U.S. 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 12(g) of
The Securities Exchange Act of 1934
MYG Corp.
(Name of Small Business Issuer in its charter)
Nevada 33-0921357
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
23 Corporate Plaza, Suite 180, Newport Beach, California 92663
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (949) 720-7320
Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on which
to be so Registered: Each Class is to be Registered:
-------------------- -------------------------------
None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $.001 Preferred Stock, Par value $.001
(Title of Class) (Title of Class)
Copies to:
Thomas E. Stepp, Jr.
Stepp & Beauchamp, LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Facsimile: 949.660.9010
Page 1 of 17
Exhibit Index is specified on Page 16
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MYG Corp.
a Nevada corporation
Index to Registration Statement on Form 10-SB
Item Number and Caption Page
1. Description of Business 3
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
3. Description of Property 10
4. Security Ownership of Certain Beneficial Owners and Management 10
5. Directors, Executive Officers, Promoters and Control Persons 11
6. Executive Compensation - Remuneration of Directors and Officers 11
7. Certain Relationships and Related Transactions 12
8. Description of Securities 12
PART II
1. Market Price of and Dividends on the Registrant's Common Equity
and Related Stockholder Matters 14
2. Legal Proceedings 15
3. Changes in and Disagreements with Accountants 15
4. Recent Sales of Unregistered Securities 15
5. Indemnification of Directors and Officers 15
PART F/S
Financial Statements F-1 through F-4
PART III
1(a). Index to Exhibits 16
1(b). Exhibits E-1 through E-34
Signatures 17
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Item 1. Description of Business.
Our Background. We were incorporated in Nevada on July 6, 2000, to engage in any
lawful undertaking, including, but not limited to, transacting mergers and
acquisitions. We have been in the developmental stage since our formation and
have never engaged in any operational activities, other than issuing stock to
our shareholder. Accordingly, we may be defined as a development stage or
"shell" company whose sole purpose at this time is to identify and complete a
merger or acquisition with a private entity.
We are filing this registration statement on a voluntary basis, as our primary
attraction as a merger partner or acquisition vehicle will be our status as a
reporting company with the Securities and Exchange Commission.
Our Business. We were incorporated on July 6, 2000, as a developmental stage or
shell corporation that seeks to identify and complete a merger or acquisition
with a private entity whose business presents an opportunity for our
shareholder. We will review and evaluate business ventures for possible mergers
or acquisitions. We have not yet entered into any agreement, nor do we have any
commitment or understanding to enter into or become engaged in a transaction.
Further, our objectives, discussed herein, are extremely general and are not
intended to restrict our discretion.
A decision to participate in a specific business opportunity will be made based
upon our analysis of the quality of the prospective business opportunity's
management and personnel, assets, the anticipated acceptability of products or
marketing concepts, the merit of a proposed business plan, and numerous other
factors which are difficult, if not impossible, to analyze using any objective
criteria.
We have no plans or arrangements proposed or under consideration for the
issuance or sale of additional securities, prior to the identification of a
business opportunity. Consequently, we anticipate that we will initially be able
to participate in only one business opportunity, due primarily to our limited
capital. The resulting lack of diversification should be considered a
substantial risk, as we will not be able to offset potential losses from one
venture against gains from another
Aspects of a Reporting Company. We believe that there are certain perceived
benefits to being a reporting company, including the following:
o increased visibility in the financial community;
o availability of information required under Rule 144 for trading of
eligible securities;
o compliance with requirements for participation on the OTC Bulletin
Board maintained by the NASD or on the Nasdaq Small Cap Market;
o easier borrowing from financial institutions;
o improved trading efficiency;
o shareholder liquidity;
o greater ease in raising capital;
o compensation of key employees through stock options for which there
may be an easily determined market value; and
o enhanced corporate image.
We believe that there are also certain perceived disadvantages to being a
reporting company, including the following:
o requirement for audited financial statements;
o required publication of otherwise confidential information;
o required filings of periodic reports with the Securities and Exchange
Commission; and
o increased rules and regulations governing management, corporate
activities and shareholder relations.
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Comparison with Initial Public Offering. Certain private companies may find a
business combination more attractive than an initial public offering of their
securities. Reasons for preferring a business combination may include the
following:
o inability to obtain underwriter;
o possible larger costs, fees and expenses;
o possible delays in the public offering process; and
o greater dilution of their outstanding securities.
Certain private companies may find a business combination less attractive than
an initial public offering of their securities. Reasons for preferring an
initial public offering may include the following:
o no investment capital raised through a business combination; and
o no underwriter support of after-market trading of the securities.
Potential Target Companies. A business entity, if any, which may be interested
in a business combination with us may include the following:
o a company for which a primary purpose of becoming public is the use of
its securities for the acquisition of assets or businesses;
o a company which is unable to find an underwriter of its securities or
is unable to find an underwriter of securities on terms acceptable to
it;
o a company which wishes to become public with less dilution of its
common stock than would occur upon an initial public offering;
o a company which believes that it will be able to obtain investment
capital on more favorable terms after it has become public;
o a foreign company which may wish an initial entry into the United
States securities market;
o a special situation company, such as a company seeking a public market
to satisfy redemption requirements under a qualified Employee Stock
Option Plan; or
o a company seeking one or more of the other perceived benefits of
becoming a public company.
