UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS Under Section 12(b) or
(g) of the Securities Exchange Act of 1934
Benchmark Technology Corporation
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(Name of Small Business Issuer in its charter)
Nevada 91-2007478
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(State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization) Number
612 Little John, Houston, Texas 77024
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(Address of principal executive offices) (Zip code)
713-524-3425
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Issuer's Telephone Number
Securities to be registered under section 12(b) of the Act:
Title of Each Class Name on each exchange on which
to be registered each class is to be registered
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Securities to be registered under section 12(g)of the Act:
Common Stock, $.001 par value per share, 20,000,000 shares authorized,
2,940,000 issued and outstanding as of September 30, 2000. Preferred Stock,
$.001 par value per share, 5,000,000 shares authorized, none issued nor
outstanding as of September 30, 2000.
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FORWARD LOOKING STATEMENTS
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
Benchmark Technology Corporation, a new contract food services company
("Benchmark Technology Corporation" or the "Company" or the
"Registrant") cautions readers that certain important factors may
affect the Company's actual results and could cause such results to
differ materially from any forward-looking statements that may be
deemed to have been made in this Document or that are otherwise made
by or on behalf of the Company. For this purpose, any statements
contained in the Document that are not statements of historical fact
may be deemed to be forward-looking statements. These forward-looking
statements can be identified by the use of predictive, future-tense or
forward-looking terminology, such as "believes," "anticipates,"
"expects," "estimates," "plans," "may," "will," or similar terms.
These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current
expectations of the Company, its directors, or its officers with
respect to, among other things: (i) trends affecting the Company's
financial condition or results of operations for its limited history;
(ii) the Company's business and growth strategies; (iii) the contract
food services industry; and, (iv) the Company's financing plans.
Investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve significant risks and
uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of
various factors. Factors that could adversely affect actual results
and performance include, among others, the Company's limited operating
history, dependence on predictable trends in the contract food
services industry, the Company's inexperience with running a
contract food services organization, potential fluctuations
in quarterly operating results and expenses, the inherent risks of
running a business that depends upon winning contracts in a wide
variety of diverse locations as a newcomer to the market, government
regulation, technological change and competition.
The accompanying information contained in this Registration including,
without limitation, the information set forth under the heading "Risk
Factors," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business" identifies important
additional factors that could materially adversely affect actual
results and performance. All of these factors should be carefully
considered and evaluated. All forward-looking statements attributable
to the Company are expressly qualified in their entirety by the
foregoing cautionary statement. Any forward-looking statements in
this report should be evaluated in light of these important risk
factors. The Company is also subject to other risks detailed herein
or set forth from time to time in the Company's filings with the
Securities and Exchange Commission.
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Part I ......................................................... 4
Item 1. Description of Business.................................. 4
Item 2. Management's Discussion and Analysis or Plan of
Operation................................................ 16
Item 3. Description of Property.................................. 17
Item 4. Security Ownership of Management and Others and Certain
Security Holders......................................... 18
Item 5. Directors, Executives, Officers and Significant
Employees................................................ 19
Item 6. Remuneration of Directors and Executive
Officers................................................. 20
Item 7. Certain Relationships and Related Transactions........... 20
Part II ......................................................... 21
Item 1. Market Price of and Dividends of the Registrant's
Common Equity and Other Stockholder Matters.............. 21
Item 2. Legal Proceedings........................................ 21
Item 3. Recent Sales of Unregistered Securities.................. 22
Item 4. Description of Securities................................ 22
Item 5. Indemnification of Directors and Officers................ 23
Part F/S ......................................................... 25
Item 1. Financial Statements..................................... 25
Item 2. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure..................... 25
Part III ........................................................ 28
Item 1. Index to Exhibits....................................... 28
Item 2. Description of Exhibits................................. 28
The following Registration is qualified in its entirety by, and should
be read in conjunction with, the more detailed information and the
Financial Statements and Notes related thereto appearing elsewhere in
this Registration. Except where the context otherwise requires, all
references in this Registration to (a) the "Registrant" or the
"Company" or "Benchmark Technology Corporation" refer to Benchmark
Technology Corporation, a Nevada corporation.
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Part I
Item 1. Description of Business
A. Business Development, Organization and Acquisition Activities
Benchmark Technology Corporation, a new contract food services company,
hereinafter referred to as " Benchmark Technology Corporation." or the "
Company" or the "Registrant", was organized by the filing of Articles of
Incorporation with the Secretary of State of the State of Nevada on
November 12, 1999.
The Company is a development stage contract foodservices company which
plans to provide contract foodservices management to restaurants and
nightclubs.
The Company was incorporated on November 12, 1999 (Nevada file number
C28250-1999) under the name Benchmark Technology Corporation. On
November 15, 1999, founding shareholders purchased 1,800,000 shares of
the company's authorized but unissued treasury stock at a price of
$0.001 per share.
On December 5, 1999, the Company completed a Private Placement
Offering of 840,000 shares to six (6) investors, pursuant to Regulation
D, Rule 506 of the Securities Act of 1933. The Company filed
an original Form D with the Securities and Exchange Commission.
On May 31, 2000, the Company completed a public offering of shares of
common stock of the Company pursuant to Regulation D, Rule 504 of the
Securities Act of 1933, as amended, whereby it sold 300,000 shares of
the Common Stock of the Company to approximately fifty unaffiliated
shareholders of record at an offering price of $0.05 per share. This
504 Offering received prior approval from the Nevada Secretary of State,
Securities Division. The Company filed an original Form D with the
Securities and Exchange Commission.
B. Business of Issuer
1) Principal Products, Services, and Principal Markets
The company plans to provide contract foodservices management
to restaurants and nightclubs. Primary emphasis will be placed on
offering specialized services to these establishments that will focus
on streamlining their foodservice management and improving on their
operations in a cost effective manner. To provide reliable management
services, any company must understand operation, flow and function. It
is our hope to build a foodservice management company that will tune
in to these elements in a dynamic way.
Initially, the market that Benchmark Technology Corporation plans to
target is the city of Houston, Texas, where the company is
headquartered, and a radius of 100 miles around Houston. Then it will
branch out to Las Vegas where it has connections; and then is
considering possible markets in other areas of the Southwest.
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Houston, Texas, the Company's initial target area, is the fourth-
largest city in the United States. Though its fortunes were famously
and dramatically impaired by the world-wide oil crisis of the early-
80's, its economy has improved steadily ever since and its current
rates of employment and economic activity are impressive with over
fifteen years of continuous growth. Harris County, the county that
includes Houston and the area surrounding it, according to the U.S.
Census Bureau, is the third largest county in the United States with
a population of 3,250,404 people and an area of 1,788 square miles.
In a 1999 Texas State Comptroller forecast, services dominate
Houston's job growth, rising 3 percent annually through the year 2000.
The State Comptroller attributes the rapid growth of services here to
two factors-"Houston will continue to dominate Texas as a center for
healthcare, and Houston will continue to experience structural
reorganization as outsourcing shifts jobs from other sectors into
business services."
Institutions like hospitals and schools, and even restaurants and
restaurant chains turn to outside management teams to take over
the management functions of running the food service portion of
their businesses. This is especially the case, in distressed situations
where the owners of an food establishment may not which to close
their operations, which searching for new management.
