U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT No. 1
TO
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
B Y & C Management, Inc.
(Name of Small Business Issuer in its charter)
Florida 52-2132622
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
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
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B Y & C Management, Inc.,
a Florida corporation
Index to Registration Statement on Form 10-SB, Amendment No.1
Item Number and Caption Page
1. Description of Business 3
2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 5
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 12
7. Certain Relationships and Related Transactions 12
8. Description of Securities 13
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 16
PART F/S
Financial Statements F-1 through F-13
PART III
1(a). Index to Exhibits 17
1(b). Exhibits E-1 through E-12
Signatures 18
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Item 1. Description of Business.
Our Background. We were incorporated in Florida on April 29, 1998. On June 26,
2000, we amended our Articles of Incorporation to authorize 100,000,000 shares
of common stock.
Our Business. We intend to be an Internet based association of property
management professionals and licensed real estate brokers and agents. We
anticipate that we will provide continuing education classes and develop
certification programs for our membership of property management professionals
and licensed real estate brokers and agents. Our courses of study will be
designed to increase the knowledge of our membership in the property management
industry and provide updated information regarding new regulations and licensing
requirements. As a professional association, we also intend to develop and
promote the adoption of policies and standards which provide guidance to
property management professionals in an effort to establish a national set of
standards to be applied and upheld by practitioners within the profession.
Our Website. We anticipate that our website will initially be developed as a
corporate presence for us and used for marketing of our services. If we raise
substantial capital or generate significant revenues, we anticipate that our
website will be expanded to provide advice and information to property
management professionals in a community based format as well as offer users free
information on changing laws. We intend to further develop the website to serve
as an online distributor of our continuing education products. If we generate
significant revenues, we plan to expand and design our website to broadcast
educational programs to our member and function as a marketplace for property
management professionals as well as related businesses and consumers. We believe
that our website could be developed to allow users to interact with other
property management professionals to obtain advice and services from other
property management professionals as well as purchase our various industry
related products. We anticipate that in order to view or download our continuing
education programs, customers will be issued a password.
Internet Advertising. If we generate significant revenues, we anticipate that we
will expand and develop our website to broadcast educational programs to our
member and function as a marketplace for property management professionals as
well as related businesses and consumers. If we develop our website into such a
marketplace, we anticipate that we will be able to generate advertising revenues
from companies which have complementary products and services and desire to
advertise our on website. The Internet is emerging as an attractive method for
advertisers, due to the growth in the number of Internet users, the amount of
time Internet users spend on the Internet, the increase in electronic commerce,
the interactive nature of the Internet, the Internet's global reach, the ability
to reach targeted audiences and a variety of other factors. Many of the largest
advertisers in traditional media, including consumer products companies,
automobile manufacturers and others, have increased their use of Internet
advertising. We believe that larger companies will begin to allocate significant
portions of their total advertising budgets for Internet advertising. We believe
that significant revenues can be generated from online advertising, initially
from small business service providers and product vendors and, as use of our
website increases, from advertisers, such as consumer products companies.
Future Products. If we generate significant revenues in the next twelve to
twenty-four months, we may further expand our website to provide multiple
location real estate listings for properties listed by our property management
professionals and real estate brokers and agents.
Our Target Markets and Marketing Strategy. We believe that our primary target
market will consist of property management professionals and real estate brokers
and agents licensed in California and other states. We intend to enter other
markets by purchasing the lists of property management professionals and
licensed real estate brokers and agents in good standing from the various
states. We plan to mail to property management professionals and licensed real
estate brokers and agents postcards which display information concerning our
products and services.
We anticipate that we will market and promote our websites on the Internet. Our
marketing strategy is to promote our services and products and attract
businesses to our website. Our marketing initiatives include the following:
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o utilizing direct response print advertisements placed primarily in
small business, entrepreneurial, and property management-oriented
magazines and special interest magazines;
o links to industry focused websites;
o advertising by television, radio, banners, affiliated marketing and
direct mail;
o presence at industry tradeshows; and
o entering into relationships with other website providers to increase
our access to Internet business consumers.
Growth Strategy. Our objective is to become a dominant Internet based provider
of continuing education classes and develop certification programs for our
membership of property management professionals and licensed real estate brokers
and agents. Key elements of our strategy include
o create awareness of our products and services;
o increase the number of Internet users to our websites;
o continue our websites;
o develop our relationships with clients;
o provide additional services for clients; and
o pursue relationships with joint venture candidates which will support
our development.
We believe that creating awareness of our website is critical in our effort to
be a dominant Internet provider of continuing education classes and develop
certification programs for our membership of property management professionals
and licensed real estate brokers and agents.
Our Competition. While we compete with traditional "brick and mortar" providers
of continuing education classes and develop certification programs, we believe
that we will also compete with other Internet based companies and businesses
that have developed and are in the process of developing websites which will be
competitive with the products developed and offered by us. There can be no
assurance that other websites or products which are functionally equivalent or
similar to our websites and products have not been developed or are not in
development. Many of these competitors have greater financial and other
resources, and more experience in research and development, than us.
Government Regulation. We believe that we may need governmental approval for our
continuing education classes and certification programs. Our business is subject
to the California Department of Real Estate regulation and other federal and
state laws relating to the continuing education classes and certification
programs. We anticipate that we will be in compliance with all laws, rules and
regulations material to our operations.
There is currently only a small body of laws and regulations directly applicable
to access to or commerce on the Internet. However, due to the increasing
popularity and use of the Internet, it is possible that a number of laws and
regulations may be adopted at the international, federal, state and local levels
with respect to the Internet, covering issues such as user privacy, freedom of
expression, pricing, characteristics and quality of products and services,
taxation, advertising, intellectual property rights, information security and
the convergence of traditional telecommunications services with Internet
communications. Moreover, a number of laws and regulations have been proposed
and are currently being considered by federal, state and foreign legislatures
with respect to these issues. The nature of any new laws and regulations and the
manner in which existing and new laws and regulations may be interpreted and
enforced cannot be fully determined.
In addition, there is substantial uncertainty as to the applicability to the
Internet of existing laws governing issues such as property ownership,
copyrights and other intellectual property issues, taxation, libel, obscenity
and personal privacy. The vast majority of these laws were adopted prior to the
advent of the Internet and, as a result, did not contemplate the unique issues
and environment of the Internet. Future developments in the law might decrease
the growth of the Internet, impose taxes or other costly technical requirements,
create uncertainty in the market or in some other manner have an adverse effect
on the Internet. These developments could, in turn, have a material adverse
effect on our business, prospects, financial condition and results of
operations.
