SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
KJMC Acquisition Corporation
(Name of Small Business Issuer in its charter)
Nevada
87-0656948
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8 East Broadway, Suite 620, Salt Lake City, Utah 84111
(Address of Principal Executive Offices including Zip Code)
Issuer's telephone number: 801-532-7858
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
_____________________________ ______________________________
_____________________________ ______________________________
Securities to be registered under Section 12(g) of the Act:
Common, Par Value $0.001
(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
This Form 10-SB contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
For this purpose any statements contained in this Form 10-SB that are
not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may,"
"will," "expect," "believe," "anticipate," "estimate" or "continue" or
comparable terminology are intended to identify forward-looking
statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially
depending on a variety of factors, many of which are not within the
Company's control. These factors include but are not limited to
economic conditions generally and in the industries in which the
Company may participate; competition within the Company's chosen
industry, including competition from much larger competitors;
technological advances and failure by the Company to successfully
develop business relationships.
PART I
Item 1. Description of Business.
KJMC Acquisition Corporation (the "Company") was incorporated on
June 12, 2000 under the laws of the state of Nevada. The Company was
established to engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions. The Company
has been in the development stage since its inception and has no
operations to date other than issuing shares to its original
shareholders.
The Company will attempt to locate and negotiate with a business
entity for the merger of that target company with the Company or a
combination through a stock exchange. In certain instances, the
business combination may be effected through a merger or stock
exchange with a subsidiary of the Company or a target company. No
assurances can be given that the Company will be successful in
locating or negotiating with any target company. The Company has been
formed to provide a method for a foreign or domestic private company
to become a reporting ("public") company whose securities are
qualified for trading in the United States secondary market.
Perceived Benefits. There are certain perceived benefits to being
a reporting company with a class of publicly-traded securities. These
are commonly thought to include the following:
* the ability to use registered securities to make acquisitions of
assets or businesses;
* increased visibility in the financial community;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
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* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital market
Potential Target Companies. A business entity, if any, which may
be interested in a business combination with the Company may include
the following:
* a company for which a primary purpose of becoming public is the use
of its securities for the acquisition of assets or businesses;
* a company which is unable to find an underwriter of its securities
or is unable to find an underwriter of securities on terms acceptable
to it;
* a company which wishes to become public with less dilution of its
common stock than would occur upon an underwriting;
* a company which believes that it will be able to obtain investment
capital on more favorable terms after it has become public;
* a foreign company which may wish an initial entry into the United
States securities market;
* a special situation company, such as a company seeking a public
market to satisfy redemption requirements under a qualified Employee
Stock Option Plan;
* a company seeking one or more of the other perceived benefits of
becoming a public company.
A business combination with a target company will normally result
in the shareholders of the target company holding a majority of the
issued and outstanding common stock of the corporation surviving the
combination, officers and directors of the target company continuing
as management of the corporation surviving the combination. No
assurances can be given that the Company 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 Company is voluntarily
filing this Registration Statement with the Securities and Exchange
Commission and is under no obligation to do so under the Securities
Exchange Act of 1934.
Risk Factors. The Company's business is subject to numerous risk
factors, including the following.
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company
has had no operating history nor any revenues or earnings from
operations. The Company has no significant assets or financial
resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in the
Company incurring a net operating loss which will increase
continuously until the Company can consummate a business combination
with a target company. There is no assurance that the Company can
identify such a target company and consummate such a business
combination.
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SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The
success of the Company's proposed plan of operation will depend to a
great extent on the operations, financial condition and management of
the identified target company. While management will prefer business
combinations with entities having established operating histories,
there can be no assurance that the Company will be successful in
locating candidates meeting such criteria. In the event the Company
completes a business combination, of which there can be no assurance,
the success of the Company's operations will be dependent upon
management of the target company and numerous other factors beyond the
Company's control.
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS. The Company is and will continue to be an insignificant
participant in the business of seeking mergers with and acquisitions
of business entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of companies which maybe merger or acquisition target
candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and
managerial capabilities than the Company and, consequently, the
Company will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business
combination. Moreover, the Company will also compete with numerous
other small public companies in seeking merger or acquisition
candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION--NO
STANDARDS FOR BUSINESS COMBINATION. The Company has no current
arrangement, agreement or understanding with respect to engaging in a
merger with or acquisition of a specific business entity. There can
be no assurance that the Company will be successful in identifying and
evaluating suitable business opportunities or in concluding a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluation by the Company.
There is no assurance that the Company will be able to negotiate a
business combination on terms favorable to the Company. The Company
has not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria which
it will require a target company to have achieved, or without which
the Company would not consider a business combination with such
business entity. Accordingly, the Company may enter into a business
combination with a business entity having no significant operating
history, losses, limited or no potential for immediate earnings,
limited assets, negative net worth or other negative characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While
seeking a business combination, management anticipates devoting only a
limited amount of time per month to the business of the Company. The
Company's sole officer has not entered into a written employment
agreement with the Company and he is not expected to do so in the
foreseeable future. The Company has not obtained key man life
insurance on its officer and director. Notwithstanding the combined
limited experience and time commitment of management, loss of the
services of this individual would adversely affect development of the
Company's business and its likelihood of continuing operations.