On the national level, the contract foodservice industry is highly
competitive. According to the National Automatic Merchandising
Association (NAMA), there are 3,000-4,000 companies in the
institutional foodservice. This figure varies because some small
companies have only one or two foodservice accounts. The major
companies are estimated to have only 25-30 percent of the
institutional accounts and the same percentage of the dollar business.
According to the U.S. Department of Commerce, contract foodservice
management companies have penetrated 15-20% of the hospital market,
45% of the colleges, 5-6% of the public schools and 75% of the business
and industry accounts. The total potential institutional market for
contract foodservice is estimated to be a $75 billion market. The major
companies continue to show significant growth, the medium-sized companies
are growing, and the small companies, if they can survive, will grow with
the growth of the market.
Restaurants, nightclubs, and institutions, faced with rising food
costs, labor pressures, unionization and tax structure revisions, are
turning increasingly to contract foodservice management companies
which give them the opportunity to contract out a segment of their
business that has become much more difficult to run.
The markets Benchmark Technology Corporation, plans to target,
(including Las Vegas, Nevada, as well as Houston, Texas) are where the
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bulk of these establishments is headquartered. According to the U.S.
Department of Commerce, Bureau of the Census for Retail Trade within
the Standard Industrial Classification for restaurants and nightclubs,
in Las Vegas, Nevada and Houston, Texas, there are 9,000 establishments,
which generate over $5 billion in sales. Each year, 1,000 of these
establishments qualify as a potential customer for Benchmark Technology
Corporation.
Competition in the Houston and Las Vegas is mostly dominated by the
huge corporate foodservice giants, especially such companies as SYSCO
Corporation, Alliant (formerly Kraft) Foods, Inc., PYA/Monarch,
Performance Food Group Corporation, U.S. Foodservice, Inc, Aspeon,
Inc., MBM Corporation, ProSource, Inc., Ameriserve, Inc. and Marriott
Distribution Services. Operating in and around these giants are a
number of successful smaller operations who are able to build solid
businesses by providing first-rate service and a knowledge of local
resources. These mostly target institutional accounts like hospitals
and medical care facilities, colleges and other educational
institutions, military bases, and airports. However, despite the fact
that there are many foodservice management companies, very few of
them target businesses in transition. It is this latter market segment
that Benchmark Technology Corporation seeks to serve, and through
which it will establish itself as a profitable going concern.
On a regular basis there are a number of smaller foodservice
establishments that undergo changes of ownership This could happen
due to the death or incapacity of a previous owner, for example, whose
heirs or family members do not have the necessary expertise to run the
business themselves and need some sort of a stopgap to keep it open
and running while they are dealing with the new situation. It can
happen when a long time owner/manager retires or wishes to diversify
and does not want to maintain the time-consuming responsibilities of
running a day-to-day operation. It can happen when an investor
purchases a foodservice business as an investment and wishes to alter
it without having to be the hands-on manager or in a case where a
partnership disagreement has placed the daily operations of the
business at serious risk.
Based on market research into this area, the management of
Benchmark Technology Corporation has noticed a void in the foodservice
management industry with respect to the needs of these types of
customers. In fact, the company's preliminary research revealed no
foodservice management companies offering these services to
restaurants and nightclubs in Nevada and Texas. This gives the Company
a market niche to gain new clients, establish its presence and build
expertise. Management plans to focus on businesses that gross
between a half-million and a million and a half dollars a year.
The Company will be competing against some major corporations, e.g.,
Marriott or Alliant (the former Kraft Foods.)
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The Company's small size allows it to be more flexible with the needs of
its customers and with the fees charged. Since the Company does not plan
to run an enormous volume of business with equally enormous overhead, its
potential profit margins will not be very large. As the Company plans
to focus on two local areas to seek business, they hope to be able to
deliver and make solid in-roads within the Houston (and later Las Vegas)
areas that will facilitate fast and reliable service that our customers
will grow to trust and recommend to other businesses. The Company plans
to devote its time and effort to help customers with the unique challenges
facing their particular businesses in a much more creative and customized
way than one of the giants could possibly provide.
Our recent stock offering in May, 2000, raised funds earmarked for
expenditures necessary to find restaurants and nightclubs that can use
the Company's service. Management is involved in the process of locating not
only target clients but referral sources and methods whereby they can
identify other prospective clients on a regular basis. For example, they
are currently developing links with business-selling agents in their
target areas. Once targeted, they intend to increase the marketing of
its services to these businesses with more sophisticated promotional
activities, and by developing promotional tools to generate new
customers. Direct mail approaches, telemarketing, and the Internet are
will most likely be used to attract new clients. They are also planning to
institute a sliding fee schedule for the company food services that
will in effect give clients discounted services as they refer other
clients to us.
Management has spent time and thought in developing highly selective
profitability criteria for their proposed work. Once they are in
the field selling their services, they want to be able to recognize quite
quickly which prospective clients will develop into good profit
centers and which would probably not work out well. As they Company moves
within the next few months into the Houston market, they intend to have
in place a method that will help them to focus in on the customers who
will give them the highest return on our investment of time and
resources, and then use their time with that client in the most
effective way possible.
The Company is developing a proposal and bidding method based on obtaining
annual contracts with potential clients. This calls for frequent meetings
with the client in the early stages of the project, thus ensuring that the
proposal becomes a logical step toward implementation rather than a
decision. Management intends to base these proposals on a computerized form
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where the outline is already formatted. Without sacrificing originality
and creativity, this will allow company personnel to spend more time
meeting clients and less on the creation of the proposal. They are also
in the process of exploring software options that quickly and
efficiently provide solutions to a number of problems within the field
of restaurant management. These computerized aids will add greatly to
our ability to serve clients in a highly concentrated and time-
efficient way that will be of increasing importance as our client base
expands. It will help the Company in maintaining the image of
professionalism and fast service, which is one of our primary company
goals.
2) RISK FACTORS
(a) LIMITED OPERATING HISTORY
The Company was organized on 12, 1999. Activities to date
have been limited primarily to organization, initial capitalization,
the establishment of an appropriate operating facility in Houston,
Texas and the initiation of our initial operational plans. The Company
has yet to generate any revenues. As of the date of this filing, the
Company has established administrative offices and conducted basic
research into providing contract foodservice management services to
restaurants and nightclubs. It is currently engaged in developing the
means to identify, contact and enroll potential businesses as customers.
The Company has limited operating history and must be considered to be
a developmental stage company. Prospective investors should be aware
of the difficulties encountered by such new enterprises, as the
Company faces all of the risks inherent in any new business and
especially with a developmental stage company. These risks include,
but are not limited to, competition, the absence of an operating
history, the need for additional working capital, and the possible
inability to adapt to various economic changes inherent in a market
economy. The likelihood of success of the Company must be considered
in light of these problems, expenses that are frequently incurred in
the operation of a new business and the competitive environment in
which the Company will be operating.
(b) NEED FOR ADDITIONAL CAPITAL
As of May 31, 2000, the Company raised an additional $15,000.00 from a
504 Regulation D offering that it added to the working capital of
$43,784 that it had available as of December 31, 1999. The Company may
need additional capital in order to expand its operations. The Company
has initial plans to provide restaurants and nightclubs food service
contracts. This expansion will be capital intensive, and also will
require a larger working capital basis from which to operate. This
need for additional funds will be derived somewhat from internal
revenues and earnings, however, the vast majority will be received
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from future stock offerings. These future offerings could significantly
dilute the value of any previous investor's investment value.