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We provide our services through data transmissions over public telephone lines
and other facilities provided by telecommunications companies. These
transmissions are subject to regulation by the Federal Communications
Commission, state public utility commissions and foreign governmental
authorities. However, we are not subject to direct regulation by the Federal
Communications Commission or any other governmental agency, other than
regulations applicable to businesses generally. Nevertheless, as Internet
services and telecommunications services converge or the services we offer
expand, there may be increased regulation of our business, including regulation
by agencies having jurisdiction over telecommunications services. Additionally,
existing telecommunications regulations affect our business through regulation
of the prices we pay for transmission services, and through regulation of
competition in the telecommunications industry.
The Federal Communications Commission has ruled that calls to Internet service
providers are jurisdictionally interstate and that Internet service providers
should not pay access charges applicable to telecommunications carriers. Several
telecommunications carriers are advocating that the Federal Communications
Commission regulate the Internet in the same manner as other telecommunications
services by imposing access fees on Internet service providers. The Federal
Communications Commission is examining inter-carrier compensation for calls to
Internet service providers, which could affect Internet service providers' costs
and consequently substantially increase the costs of communicating via the
Internet. This increase in costs could slow the growth of Internet use and
thereby decrease the demand for our services.
Federal legislation imposing limitations on the ability of states to impose new
state taxes on e-commerce was enacted in 1998. The Internet Tax Freedom Act, as
this legislation is known, exempts specific types of sales transactions
conducted over the Internet from multiple or discriminatory state and local
taxation through October 21, 2001. It is possible that this legislation will not
be renewed when it terminates in October 2001. Failure to renew this legislation
or the enactment of new legislation could allow state and local governments to
impose taxes on Internet-based sales and use. Such taxes could decrease the
demand for our products and services or increase our costs of operations.
Patents and Proprietary Rights. Our success depends in part upon our ability to
preserve our trade secrets and operate without infringing the proprietary rights
of other parties. However, we rely on certain proprietary technologies, trade
secrets, and know-how that are not patentable. Although we have not yet
registered an Internet domain name, we anticipate that we will own our Internet
domain name. Under current domain name registration practices, no one else can
obtain an identical domain name, but someone might obtain a similar name, or the
identical name with a different suffix, such as ".org", or with a country
designation. The regulation of domain names in the United States and in foreign
countries is subject to change, and we could be unable to prevent third parties
from acquiring domain names that infringe or otherwise decrease the value of our
domain names.
Our Research and Development. We are not currently conducting any research and
development activities and do not anticipate conducting such activities in the
near future. If we generate significant revenues, we may expand our product line
by entering into relationships with third parties.
Employees. As of October 31, 2000, we have two (2) employees. We do not
currently anticipate that we will hire any employees in the next six months,
unless we generate significant revenues. We believe our future success depends
in large part upon the continued service of our key senior management personnel
and our ability to attract and retain managerial personnel. From time-to-time,
we anticipate that we will use the services of independent contractors and
consultants to support marketing and sales and business development.
Facilities. Our executive, administrative and operating offices are located at
23 Corporate Plaza, Suite 180, Newport Beach, California 92663. Robert A.
Younker, our President and a director, currently provides office space to us at
no charge.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Information in this registration statement contains "forward looking statements"
which can be identified by the use of forward-looking words such as "believes",
"estimates", "could", "possibly", "probably", "anticipates",
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"estimates", "projects", "expects", "may", "will", or "should" or other
variations or similar words. No assurances can be given that the future results
anticipated by the forward-looking statements will be achieved. The following
matters constitute cautionary statements identifying important factors with
respect to those 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. Among the key factors
that have a direct bearing on our results of operations are the effects of
various governmental regulations, the fluctuation of our direct costs and the
costs and effectiveness of our operating strategy. Other factors could also
cause actual results to vary materially from the future results anticipated by
those forward-looking statements.
Liquidity and Capital Resources. We had cash resources of approximately $14,547
at September 30, 2000. Our total assets were approximately $14,547 and our total
liabilities were approximately $0 as of September 30, 2000.
Results of Operations. For the fiscal year ended June 30, 2000 and through
September 30, 2000, we have not realized any revenues from operations. We do not
expect to realize any significant revenues in the foreseeable future. We cannot
predict when we will begin realizing positive revenue.
Our Plan of Operation for the Next Twelve Months. Our plan of operation is
materially dependent on our ability to complete the redevelopment of our website
and raise additional capital to market our website. If we are able to raise
additional capital or generate significant revenues, we anticipate that those
revenues will be used to market our website, provide us with working capital and
pay our legal and accounting fees for the next twelve months.
We are currently conducting a private placement of 150,000 shares of our common
stock at a purchase price of $1.00 per share in transactions which we believe
satisfy the requirements of that certain exemption from the registration and
prospectus delivery requirements of the Securities Act of 1933, which exemption
is specified by the provisions of Section 4(2) of that act and Rule 506 of
Regulation D promulgated pursuant to that act by the Securities and Exchange
Commission. Specifically, we are offering the shares to purchasers whom we
believe are accredited investors, as that term is defined under applicable
federal and state securities laws, and no more than 35 non-accredited investors.
As of October 31, 2000, we have raised approximately $65,000.
In our opinion, our available funds will satisfy our working capital
requirements through February 2001. Our forecast of the period of time through
which our financial resources will be adequate to support our operations is a
forward-looking statement that involves risks and uncertainties, and actual
results could vary as a result of a number of factors.
We anticipate that we will need to raise additional capital within the next 12
months, including cash for the following:
o development of our website;
o increased operating expenses;
o marketing and promotion of our products and services; and
o further implementation of our business strategies.
We cannot guaranty that we will have access to the capital markets in the
future, or that financing will be available on acceptable terms to satisfy our
cash requirements to implement our business strategies. Our inability to access
the capital markets or obtain acceptable financing could have a material adverse
effect on our results of operations and financial condition. To the extent that
additional capital is raised through the sale of equity or equity-related
securities, the issuance of such securities could result in dilution of our
stockholders. We cannot guaranty that additional funding will be available on
favorable terms. If adequate funds are not available within the next 12 months,
we may be required to limit our proposed website development activities or to
obtain funds through entering into arrangements with collaborative partners.
Our prospects must be considered speculative, considering the risks, expenses,
and difficulties frequently encountered in the establishment of a new business,
specifically the risks inherent in the development of electronic commerce.
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Our business is subject to numerous risk factors, including the following:
We anticipate that we will need to raise additional capital to complete our
website development and market our website.