CONFLICTS OF INTEREST--GENERAL. The Company's officer and director
participates in other business ventures which may compete directly
with the Company. Additional conflicts of interest and non-arms length
transactions may also arise in the future. Management has adopted a
policy that the Company will not seek a merger with, or acquisition
of, any entity in which any member of management
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serves as an officer, director or partner, or in which they or their
family members own or hold any ownership interest.
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Section
13 of the Securities Exchange Act of 1934 (the "Exchange Act")
requires companies subject thereto to provide certain information
about significant acquisitions including certified financial
statements for the company acquired covering one or two years,
depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target companies to
prepare such financial statements may significantly delay or
essentially preclude consummation of an otherwise desirable business
combination. Acquisition prospects that do not have or are unable to
obtain the required audited statements may not be appropriate for
acquisition so long as the reporting requirements of the Exchange Act
are applicable.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has
neither conducted, nor have others made available to it, market
research indicating that demand exists for the transactions
contemplated by the Company. Even in the event demand exists for a
merger or acquisition of the type contemplated by the Company, there
is no assurance the Company will be successful in completing any such
business combination.
LACK OF DIVERSIFICATION. The Company's proposed operations, even
if successful, will in all likelihood result in the Company engaging
in a business combination with only one business entity.
Consequently, the Company's activities will be limited to those
engaged in by the business entity with which the Company effects a
combination. The Company's inability to diversify its activities into
a number of areas may subject the Company to economic fluctuations
within a particular business or industry and therefore increase the
risks associated with the Company's operations.
REGULATION UNDER INVESTMENT COMPANY ACT. Although the Company will
be subject to regulation under the Exchange Act, management believes
the Company will not be subject to regulation under the Investment
Company Act of 1940, insofar as the Company will not be engaged in the
business of investing or trading in securities. In the event the
Company engages in business combinations which result in the Company
holding passive investment interests in a number of entities, the
Company could be subject to regulation under the Investment Company
Act of 1940. In such event, the Company would be required to register
as an investment company and could be expected to incur significant
registration and compliance costs. The Company has obtained no formal
determination from the Securities and Exchange Commission as to the
status of the Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act could subject the Company to
material adverse consequences.
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination
will, in all likelihood, result in shareholders of a target company
obtaining a controlling interest in the resulting corporation. Any
such business combination may require shareholders of the Company to
sell or transfer all or a portion of the Company's common stock held
by them. The resulting change in control of the Company will likely
result in removal of the present officer and director of the Company
and a corresponding reduction in or elimination of his participation
in the future affairs of the Company.
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REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS
COMBINATION. The Company's primary plan of operation is based upon a
business combination with a business entity which, in all likelihood,
will result in the shareholders of the target company holding a
majority of the outstanding shares of the corporation resulting from
the combination.
TAXATION. Federal and state tax consequences will, in all
likelihood, be major considerations in any business combination the
Company may undertake. Currently, such transactions may be structured
so as to result in tax-free treatment to both companies, pursuant to
various federal and state tax provisions. The Company intends to
structure any business combination so as to minimize the federal and
state tax consequences to both the Company and the target company;
however, there can be no assurance that such business combination will
meet the statutory requirements of a tax-free reorganization or that
the parties will obtain the intended tax-free treatment upon a
transfer of stock or assets. A non-qualifying reorganization could
result in the imposition of both federal and state taxes which may
have an adverse effect on both parties to the transaction.
Reports to Security Holders. Prior to the filing of this
registration statement on Form 10-SB, the Company was not subject to
the reporting requirements of Section 12(a) or 15(d) of the Exchange
Act. Upon effectiveness of this registration statement, the Company
will file annual and quarterly reports with the Securities and
Exchange Commission ("SEC"). The public may read and copy any
materials filed by the Company with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SED-0330. The Company is an
electronic filer and the SEC maintains an Internet site that contains
reports and other information regarding the Company, which may be
viewed at
Item 2. Plan of Operation
The Company intends to merge with or acquire a business entity in a
stock exchange. The Company has no particular business combination in
mind and has not entered into any negotiations regarding such a
combination. Neither the Company's officer and director nor any
affiliate has engaged in any negotiations with any representative of
any company regarding the possibility of a merger or stock exchange
between the Company and such other company. Management anticipates
seeking out a target company through solicitation. Such solicitation
may include newspaper or magazine advertisements, mailings and other
distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World
Wide Web sites and similar methods. No estimate can be made as to the
number of persons who will be contacted or solicited. Management may
engage in such solicitation directly or may employ one or more other
entities to conduct or assist in such solicitation. Management and
its affiliates pay referral fees to consultants and others who refer
target businesses for mergers with public companies in which
management and its affiliates have an interest. Payments are made if
a business combination occurs, and may consist of cash or a portion of
the stock in the Company retained by management and its affiliates, or
both.
The Company has no full time employees. The Company's president
has agreed to allocate a portion of his time to the activities of the
Company, without compensation. The president anticipates that the
business plan of the Company can be implemented by him devoting no
more than 10 hours per
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month to the business affairs of the Company and, consequently,
conflicts of interest may arise with respect to the limited time
commitment by such officer.