A business combination with a target company will normally involve the issuance
to the target company of the majority of our issued and outstanding common
stock, and the substitution by the target company of its own management and
board of directors.
We cannot assure you that we will be able to enter into a business combination,
as to the terms of a business combination, or as to the nature of the target
company.
The proposed business activities described herein classify us as a "blank check"
company. The Securities and Exchange Commission and certain states have enacted
statutes, rules and regulations limiting the sale of securities of blank check
companies. We will not issue or sell additional shares or take any efforts to
cause a market to develop in our securities until such time as we have
successfully implemented our business plan and we are no longer classified as a
blank check company.
We are voluntarily filing this Registration Statement on Form 10-SB with the
Securities and Exchange Commission and are under no obligation to do so pursuant
to the Securities Exchange Act of 1934. We will continue to file all reports
required pursuant to the Securities Exchange Act of 1934 until a business
combination has occurred. A business combination will normally result in a
change in control of our management. As a benefit of a business combination with
us would normally be considered our status as a reporting company, we anticipate
that we will continue to file reports pursuant to the Securities Exchange Act of
1934 following a business combination. We cannot assure you that this will occur
or, if it does, for how long.
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Government Regulation. It is impossible to anticipate government regulations, if
any, to which we may be subject until we have acquired an interest in a
business. The ownership or use of assets to conduct a business which we may
acquire could subject us to environmental, public health and safety, land use,
trade, or other governmental regulations and state or local taxation. In
selecting a business in which to acquire an interest, we will endeavor to
ascertain, to the extent of our limited resources, the effects of such
government regulation on our prospective business. In certain circumstances,
however, such as the acquisition of an interest in a new or start-up business
activity, it may not be possible to predict with any degree of accuracy the
impact of government regulation. The inability to ascertain the effect of
government regulation on a prospective business activity will make the
acquisition of an interest in such business a greater risk.
Competition. We will be involved in intense competition with other business
entities, many of which will have a competitive edge over us by virtue of their
stronger financial resources and prior experience in business. We cannot assure
you we will be successful in obtaining suitable business opportunities.
Employees. We are a development stage company and currently have no employees.
Our executive officers will devote only such time to our affairs as they deem
appropriate, which is estimated to be approximately five (5) hours per month. We
expect to use consultants, attorneys, and accountants, as necessary, and do not
anticipate a need to engage any full-time employees so long as we are
identifying and evaluating businesses. The need for employees and their
availability will be considered in connection with a decision whether or not to
acquire or participate in a specific business venture.
Risk Factors.
Information specified in this Registration Statement contains "forward looking
statements" which can be identified by the use of forward-looking words such as
"believes", "could", "possibly", "probably", "anticipates", "estimates",
"projects", "expects", "may", "will", or "should" or other variations or similar
words. We cannot assure you that the future results anticipated by those
forward-looking statements will be achieved. The following matters constitute
cautionary statements identifying important factors with respect to such
forward-looking statements, including certain risks and uncertainties that could
cause actual results to vary materially from the future results anticipated by
those forward-looking statements.
Our business is subject to numerous risk factors, including the following:
We have no operating history nor revenue and minimal assets and operate at a
loss.
We have had no operating history and no revenues or earnings from operations. We
have has no significant assets or financial resources. We have operated at a
loss to date and will, in all likelihood, continue to sustain operating expenses
without corresponding revenues, at least until the consummation of a business
combination. Bruce Younker, our sole director, officer and principal shareholder
has agreed to pay all of our expenses without repayment by us. We cannot assure
you that we will ever be profitable.
Bruce Younker, our sole officer and director, is engaged in other activities
that could have conflicts of interest with us.
Bruce Younker, our sole officer and director, has existing responsibilities and,
in the future, may have additional responsibilities, to provide management and
services to other entities in addition to us. As a result, conflicts of interest
between us and the other activities of Mr. Younker may occur from time to time,
in that Mr. Younker shall have conflicts of interest in allocating time,
resources, services, and functions between the other business ventures in which
Mr. Younker may be or become involved and our affairs.
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The success of our proposed plan of operation will depend to a great extent on
the operations, financial condition and management of the identified target
company.
While business combinations with entities having established operating histories
are preferred, we cannot assure you that we will be successful in locating
candidates meeting such criteria. The decision to enter into a business
combination will likely be made without detailed feasibility studies, market
surveys or similar information which, if we had more funds available to us,
would be desirable. In the event that we complete a business combination, the
success of our operations will depend upon management of the target company and
numerous other factors beyond our control. We cannot assure you that we can
identify a target company and consummate a business combination.
There is a scarcity of and intense competition for business opportunities and
combinations.