To complete our development and market our proposed website, we anticipate that
we will be required to raise additional funds. We believe that we may be able to
acquire additional financing at commercially reasonable rates. We cannot
guaranty that we will be able to obtain additional financing at commercially
reasonable rates, or at all. We anticipate that we will expend in the future,
substantial funds on the development and marketing and promotion of our website.
The minimum amount of funding necessary to complete our current website
redevelopment is approximately $25,000. Our failure to obtain additional
financing would significantly limit or eliminate our ability to fund our sales
and marketing activities, which would have a material adverse effect on our
ability to continue our operation and compete with other providers.
We anticipate that we may seek additional funding through public or private
sales of our securities, including equity securities, or through commercial or
private financing arrangements. However, adequate funds, whether through
financial markets or collaborative or other arrangements with corporate partners
or from other sources, may not be available when needed or on terms acceptable
to us. In the event that we are not able to obtain additional funding on a
timely basis, we may be required to scale back any proposed operations or
eliminate certain or all of our marketing programs, either of which could have a
material adverse effect on our results of operations.
We operate in a highly competitive industry and we may not have adequate
resources to market our products in order to compete successfully.
Competition in the Internet industry is intense. We compete directly with other
companies and businesses that have developed and are in the process of
developing online associations of property management professionals and licensed
real estate brokers and agents which are functionally equivalent or similar to
our proposed online association. We expect that these competitors who have
developed similar websites will market those websites to our target customers,
which will significantly affect our ability to compete.
Most of our competitors have substantially greater experience, financial and
technical resources, marketing and development capabilities than we do. Many of
those competitors with greater financial resources can afford to spend more
resources than we can to market their websites. We cannot guaranty that we will
succeed in marketing our websites and generating revenues. We cannot guaranty
that our competitors will not succeed in marketing their websites and generating
revenues.
Our ability to generate business depends on continued growth of online commerce.
Our ability to generate business through our proposed website depends on
continued growth in the use of the Internet and in the acceptance and volume of
commerce transactions on the Internet. Rapid growth in the use of the Internet
and online services is a recent phenomenon. This growth may not continue. A
sufficiently broad base of consumers may not accept, or continue to use, the
Internet as a medium of commerce. We cannot guaranty that the number of Internet
users will continue to grow in general or with respect to our site or that
commerce over the Internet will become more widespread or that our sales will
grow at a comparable rate. As is typical in the case of a new and rapidly
evolving industry, demand and market acceptance for recently introduced services
are subject to a high level of uncertainty. The Internet may not prove to be a
viable commercial marketplace for a number of reasons including but not limited
to:
o the lack of acceptable security technologies;
o the lack of access and ease of use;
o congestion of traffic;
o inconsistent quality of service and the lack of availability of cost
effective, high speed service;
o potentially inadequate development of the necessary infrastructure;
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o governmental regulation and/or taxation; and
o uncertainty regarding intellectual property ownership or the
enforcement of intellectual property rights.
We may not be able to attract and expand our online traffic.
We believe that developing, maintaining and enhancing our proposed website will
be a critical aspect of our efforts to attract and expand our online traffic.
The number of Internet sites that offer competing services increases the
importance of establishing and maintaining brand recognition. Many of these
Internet sites already have well-established brands in online services or the
real estate industry generally. Promotion of our website will depend largely on
our success in providing a high-quality online experience supported by a high
level of customer service. In addition, we intend to increase our spending on
marketing and advertising with the intention of expanding the recognition of our
website to attract and retain online users and to respond to competitive
pressures. However, our proposed expenditures may not be effective to promote
our brand or that our marketing efforts generally will achieve our goals.
We may not be able to maintain our web domain name, which may cause confusion
among web users and decrease the value of our brand name.
We currently anticipate that we will own a web domain name relating to our
brand. Currently, the acquisition and maintenance of domain names is regulated
by governmental agencies and their designees. The regulation of domain names in
the U.S. and in foreign countries is expected to change in the near future. As a
result, we may not be able to maintain our domain name. These changes could
include the introduction of additional top-level domains, which could cause
confusion among web users trying to locate our sites. Furthermore, the
relationship between regulations governing domain names and laws protecting
trademarks and similar proprietary rights is unclear. We may be unable to
prevent third parties from acquiring domain names that are similar to ours. The
acquisition of similar domain names by third parties could cause confusion among
web users attempting to locate our site and could decrease the value of our
brand name and the use of our site.
Although Internet commerce has yet to attract significant regulation, government
regulation may result in fines, penalties, taxes or other costs that may reduce
our future earnings.
Our Internet and e-commerce businesses currently are not directly regulated by
any governmental agency, other than through regulations applicable to businesses
generally. However, due to the increasing popularity and use of the Internet, it
is possible that a number of laws and regulations may be adopted with respect to
the Internet covering, among other things, the following issues:
o taxation of consumer transactions;
o advertising;
o user privacy;
o unsolicited marketing;
o pricing;
o quality of products and services;
o intellectual property;
o information security; and
o anti-competitive practices.
The adoption of laws or regulations covering these issues may decrease the
growth of Internet commerce. Such laws could decrease the demand for our
products and services, increase our cost of doing business, or otherwise have an
adverse effect on our business, operating results or financial condition.
Moreover, the applicability to the Internet of existing laws governing issues
including intellectual property ownership, libel and personal privacy is
uncertain. If these existing laws were to be applied to the Internet, our
business may be harmed.
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Taxing authorities in a number of states are currently reviewing the appropriate
tax treatment of companies engaged in Internet commerce. New state tax
regulations may subject us to additional state sales, use and income taxes. The
adoption of any of these laws or regulations may decrease the growth of Internet
usage or the acceptance of Internet commerce which could, in turn, decrease the
demand for our products and services, increase costs and otherwise have a
material adverse effect on our business, results of operations and financial
condition.
Our proposed computer infrastructure may suffer security breaches. Any such
breaches could jeopardize confidential information transmitted over the
Internet, cause interruptions in our operations or cause us to have liability to
third parties.
We intend to rely on technology that is designed to facilitate the secure
transmission of confidential information. Our proposed computer infrastructure
will be potentially vulnerable to physical or electronic computer break-ins,
viruses and similar disruptive problems. A party who is able to circumvent our
security measures could misappropriate proprietary information, jeopardize the
confidential nature of information transmitted over the Internet or cause
interruptions in our operations. Concerns over the security of Internet
transactions and the privacy of users could also inhibit the growth of the
Internet in general, particularly as a means of conducting commercial
transactions. To the extent that our activities involve the storage and
transmission of proprietary information, including personal financial
information, security breaches could expose us to a risk of financial loss,
litigation and other liabilities. Our insurance does not currently protect us
against these losses. Any security breach would have a material adverse effect
on our business, results of operations and financial condition.