Management is currently involved with other shell companies, and is
involved in creating additional shell companies similar to this one.
A conflict may arise in the event that another shell company with
which management is affiliated is formed and actively seeks a target
company. Management anticipates that target companies will be located
for the Company and other shell companies in chronological order of
the date of formation of such shell companies or by lot. However,
other shell companies that may be formed may differ from the Company
in certain items such as place of incorporation, number of shares and
shareholders, working capital, types of authorized securities, or
other items. It may be that a target company may be more suitable for
or may prefer a certain shell company formed after the Company. In
such case, a business combination might be negotiated on behalf of the
more suitable or preferred shell company regardless of date of
formation or choice by lot.
The Articles of Incorporation of the Company provides that the
Company may indemnify officers and/or directors of the Company for
liabilities, which can include liabilities arising under the
securities laws. Therefore, assets of the Company could be used or
attached to satisfy any liabilities subject to such indemnification.
General Business Plan. The Company's purpose is to seek,
investigate and, if such investigation warrants, effect a merger or
stock exchange with a business entity which desires to seek the
perceived advantages of a corporation which has a class of securities
registered under the Exchange Act. The Company will not restrict its
search to any specific business, industry or geographical location and
the Company may participate in a business venture of virtually any
kind or nature. Management anticipates that it will be able to
participate in only one potential business venture because the Company
has nominal assets and limited financial resources.
This lack of diversification should be considered a substantial
risk to the shareholders of the Company because it will not permit the
Company to offset potential losses from one venture against gains from
another. The Company may seek a business opportunity with entities
which have recently commenced operations, or which wish to utilize the
public marketplace in order to raise additional capital in order to
expand into new products or markets, to develop a new product or
service, or for other corporate purposes.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely
risky. Management believes (but has not conducted any research to
confirm) that there are business entities seeking the perceived
benefits of a publicly registered corporation. Such perceived
benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees,
increasing the opportunity to use securities for acquisitions,
providing liquidity for shareholders and other factors. Business
opportunities may be available in many different industries and at
various stages of development, all of which will make the task of
comparative investigation and analysis of such business opportunities
difficult and complex.
The Company has, and will continue to have, no capital with which
to provide the owners of business entities with any cash or other
assets. However, management believes the Company will be
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able to offer owners of acquisition candidates the opportunity to
acquire a controlling ownership interest in a public company without
incurring the cost and time required to conduct an initial public
offering. Management has not conducted market research and is not
aware of statistical data to support the perceived benefits of a
merger or acquisition transaction for the owners of a business
opportunity.
The analysis of new business opportunities will be undertaken by,
or under the supervision of, the officer and director of the Company,
who is not a professional business analyst. In analyzing prospective
business opportunities, management may consider such matters as the
available technical, financial and managerial resources; working
capital and other financial requirements; history of operations, if
any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which
may be available and the depth of that management; the potential for
further research, development, or exploration; specific risk factors
not now foreseeable but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or
expansion; the potential for profit; the perceived public recognition
or acceptance of products, services, or trades; name identification;
and other relevant factors. This discussion of the proposed criteria
is not meant to be restrictive of the Company's virtually unlimited
discretion to search for and enter into potential business
opportunities.
The Exchange Act requires that any merger or acquisition candidate
comply with certain reporting requirements, which include providing
audited financial statements to be included in the reporting filings
made under the Exchange Act. The Company will not combine or merge
with any company for which audited financial statements cannot be
obtained at or within a reasonable period of time after closing of the
proposed transaction.
The Company may enter into a business combination with a business
entity that desires to establish a public trading market for its
shares. A target company may attempt to avoid what it deems to be
adverse consequences of undertaking its own public offering by seeking
a business combination with the Company. Such consequences may
include, but are not limited to, time delays of the registration
process, significant expenses to be incurred in such an offering, loss
of voting control to public shareholders, or the inability to obtain
an underwriter or to obtain an underwriter on satisfactory terms. The
Company will not restrict its search for any specific kind of business
entities, but may combine with a venture which is in its preliminary
or development stage, which is already in operation, or in essentially
any stage of its business life. It is impossible to predict at this
time the status of any business in which the Company may become
engaged, in that such business may need to seek additional capital,
may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer. Management of the
Company, which in all likelihood will not be experienced in matters
relating to the business of a target company, will rely upon its own
efforts in accomplishing the business purposes of the Company.
Outside consultants or advisors may be utilized by the Company to
assist in the search for qualified target companies. If the Company
does retain such an outside consultant or advisor, any cash fee earned
by such person will need to be assumed by the target company, as the
Company has limited cash assets with which to pay such obligation.
Following a business combination the Company may benefit from the
services of others in regard to accounting, legal services,
underwritings and corporate public relations. If requested by a
target
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company, management may recommend one or more underwriters, financial
advisors, accountants, public relations firms or other consultants to
provide such services. A potential target company may have an
agreement with a consultant or advisor providing that services of the
consultant or advisor be continued after any business combination.