We are and will continue to be an insignificant participant in the business of
seeking mergers with and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be merger or
acquisition target candidates for us. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than us and, consequently, we will be at a competitive disadvantage
in identifying possible business opportunities and successfully completing a
business combination. Moreover, we will also compete with numerous other small
public companies in seeking merger or acquisition candidates.
We do not have an agreement for a business combination or minimum requirements
for business combination.
We have no current arrangement, agreement or understanding with respect to
engaging in a business combination with a specific entity. There can be no
assurance that we will be successful in identifying and evaluating suitable
business opportunities or in concluding a business combination. No particular
industry or specific business within an industry has been selected as a target
company. We have not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria which it will
require a target company to have achieved, or without which we would not
consider a business combination with such business entity. Accordingly, we may
enter into a business combination with a business entity having no significant
operating history, losses, limited or no potential for immediate earnings,
limited assets, negative net worth or other negative characteristics. We cannot
assure you that we will be able to negotiate a business combination on terms
favorable to us.
Bruce Younker is our sole officer, director and principal security holder and
owns 100% of our outstanding shares of common stock.
Bruce Younker is our sole officer, director and principal shareholder. Because
our management consists of only one person, we do not benefit from multiple
judgments that a greater number of directors or officers would provide, and we
will rely completely on the judgment of our sole officer and director when
selecting a target company. Mr. Younker anticipates devoting only a limited
amount of time per month to our business and does not anticipate commencing any
services until after the effective date of this Registration Statement. Mr.
Younker has not entered into a written employment agreement with us and he is
not expected to do so. We have not obtained key man life insurance on Mr.
Younker. The loss of the services of Mr. Younker would adversely affect
development of our business and our likelihood of continuing operations.
Bruce Younker, our sole director, officer and principal shareholder, owns 100%
of our outstanding common stock. Such concentrated control of us may adversely
affect the price of our common stock. Mr. Younker may also be able to exert
significant influence, or even control matters requiring approval by our
shareholders, including the election of directors, as a result of such
ownership. In addition, certain provisions of Nevada law could have the effect
of making it more difficult or more expensive for a third party to acquire, or
of discouraging a third party from attempting to acquire, control of us.
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We lack a public market for our common stock, which may make it difficult for
investors to sell their shares.
There is no public market for our common stock and we cannot assure you that an
active public market will develop or be sustained. Therefore, investors may not
be able to find purchasers for their shares of our common stock. Should there
develop a significant market for our securities, the market price for those
securities may be significantly affected by such factors as our financial
results and introduction of new products and services. Factors such as
announcements of new or enhanced products by us or our competitors and
quarter-to-quarter variations in our results of operations, as well as market
conditions, may have a significant impact on the market price of our securities.
Further, the stock market has experienced extreme volatility that has
particularly affected the market prices of equity securities of many companies
and that often has been unrelated or disproportionate to the operating
performance of such companies.
The reporting requirements of the Securities Exchange Act of 1934 may delay or
preclude our acquisition of a target company.
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, we are required to provide certain information about significant
acquisitions including audited financial statements of the target company. These
audited financial statements must be furnished within 75 days following the
effective date of a business combination. Obtaining audited financial statements
are the economic responsibility of the target company. The additional time and
costs that may be incurred by some potential target companies to prepare such
financial statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by us. Acquisition prospects
that do not have or are unable to obtain the required audited statements may not
be appropriate for acquisition so long as the reporting requirements of the
Securities Exchange Act of 1934 are applicable. Notwithstanding a target
company's agreement to obtain audited financial statements within the required
time frame, such audited financials may not be available to us at the time of
closing a business combination. In situations where audited financials are
unavailable, we will have to rely upon unaudited information that has not been
verified by outside auditors in making our decision to engage in a transaction
with the business entity. This risk increases the prospect that a business
combination with such a business entity might prove to be an unfavorable one for
us.
We lack market research and marketing organization.
We have neither conducted, nor have others made available to us, results of
market research indicating that market demand exists for the transactions
contemplated by us. Moreover, we do not have, and does not plan to establish, a
marketing organization. Even in the event demand is identified for a merger or
acquisition contemplated by us, we cannot assure you that we will be successful
in completing any such business combination.
We may be subject to regulation of the Investment Company Act of 1940.
In the event we engage in business combinations which result in us holding
passive investment interests in a number of entities, we could be subject to
regulation pursuant to the Investment Company Act of 1940. Passive investment
interests, as used in the Investment Company Act of 1940, essentially means
investments held by entities which do not provide management or consulting
services or are not involved in the business whose securities are held. In such
event, we would be required to register with the Securities and Exchange
Commission as an investment company pursuant to the Investment Company Act of
1940 and could be expected to incur significant registration and compliance
costs. We have obtained no formal determination from the Securities and Exchange
Commission as to our status pursuant to the Investment Company Act of 1940. Any
violation of Investment Company Act of 1940 could subject us to material adverse
consequences.
A change in our control and management will likely occur in any business
combination we may undertake.