It is most likely, the Company will be required to seek other sources of
financing. No guarantees can be given that the Company will sell any
of the Common Shares offered or that other financing will be
available, if required, or if available, will be on terms and
conditions satisfactory to management. The above outlined capital
problems could significantly affect the value of any Common Shares
that are sold to the public and could result in the loss of an
investor's entire investment.
(c) NEGATIVE CASH FLOW WITH ANTICIPATED LOSSES FOR THE FORESEEABLE
FUTURE
Included in this report are the Company's most recent audited
financial statements, reporting that the Company is in its
developmental stages. Its ability to continue to operate as a going
concern is fully dependent upon the Company obtaining sufficient
financing to continue its development and operational activities. The
ability to achieve profitable operations is in direct correlation to
the Company's ability to raise sufficient financing. Accordingly,
management believes the Company's continued existence, future
expansion, and ultimate profitability are fully dependent upon raising
sufficient proceeds from future offerings. It is important to note
that even if the appropriate financing is received, there is no
guarantee that the Company will ever be able to operate profitably or
derive any significant revenues from its operation. The Company could
be required to raise additional financing to fully implement its
entire business plan.
It is also important to note that the Company anticipates that it will
incur losses and negative cash flow over the next twelve (12) to eighteen
(18) months. There is no guarantee that the Company will ever operate
profitably or even receive positive cash flows from full operations.
(d) POSSIBLE INABILITY TO FIND SUITABLE EMPLOYEES.
The Company currently relies heavily upon the services and expertise
of William D. DePriest II, and LaDonna Tebo. In order to implement
the aggressive business plan of the Company, management recognizes
that additional staff will be required once the Company signs management
agreements.
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No assurances can be given that the Company will be able to find
suitable employees that can support the above needs of the Company or
that these employees can be hired on terms favorable to the Company.
(e) LACK OF EXPERIENCE OR AN INDUSTRY TRACK RECORD ON THE PART OF
MANAGEMENT
As stated above, the Company currently relies exclusively upon the
services and expertise of William D. DePriest II and LaDonna Tebo.
Mr. DePriest has founded and sold a trucking company and thus can draw
upon his limited success in that venture. However, neither he nor
Ms. Tebo are experienced in the foodservice industry or in the restaurant
business, a rather substantial handicap in their being able to establish
credibility in the industry that the Company seeks to enter. There is
no guarantee that their intelligence and determination can overcome
this obstacle, or that the potential customers they contact will be
persuaded to trust them without their having established, up to this
point, a track record within the field of foodservice or foodservice
management.
It may prove to be too great a challenge, given all the other factors
listed here, for the Company to establish itself sufficiently in
foodservice management to become a viable business. It may develop
that their plan is flawed in some way hard for management to correct
because of its lack of specific expertise. And though they consult
with trusted advisors who have more breadth of exposure to these
practical details, it may yet happen that this advice itself will
prove to be ineffective when and if difficulties arise.
(f) COMPETITION
As stated above, although there are thousands of foodservice
management companies, there are very few who target businesses in
transition. The major foodservice management companies target
institutional accounts, hospitals, military bases, airports, and
colleges. They do not target the smaller establishments undergoing
changes of ownership. The management of Benchmark Technology
Corporation has discovered what it believes to be a void in the
foodservice management industry with respect to these customers. It
believes that, when businesses are in jeopardy of losing their entire
business because the existing management has become incapacitated, it
is very difficult for them to find a foodservice management company
that can help them fill the gap
However, larger companies, should they decide to aggressively pursue a
campaign designed to increase their marketshare vis-a-vis these
transitional businesses, could significantly affect the Company's
plans to expand and to grow its share of the market. Because of their
size and name recognition and general clout, companies like Marriott
and Alliant and Ameriserve, Inc. have resources that Benchmark
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Technology Corporation, a small start-up company, could never hope to
match, and with which they could effectively quash its bid to
establish itself.
Moreover, and perhaps more dangerous to the Company's prospects, is
the possibility that some other well-managed and aggressive start-up
company, with greater financial resources, currently contemplated in the
Company's target markets but unknown to it, may emerge that would focus its
attentions on just those businesses that the Company intends to serve, i.e.
businesses in transition. If said competitor were to be run by a management
team that has the foodservice management experience that the Company
currently lacks, it could have a sizable impact on the Company's hopes
to establish itself as a serious presence in the foodservice
management industry in the Houston and Las Vegas markets. Though no
such competitor currently exists to the knowledge of management, it is
entirely possible that such a one may, or that, indeed, such a one may
even now be gearing up to begin. The Company can therefore offer no guarantees
or reassurances that the currently pristine nature of its chosen market will
continue to exist, or that the field will remain, as now, relatively open to
development. Indeed, the Company's own efforts, should its initial
numbers prove as good as the Company now anticipates them to be, may
alert potential competitors to the existence of said market such that,
ironically, the Company's own success over its start-up period may
bring about its eventual inability to compete with a better financed
or more experienced operation, either one newly emerging or one pre-
existing, that gets wind of the marketing strategy that the Company
will have by that time successfully employed.
(g) BUSINESS MAY PROVE TO BE UNWORKABLE OR BASED ON MISTAKEN ASSUMPTIONS
Though the Company truly is committed to the plan stated above and has
great confidence in its ability to establish itself and then expand
its influence, there is no guarantee that it will in fact be able to
do so. As it is still a small operation run primarily by two related
individuals, even its first steps---to establish itself more firmly as
a viable organization in Houston, Texas---may prove to be beyond its
capacity to achieve. Once established, it may prove unable to expand
and extend its business there and in the surrounding parts of Harris
County. Even if it is successful in Houston and in Harris County, it
may prove unable to expand into Las Vegas, its next target.
It is entirely possible that the Company's primary strategy to aim
its marketing efforts at businesses in transition may prove to be a
good idea that does not produce results sufficient to create a
profitable business venture. As stated above, the Company has
discovered a void in foodservice management companies that serve this
type of client, thus giving it a market niche to gain new clients.
However, this could also mean that the market for this type of
foodservices management is limited---which would hinder the Company's
growth and opportunities. There are no guarantees that the Company
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will be able to find clients in this market niche. There are no
guarantees that businesses of this type would necessarily hire the
Company even if they are in need of services like those the Company
would provide.
(h) INABILITY TO LOCATE TARGET BUSINESSES
Despite its efforts to contact business-selling agents in order to
find the transitioning businesses it must have to establish its client
base, the Company may be unable to locate these businesses through
these agents soon enough and in sufficient numbers to counter the
immense challenges of starting a successful venture. Its appeals to
the agents may not inspire them to produce referrals.
Moreover, the sliding scale fees the Company is proposing to offer to
clients to inspire them to similarly provide referrals may not
generate sufficient referrals to have any significant impact on the
Company's growth. The referrals might prove to be dead-ends which
would not justify the lowered fees of the referring business, thus
eating into needed profits without providing added income. No
assurances can be given that any of the Company's plans for targeting
potential customers will be successful, or even sufficiently
successful to provide what any start-up business must have: enough
paying customers to operate in the black. Until the ideas for doing so
presented above are implemented fully, all claims made about their
potential effectiveness are speculative and cannot be counted upon.