Rapid technological changes may render our technology obsolete or decrease the
competitiveness of our services.
To become competitive in the online real estate industry, we must enhance and
improve the functionality and features of our proposed website. The Internet and
the online commerce industry are rapidly changing. In particular, the online
real estate industry is characterized by increasingly complex systems and
infrastructures. If competitors introduce new services with new technologies, or
if new industry standards and practices emerge, our proposed website and
proprietary technology and systems may become obsolete. Our future success will
depend on our ability to do the following:
o enhance our existing services;
o develop and license new services and technologies that address the
increasingly sophisticated and varied needs of our prospective
customers and suppliers; and
o respond to technological advances and emerging industry standards and
practices on a cost-effective and timely basis.
Developing our websites and other proprietary technology entails significant
technical and business risks. We may use new technologies ineffectively or we
may fail to adapt our websites, transaction-processing systems and network
infrastructure to customer requirements or emerging industry standards. If we
face material delays in introducing new services, products and enhancements, our
customers and suppliers may forego the use of our services and use those of our
competitors.
Our officers, directors and principal security holders own approximately 98.29%
of our outstanding shares of common stock.
Our directors, officers and principal (greater than 5%) security holders, taken
as a group, together with their affiliates, beneficially own, in the aggregate,
approximately 98.29% of our outstanding shares of common stock. Certain
principal security holders are our directors or executive officers. Such
concentrated control of us may adversely affect the price of our common stock.
These security holders may also be able to exert significant influence, or even
control, matters requiring approval by our security holders, including the
election of directors, as a result of such ownership. In
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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.
We lack a public market for shares of our common stock, which may make it
difficult for investors to sell their shares.
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. 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 in the high technology sector may have a significant impact on the
market price of our shares. 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.
Item 3. Description of Property.
Property held by Us. As of the dates specified in the following table, we held
the following property in the following amounts:
============================================================
Property September 30, 2000
------------------------------------------------------------
Cash and equivalents $14,547.00
------------------------------------------------------------
Property & Equipment, net $0.00
============================================================
We define cash equivalents as all highly liquid investments with a maturity of 3
months or less when purchased. We do not presently own any interests in real
estate. We do not presently own any inventory or equipment.
Our Facilities. We do not own any real property. Our executive, administrative
and operating offices are located at 23 Corporate Plaza, Suite 180, Newport
Beach, California 92663. Robert A. Younker, our President and a director,
currently provides office space to us at no charge.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
Security Ownership of Certain Beneficial Owners. Other than directors and
officers, there are no beneficial owners of 5% or more of our issued and
outstanding common stock.
Security Ownership by Management. The following table specifies the number of
shares of common stock owned by our officers and directors.
<TABLE>
<CAPTION>
===================================================================================================
Title of Class Name of Beneficial Owner Amount of Beneficial Owner Percent of Class
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Robert Younker, President, 4,500,000 shares 64.10%
Director
---------------------------------------------------------------------------------------------------
Common Stock Carol Jean Gehlke, Secretary, 2,000,000 shares 28.49%
Treasurer, Director
---------------------------------------------------------------------------------------------------
Common Stock Calvin K. Mees, Director 400,000 shares 5.70%
---------------------------------------------------------------------------------------------------
Common Stock All directors and 98.29%
named executive officers
as a group
===================================================================================================
</TABLE>
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Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. In accordance with Securities and Exchange
Commission rules, shares of our common stock which may be acquired upon exercise
of stock options or warrants which are currently exercisable or which become
exercisable within 60 days of the date of the table are deemed beneficially
owned by the optionees. Subject to community property laws, where applicable,
the persons or entities named in the table above have sole voting and investment
power with respect to all shares of our common stock indicated as beneficially
owned by them.
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.
Executive Officers and Directors. We are dependent on the efforts and abilities
of certain of our senior management. The interruption of the services of key
management could have a material adverse effect on our operations, profits and
future development, if suitable replacements are not promptly obtained. We have
not entered into employment agreements with any of our key executives. We cannot
guaranty that each executive will remain with us. In addition, our success
depends, in part, upon our ability to attract and retain other talented
personnel. Although we believe that our relations with our personnel are good
and that we will continue to be successful in attracting and retaining qualified
personnel, we cannot guaranty that we will be able to continue to do so. Our
officers and directors will hold office until their resignation or removal.
The following table sets forth information regarding our executive officers and
directors as well as other key members of our management.
============================================================================
Name Age Position
----------------------------------------------------------------------------
Robert A. Younker 56 President and a Director
----------------------------------------------------------------------------
Carol Jean Gehlke 47 Secretary, Treasurer and a Director
----------------------------------------------------------------------------
Calvin K. Mees 40 Director
============================================================================
Robert A. Younker. Mr. Younker has been the President and one of our directors
since our inception. Mr. Younker is responsible for management of our day-to-day
operations. Since 1997, Mr. Younker has managed the commercial division of REMAX
Real Estate in Newport Beach. From 1996 to 1997, Mr. Younker worked as a real
estate investment sales agent for Marcus & Millichap, Inc., in Miami and Fort
Lauderdale, Florida. Mr. Younker has been involved in the real estate industry
for approximately 28 years and has possessed a California Real Estate
Salesperson license since 1978. Mr. Younker is not an officer or a director of
any other reporting company.
Carol Jean Gehlke. Ms. Gehlke has been the Secretary, Treasurer and one of our
directors since our inception. Ms. Gehlke is responsible for day-to-day
operations as well as our sales and marketing activities. Since 1986, Ms. Gehlke
has been the Chief Executive Officer of REO Nationwide Outsource Services which
manages a network of real estate agents who process and liquidate real estate
owned (REO) properties for lenders and servicers nationally. Ms. Gehlke has
extensive experience in the real estate industry and possesses a California Real
Estate Salesperson license since 1980. Ms. Gehlke graduated from the University
of California, Irvine with a Bachelor of Arts in urban planning in 1975. Ms.
Gehlke is not an officer or a director of any other reporting company.
Calvin K. Mees. Mr. Mees has been one of our directors since our inception. Mr.
Mees has been self-employed as a small business financial consultant since March
1996. Mr. Mees was a securities broker and account executive with Lew Lieber
Baum & Company from April 1994 through March 1996, and held a Series 7 general
securities representative license until March 1996. Mr. Mees is currently an
officer and a director of the CATNK, Inc., a Nevada corporation.