A business combination involving the issuance of our common stock will, in all
likelihood, result in shareholders of a target company obtaining a controlling
interest in us. As a condition of the business combination agreement, Bruce
Younker, our sole shareholder, may agree to sell or transfer all or a portion of
his common stock in order to provide the target company with complete or
majority control. Change in control of us will likely result in removal of our
present officer and director and a corresponding reduction in or elimination of
his participation in our future affairs.
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Dilution of value of our common stock will likely occur in any business
combination we may undertake.
A business combination normally will involve the issuance of a significant
number of additional shares of our common stock. Depending upon the value of the
assets acquired in such business combination, the per share value of our common
stock may increase or decrease, perhaps significantly.
Federal and state tax consequences will likely be major considerations in any
business combination we may undertake.
Transactions involving business combinations may be structured so as to result
in tax-free treatment to both companies, pursuant to various federal and state
tax provisions. We intend to structure any business combination so as to
minimize the federal and state tax consequences to us and the target company. We
cannot assure you that such business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain the
intended tax-free treatment, upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both federal and
state taxes, which may have an adverse effect on both parties to the
transaction.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources. We have cash of $0.00 as of August 31, 2000.
Bruce Younker, our sole officer and director, has paid our expenses since our
formation, and we anticipate that Mr. Younker will continue to pay our expenses.
Results of Operations. We have not yet realized any revenue from operations, nor
do we expect to in the foreseeable future.
Plan of Operation for the Next Twelve Months. We will review and evaluate
business opportunities for possible mergers or acquisitions. We have not yet
entered into any agreement, nor do we have any commitment or understanding to
enter into or become engaged in a transaction.
A decision to participate in a specific business opportunity will be made based
upon our analysis of the quality of the prospective business opportunity's
management and personnel, assets, the anticipated acceptability of products or
marketing concepts, the merit of a business plan, and numerous other factors,
which are difficult, if not impossible, to analyze using any objective criteria.
Selection of a Business. We anticipate that potential business opportunities
will be referred from various sources, including our officer and director,
professional advisors, securities broker-dealers, venture capitalists, persons
involved in the financial community, and others who may present unsolicited
proposals. We will not engage in any general solicitation or advertising for a
business opportunity and will rely on the personal relationships of our officer
and director and his affiliates, as well as indirect associations with other
business and professional people. Our reliance on "word of mouth" may limit the
number of potential business opportunities identified. While it is not presently
anticipated that we will engage unaffiliated professional firms specializing in
business acquisitions or reorganizations, such firms may be retained if we deems
it in our best interest. Finder's fees paid to professional acquisition firms
could involve one-time cash payments, payments based on a percentage of the
business opportunity's revenues or product sales volume, payments involving
issuance of securities, or any combination of these or other compensation
arrangements. Consequently, we are unable to predict the cost of utilizing such
services. As of August 31, 2000, there have been no discussions, agreements or
understandings with any professional advisors, financial consultants,
broker-dealers or venture capitalists. Our present intentions are to rely upon
our President to perform those services normally provided by professional
advisors or financial consultants.
We will not restrict our search to any particular business, industry, or
geographical location. We reserve the right to evaluate and enter into any type
of business in any location. In seeking a business venture, our decision will
not be controlled by an attempt to take advantage of any anticipated or
perceived appeal of a specific industry, management group, product, or industry,
but will be based on the business objective of seeking long-term capital
appreciation. We may participate in a newly organized business or in a more
established business. Participation in a new business entails
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greater risks, as, in many instances, management of such a business may not have
an established track record; the eventual market for such business' product or
services will likely not be established; and the profitability of such business
will be untested and impossible to forecast accurately. Should we participate in
a more established business that is experiencing financial difficulty, risks may
result from our inability to generate sufficient funds to manage or reverse the
circumstances causing such financial problems.
The analysis of new businesses will be undertaken by or under the supervision of
our sole officer and director. In analyzing prospective businesses, we will
consider, to the extent applicable, the available technical, financial and
managerial resources of any given business. We will also consider the following:
o nature of present and expected competition;
o potential advances in research and development or exploration;
o the potential for growth and expansion;
o the likelihood of sustaining a profit within given time periods;
o the perceived public recognition or acceptance of products, services,
trade or service marks;
o name identification; and
o other relevant factors.
We anticipate that the results of operations of a specific business may not
necessarily be indicative of the potential for future earnings for that
business, which may be impacted by a change in marketing strategies, expansion,
modifying product emphasis, changing or substantially augmenting management, and
other factors.
We have no present intention to hire any independent advisors or consultants.
Our officer will act in these capacities. We may pay a fee for locating a
merger, acquisition or business combination candidate. No criteria will be used
in determining who can act as a finder for us, other than we will require such
finder to have all the necessary state or federal licenses to act in such
capacity and receive compensation therefor. A finder will only be paid if we
complete a transaction. All other terms of service will be negotiated on an
individual basis and have not been determined as of yet. We have not yet
contacted nor had any discussions with any finders.