They constitute "forward-looking statements." as defined above.
(i) UNTESTED METHODS OF DETERMINING PROFITABILITY CRITERIA AND/OR
METHODS OF STREAMLINING BIDS AND PROPOSALS
The Company, as stated above, has put a great deal of time and
attention into its methods of ascertaining which businesses in its
target market will give the best return for the Company's investments
of time and energy in the proposal-writing and bidding process. One of
the biggest obstacles to profitability for any business that bases its
income on annual contracts is the fact that it must devote many man-
hours (perhaps person-hours would be the better term) to the account
before any revenue is realized; and then it is always possible that
the bid submitted will ultimately be rejected. The Company has thus
developed a formula for a way of proceeding that would circumvent this
adverse result. However, as this model is still untested and untried,
no guarantees can be given as to its ultimate effectiveness. It may
prove to be an unworkable model that will not achieve the desired
results. If this is the case, the Company may find itself doing hours
of extra proposal work that will negatively influence its attempts to
create a profitable and successful new business.
Similarly, as stated above, the Company intends to base its proposals
on a computerized form on which the outline is already formatted.
Without sacrificing originality and creativity, this will allow
company personnel to spend more time meeting clients and less on the
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creation of the proposal. It is also in the process of exploring
software options that quickly and efficiently provide solutions to a
number of problems within the field of restaurant management. It is
hoped that these computerized aids will add greatly to the Company's
ability to serve clients in a highly concentrated and time-efficient
way. However, these computer-based solutions, not having yet been
tried in the field and over time and in relation to a potentially
large number of clients, cannot be held at this time to be any
guarantee of greater efficiency, nor is there any reason at this point
to believe them to be a panacea relative to the irksome difficulties
of the proposal and bidding process. In fact, it is well known that
technological solutions, while they often promise greater efficiency,
equally often prove to have hidden disadvantages or "bugs" that
actually can slow a process that a competent human being could
accomplish just as easily or, indeed, more easily. Thus, potential
investors should be aware that however good the prospect of a
streamlined proposal process might appear at first glance, the fact of
this plan by itself cannot be relied upon at this early stage of the
Company's development to actually make the kind of significant savings
of time (and therefore money) that the Company fully believes it will
ultimately accomplish.
(j) INDUSTRY-WIDE VULNERABILITY TO NATIONAL AND REGIONAL MARKET
CONDITIONS BECAUSE OF RELATIVELY LOW PROFIT MARGINS
The Contract Foodservice Industry in general has relatively low profit
margins that make it a difficult one to operate successfully,
especially for a start-up Company with no experience in the field.
These low profit margins exaggerate the negative impact of mistakes,
such that even a simple misjudgment or misunderstanding of a client's
wishes or needs can evolve into situations that will greatly
compromise the profitability of a particular contract. Over time,
enough situations of this type can seriously undercut a company's
chances for success.
Similarly, the ebb and flow of market conditions both nationally and
regionally and such variables as the price of food, the cost of
shipping, the rise in fuel prices, etc. can have a very negative
effect on the Company's profitability. As stated above, for example,
in the early nineteen-eighties, Houston was hit hard by an economic
recession. Despite the economic climate that has emerged in recent years,
unexpected reversals in the economy of Texas or the Southwest in
general could have a deleterious effect on the Company's prospects. If
patronage at restaurants declines, the target businesses we seek to
serve will be unable to afford our services, or perhaps to remain in
business. Lacking so-called deep pockets, any such downward spiraling
trends in the region or, indeed, in the country as a whole, could
seriously hinder the Company's efforts to become a viable business and
must be considered very significant potential obstacles to its
eventual success.
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(k) POTENTIAL FLUCTUATION IN OPERATING RESULTS; QUARTERLY FLUCTUATIONS
The Company's operating results may fluctuate significantly in the
future as a result of a variety of factors, many of which are outside
the Company's control. See "--Limited Operating History." As a
strategic response to changes in the competitive environment, the
Company may from time to time make certain pricing, marketing
decisions or acquisitions that could have a material short-term or
long-term adverse effect on the Company's business, results of
operations and financial condition.
(l) LACK OF CASH DIVIDENDS.
The Company has not paid any cash dividends on the Common Shares to
date, and there can be no guarantee that the Company will be able to
pay any cash dividends on the Common Shares in the foreseeable future.
Initial earnings that the Company may realize, if any, will be
retained to finance the growth of the Company. Any future dividends,
of which there can be no guarantee, will be directly dependent upon
earnings of the Company, its financial requirements and other factors
that are not determined. (See "CAPITALIZATION")
(m) INABILITY TO ATTRACT FUTURE INVESTORS
As stated above, the Company does not currently have capital
sufficient to enact all its plans. Ultimately the Company will have to
acquire more capital to bring its plans into reality. If it cannot
attract investors willing to gamble on its current accomplishments,
results and vision of the future, it will be unable to maintain its
status as a going concern. If unable to attract investor capital, it
will neither be able to afford more phone sites nor afford more
equipment to place in them. For any of the reasons listed here,
investor money may freeze up and force the Company to shut its doors.
(n) GOVERNMENT REGULATION.
Although the Company plans on obtaining all required federal and state
permits, licenses, and bonds to operate its facilities, there can be
no assurance that the Company's operation and profitability will not
be subject to more restrictive regulation or increased taxation by
federal, state, or local agencies.
(o) POSSIBLE LIABILITY FOR SERVICE PROVIDED.
There is no guarantee that the level of coverage secured by the
Company will be adequate to protect the Company from risks associated
with claims that exceed the level of coverage maintained. As a result
of the Company's limited operations to date, no threatened or actual
claims have been made upon the Company for service liability.
14
<PAGE>
(p) RISKS ASSOCIATED WITH NEW CAMPAIGNS AND ATTEMPTS TO EXPAND
There can be no assurance that the Company will be able to expand its
operations in a cost-effective or timely manner or that any such
efforts will maintain or increase overall market acceptance.
Furthermore, any concerted but unsuccessful attempts by the Company to
find new target markets or to expand its base beyond Houston
could damage the Company's reputation and diminish the value of its
name. Expansion of the Company's operations in this manner would also
require significant additional expenses and development that could
strain the Company's management, financial and operational resources.
The lack of market acceptance of the Company's services could result
in the Company's inability to generate satisfactory revenues and its
inability to offset their costs could have a material adverse effect
on the Company's business, results of operations and financial
condition.
(q) Impact on Environmental Laws
As the Company is involved in restaurant service industry. The Company
needs to comply with state and federal guidelines concerning restaurant
waste materials, especially, the disposal of grease products.
(r) Employees
The Company currently has two (2) employee: one President and one Secretary.
Until the Company can grow and generate revenues, the Company does not plan
on adding any new employees.
(s) Year 2000 Issue
The Company's business does not currently utilize any electronic processing
systems and therefore is not directly at risk for having systems that will not
recognize the Year 2000 ("Y2K") or treat any date after December 31, 1999 as a
date during the twentieth century. However, no assurances can be given that the
Company will be able to avoid all Y2K problems, especially those that might
originate with third parties with whom the Company transacts business, such as
financial institutions, and the Company has not undertaken any investigation to
determine the Y2K readiness of such parties. If the Company, or any third party
with whom the Company does business were to have a Y2K problem, the business of
the Company could be disrupted and the Company's financial condition and
results of operations could be materially adversely affected.