Additionally, a target company may be presented to the Company only on
the condition that the services of a consultant or advisor be
continued after a merger or acquisition. Such preexisting agreements
of target companies for the continuation of the services of attorneys,
accountants, advisors or consultants could be a factor in the
selection of a target company.
Acquisition of Opportunities. In implementing a structure for a
particular business acquisition, the Company may become a party to a
merger, consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. On the consummation of
a transaction, it is likely that the present management and
shareholders of the Company will no longer be in control of the
corporation resulting from the combination.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance upon exemption from
registration under applicable federal and state securities laws. In
some circumstances, however, as a negotiated element of its
transaction, there may be an agreement to register all or a part of
such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which
there can be no assurance, it will be undertaken by the surviving
entity after the Company has entered into an agreement for a business
combination or has consummated a business combination and the Company
is no longer considered a shell company. The issuance of additional
securities and their potential sale into any trading market which may
develop may depress the market value of the securities of the
corporation resulting from the combination in the future if such a
market develops, of which there is no assurance.
While the terms of a business transaction to which the Company may
be a party cannot be predicted, it is expected that the parties to the
business transaction will desire to avoid the creation of a taxable
event and thereby structure the acquisition in a "tax-free"
reorganization under Sections 351 or 368 of the Internal Revenue Code
of 1986, as amended (the "Code").
The Company will participate in a business opportunity only after
the negotiation and execution of appropriate agreements. Although the
terms of such agreements cannot be predicted, generally such
agreements will require certain representations and warranties of the
parties thereto, will specify certain events of default, will detail
the terms of closing and the conditions which must be satisfied by the
parties prior to and after such closing and will include miscellaneous
other terms. The Company will not acquire or merge with any entity
which cannot provide audited financial statements at or within a
reasonable period of time after closing of the proposed transaction.
The Company is subject to all of the reporting requirements
included in the Exchange Act. Included in these requirements is the
duty of the Company to file audited financial statements as part of or
within 60 days following its Form 8-K to be filed with the Securities
and Exchange Commission upon consummation of a merger or acquisition,
as well as the Company's audited financial statements included in its
annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or within
time parameters necessary to insure the Company's compliance with the
requirements of the Exchange Act, or if the audited financial
statements provided do not conform to there presentations made by the
target company, the closing documents may provide
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that the proposed transaction will be voidable at the discretion of
the present management of the Company.
The principal shareholders of the Company have orally agreed that
they will advance to the Company any additional funds which the
Company needs for operating capital and for costs in connection with
searching for or completing an acquisition or merger. Such advances
will be made without expectation of repayment unless the owners of the
business which the Company combines or merges with agree to repay all
or a portion of such advances. There is no minimum or maximum amount
the shareholders will advance to the Company. The Company will not
borrow any funds to make any payments to the Company's promoters,
management or their affiliates or associates. The Board of Directors
has passed a resolution which contains a policy that the Company will
not seek a combination or merger with any entity in which the
Company's officer, director, and shareholders or any affiliate or
associate serves as an officer or director or holds any ownership
interest.
Competition. The Company will remain an insignificant participant
among the firms which engage in the acquisition of business
opportunities. There are many established venture capital and
financial concerns which have significantly greater financial and
personnel resources and technical expertise than the Company. In view
of the Company's combined extremely limited financial resources and
limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's
competitors.
Item 3. Description of Property
The Company has no properties and at this time has no agreements to
acquire any properties. The Company currently uses the offices of the
Company's shareholders at no cost to the Company. The shareholders
have agreed to continue this arrangement until the Company completes
an acquisition or merger.
Item 4. Security Ownership of Certain Beneficial Owners and
Management; Changes in Control
The following table sets forth as of September 19, 2000, the name
and the number of shares of the Registrant's Common Stock, par value
$0.001 per share, held of record or beneficially by each person who
held of record, or was known by the Registrant to own beneficially,
more than 5% of the 1,000,000 issued and outstanding shares of the
Registrant's Common Stock, and the name and shareholdings of each
director and of all officers and directors as a group.
Title of Name and Address of Amount and Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class
Common Mark E. Lehman (1) 250,000 25%
8 E. Broadway, Ste. 620
Salt Lake City, UT 84111
Common Cletha A. Walstrand 250,000 25%
8 E. Broadway, Ste. 620
Salt Lake City, UT 84111
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Common JEC Holdings, Inc. 250,000 25%
5882 South 900 East, Ste. 202
Salt Lake City, UT 84121
Common Capital Consulting, Inc. 250,000 25%
5882 South 900 East, Ste. 202
Salt Lake City, UT 84121
Common Total Officers and
Directors (1 person) 250,000 25%
(1) Officer and/or Director
(1) Officer and/or Director These shares are held of record by MRF
Investment & Consulting, LLC, a Utah Limited Liability Company of which
Mr. Lehman is the sole owner.
There are no contracts or other arrangements that could result in a
change of control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth as of September 1, 2000 the name,
age, and position of each executive officer and director and the term
of office of each director of the Corporation.
Name Age Position Director or Officer Since
Mark E. Lehman 45 Director, President, June 12, 2000
Secretary & Treasurer
All officers hold their positions at the will of the Board of
Directors. All directors hold their positions for one year or until
their successors are elected and qualified.