11
<PAGE>
There is no family relationship between any of our officers or directors. 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 any of our officers or directors from engaging in or continuing any
conduct, practice or employment in connection with the purchase or sale of
securities, or convicting such person of any felony or misdemeanor involving a
security, or any aspect of the securities business or of theft or of any felony,
nor are any of the officers or directors of any corporation or entity affiliated
with us so enjoined.
Item 6. Executive Compensation.
Any compensation received by our officers, directors, and management personnel
will be determined from time to time by our Board of Directors. Our officers,
directors, and management personnel will be reimbursed for any out-of-pocket
expenses incurred on our behalf.
Summary Compensation Table. The table set forth below summarizes the annual and
long-term compensation for services in all capacities to us for the year ended
payable to our President and our other executive officers whose total annual
salary and bonus is anticipated to exceed $50,000 during the year ending
December 31, 2000. Our Board of Directors may adopt an incentive stock option
plan for our executive officers which would result in additional compensation.
<TABLE>
<CAPTION>
===================================================================================================================================
Name and Principal Position Year Annual Bonus ($) Other Annual Compensation ($) All Other Compensation
Salary ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert Younker, President 2000 None None None None
-----------------------------------------------------------------------------------------------------------------------------------
Carol Jean Gehlke, Secretary, Treasurer 2000 None None None None
===================================================================================================================================
</TABLE>
Compensation of Directors. Our directors who are also our employees receive no
extra compensation for their service on our Board of Directors.
Compensation of Officers. As of October 31, 2000, our officers have received no
compensation for their services provided to us.
Employment Contracts. We anticipate that we will enter into employment contracts
with Robert Younker and Carol Jean Gehlke.
Stock Option Plan. We anticipate that we will adopt a stock option plan,
pursuant to which shares of our common stock will be reserved for issuance to
satisfy the exercise of options. The stock option plan will be designed to
retain qualified and competent officers, employees, and directors. Our Board of
Directors, or a committee thereof, shall administer the stock option plan and
will be authorized, in its sole and absolute discretion, to grant options
thereunder to all of our eligible employees, including officers, and to our
directors, whether or not those directors are also our employees. Options will
be granted pursuant to the provisions of the stock option plan on such terms,
subject to such conditions and at such exercise prices as shall be determined by
our Board of Directors. Options granted pursuant to the stock option plan shall
not be exercisable after the expiration of ten years from the date of grant.
Item 7. Certain Relationships and Related Transactions.
Conflicts Related to Other Business Activities. The persons serving as our
officers and directors have 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 those persons may occur from time to time.
12
<PAGE>
We will attempt to resolve any such conflicts of interest in our favor. Our
officers and directors are accountable to us and our shareholders as
fiduciaries, which requires that such officers and directors exercise good faith
and integrity in handling our affairs. A shareholder may be able to institute
legal action on our behalf or on behalf of that shareholder and all other
similarly situated shareholders to recover damages or for other relief in cases
of the resolution of conflicts in any manner prejudicial to us.
Related Party Transactions. There have been no related party transactions,
except for the following:
Robert A. Younker, our President and a director, currently provides office space
to us at no charge.
With regard to any future related party transaction, we plan to fully disclose
any and all related party transactions, including, but not limited to, the
following:
o disclosing such transactions in prospectus' where required;
o disclose in any and all filings with the Securities and Exchange
Commission, where required;
o obtain uninterested directors consent; and
o obtain shareholder consent where required.
Transactions with Promoters. Robert A. Younker, Carol Jean Gehlke, Calvin K.
Mees, Bruce Younker, Richard Ross, Mark Jaques and Cindy Podosin were issued
6,950 shares of our $1.00 par value common stock in exchange for their services
to us valued at $6,950.
Item 8. Description of Securities.
Our authorized capital stock originally consisted of 7,000 shares of $1.00 par
value common stock. On June 26, 2000, we amended our Articles of Incorporation
to authorize 100,000,000 shares of $.001 par value common stock, of which
7,020,000 are issued and outstanding as of October 31, 2000, and 50,000,000
shares of $.001 par value preferred stock, of which no such shares are issued
and outstanding as of October 31, 2000. On July 10, 2000, our Board of Directors
authorized a forward split of 1000 to 1.
Each shareholder of our common stock is entitled to a pro rata share of cash
distributions made to shareholders, 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. Therefore, 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 therefore. 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 any
preference in relation to our common stock. Holders of shares of our common
stock have no conversion, preemptive or other subscription rights, and there are
no redemption provisions applicable to our common stock.
Dividend Policy. We have never declared or paid a cash dividend on our capital
stock. We do not expect to pay cash dividends on our common stock in the
foreseeable future. We currently intend to retain our earnings, if any, for use
in our business. Any dividends declared in the future will be at the discretion
of our Board of Directors and subject to any restrictions that may be imposed by
our lenders.
13
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
Reports to Security Holders. Our securities are not listed for trading on any
exchange or quotation service. We are not required to comply with the timely
disclosure policies of any exchange or quotation service. The requirements to
which we would be subject if our securities were so listed typically include the
timely disclosure of a material change or fact with respect to our affairs and
the making of required filings. Although we are not required to deliver an
annual report to security holders, we intend to provide an annual report to our
security holders, which will include audited financial statements.
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, 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 Securities and Exchange Commission
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.
There are no outstanding options or warrants to purchase, or securities
convertible into, shares of our common stock. There are no outstanding shares of
our common stock that we have agreed to register under the Securities Act for
sale by security holders. The approximate number of holders of record of shares
of our common stock is twenty-nine (29).
There have been no cash dividends declared on our common stock. Dividends are
declared at the sole discretion of our Board of Directors.
On July 10, 2000, our Board of Directors authorized a forward split of 1000
to 1.
Penny Stock Regulation. Shares of our common stock will probably be subject to
rules adopted the Securities and Exchange Commission 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 those 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 level of risk 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 securities' laws;
o a brief, clear, narrative description of a dealer market, including
"bid" and "ask" prices for penny stocks and the 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;
14
<PAGE>
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 acknowledgment 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.
Holders of shares of our common stock may have difficulty selling those shares
because our common stock will probably be subject to the penny stock rules.
Item 2. Legal Proceedings.
There are no legal actions pending against us nor are any legal actions
contemplated by 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 August 25, 2000, we issued 5,000 shares of our common stock to Michael
Muellerleile, in a transaction which we believe satisfies the requirements of
that certain exemption from the registration and prospectus delivery
requirements of the Securities Act of 1933, which exemption is specified by the
provisions of Section 4(2) of that act and Rule 506 of Regulation D promulgated
pursuant to that act by the Securities and Exchange Commission. The shares were
issued in exchange for legal services provided to us.