15
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
A. Management's Plan of Operation
The Company was formed on November 12, 1999, under the laws of the State of
Nevada.
On November 15, 1999, the Company issued 1,800,000 shares of its $.001 par
value common stock for cash of $1,800.
On December 5, 2000, the Company issued 840,000 shares of its $.001 par value
common stock at $.05 per share for cash of $42,000. The shares were issued
pursuant to a Securities and Exchange Commission Rule 506 offering. The
Company filed an original Form D with the Securities and Exchange Commission.
On May 31, 2000, the Company issued 300,300 shares of its $.001 par value
common stock at $.05 per share for cash of $18,565. The shares were issued
pursuant to a Securities and Exchange Commission Rule 504 offering. This
504 Offering received prior approval from the Nevada Secretary of State,
Securities Division on January 21, 2000 (See "Exhibit 99.1"). The Company
filed an original Form D with the Securities and Exchange Commission.
The company plans to provide contract foodservices management
to restaurants and nightclubs. Primary emphasis will be placed on
offering specialized services to these establishments that will focus
on streamlining their foodservice management and improving on their
operations in a cost effective manner. To provide reliable management
services, any company must understand operation, flow and function. It
is our hope to build a foodservice management company that will tune
in to these elements in a dynamic way.
Benchmark Technology Corporation plans to target is the city of Houston,
Texas, where the company is headquartered, and a radius of 100 miles around
Houston. If its operations are successful, the company plans tobranch out
to Las Vegas where it has connections; and then is considering possible
markets in other areas of the Southwest.
As stated in Financial Footnote #5 ("Going Concern") the Company does not
have significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. "Without realization of
additional capital, it would be unlikely for the Company to continue as a
going concern." It is, however, the intent of the Company to seek to
raise additional capital via a private placement offering pursuant to
Regulation D, 505 or 506.
The Company does not have any preliminary agreements or understandings between
the company and its stockholders/officers and directors with respect to loans or
financing to operate the company. The Company currently has no arrangements or
commitments for accounts and accounts receivable financing. There can be no
assurance that any such financing can be obtained or, if obtained, that it will
be on reasonable terms.
16
<PAGE>
As of September 30, 2000, the Company has yet to generate any revenues. In
addition, the Company does not expect to generate any revenues over the next
approximately twelve to twenty-four months.
(ii) No engineering, management or similar report has been prepared or
provided for external use by the Company in connection with the offer of its
securities to the public.
(iii) Management believes that the Company's future growth and success will be
largely dependent on its ability to place pay phone systems in high foot
traffic areas.
The Company has not incurred any research and development costs from November
12, 1999 (date of inception) through September 30, 2000. Any research
activities are not expected to be borne by any of the Company's customers,
of which there are none, but rather by the Company.
(iv) The Company does not expect to purchase or sell any of its facilities or
equipment.
(v) Management does not anticipate any significant changes in the number of
its employees over the next approximately six (6) to twelve (12) months.
B. Segment Data
As of September 30, 2000, no sales revenue has been generated by the Company.
Accordingly, no table showing percentage breakdown of revenue by business
segment or product line is included.
Item 3. Description of Property
A. Description of Property
The Company's corporate headquarters are located at: 612 Little John,
Houston, Texas 77024, Phone: 713-524-3425 The office space is provided
by the officer of the Company at no cost to the Company.
17
<PAGE>
B. Investment Policies
The Company does not currently own and the Company has not made any investments
in real estate, including real estate mortgages, and the Company does not
intend to make such investments in the near future.
Item 4. Security Ownership of Management and Certain Security Holders
A. The following table sets forth information concerning stock ownership of
(i) each director, (ii) each executive officer, (iii) the directors and
officers of the Company as a group, (iv) and each person known by the Company
to own beneficially more than five percent (5%) of the Common Stock of the
Company. Unless otherwise indicated, the owners have sole voting and
investment power with respect to their respective shares.
<TABLE>
<CAPTION>
Amount
Title Name and Address of shares Percent
of of Beneficial held by Date of
Class Owner of Shares Position Owner Purchased Class
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common William D. DePriest II (1) President/Director 900,000 11/15/99 29.6%
Common LaDonna Tebo(2) Secretary/Director 900,000 11/15/99 29.6%
--------------------------------------------------------------------------------
Common All Executive Officers and
Directors as a Group (2 persons) 1,800,000 59.2%
</TABLE>
(1) William D. DePriest II, 612 Little John, Houston, Texas 77024
(2) LaDonna Tebo, 612 Little John, Houston, Texas 77024
B. Persons Sharing Ownership of Control of Shares
No persons other than William D. DePriest II, and LaDonna Tebo, owns
or shares the power to vote five percent (5%) or more of the Company's
securities.
18
<PAGE>
C. Non-voting Securities and Principal Holders Thereof
The Company has not issued any non-voting securities.
D. Options, Warrants and Rights
There are no options, warrants or rights to purchase securities of the
Company.
E. Parents of the Issuer
Under the definition of parent, as including any person or business
entity who controls substantially all (more than 80%) of the issuers of
common stock, the Company has no parents.
Item 5. Directors, Executive Officers and Significant Employees
A. Directors, Executive Officers and Significant Employees
The names, ages and positions of the Company's directors and executive officers
are as follows:
<TABLE>
<CAPTION>
Name Age Position
------------ --- -------------------------------
<S> <C> <C>
William D. DePriest II 28 President, Chief Executive
Officer, Chief Financial
Officer, and Director
LaDonna Tebo 30 Secretary, Director
</TABLE>
B. Family relationships
Not applicable.
C. Work Experience
William D. DePriest II
The Company is managed and led by Mr. William D. DePriest II. Mr. DePriest
joined the Army Reserves and is currently on inactive duty. He is attending
Montgomery County Community College business classes focusing on networking
and web page design. He started a trucking company and sold it in September,
1997. Mr. DePriest plans to devote 20-25 hours per week to Benchmark
Technology Corporation. He graduated Montgomery High School in 1991.
LaDonna Tebo
LaDonna Tebo was formerly a model for Page Parkes modeling studio and Eva
Models (Paris, France). She worked part-time as a librarian and held sales
positions for various retail establishments in the Houston area.
LaDonna Tebo plans to devote 10-20 hours per week to Benchmark Technology
Corporation.
She graduated Conroe High School in 1987; graduated Texas A & M University
(summa cum laude) in 1992 earning a Bachelor of Science degree majoring in bio-
chemistry. Currently in medical school at University of Texas Health Science
Center at Houston; completed 2-1/2 years.
19
<PAGE>
D. Involvement on Certain Material Legal Proceedings During the Last Five
Years
(1) No director, officer, significant employee or consultant has been
convicted in a criminal proceeding, exclusive of traffic violations.
(2) No bankruptcy petitions have been filed by or against any business or
property of any director, officer, significant employee or consultant
of the Company nor has any bankruptcy petition been filed against a
partnership or business association where these persons were general
partners or executive officers.
(3) No director, officer, significant employee or consultant has been
permanently or temporarily enjoined, barred, suspended or otherwise
limited from involvement in any type of business, securities or banking
activities.
(4) No director, officer or significant employee has been convicted of
violating a federal or state securities or commodities law.