We will analyze all relevant factors and make a determination based on a
composite of available information, without reliance on any single factor. The
period within which we will decide to participate in a given business cannot be
predicted and will depend on the following factors:
o the time involved in identifying businesses;
o the time required for us to complete our analysis of such businesses;
o the time required to prepare appropriate documentation to effect a
merger or acquisition; and
o other circumstances.
Acquisition of a Business. The implementing of a structure that will result in
any given business transaction, may cause us to become party to a merger,
consolidation, purchase and sale of assets, purchase or sale of stock, or other
reorganization involving another corporation, joint venture, partnership or
licensee. The exact structure of the anticipated transaction cannot yet be
determined, although we do not intend to participate in a business by the
acquisition of minority stock interests. Our current intention is to acquire a
controlling interest in a business. Upon the completion of a transaction, it is
likely that our present management will no longer control our affairs. Further,
our present director may, as part of the terms of a prospective business
transaction, resign and be replaced by new directors without a vote of our
shareholders.
It is the opinion of the Office of Small Business of the Securities and Exchange
Commission (as indicated in No Action Letter, NASD Regulation, Inc., dated
January 21, 2000) that Rule 144 is not available for resale transactions
involving securities sold by promoters and affiliates of a blank check company,
and their transferees, and anyone else who has been issued securities from a
blank check company, and that securities issued by a blank check company to
promoters and affiliates, and their transferees, can only be resold by
registration pursuant to the Securities Act of 1933. Upon consummation of a
merger, we may decide to file the necessary and appropriate registration
statements to register our
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common stock for promoters and affiliates and their transferees. In addition,
the promoters or affiliates of blank check companies, as well as their
transferees, are deemed to be "underwriters" of the securities of those blank
check companies issued both before and after any business combination.
The issuance of a substantial amount of additional securities and their
potential sale into any trading market which may develop in our securities may
have a depressive effect on such market.
While the actual terms of a transaction to which we may be a party cannot be
determined at this time, it is expected that the parties to any business
transaction will determine that it is desirable to structure the merger or
acquisition as a "tax-free" event pursuant to Sections 351 or 368(a) of the
Internal Revenue Code of 1986. In order to obtain tax-free treatment under
Section 351 of the Internal Revenue Code of 1986, it would be necessary for the
owners of the acquired business to own 80% or more of the voting stock of the
surviving entity. In such event, our shareholder would retain less than 20% of
the issued and outstanding shares of the surviving entity. Section 368(a)(1) of
the Internal Revenue Code of 1986 provides for tax-free treatment of certain
business reorganizations between corporate entities where one corporation is
merged with or acquires the securities or assets of another corporation.
Generally, we expect to be the acquiring corporation in such a business
reorganization, and the tax-free status of the transaction will not depend on
the issuance of any specific amount of our voting securities pursuant to that
Section 368. The acquiring corporation will issue securities in such an amount
that the shareholders of the acquired corporation will hold 50% or more of the
voting stock of the surviving entity. Consequently, there is a substantial
possibility that our shareholder immediately prior to the transaction would
retain less than 50% of the issued and outstanding shares of the surviving
entity. Therefore, regardless of the form of the business acquisition, it may be
anticipated that our stockholders immediately prior to the transaction will
experience a significant reduction in their percentage of ownership in us.
Notwithstanding the fact that we are technically the merging or acquiring entity
in the foregoing circumstances, generally accepted accounting principles will
ordinarily require that such transaction be accounted for as if we had been
acquired by the other entity owning the business and, therefore, will not permit
an increase in the carrying value of the assets of the other business.
The manner in which we participate in a business will depend on the nature of
the business, our respective needs and desires, the management of the business,
and our relative negotiating strength and such other management.
We will participate in a business only after the negotiation and execution of
appropriate written agreements. Although the terms of such agreements cannot be
determined at this time, generally, such agreements will require specific
representations and warranties by all of the parties thereto, will specify
certain events of default, will detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to such closing, will
outline the manner of paying costs if the transaction is not closed, will set
forth remedies on default, and will include miscellaneous other terms.
Operation of Business After Acquisition. Our operation following our merger or
acquisition of a business will be dependent on the nature of the business and
the interest acquired. We are unable to determine at this time whether we will
be in control of the business or whether our present management will be in
control of us following the acquisition. It may be expected that the business
will present various risks, which cannot be predicted at the present time.
Item 3. Description of Property.