On or about August 9, 2000, we issued 65,000 shares of our common stock for
$1.00 per share. The shares were issued in a transaction which we believe
satisfies the requirements of that certain exemption from the registration and
prospectus delivery requirements of the Securities Act of 1933, which exemption
is specified by the provisions of Section 4(2) of that act and Rule 506 of
Regulation D promulgated pursuant to that act by the Securities and Exchange
Commission. Specifically, the offer was made to "accredited investors", as that
term is defined under applicable federal and state securities laws, and no more
than 35 non-accredited investors. The value of the shares was arbitrarily set by
us and had no relationship to our assets, book value, revenues or other
established criteria of value. There were no commissions paid on the sale of
those shares. The net proceeds were $65,000. All twenty one purchasers of shares
of our common stock were business associates, personal friends or family members
of Robert A. Younker, our President and one of our directors, or Carol Jean
Gehlke, our Secretary, Treasurer and one of our directors.
In May 1998, we issued 6,950 shares of our $1.00 par value common stock to
Robert A. Younker, Carol Jean Gehlke, Calvin K. Mees, Bruce Younker, Richard
Ross, Mark Jaques and Cindy Podosin in exchange for their services in reliance
on the exemption specified by the provisions of Section 4(2) of the Securities
Act of 1933, as amended. On June 26, 2000, we amended our Articles of
Incorporation to authorize 100,000,000 shares of $.001 par value common stock.
On July 10, 2000, our Board of Directors authorized a forward split of 1000 to
1.
15
<PAGE>
Item 5. Indemnification of Directors and Officers.
Article VIII of our Articles of Incorporation provides, among other things, that
our officers or directors shall not be personally liable to us or our
shareholders for monetary damages for breach of fiduciary duty as an officer or
director, except for liability
o for any breach of such director's duty of loyalty to us or our
security holders;
o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
o for unlawful payments of dividends or unlawful stock purchase or
redemption by the corporation; or
o for any transaction from which such officer or director derived any
improper personal benefit.
Accordingly, our officers or directors may have no liability to our shareholders
for any mistakes or errors of judgment or for any act or omission, unless such
act or omission involves intentional misconduct, fraud, or a knowing violation
of law or results in unlawful distributions to our shareholders.
Indemnification Agreements. We anticipate that we will enter into
indemnification agreements with each of our executive officers pursuant to which
we will agree to indemnify each such person for all expenses and liabilities,
including criminal monetary judgments, penalties and fines, incurred by such
person in connection with any criminal or civil action brought or threatened
against such person by reason of such person being or having been our officer or
director or employee. In order to be entitled to indemnification by us, such
person must have acted in good faith and in a manner such person believed to be
in our best interests and, with respect to criminal actions, such person must
have had no reasonable cause to believe his or her conduct was unlawful.
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 the Act and is, therefore, unenforceable.
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-1
2 Audited Balance Sheets F-2
as of June 30, 2000
3 Audited Statement of Operations F-3
for the Years Ended June 30, 2000 and 1999
and for the Period of Inception to June 30, 2000
4 Audited Statements of Stockholders' F-4
Equity as of June 30, 2000
5 Audited Statements of Cash Flows F-5
for the Years Ended June 30, 2000 and 1999
and for the Period of Inception to June 30, 2000
6 Notes to Financial Statements F-6 through F-8
16
<PAGE>
7 Unaudited Balance Sheet F-9
as of September 30, 2000
8 Unaudited Statement of Operations F-10
for the Period Ended September 30, 2000 and 1999
and for the Period of Inception to September 30, 2000
9 Unaudited Statements of Stockholders' F-11
Equity as of September 30, 2000
10 Unaudited Statements of Cash Flows F-12
for the Period Ended September 30, 2000 and 1999
and for the Period of Inception to September 30, 2000
11 Notes to Financial Statements F-13
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* E-1 through E-3
3.2 Certificate of Amendment of Articles of
Incorporation* E-4
3.3 Bylaws* E-5 through E-11
27 Financial Data Schedule E-12
* Included in Registration Statement on Form 10-SB filed on September 7, 2000.
17
<PAGE>
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 October 31, 2000.
B Y & C, Management, Inc.,
a Florida corporation
By: /s/ Robert Younker
------------------------------
Robert Younker
Its: President, Director
18
<PAGE>
Board of Directors
B Y & C Management, Inc.
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheet of B Y & C Management, Inc.
(Company) as of June 30, 2000 and the related statement of operations, statement
of stockholders' equity, and the statement of cash flows for the years then
ended June 30, 2000 and 1999 and from April 28, 1998 (inception) to June 30,
2000. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these 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 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.
I believe that my audit provides a reasonable basis for my opinion.
The Company is a development stage enterprise, as defined in Financial
Accounting Standards Board No. 7. The Company is devoting all of its present
efforts in securing and establishing a new business, and its planned principal
operations have not commenced, and, accordingly, no revenue has been derived
during the organizational period.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of June 30, 2000 and
the results of its operations for the year then ended in conformity with
generally accepted accounting principles.
S/ Clyde Bailey
Clyde Bailey
Certified Public Accountant
San Antonio, Texas
August 28, 2000
F-1
<PAGE>
B Y & C Management Inc.
(A Development Stage Enterprise)
Balance Sheet
As of June 30, 2000
ASSETS
Current Assets
Cash $ 251
-------
Total Current Assets $ 251
-------
Total Assets 251
=======
LIABILITIES
Current Liabilities
Taxes Payable --
-------
Total Current Liabilities --
-------
Total Liabilities --
Commitments and Contingencies --
STOCKHOLDERS' EQUITY
Preferred Stock --
50,000,000 authorized shares, par value $.001
no shares issued and outstanding
Common Stock 6,950
100,000,000 authorized shares, par value $.001
6,950,000 shares issued and outstanding
Additional Paid-in-Capital --
Accumulated Deficit (6,699)
-------
Total Stockholders' Equity (Deficit) 251
-------
Total Liabilities and Stockholders' Equity 251
=======
The accompanying notes are integral part of consolidated financial statements.
F-2
<PAGE>
B Y & C Management, Inc.