Set forth below is certain biographical information regarding each
of the Company's executive officers and directors:
Mark E. Lehman, Director, President, Secretary & Treasurer. Mr.
Lehman is a lawyer engaged in the private practice of law in Salt Lake
City, Utah, as a partner in the law firm of Lehman Walstrand &
Associates L.L.C., of which he was a founding member in June 2000.
Prior to June 2000 Mr. Lehman has been engaged in the private practice
of law for the past 19 years.
Other Reporting Company Activities. Mr. Lehman is currently
President, Secretary/Treasurer and Director of the following reporting
company, Edlam Acquisition Corporation, which is seeking a business
acquisition. The possibility exists that one or more of the officers
and directors of the Company could become officers and/or directors of
other reporting companies in the future, although they have no intention
of doing so at the present time. Certain conflicts of interest are
inherent in the participation of the Company's officers and directors
as management in other reporting companies, which may be difficult, if not
impossible, to resolve in all cases in the best interests of the
Company. Failure by management to conduct the Company's business in
its best interests may result in liability of management of the
Company to the shareholders.
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To the knowledge of management, during the past five years, no
present or former directors, executive officer or person nominated to
become a director or an executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by a court for the business or property of such person, or
any partnership in which she was a general partner at or within two
years before the time of such filing, or any corporation or business
association of which she was an executive officer at or within two
years before the time of such filing;
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations or other
minor offenses);
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or
otherwise limiting, the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or dealer
in securities, or as an affiliate person, director or employee of any
investment company, or engaging in or continuing any conduct or
practice in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation
of federal or state securities laws or federal commodities laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or state
authority barring, suspending, or otherwise limiting for more than 60
days the right of such person to engage in any activity described
above under this Item, or to be associated with persons engaged in any
such activity.
(5) was found by a court of competent jurisdiction in a civil
action or by the Securities and Exchange Commission to have violated
any federal or state securities law, and the judgment in such civil
action or finding by the Securities and Exchange Commission has not
been subsequently reversed, suspended, or vacated
(6) was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have violated
any federal Commodities law, and the judgment in such civil action or
finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated.
Conflicts of Interest. The Company's officer and director has
organized and expects to organize other companies of a similar nature
and with a similar purpose as the Company. Consequently, there are
potential inherent conflicts of interest in acting as an officer and
director of the Company. Insofar as the
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officer and director is engaged in other business activities,
management anticipates that he will devote only a minor amount of time
to the Company's affairs. The Company does not have a right of first
refusal pertaining to opportunities that come to management's
attention insofar as such opportunities may relate to the Company's
proposed business operations. A conflict may arise in the event that
another reporting company with which management is affiliated is formed
and actively seeks a target company. It is anticipated that target
companies will be located for the Company and other reporting companies in
chronological order of the date of formation of such reporting companies
or by lot. However, any reporting companies that may be formed may differ
from the Company in certain items such as place of incorporation,
number of shares and shareholders, working capital, types of
authorized securities, or other items. It may be that a target
company may be more suitable for or may prefer a certain reporting company
formed after the Company. In such case, a business combination might
be negotiated on behalf of the more suitable or preferred reporting
company regardless of date of formation or choice by lot.
Mr. Lehman will be responsible for seeking, evaluating, negotiating
and consummating a business combination with a target company which
may result in terms providing benefits to Mr. Lehman. Mr. Lehman is a
founder of Lehman Walstrand & Associates, L.L.C., a law firm located
in Salt Lake City, Utah. Additionally, as stated in the above "other
reporting company activities information, Mr. Lehman is also an
officer and director of other reporting companies. As such, demands
may be placed on the time of Mr. Lehman which will detract from the
amount of time he is able to devote to the Company. Mr. Lehman
intends to devote as much time to the activities of the Company as
required. However, should such a conflict arise, there is no
assurance that Mr. Lehman would not attend to other matters prior to
those of the Company. Mr. Lehman projects that initially up to ten
hours per month of his time may be spent locating a target company
which amount of time would increase when the analysis of, and
negotiations and consummation with, a target company are conducted.
Mr. Lehman owns 25% of the issued and outstanding stock of the
Company and is the president, director and a controlling shareholder.
At the time of a business combination, some or all of the shares of
Common Stock owned by Mr. Lehman will be purchased by the target
company or retired by the Company. The amount of Common Stock sold or
continued to be owned by Mr. Lehman cannot be determined at this time.
The terms of business combination may include such terms as Mr. Lehman
remaining a director or officer of the Company and/or the continuing
of securities or other legal work of the Company being handled by the
law firm of which Mr. Lehman is a principal.
The terms of a business combination may provide for a payment by
cash or otherwise to Mr. Lehman for the purchase of all or part of her
common stock of the Company by a target company or for services
rendered incident to or following a business combination. Mr. Lehman
would directly benefit from such employment or payment. Such benefits
may influence Mr. Lehman's choice of a target company.