Property held by Us. We have no properties at this time and we have no
agreements to acquire any properties. Our offices are provided to us at no
charge by Bruce Younker, our sole officer and director. Mr. Younker has agreed
to continue this arrangement until we complete a business combination.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners. Other than our director and
officer, there are no beneficial owners of 5% or more of our issued and
outstanding common stock:
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(b) Security Ownership by Management. As of August 31, 2000, our director and
principal executive officer beneficially owned, in the aggregate, 6,000,000
shares of our common stock, or 100% of our common stock, as set forth on the
following table:
<TABLE>
<CAPTION>
Title of Class Name of Beneficial Owner Amount and Nature of Percent of Class
-------------- ------------------------ Beneficial Owner ----------------
----------------
<S> <C> <C> <C>
Common Stock Bruce Younker 6,000,000 shares 100%
23 Corporate Plaza, Suite 180 President, Secretary, Treasurer
Newport Beach, California 92663 and a Director
Common Stock All Officer and Directors 6,000,000 shares 100%
as a Group
</TABLE>
Changes in Control. We are not aware of any arrangements which may result in
"changes in control" as that term is defined by the provisions of Item 403 of
Regulation S-B.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
Our sole director and officer is specified on the following table:
<TABLE>
<CAPTION>
==================================== ============ =======================================
Name and Address Age Position
------------------------------------ ------------ ---------------------------------------
<S> <C> <C>
Bruce Younker 58 President, Secretary, Treasurer and
23 Corporate Plaza, Suite 180 sole Director
Newport Beach, California 92663
==================================== ============ =======================================
</TABLE>
Bruce Younker. Mr. Younker is our President, Secretary, Treasurer, and sole
director. From 1995 to the present, Mr. Younker has been a self-employed real
estate broker and developer. Mr. Younker has been involved in the real estate
industry for approximately 30 years and has possessed a real estate broker
license since 1970. Mr. Younker has not been an officer or director for a
reporting company.
There are no agreements or understandings for our sole officer and director to
resign at the request of another person, and our sole officer and director is
not acting on behalf of nor will act at the direction of any other person,
provided that our sole officer and director may agree to resign in connection
with the consummation of a business combination with another entity.
There are no orders, judgments, or decrees of any governmental agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license, permit or other authority to engage in the securities
business or in the sale of a particular security or temporarily or permanently
restraining Mr. Younker from engaging in or continuing any conduct, practice or
employment in connection with the purchase or sale of securities, or convicting
Mr. Younker of any felony or misdemeanor involving a security, or any aspect of
the securities business or of theft, nor are Mr. Younker, the officers or
directors of any corporation or entity so enjoined.
Item 6. Remuneration of Directors and Officers.
Executive Compensation. Our sole officer and director does not receive any
compensation for his services rendered to us, has not received such compensation
in the past, and is not accruing any compensation pursuant to any agreement with
us. However, our sole officer and director anticipates receiving benefits as
sole shareholder.
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Item 7. Certain Relationships and Related Transactions.
Related Party Transactions. There have been no related party transactions,
except for the following:
We issued 6,000,000 shares of our common stock to Bruce Younker, our sole
officer and director, in exchange for $6,000.
Our offices are provided to us at no charge by Bruce Younker, our sole officer
and director. Mr. Younker has agreed to continue this arrangement until we
complete a business combination.
Item 8. Description of Securities.
We are authorized to issue 50,000,000 shares of common stock, $.001 par value,
each share of common stock having equal rights and preferences, including voting
privileges and 10,000,000 shares of preferred stock, $.001 par value. As of
August 31, 2000, 6,000,000 shares of our common stock are issued and outstanding
and no shares of our preferred stock are issued and outstanding.
Common Stock. Each shareholder of our common stock is entitled to a pro rata
share of cash distributions, including dividend payments. The holders of our
common stock are entitled to one vote for each share of record on all matters to
be voted on by shareholders. There is no cumulative voting with respect to the
election of our directors or any other matter, with the result that the holders
of more than 50% of the shares voted for the election of those directors can
elect all of the directors. The holders of our common stock are entitled to
receive dividends when, as and if declared by our Board of Directors from funds
legally available therefor; provided, however, that cash dividends are at the
sole discretion of our Board of Directors. In the event of our liquidation,
dissolution or winding up, the holders of common stock are entitled to share
ratably in all assets remaining available for distribution to them after payment
of our liabilities and after provision has been made for each class of stock, if
any, having preference in relation to our common stock.
Holders of our common stock have no conversion, preemptive or other subscription
rights, and there are no redemption provisions applicable to our common stock.
All of the outstanding shares of our common stock are duly authorized, validly
issued, fully paid and non-assessable.
Preferred Stock. Our Board of Directors is authorized to provide for the
issuance of shares of preferred stock in series and, by filing a certificate
pursuant to the Nevada General Corporation Law, to establish from time to time
the number of shares to be included in each such series, and to determine the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof, without any further
vote or action by the shareholders. Any shares of preferred stock so issued
would have priority over the common stock with respect to dividend or
liquidation rights. Any future issuance of preferred stock may have the effect
of delaying, deferring or preventing a change in control of us without further
action by the shareholders and may adversely affect the voting and other rights
of the holders of common stock. At present, we have no plans to issue any
preferred stock nor adopt any series, preferences or other classification of
preferred stock.