Item 6. Executive Compensation
(i) Remuneration of Directors and Executive Officers
The Company currently does not have employment agreements with its executive
officers. The executive officers will not draw any salary from the Company,
and the Company - in order to prudently manage its limited financial
resources - does not plan on compensating its executive officers for their
present services rendered to the Company for the foreseeable future. (See
Item 5 (C) "Work Experience").
(ii) Compensation of Directors
There were no arrangements pursuant to which any director of the Company was
compensated for the period from November 12, 1999 (date of Inception) to
September 30, 2000 for any service provided as a director. In addition, no
such arrangement is contemplated for the foreseeable future.
Item 7. Interest of Management and Others in Certain Transactions
Because of the Company's development stage nature and its relatively recent
inception, 12, 2000, the Company has no relationships or transactions to
disclose.
20
<PAGE>
Part II
Item 1. Market for Common Equity and Related Stockholder Matters
A. Market Information
(1) The common stock of the Company is currently not traded on the OTC
Bulletin Board or any other formal or national securities exchange. There is
no trading market for the Company's Common Stock at present and there has
been no trading market to date. At this time, management has not undertaken
any discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities, but the Company may initiate such discussions in the
future. In addition, being a start-up, there is no fiscal history to disclose.
(2)(i) There is currently no Common Stock which is subject to outstanding
options or warrants to purchase, or securities convertible into, the Company's
Common Stock.
(ii) There is currently no common Stock of the Company which could be sold
under Rule 144 under the Securities Act of 1933, as amended, or that the
registrant has agreed to register for sale by the security holders.
(iii) There is currently no common equity that is being or is proposed to be
publicly offered by the registrant, the offering of which could have a material
effect on the market price of the issuer's common equity.
B. Dividends
The Company has never paid or declared any dividend on its Common Stock and
does not anticipate paying cash dividends in the foreseeable future.
C. Holders
As of September 30, 2000, the Company has approximately fifty-five (55)
stockholders of record.
D. Reports to Shareholders
The Company intends to furnish its shareholders with annual reports containing
audited financial statements and such other periodic reports as the Company
may determine to be appropriate or as may be required by law. Upon the
effectiveness of this Registration Statement, the Company will be required to
comply with periodic reporting, proxy solicitation and certain other
requirements by the Securities Exchange Act of 1934.
E. Transfer Agent and Registrar
The Transfer Agent for the shares of common voting stock of the Company is
Shelley Godfrey, Pacific Stock Transfer Company, 5844 S. Pecos, Suite D, Las
Vegas, Nevada 89120 (702) 361-3033.
Item 2. Legal Proceedings
The Company is not currently involved in any legal proceedings nor does it have
knowledge of any threatened litigation.
21
<PAGE>
Item 3. Recent Sales of Unregistered Securities
The Company is authorized to issue 20,000,000 shares of its $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
On November 15, 1999, the Company issued 1,800,000 shares of its $.001 par
value common stock for cash of $1,800.
On December 5, 2000, the Company issued 840,000 shares of its $.001 par value
common stock at $.05 per share for cash of $42,000. The shares were issued
pursuant to a Securities and Exchange Commission Rule 506 offering. The
Company filed an original Form D with the Securities and Exchange Commission.
On May 31, 2000, the Company issued 300,000 shares of its $.001 par value
common stock at $.05 per share for cash of $15,000. The shares were issued
pursuant to a Securities and Exchange Commission Rule 504 offering, and a
Registration to sell 504 shares was issued by the Nevada Secretary of State
on January 21, 2000 (See, "Exhibit 99.1"). The Company filed an original
Form D with the Securities and Exchange Commission.
Item 4. Description of Securities
A. Common Stock
(1) Description of Rights and Liabilities of Common Stockholders
i. Dividend Rights - The holders of outstanding shares of common stock are
entitled to receive dividends out of assets legally available therefore at such
times and in such amounts as the Board of Directors of the Company may from
time to time determine. The board of directors of the Company will review its
dividend policy from time to time to determine the desirability and feasibility
of paying dividends after giving consideration the Company's earnings,
financial condition, capital requirements and such other factors as the board
may deem relevant.
ii. Voting Rights - Each holder of the Company's common stock are entitled to
one vote for each share held of record on all matters submitted to the vote of
stockholders, including the election of directors. All voting is
noncumulative, which means that the holder of fifty percent (50%) of the
shares voting for the election of the directors can elect all the directors.
The board of directors may issue shares for consideration of previously
authorized but unissued common stock without future stockholder action.
iii. Liquidation Rights - Upon liquidation, the holders of the common stock
are entitled to receive pro rata all of the assets of the Company available for
distribution to such holders.
iv. Preemptive Rights - Holders of common stock are not entitled to preemptive
rights.
v. Conversion Rights - No shares of common stock are currently subject to
outstanding options, warrants, or other convertible securities.
vi. Redemption rights - no redemption rights exist for shares of common stock.
vii. Sinking Fund Provisions - No sinking fund provisions exist.
viii. Further Liability For Calls - No shares of common stock are subject to
further call or assessment by the issuer. The Company has not issued stock
options as of the date of this registration statement.
22
<PAGE>
(2) Potential Liabilities of Common Stockholders to State and Local
Authorities
No material potential liabilities are anticipated to be imposed on stockholders
under state statutes. Certain Nevada regulations, however, require regulation
of beneficial owners of more than 5% of the voting securities. Stockholders
that fall into this category, therefore, may be subject to fines in
circumstances where non-compliance with these regulations are established.
B. Debt Securities
The Company is not registering any debt securities, nor are any outstanding.
C. Other Securities To Be Registered
The Company is not registering any security other than its Common Stock.
Item 5. Indemnification of Directors and Officers
The Bylaws of the Company provide for indemnification of its directors,
officers and employees as follows:
Every director, officer, or employee of the Corporation shall be indemnified
by the Corporation against all expenses and liabilities, including counsel
fees, reasonably incurred by or imposed upon him/her in connection with any
proceeding to which he/she may be made a party, or in which he/she may
become involved, by reason of being or having been a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of the Corporation,
partnership, joint venture, trust or enterprise, or any settlement thereof,
whether or not he/she is a director, officer, employee or agent at the time
such expenses are incurred, except in such cases wherein the director, officer,
employee or agent is adjudged guilty of willful misfeasance or malfeasance in
the performance of his/her duties; provided that in the event of a settlement
the indemnification herein shall apply only when the Board of Directors
approves such settlement and reimbursement as being for the best interests of
the Corporation.
The Bylaws of the Company further states that the Company shall provide to
any person who is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of the corporation, partnership, joint
venture, trust or enterprise, the indemnity against expenses of a suit,
litigation or other proceedings which is specifically permissible under
applicable Nevada law. The Board of Directors may, in its discretion, direct
the purchase of liability insurance by way of implementing the provisions of
this Article. However, the Company has yet to purchase any such insurance and
has no plans to do so.
The Articles of Incorporation of the Company states that a director or
officer of the corporation shall not be personally liable to this corporation
or its stockholders for damages for breach of fiduciary duty as a director or
officer, but this Article shall not eliminate or limit the liability of a
director or officer for (i) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of the law or (ii) the unlawful
payment of dividends. Any repeal or modification of this Article by
stockholders of the corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the corporation for acts or omissions prior to such repeal or
modification.