The Company may agree to pay finder's fees, as appropriate and
allowed, to unaffiliated persons who may bring a target company to the
Company where that reference results in a business combination. No
finder's fee of any kind will be paid by the Company to management or
promoters of the Company or to their associates or affiliates. No
loans of any type have, or will be, made by the Company to management
or promoters of the Company or to any of their associates or
affiliates. The Company will not enter into a business combination,
or acquire any assets of any kind for its securities, in which
13
<PAGE>
management or promoters of the Company or any affiliates or
associates have any interest, direct or indirect.
Management has adopted certain policies involving possible
conflicts of interest, including prohibiting any of the following
transactions involving management, promoters, shareholders or their
affiliates: (i) Any lending by the Company to such persons; (ii) The
issuance of any additional securities to such persons prior to a
business combination; (iii) The entering into any business combination
or acquisition of assets in which such persons have any interest,
direct or indirect; or (iv) The payment of any finder's fees to such
persons. These policies have been adopted by the Board of Directors of
the Company and any changes in these provisions require the approval
of the Board of Directors. Management does not intend to propose any
such action and does not anticipate that any such action will occur.
There are no binding guidelines or procedures for resolving potential
conflicts of interest. Failure by management to resolve conflicts of
interest in favor of the Company could result in liability of
management to the Company. However, any attempt by shareholders to
enforce a liability of management to the Company would most likely be
prohibitively expensive and time consuming.
Item 6. Executive Compensation.
The Company's officer and director does not receive any
compensation for his services rendered to the Company, has not
received such compensation in the past, and is not accruing any
compensation pursuant to any agreement with the Company. The officer
and director of the Company will not receive any finder's fee from the
Company as a result of his efforts to implement the Company's business
plan outlined herein. However, the officer and director of the
Company anticipates receiving benefits as a beneficial shareholder of
the Company.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the Company
for the benefit of its employees.
Item 7. Certain Relationships and Related Transactions.
Mr. Lehman provides office space at no cost to the Company.
Item 8. Description of Securities.
The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, par value $0.001 per share, and 10,000,000
shares of Preferred Stock, par value $0.001 per share. The following
statements relating to the capital stock set forth the material terms
of the Company's securities; however, reference is made to the more
detailed provisions of, and such statements are qualified in their
entirety by reference to, the Articles of Incorporation and the By-
laws, copies of which are filed as exhibits to this registration
statement.
Common Stock. Holders of shares of common stock are entitled to
one vote for each share on all matters to be voted on by the
stockholders. Holders of common stock do not have cumulative voting
rights. Holders of common stock are entitled to share ratably in
dividends, if any, as may be declared from time to time by the Board
of Directors in its discretion from funds legally available there for.
In the event of a liquidation, dissolution or winding up of the
Company, the holders of common stock are
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entitled to share pro rata all assets remaining after payment in full
of all liabilities. All of the outstanding shares of common stock are
fully paid and non-assessable. Holders of common stock have no
preemptive rights to purchase the Company's common stock. There are
no conversion or redemption rights or sinking fund provisions with
respect to the common stock.
Preferred Stock. The Company's Certificate of Incorporation
authorizes the issuance of 10,000,000 shares of preferred stock,
$0.001 par value per share, of which no shares have been issued. The
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 applicable law of Nevada, to establish from time to time the
number of shares to be included in each such series, and to fix 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 the Company without further action
by the shareholders and may adversely affect the voting and other
rights of the holders of common stock. At present, the Company has no
plans to issue any preferred stock nor adopt any series, preferences
or other classification of preferred stock. The issuance of shares of
preferred stock, or the issuance of rights to purchase such shares,
could be used to discourage an unsolicited acquisition proposal. For
instance, the issuance of a series 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, under
certain circumstances, the issuance of preferred stock could adversely
affect the voting power of the holders of the common stock. Although
the Board of Directors is required to make any determination to issue
such stock based on its judgment as to the best interests of the
stockholders of the Company, the Board of Directors could act in a
manner that would discourage an acquisition attempt or other
transaction that some, or a majority, of the stockholders might
believe to be in their best interests or in which stockholders might
receive a premium for their stock over the then market price of such
stock. The Board of Directors does not at present intend to seek
stockholder approval prior to any issuance of currently authorized
stock, unless otherwise required by law or stock exchange rules. The
Company has no present plans to issue any preferred stock.
Dividends. Dividends, if any, will be contingent upon the
Company's revenues and earnings, if any, capital requirements and
financial conditions. The payment of dividends, if any, will be within
the discretion of the Company's Board of Directors. The Company
presently intends to retain all earnings, if any, for use in its
business operations and accordingly, the Board of Directors does not
anticipate declaring any dividends prior to a business combination.
Restrictions on Transfers of Securities Prior to Business
Combination. The proposed business activities described herein
classify the Company as a shell company. See "GLOSSARY". The
Securities and Exchange Commission and many states have enacted
statutes, rules and regulations limiting the sale of securities of
shell companies. Management does not intend to undertake any efforts
to cause a market to develop in the Company's securities until such
time as the Company has successfully implemented its business plan
described herein.