The issuance of preferred stock, or the issuance of rights to purchase preferred
stock, could be used to discourage an unsolicited acquisition proposal. For
instance, the issuance of preferred stock might impede a business combination by
including class voting rights that would enable the holder to block such a
transaction, or facilitate a business combination by including voting rights
that would provide a required percentage vote of the stockholders. In addition,
in certain circumstances, the issuance of preferred stock could adversely affect
the voting power of the holders of the common stock. Although our Board of
Directors is required to make any determination to issue such stock based on its
judgment as to the best interests of our stockholders, our Board of Directors
could act in a manner that would discourage an acquisition attempt or other
transaction that some, or a majority, of stockholders might believe to be in
their best interests or in which our stockholders might receive a premium for
their stock over the then market price of such stock. Our Board of Directors
does not, at present, intend to seek stockholder approval prior to any issuance
of
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currently authorized stock, unless otherwise required by law or stock exchange
rules. We have no present plans to issue any preferred stock.
Dividend Policy. Dividends, if any, will be contingent upon our revenues and
earnings, capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of our Board of Directors. We
presently intend to retain all earnings, if any, for use in our business
operations and, accordingly, our Board of Directors does not anticipate
declaring any dividends prior to a business combination.
Following a business combination, a target company will normally wish to cause
our common stock to trade in one or more United States securities markets. The
target company may elect to take the action required for such trading following
the business combination or at some later time.
In order to qualify for listing on the Nasdaq Small Cap Market, a company must
meet the following minimum criteria:
o net tangible assets of $4,000,000 or market capitalization of
$50,000,000 or net income for two of the last three fiscal years of
$750,000;
o public float of 1,000,000 shares with a market value of $5,000,000;
o a bid price of $4.00;
o three market makers;
o 300 shareholders; and
o an operating history of one year or, if less than one year,
$50,000,000 in market capitalization.
For continued listing on the Nasdaq Small Cap Market, a company must meet the
following minimum criteria:
o net tangible assets of $2,000,000 or market capitalization of
$35,000,000 or net income for two of the last three fiscal years of
$500,000;
o a public float of 500,000 shares with a market value of $1,000,000; a
bid price of $1.00;
o two market makers; and
o 300 shareholders.
If, after a business combination, we do not meet the qualifications for listing
on the Nasdaq Small Cap Market, we may apply for quotation of our securities on
the OTC Bulletin Board. In certain cases, we may elect to have our securities
initially quoted in the "pink sheets" published by the National Quotation
Bureau, Inc.
To have our securities quoted on the OTC Bulletin Board we must:
o report our current financial information to the Securities and
Exchange Commission, banking regulators or insurance regulators;
o have at least one market maker who completes and files a Form 211 with
NASD Regulation, Inc.
The OTC Bulletin Board is a dealer-driven quotation service. Unlike the Nasdaq
Stock Market, companies cannot directly apply to be quoted on the OTC Bulletin
Board, only market makers can initiate quotes, and quoted companies do not have
to meet any quantitative financial requirements. Any equity security of a
reporting company not listed on the Nasdaq Stock Market or on a national
securities exchange is eligible.
In general, there is greatest liquidity for traded securities on the Nasdaq
Small Cap Market, less on the OTC Bulletin Board, and least by quotation by the
National Quotation Bureau, Inc. on the "pink sheets". It is not possible to
predict where, if at all, our securities will be traded following a business
combination.
Transfer Agent. It is anticipated that Pacific Stock Transfer, 5844 South Pecos
Road, Suite D, Las Vegas, Nevada, will act as transfer agent for our common
stock.
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PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
There is no public market for shares of our common stock, and no assurance can
be given that an active public market will develop or be sustained. Therefore,
investors may not be able to find purchasers for their shares of our common
stock.
Penny Stock Regulation. The Securities and Exchange Commission has adopted rules
that regulate broker-dealer practices in connection with transactions in "penny
stocks". Penny stocks are generally equity securities with a price of less than
$5.00 (other than securities registered on certain national securities exchanges
or quoted on the Nasdaq system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules, deliver a
standardized risk disclosure document prepared by the Securities and Exchange
Commission, which contains the following:
o a description of the nature and risks in the market for penny stocks
in both public offerings and secondary trading;
o a description of the broker's or dealer's duties to the customer and
of the rights and remedies available to the customer with respect to
violation to such duties or other requirements of applicable
securities' laws;
o a brief, clear, narrative description of a dealer market, including
"bid" and "ask" prices for penny stocks and significance of the spread
between the "bid" and "ask" price;
o a toll-free telephone number for inquiries on disciplinary actions;
o definitions of significant terms in the disclosure document or in the
conduct of trading in penny stocks; and
o such other information and is in such form (including language, type,
size and format), as the Securities and Exchange Commission shall
require by rule or regulation.
Prior to effecting any transaction in penny stock, the broker-dealer also must
provide the customer the following:
o the bid and offer quotations for the penny stock;
o the compensation of the broker-dealer and its salesperson in the
transaction;
o the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
o monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that, prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgement of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for a stock that becomes subject to the penny stock rules.
If any of our securities become subject to the penny stock rules, holders of
those securities may have difficulty selling those securities.