23
<PAGE>
Article VI of the Articles of Incorporation states: "A director or officer
of the Corporation shall not be personally liable to this Corporation or its
stockholders for damages for breach of fiduciary duty as a director or officer,
but this Article shall not eliminate or limit the liability of a director or
officer for (i) acts or omissions which involve international misconduct, fraud
or a knowing violation of the law or (ii) the unlawful payment of dividends.
Any repeal or modification of the Article by stockholders of the Corporation
shall be prospective only, and shall not adversely affect any limitation on the
personal liability of a director or officer of the Corporation for acts of
omissions prior to such repeal of modification."
Article VII of the Articles of Incorporation states: "Every person who was or
is a party to, or is threatened to be made a party to, or is involved in any
such action, suit or proceeding, whether civil, criminal, administrative or
investigative, by the reason of the fact that he or she or a person with whom
he or she is a legal representative, is or was a director of the Corporation,
or who is serving at the request of the Corporation as a director or officer
of another corporation, or is a representative in a partnership, joint venture,
trust or other enterprise, shall be indemnified and held harmless to the
fullest extent legally permissible under the laws of the State of Nevada from
time to time against all expenses, liability and loss (including attorneys'
fees, judgments, fines, and amounts paid or to be paid in a settlement)
reasonably incurred or suffered by him or her in connection therewith. Such
right of indemnification shall be contract right which may be enforced in any
manner desired by such person. The expenses of officers and directors incurred
in defending a civil suit or proceeding must be paid by the Corporation as
incurred and in advance of the final disposition of the action, suit, or
proceeding, under receipt of an undertaking by or on behalf of the director
or officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he or she is not entitled to be indemnified by the
Corporation. Such right of indemnification shall not be exclusive of any
other right of such directors, officers or representatives may have or
hereafter acquire, and without limiting the generality of such statement, they
shall be entitled to their respective rights of indemnification under any
bylaw, agreement, vote of stockholders, provision of law, or otherwise, as
well as their rights under this article."
Insofar as indemnification for liabilities arising under the Securities
Act 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 Securities
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
Securities Act and will be governed by the final adjudication of such issue.
24
<PAGE>
Part F/S
Item 1. Financial Statements
The following documents are filed as part of this report:
a) Benchmark Technology Corporation
<TABLE>
Page
<S> <C>
Financial Statements
Report of G. Brad Beckstead, CPA F-1
Balance Sheet as of September 30, 2000 F-2
Statement of Operations for the period from
November 15, 1999 through September 30, 2000 F-3
Statement of Stockholder's Equity for the period from
November 15, 1999 through September 30, 2000 F-4
Statement of Cash Flows for the period from
November 15, 1999 through September 30, 2000 F-5
Notes to Financial Statements F-6-7
</TABLE>
b) Interim Financial Statements are not provided at this time as they are not
applicable at this time.
c) Financial Statements of Businesses Acquired or to be acquired are not
provided at this time, as they are not applicable at this time.
d) Proforma Financial Information is not provided at this time, as it is not
applicable at this time.
Item 2. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None -- Not Applicable.
25
<PAGE>
Benchmark Technology Corporation
(A Development Stage Company)
Balance Sheet
as of
September 30, 2000
and
Statements of Income,
Stockholders' Equity, and
Cash Flows
for the period
November 12, 1999 (Inception)
To September 30, 2000
26
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
Independent Auditor's Report F-1
Balance Sheet F-2
Income Statement F-3
Statement of Stockholders' Equity F-4
Statement of Cash Flows F-5
Footnotes F-6-7
27
<PAGE>
G. BRAD BECKSTEAD
-------------------------------
Certified Public Accountant
330 E. Warm Springs
Las Vegas, NV 89119
702.528.1984
425.928.2877 (efax)
INDEPENDENT AUDITOR'S REPORT
October 4, 2000
Board of Directors
Benchmark Technology Corporation
Las Vegas, NV
I have audited the Balance Sheet of Benchmark Technology Corporation(the
"Company") (A Development Stage Company), as of September 30, 2000, and the
related Statements of Operations, Stockholders' Equity, and Cash Flows for
the period November 12, 1999 (Date of Inception) to September 30, 2000.
These financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial statements
based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement presentation.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the balance sheet of Benchmark Technology Corporation,
(A Development Stage Company), as of September 30, 2000, and its related
statements of operations, equity and cash flows for the period November 12,
1999 (Date of Inception) to September 30, 2000, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 5 to the financial
statements, the Company has had limited operations and have not commenced
planned principal operations. This raises substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters
are also described in Note 5. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ G. Brad Beckstead
-----------------------
G. Brad Beckstead, CPA
<PAGE>
Benchmark Technology Corporation
(A Development Stage Company)
Balance Sheet
September 30, 2000
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET
Assets
<S> <C>
Cash $ 44,336
---------
Total Assets $ 44,336
=========
Liabilities and Stockholders' Equity
Common stock, $0.001 par value,
20,000,000 shares authorized; 2,940,000
shares issued and outstanding
at 9/30/00 2,940
Additional paid-in capital 55,860
Deficit accumulated during development stage (14,464)
----------
Total Stockholders' Equity 44,336
----------
Total Liabilities and Stockholders' Equity $ 44,336
=========
</TABLE>
See accompanying Independent Auditor's Report and notes to financial statements.
F-2
<PAGE>
Benchmark Technology Corporation
(A Development Stage Company)
Income Statement
For the period
November 12, 1999 (Date of Inception) to
September 30, 2000
<TABLE>
<CAPTION>
INCOME STATEMENT
November 12, 1999
(Inception) to
September 30, 2000
-------------------
<S> <C>
Revenue $ -0-
General and administrative expenses (14,464)
-----------
Net loss $ (14,464)
===========
Weighted average number of
common shares outstanding 2,940,000
Net loss per share $ -0-
===========
</TABLE>
See accompanying Independent Auditor's Report and notes to financial statements.
F-3
<PAGE>
Benchmark Technology Corporation
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the period
November 12, 1999 (Date of Inception)
to September 30, 2000
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Common Stock Accumulated
------------ Additional During Total
Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
November 15, 1999
Founders shares
issued
for cash 1,800,000 $1,800 $ -0- $ -0- $ 1,800
December 5, 2000
Shares issued
for Cash
pursuant to
Rule 506
Offering 840,000 840 41,160 42,000
May 31, 2000
Shares issued
For cash
Pursuant to Rule
504 Offering 300,000 300 14,700 15,000
Net Loss,
Nov. 12, 1999
(inception) to
Sept 30, 2000 (14,464) (14,464)
--------------------------------------------------------
Balance as of
Sept 30, 2000 2,940,000 $2,940 $55,860 $(14,464) $ 44,336
========================================================
</TABLE>
See accompanying Independent Auditor's Report and notes to financial statements.
F-4
<PAGE>
Benchmark Technology Corporation
(A Development Stage Company)
Statement of Cash Flows
For the period
November 12, 1999 (Date of Inception)
to September 30, 2000
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
CASH FLOWS USED BY OPERATING ACTIVITIES
<S> <C>
Net loss (14,464)
--------
Net cash used by operating activities (14,464)
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used by investing activities -0-
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock 2,940
Additional paid-in capital 55,860
-------
Net cash provided by financing activities 58,800
-------
Beginning cash -0-
-------
Ending cash 44,336
=======
NON-CASH TRANSACTIONS
Interest expense -0-
Income taxes -0-
</TABLE>
See accompanying Independent Auditor's Report and notes to financial statements.