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<PAGE>
Trading of Securities in Secondary Market. The National Securities
Market Improvement Act of 1996 limited the authority of states to
impose restrictions upon sales of securities made pursuant to
exemptions from registration in Sections 4(1), 4(3) and 4(4) of the
Securities Act of 1933, as amended (the "Securities Act") of companies
which file reports under Sections 13 or 15(d) of the Securities
Exchange Act. The Company files such reports. As a result, sales of
the Company's common stock in the secondary trading market by the
holders thereof may be made subject to complying with these
exemptions.
If, after a merger or acquisition, the Company does not meet the
qualifications for listing on the Nasdaq SmallCap Market, the
Company's securities may be traded in the over-the-counter ("OTC")
market. The OTC market differs from national and regional stock
exchanges in that it (1) is not sited in a single location but
operates through communication of bids, offers and confirmations
between broker-dealers and (2) securities admitted to quotation are
offered by one or more broker-dealers rather than the
"specialist"common to stock exchanges. The Company may apply for
listing on the NASD OTC Bulletin Board or may offer its securities in
what are commonly referred to as the "pink sheets" of the National
Quotation Bureau, Inc. To qualify for listing on the NASD OTC
Bulletin Board, an equity security must have one registered broker-
dealer, known as the market maker, willing to list bid or sale
quotations and to sponsor the company for listing on the Bulletin
Board.
GLOSSARY
The Company or The company whose common stock is the subject of this
the Registrant registration statement.
Exchange Act The Securities Exchange Act of 1934, as amended.
"Penny Stock" As defined in Rule 3a51-1 of the Exchange Act,
Security a "penny stock" security is any equity security
other than a security (i) that is a reported
security (ii) that is issued by an investment
company (iii) that is a put or call issued by
the Option Clearing Corporation (iv) that has a
price of $5.00 or more (except for purposes of
Rule 419 of the Securities Act) (v) that is
registered on a national securities exchange
(vi) that is authorized for quotation on the
Nasdaq Stock Market, unless other provisions of
Rule 3a51-1 are not satisfied, or (vii) that is
issued by an issuer with (a) net tangible
assets in excess of $2,000,000, if in
continuous operation for more than three years
or $5,000,000 if in operation for less than
three years or (b) average revenue of at least
$6,000,000 for the last three years.
Securities Act The Securities Act of 1933, as amended.
Small Business Issuer As defined in Rule 12b-2 of the Exchange Act, a
"Small Business Issuer" is an entity (i) which
has revenues of less than $25,000,000 (ii)
whose public float (the outstanding securities
not held by affiliates) has a value of less
than $25,000,000 (iii) which is a United States
or Canadian issuer (iv) which is not an
Investment Company and (v) if a
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<PAGE>
majority-owned subsidiary, whose parent
corporation is also a small business issuer.
PART II
Item 1. Market Price for Common Equity and Related Stockholder
Matters.
(A) Market Price. There is no trading market for the Company's
Common Stock at present and there has been no trading market to date.
There is no assurance that a trading market will ever develop or, if
such a market does develop, that it will continue. The Securities and
Exchange Commission has adopted Rule 15g-9 which establishes certain
restrictions on transactions in a "penny stock." For any transaction
involving a penny stock, unless exempt, the rules require: (i) that a
broker or dealer approve a person's account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor a
written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or
dealer must (i) obtain financial information and investment experience
and objectives of the person; and (ii) make a reasonable determination
that the transactions in penny stocks are suitable for that person and
that person has sufficient knowledge and experience in financial
matters to be capable of evaluating the risks of transactions in penny
stocks.
The broker or dealer must also deliver, prior to any transaction in
a penny stock, a disclosure schedule prepared by the Commission
relating to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed,
written agreement from the investor prior to the transaction.
Disclosure also has to be made about the risks of investing in penny
stocks in both public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and the rights
and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing
recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
In order to qualify for listing on the Nasdaq SmallCap Market, a
company must have at least (i) net tangible assets of $4,000,000 or
market capitalization of $50,000,000 or net income for two of the last
three years of $750,000; (ii) public float of 1,000,000 shares with a
market value of $5,000,000; (iii) a bid price of $4.00; (iv) three
market makers; (v) 300 shareholders and (vi) an operating history of
one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the Nasdaq SmallCap Market, a
company must have at least (i) net tangible assets of$2,000,000 or
market capitalization of $35,000,000 or net income for two of the last
three years of $500,000; (ii) a public float of500,000 shares with a
market value of $1,000,000; (iii) a bid price of $1.00; (iv) two
market makers; and (v) 300 shareholders.
If, after a merger or acquisition, the Company does not meet the
qualifications for listing on the Nasdaq SmallCap Market, the
Company's securities may be traded in the over-the-counter ("OTC")
market. The OTC market differs from national and regional stock
exchanges in that it (1) is not sited in a single location but
operates through communication of bids, offers and confirmations
between broker-dealers and (2) securities admitted to quotation are
offered by one or more broker-dealers rather than the
17
<PAGE>
"specialist" common to stock exchanges. The Company may apply for
listing on the NASD OTC Bulletin Board or may offer its securities in
what are commonly referred to as the "pink sheets" of the National
Quotation Bureau, Inc. To qualify for listing on the NASD OTC Bulletin
Board, an equity security must have one registered broker-dealer,
known as the market maker, willing to list bid or sale quotations and
to sponsor the company for listing on the Bulletin Board. If the
Company is unable initially to satisfy the requirements for quotation
on the Nasdaq SmallCap Market or becomes unable to satisfy the
requirements for continued quotation thereon, and trading, if any, is
conducted in the OTC market, a shareholder may find it more difficult
to dispose of, or to obtain accurate quotations as to the market value
of, the Company's securities.
