P.C., This Filing
Independent accountants
23.2 23 Consent of Mark N. Schneider, A Professional Corporation Filed Previously
Item 27 Financial Data Schedule
--------------------------------------------------------------------------------------------
27.1 27 Financial Data Schedule This Filing
</TABLE>
II-1
<PAGE>
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this pre-effective
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Salt Lake City, State of
Utah, on November 27, 2000.
Mobile Design Concepts, Inc.
By: /s/ Steven N. Bednarik
--------------------------
Steven N. Bednarik
President (Principal Executive,
Accounting and Financial Officer)
In accordance with the requirements of the Securities Act of 1933, this
pre-effective Amendment No. 1 to Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ Steven N. Bednarik Director November 27, 2000
-----------------------
Steven N. Bednarik
II-2