F-5
<PAGE>
Benchmark Technology Corporation
(A Development Stage Company)
Footnotes
September 30, 2000
Note 1 - History and organization of the company
The Company was organized November 12, 1999 (Date of Inception) under the laws
of the State of Nevada. The Company has no operations and in accordance with
SFAS #7, the Company is considered a development stage company. The Company
is authorized to issue 20,000,000 shares of $0.001 par value common stock and
5,000,000 of its $0.001 par value common stock.
Note 2 - Summary of significant accounting policies
Accounting policies and procedures have not been determined except as follows:
1. The Company uses the accrual method of accounting.
2. 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 and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ significantly from those
estimates.
3. The Company maintains a cash balance in a non-interest-bearing bank that
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents. There are no cash
equivalents as of May 31, 2000.
4. Earnings per share (EPS) is computed using the weighted average number of
shares of common stock outstanding during the period. Diluted EPS is computed
by dividing net income by the weighted average shares outstanding, assuming all
dilutive potential common shares were issued. Since the Company has no common
shares that are potentially issuable, such as stock options, convertible
preferred stock and warrants, basic and diluted EPS are the same. The Company
had no dilutive common stock equivalents such as stock options as of September
30, 2000.
5. The Company has not yet adopted any policy regarding payment of dividends.
No dividends have been paid since inception.
6. The Company will review its need for a provision for federal income tax
after each operating quarter and each period for which a statement of
operations is issued.
7. The Company has adopted December 31 as its fiscal year end.
Note 3 - Income taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS
#109) "Accounting for Income Taxes". A deferred tax asset or liability is
recorded for all temporary differences between financial and tax reporting.
Deferred tax expenses (benefit) results from the net change during the year
of deferred tax assets and liabilities.
There is no provision for income taxes for the year ended September 30, 2000,
due to the net loss and no state income tax in Nevada.
F-6
<PAGE>
Benchmark Technology Corporation
(A Development Stage Company)
Footnotes
September 30, 2000
Note 4 - Stockholders' Equity
The Company is authorized to issue 20,000,000 shares of its $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
On November 15, 1999, the Company issued 1,800,000 shares of its $.001 par
value common stock for cash of $1,800.
On December 5, 2000, the Company issued 840,000 shares of its $.001 par value
common stock at $.05 per share for cash of $42,000. The shares were issued
pursuant to a Securities and Exchange Commission Rule 506 offering. Of the
total, $840 is considered common stock, and $41,160 is considered additional
paid-in capital.
On May 31, 2000, the Company issued 300,000 shares of its $.001 par value
common stock at $.05 per share for cash of $15,000. The shares were issued
pursuant to a Securities and Exchange Commission Rule 504 offering. Of the
total, $300 is considered common stock, and $14,700 is considered additional
paid-in capital.
There have been no other issuances of common or preferred stock.
Note 5 - Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not commenced its planned principal
operations. Without realization of additional capital, it would be unlikely
for the Company to continue as a going concern.
Note 6 - Related party transactions
The Company does not lease or rent any property. Office services are provided
without charge by a director. Such costs are immaterial to the financial
statements and, accordingly, have not been reflected therein. The officers and
directors of the Company are involved in other business activities and may, in
the future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The Company
has not formulated a policy for the resolution of such conflicts.
Note 7 - Warrants and options
There are no warrants or options outstanding to acquire any additional shares
of common stock.
Note 7 - Year 2000 issue
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise
in systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 issue may be experienced before, on, or
after January 1, 2000, and if not addressed, the impact on operations and
financial reporting may range from minor errors to significant system failure
which could affect an entity's ability to conduct normal business operations.
It is not possible to be certain that all aspects of the Year 2000 issue
affecting the entity, including those related to the efforts of customers,
suppliers, or other third parties will be fully resolved.
F-7
<PAGE>
Part III
Item 1. Index to Exhibits (Pursuant to Item 601 of Regulation SB)
Exhibit Number Name and/or Identification of Exhibit
----------------------------------------------------------------------
1. Underwritten agreement
None. Not Applicable
2. Plan of Acquisition, Reorganization, Arrangement, Liquidation, or
Succession.
a) Valuation engagement of Benchmark Technology Corporation and Related Proxy
Information
None. Not Applicable
b) Asset Purchase and Liability Assumption Agreement
None. Not Applicable
c) Interest Purchase Agreement
d) Agreement for Bill of Sale and Assignment of Assets
None. Not Applicable
e) Exchange Stock Agreement
None. Not Applicable
3. Articles of Incorporation & By-Laws
3.1 Articles of Incorporation of the Company Filed November 12, 1999
3.2 By-Laws of the Company adopted November 19, 1999
d) Certificate of Amendment for By-Laws
None. Not Applicable
4. Instruments Defining the Rights of Security Holders
Those included in exhibit 3, and sample of Stock Certificate
5. Option of Legality
None. Not Applicable
6. Option on Liquidation Preference
None. Not Applicable
7. Option on Liquidation Matters
None. Not Applicable
28
<PAGE>
8. Option on Tax Matters
None. Not Applicable
9. Voting Trust Agreement and Amendments
None. Not Applicable
10. Material Contracts
a) Premise Lease <none>
b) Consulting Agreement with <none>
c) Employment Agreement with:
None. Not applicable.
d) Licensing Agreement dated <none>
11. Statement Re Computation of Per Share Earnings
Not applicable-Computation of per share earnings can be clearly determined
from the Statement of Operations in the Company's financial statements.
12. No Exhibit Required
None. Not applicable
13. Annual or Quarterly Reports - Form 10-Q
None. Not Applicable
14. Material Foreign Patents
None. Not Applicable
15. Letter of Unaudited Interim Financial Information
None. Not Applicable
16. Letter on Change in Certifying Accountant
None. Not Applicable
17. Letter of Director Resignation
None. Not Applicable
18. Letter on Change in Accounting Principles
None. Not Applicable
19. Reports Furnished to Security Holders
None. Not Applicable
29
<PAGE>
20. Other Documents or Statements to Security Holders
None. Not Applicable
21. Subsidiaries of Small Business Issuers
None. Not Applicable
22. Published Report Regarding Matters Submitted to Vote of Security Holders
None. Not Applicable
23. Consent of Experts and Counsel
Letter of Consent from G. Brad Beckstead, CPA
24. Power of Attorney
None. Not Applicable
25. Statement of Eligibility of Trustee
None. Not Applicable
26. Invitations for Competitive Bids
None. Not Applicable
27. Financial data Schedule
Financial Data Schedule of Benchmark Technology Corporation ending
September 30, 2000.
28. Information from Reports Furnished to State Insurance Regulatory
Authorities
Not applicable
99. Additional Exhibits -- State of Nevada 504 Registration Statement
30
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Benchmark Technology Corporation
--------------------------------
(Registrant)
Dated: October 5, 2000
By: /s/ William D. DePriest II
--------------------------------
William D. DePriest II, Chairman of the Board, President and Chief Executive
Officer, Chief Financial Officer
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Benchmark Technology Corporation
-----------------------------
(Registrant)
Dated: October 5, 2000
By: /s/ LaDonna Tebo
------------------------------------
LaDonna Tebo, Secretary and Director
31
<PAGE>