Reports to Security Holders. We will be a reporting company pursuant to the
Securities and Exchange Act of 1934 upon the effective date of this Registration
Statement on Form 10-SB. As such, we will be required to provide an annual
report to our security holders, which will include audited financial statements,
and quarterly reports, and which will contain unaudited financial statements.
The public may read and copy any materials filed with the Securities and
Exchange Commission at the Securities and Exchange Commission's Public Reference
Room at 450 Fifth Street NW, Washington, D.C. 20549. The public may also obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The Securities and Exchange Commission maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Securities and
Exchange Commission. The address of that site is http://www.sec.gov.
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Investment Company Act of 1940. Although we will be subject to regulation under
the Securities Act of 1933 and the Securities Exchange Act of 1934, we believe
we will not be subject to regulation under the Investment Company Act of 1940,
insofar as we will not be engaged in the business of investing or trading in
securities. In the event we engage in business combinations which result in us
holding passive investment interests in a number of entities, we could be
subject to regulation pursuant to the Investment Company Act of 1940. In such
event, we would be required to register with the Securities and Exchange
Commission as an investment company under the Investment Company Act of 1940 and
could be expected to incur significant registration and compliance costs. We
have obtained no formal determination from the Securities and Exchange
Commission as to our status pursuant to the Investment Company Act of 1940. Any
violation of the Investment Company Act of 1940 would subject us to material
adverse consequences.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against us at this time.
Item 3. Changes in and Disagreements with Accountants.
There have been no changes in or disagreements with our accountants since our
formation required to be disclosed pursuant to Item 304 of Regulation S-B.
Item 4. Recent Sales of Unregistered Securities.
There have been no sales of unregistered securities within the last three (3)
years which would be required to be disclosed pursuant to Item 701 of Regulation
S-B, except for the following:
On or about July 8, 2000, we issued 6,000,000 shares of our common stock to
Bruce Younker, our sole officer and director, in reliance on the exemption
specified by the provisions of Section 4(2) of the Securities Act of 1933, as
amended, and Rule 506 of Regulation D in a transaction not involving a public
offering. The shares were issued in exchange for $6,000.
Item 5. Indemnification of Directors and Officers.
Article Seven of our Articles of Incorporation provides that our directors or
officers shall not have any personal liability to us or our shareholders for
damages for breach of fiduciary duty as a director or officer. Article Seven
does not eliminate or limit the liability of a director or officer for the
following:
o acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law, or
o the payment of dividends in violation of the Nevada General
Corporation Law.
Accordingly, our officers or directors may have no liability to our shareholders
for any mistakes or errors of judgment or for any act of omission, unless such
act or omission involves intentional misconduct, fraud, or a knowing violation
of law or results in unlawful distributions to our shareholders.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in that act and is, therefore, unenforceable.
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PART F/S
Copies of the financial statements specified in Regulation 228.310 (Item 310)
are filed with this Registration Statement, Form 10-SB.
(a) Index to Financial Statements. Page
1 Independent Auditor's Report F-2
2 Audited Balance Sheets F-3
as of July 6, 2000.
3 Notes to Financial Statements F-4
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MYG CORP.
FINANCIAL STATEMENT
JULY 6, 2000
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of MYG Corp. as of July 6, 2000.
The financial statement is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MYG Corp. as of July 6, 2000 in
conformity with generally accepted accounting principles.
MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
Certified Public Accountants
New York, New York
July 6, 2000
F-2
<PAGE>
MYG CORP.
BALANCE SHEET
JULY 6, 2000
ASSETS $ --
-------
LIABILITIES --
CAPITAL
Subscription of Stock Receivable (6,000)
Preferred Stock, $.001 par value, 10,000,000 shares
Authorized, -0- shares issued and outstanding --
Common Stock, $.001 par value; 50,000,000 shares
authorized, 6,000,000 shares issued and outstanding 6,000
-------
Total Capital --
-------
TOTAL CAPITAL AND LIABILITIES $ --
=======
The accompanying note is an integral part of the financial statement.
F-3
<PAGE>
MYG CORP.
NOTES TO FINANCIAL STATEMENTS
JULY 6, 2000
NOTE 1 - NATURE OF OPERATIONS
MYG Corp. was incorporated on July 6, 2000 in the State of Nevada. The
Corporation's principal business activity has not been determined.
F-4
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PART III
Item 1. Index to Exhibits
Exhibits.
Copies of the following documents are filed with this Registration Statement on
Form 10-SB, as exhibits:
3.1 Articles of Incorporation of
MYG Corp., a Nevada corporation E-1 through E-8
3.2 Bylaws of MYG Corp., a Nevada corporation E-9 through E-34
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SIGNATURES
In accordance with the provisions of Section 12 of the Securities Exchange
Act of 1934, we have duly caused this Registration Statement on Form 10-SB to be
signed on our behalf by the undersigned, thereunto duly authorized, in the City
of Newport Beach, California, on September 1, 2000.
MYG Corp.
a Nevada corporation
By: /s/ Bruce Younker
-----------------------------------
Bruce Younker
Its: President, Secretary, Treasurer, Director
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