(A Development Stage Enterprise)
Statement of Operations
<TABLE>
<CAPTION>
-------------------------- ------------
For the Year Ended From 4/28/98
June 30 to June 30
-------------------------- ------------
2000 1999 2000
----------- ----------- ------------
<S> <C> <C> <C>
Revenues:
Revenues -- 10,000 126,000
----------- ----------- -----------
Total Revenues $ -- $ -- $ 126,000
Expenses:
Consulting 2,350 -- 56,226
Professional Fees -- 35,879 39,085
Operating Expenses 9,122 16,746 23,117
----------- ----------- -----------
Total Expenses 11,472 52,625 118,428
Net Income (Loss) from Operations $ (11,472) $ (42,625) $ 7,572
Other Income and Expenses:
Sale of Assets (14,271) -- (14,271)
----------- ----------- -----------
Net Income before Taxes $ (25,743) $ (42,625) $ (6,699)
Provision for Income Taxes:
Income Tax Benefit -- -- --
Net Income (Loss) $ (25,743) $ (42,625) $ (6,699)
=========== =========== ===========
Basic and Diluted Earnings Per Common Share (0.004) (0.006) (0.001)
----------- ----------- -----------
Weighted Average number of Common Shares
used in per share calculations 6,950,000 6,950,000 6,950,000
=========== =========== ===========
</TABLE>
The accompanying notes are integral part of consolidated financial statements.
F-3
<PAGE>
B Y & C Management, Inc.
(A Development Stage Enterprise)
Statement of Stockholders' Equity
As of June 30, 2000
<TABLE>
<CAPTION>
$0.001 Paid-In Accumulated Stockhoders'
Shares Par Value Capital Deficit Equity
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance, April 28, 1998 -- $ -- $ -- $ -- $ --
Stock Issuance* 6,950,000 6,950 -- -- 6,950
Net Income (Loss) 61,669 61,669
--------- --------- --------- --------- ---------
Balance, June 30, 1998 6,950,000 6,950 -- 61,669 68,619
Net Income (Loss) (42,625) (42,625)
--------- --------- --------- --------- ---------
Balance, June 30, 1999 6,950,000 6,950 -- 19,044 25,994
Net Income (Loss) (25,743) (25,743)
--------- --------- --------- --------- ---------
Balance May 31, 2000 6,950,000 $ 6,950 $ -- $ (6,699) $ 251
========= ========= ========= ========= =========
</TABLE>
*Retroactively Restated
The accompanying notes are integral part of consolidated financial statements.
F-4
<PAGE>
B Y & C Management Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
<TABLE>
<CAPTION>
-------------------------- ------------
For the Year Ended From 4/28/98
June 30 to June 30
-------------------------- ------------
2000 1999 2000
----------- ----------- ------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss) $(25,743) $(42,625) $ (6,699)
Changes in operating assets and liabilities:
Stock issued for Services -- -- 6,950
-------- -------- --------
Total Adjustments -- -- 6,950
-------- -------- --------
Net Cash Used in Operating Activities $(25,743) $(42,625) $ 251
Cash Flows from Investing Activities:
Assets Sold 25,081 -- --
Investments Purchased -- (3,633) --
-------- -------- --------
Net Cash Used in Investing Activities $ 25,081 $ (3,633) $ --
-------- -------- --------
Cash Flows from Financing Activities:
Note Payable -- -- --
Common Stock -- -- --
-------- -------- --------
Net Cash Provided for Financing Activities $ -- $ -- $ --
-------- -------- --------
Net Increase (Decrease) in Cash $ (662) $(46,258) $ 251
Cash Balance, Begin Period 913 47,171 --
-------- -------- --------
Cash Balance, End Period $ 251 $ 913 $ 251
======== ======== ========
Supplemental Disclosures:
Cash Paid for interest $ -- $ -- $ --
Cash Paid for income taxes $ -- $ -- $ --
Stock Issued for Services $ -- $ -- $ 6,950
</TABLE>
The accompanying notes are integral part of consolidated fina ncial statements.
F-5
<PAGE>
B Y & C Management, Inc.
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Organization
B Y & C Management, Inc. ("the Company") was incorporated under the laws of the
State of Florida on April 28, 1998 for the purpose to promote and carry on any
lawful business for which a corporation may be incorporated under the laws of
the State of Florida. The company has a total of 100,000,000 authorized common
shares with a par value of $.001 per share and with 6,950,000 common shares
issued and outstanding as of June 30, 2000. The Company has a total of
50,000,000 authorized shares of preferred stock with a par value of $.001 and no
shares are outstanding. On June 27, 2000, the Company filed a Certificate of
Amendment to the Articles of Incorporation with the Florida Corporation
Commission to increase the authorized common shares to 100,000,000, authorize
50,000,000 in preferred shares, and change the par value to $.001. The Company
has been mostly inactive since inception and has little or no operating revenues
or expenses.
Development Stage Enterprise
The Company is a development stage enterprise, as defined in Financial
Accounting Standards Board No. 7. The Company is devoting all of its present
efforts in securing and establishing a new business, and its planned principal
operations have not commenced, and, accordingly, no revenue has been derived
during the organizational period other than the initial revenue of $126,000.
Fixed Assets
The Company has no fixed assets at this time.
Federal Income Tax
The Company has adopted the provisions of Financial Accounting Standards Board
Statement No. 109, Accounting for Income Taxes. The Company accounts for income
taxes pursuant to the provisions of the Financial Accounting Standards Board
Statement No. 109, "Accounting for Income Taxes", which requires an asset and
liability approach to calculating deferred income taxes. The asset and liability
approach requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between the carrying
amounts and the tax basis of assets and liabilities.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure on
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F-6
<PAGE>
B Y & C Management, Inc.
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies (con't)
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. Revenues are recognized when earned and expenses when incurred.
Fixed assets are stated at cost. Depreciation and amortization using the
straight-line method for financial reporting purposes and accelerated methods
for income tax purposes.
Earnings per Common Share
The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods.
Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.
Diluted earnings per share are computed on the basis of the weighted average
number of common shares and dilutive securities outstanding. Dilutive securities
having an anti-dilutive effect on diluted earnings per share are excluded from
the calculation.
Comprehensive Income
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No.130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The Company does not have any assets requiring disclosure
of comprehensive income.
Segments of an Enterprise and Related Information
Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information, supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
establishes standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Company has evaluated this SFAS and does not believe it is
applicable at this time.
F-7
<PAGE>
B Y & C Management, Inc.
Notes to Financial Statements
Note 2 - Common Stock
In April of 1998, a total of 6,950 shares of stock were issued for consulting
services to the founders of the Company. On June 26, 2000, the Company approved
a 1000/1 forward split of the common shares making the total shares outstanding
as 6,950,000 as of June 30, 2000.
Note 3 - Other Income and Expenses
The Company had acquired an automobile in June of 1998 for $21,448. The
automobile was sold for $5,100 in September of 1999 which resulted in a loss of
$16,348. Also, the Company had purchased some stock in March of 1999 and sold
the shares in September of 1999 which resulted in a gain of $2,077.
Note 4 - Related Parties
The Organization has no significant related party transactions and/or
relationships any individuals or entities.
Note 5 - Subsequent Events
There were no other material subsequent events that have occurred since the
balance sheet date that warrants disclosure in these financial statements.
F-8
<PAGE>
B Y & C Management Inc.
(A Development Stage Enterprise)
Balance Sheet
<TABLE>
<CAPTION>
September 30 June 30
2000 2000
------------------------
A S S E T S
(Unaudited) (Audited)
<S> <C> <C>
Current Assets
Cash $ 14,547 $ 251
-------- --------
Total Current Assets 14,547 251
-------- --------
Total Assets $ 14,547 $ 251
======== ========
L I A B I L I T I E S
Current Liabilities
Taxes Payable --
-------- --------
Total Current Liabilities -- --
-------- --------
Total Liabilities -- --
Commitments and Contingencies -- --
S T O C K H O L D E R S ' E Q U I T Y
Preferred Stock --
50,000,000 authorized shares, par value $.001
no shares issued and outstanding
Common Stock 7,020 6,950
100,000,000 authorized shares, par value $.001
7,020,000 and 6,950,000 shares issued and outstanding
Additional Paid-in-Capital 69,930 --
Accumulated Deficit (62,403) (6,699)
-------- --------
Total Stockholders' Equity (Deficit) 14,547 251
-------- --------
Total Liabilities and Stockholders' Equity $ 14,547 $ 251
======== ========
</TABLE>
The accompanying notes are integral part of the financial statements.
F-9
<PAGE>
B Y & C Management Inc.
(A Development Stage Enterprise)
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
---------------------------------- -----------
For the Three Months Ended From 4/28/98
September 30 to Sept 30
---------------------------------- -----------
2000 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
Revenues:
Revenues -- -- 126,000
----------- ----------- -----------
Total Revenues $ -- $ -- $ 126,000
Expenses:
Consulting Services 8,000 2,000 64,226
Professional Fees 42,800 0 76,885
Operating Expenses 4,904 8,464 28,021
----------- ----------- -----------
Total Expenses 55,704 8,464 169,132
Net Income (Loss) from Operations $ (55,704) $ (8,464) $ (43,132)
Other Income and Expenses:
Sale of Assets -- -- (14,271)
----------- ----------- -----------
Net Income before Taxes (55,704) (8,464) (57,403)
Provision for Income Taxes:
Income Tax Benefit -- -- --
Net Income (Loss) $ (55,704) $ (8,464) $ (57,403)
=========== =========== ===========
Basic and Diluted Earnings Per Common Share (0.008) (0.001) (0.008)
----------- ----------- -----------
Weighted Average number of Common Shares 7,000,560 6,950,000 7,000,560
used in per share calculations =========== =========== ===========
</TABLE>
The accompanying notes are integral part of the financial statements.
F-10
<PAGE>
B Y & C Management Inc.
(A Development Stage Enterprise)
Statement of Stockholders' Equity
As of September 30, 2000
<TABLE>
<CAPTION>
$0.001 Paid-In Accumulated Stockholders'
Shares Par Value Capital Deficit Equity
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance, April 28, 1998 -- $ -- $ -- $ -- $ --
Stock Issuance * 6,950,000 6,950 -- -- 6,950
Net Income (Loss) 61,669 61,669
---------- ---------- ---------- ---------- ----------
Balance, June 30, 1998 6,950,000 6,950 -- 61,669 68,619
Net Income (Loss) (42,625) (42,625)
---------- ---------- ---------- ---------- ----------
Balance, June 30, 1999 6,950,000 6,950 -- 19,044 25,994
Net Income (Loss) (25,743) (25,743)
---------- ---------- ---------- ---------- ----------
Balance June 30, 2000 6,950,000 6,950 -- (6,699) 251
Shares Issued for Cash 65,000 65 64,935 65,000
Shares Issued for Services 5000 5 4,995 5,000
Net Income (Loss) (55,704) (55,704)
-------------------------------------------------------------------------------------
Balance September 30, 2000 7,020,000 $ 7,020 $ 69,930 $ (62,403) $ 14,547
=====================================================================================
</TABLE>
The accompanying notes are integral part of the financial statements.
F-11
<PAGE>
B Y & C Management Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
-------------------------- ------------
For the Three Months Ended From 4/28/98
September 30 to Sept 30
-------------------------- ------------
2000 1999 2000
---------- ---------- ------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss) $(55,704) $ (8,464) $(57,403)
Changes in operating assets and liabilities:
Stock issued for Services 5,000 -- 6,950
-------- -------- --------
Total Adjustments 5,000 -- 6,950
-------- -------- --------
Net Cash Used in Operating Activities $(50,704) $ (8,464) $(50,453)
Cash Flows from Investing Activities:
Assets Sold --
Investments Purchased -- -- --
-------- -------- --------
Net Cash Used in Investing Activities $ -- $ -- $ --
-------- -------- --------
Cash Flows from Financing Activities:
Note Payable -- -- --
Common Stock 65,000 -- 65,000
-------- -------- --------
Net Cash Provided for Financing Activities $ 65,000 $ -- $ 65,000
-------- -------- --------
Net Increase (Decrease) in Cash $ 14,296 $ (8,464) $ 14,547
Cash Balance, Begin Period 251 9,123 --
-------- -------- --------
Cash Balance, End Period $ 14,547 $ 659 $ 14,547
======== ======== ========
Supplemental Disclosures:
Cash Paid for interest $ -- $ -- $ --
Cash Paid for income taxes $ -- $ -- $ --
Stock Issued for Services 5,000 -- 6,950
</TABLE>
The accompanying notes are integral part of the financial statements.
F-12
<PAGE>
PART I
Item 1. Financial Statements
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with the generally
accepted accounting principles have been omitted. However, in the opinion of
management, all adjustments (which include only normal recurring accruals)
necessary to present fairly the financial position and results of operations for
the period presented have been made. The results for interim periods are not
necessarily indicative of trends or of results to be expected for the full year.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's registration statement on
Form 10KSB, as amended.
Common Stock
The Company has issued 65,000 shares of Common Stock pursuant to a private
placement memorandum in July 2000. The Company received a total of $65,000 cash
for the common shares issued. Also, the Company issued 5,000 shares of Common
Stock in August 2000 for legal services. The shares for legal services was
valued at $5,000 by the Company.
F-13