(B) Holders. There are four holders of the Company's Common Stock.
The issued and outstanding shares of the Company's Common Stock were
issued in accordance with the exemptions from registration afforded by
Section 4(2) of the Securities Act of 1933.
(C) Dividends. The Company has not paid any dividends to date, and
has no plans to do so in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the
Company.
Item 3. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
The Company has not changed accountants since its formation and
there are no disagreements with the findings of its accountants.
Item 4. Recent Sales of Unregistered Securities.
During the past three years, the Company has sold securities which
were not registered as follows:
On June 12, 2000, 1,000,000 shares of common stock of the company
were sold for cash to each of two individuals and two corporations
relying on an exemption from registration provided by Section 4(2) of
the Securities Act of 1933. The Company realized $4,000 from the sale
of the shares which is being used as working capital.
Item 5. Indemnification of Directors and Officers.
The General Corporation Law of Nevada permits provisions in the
articles, by-laws or resolutions approved by shareholders which limit
liability of directors for breach of fiduciary duty to certain
specified circumstances, namely, breaches of their duties of loyalty,
acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law, acts involving unlawful
payment of dividends or unlawful stock purchases or redemptions, or
any transaction from which a director derives an improper personal
benefit. The articles with these exceptions eliminate any personal
liability of a Director to the Company or its shareholders for
monetary damages for the breach of a Director's fiduciary duty and
therefore a Director cannot be held liable for damages to the Company
or its shareholders for gross negligence or lack of due care in
carrying out his fiduciary duties as a Director.
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<PAGE>
The Company's by-laws indemnify its Officers and Directors to the
full extent permitted by Nevada law. Nevada law permits
indemnification if a director or officer acts in good faith in a
manner reasonably believed to be in, or not opposed to, the best
interests of the corporation. A director or officer must be
indemnified as to any matter in which she successfully defends
himself. Indemnification is prohibited as to any matter in which the
director or officer is adjudged liable to the corporation.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS,
OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING
PROVISIONS, IT IS THE OPINION OF THE SECURITIES AND EXCHANGE
COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS
EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
PART F/S
Attached are audited financial statements for the Company for the
period ended June 30, 2000. The following financial statements are
attached to this report and filed as a part thereof.
PART III
Item 1. Index and Description of Exhibits.
Exhibit No SEC Ref Title of Document Location
Number
1 1(i) Articles of Incorporation See Attached
2 2(ii) Bylaws See Attached
3 27 Financial Data Schedule See Attached
19
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed
on its behalf, thereunto duly authorized.
KJMC ACQUISITION CORPORATION.
Date: September 21, 2000 By: /s/ Mark E. Lehman
President, Secretary & Treasurer
KJMC ACQUISITION CORPORATION
[A Development Stage Company]
CONTENTS
PAGE
- Independent Auditors' Report 22
- Balance Sheet, June 30, 2000 23
- Statement of Operations, for the period from
inception on June 12, 2000 through June 30, 2000 24
- Statement of Stockholders' Equity, for the
period from inception on June 12, 2000 through
June 30, 2000 25
- Statement of Cash Flows, for the period from
inception on June 12, 2000 through June 30, 2000 26
- Notes to Financial Statements 27-29
21
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
KJMC ACQUISITION CORPORATION
Salt Lake City, Utah
We have audited the accompanying balance sheet of KJMC Acquisition
Corporation [a development stage company] at June 30, 2000 and the
related statements of operations, stockholders' equity and cash flows
for the period from inception on June 12, 2000 through June 30, 2000.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly,
in all material respects, the financial position of KJMC Acquisition
Corporation [a development stage company] as of June 30, 2000 and the
results of its operations and its cash flows for the period from
inception on June 12, 2000 through June 30, 2000 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
KJMC Acquisition Corporation will continue as a going concern. As
discussed in Note 5 to the financial statements, KJMC Acquisition
Corporation was only recently formed and has not yet been successful
in establishing profitable operations, raising substantial doubt about
its ability to continue as a going concern. Management's plans in
regards to these matters are also described in Note 5. The financial
statements do not include any adjustments that might result from the
outcome of these uncertainties.
/s/ PRITCHETT, SILER & HARDY, P.C.
August 2, 2000
Salt Lake City, Utah
22
<PAGE>
KJMC ACQUISITION CORPORATION
[A Development Stage Company]
BALANCE SHEET
ASSETS
June 30,
2000
___________
CURRENT ASSETS:
Cash in bank $ 4,000
___________
Total Current Assets 4,000
___________
$ 4,000
____________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ -
___________
Total Current Liabilities -
___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,000,000 shares issued and
outstanding 1,000
Capital in excess of par value 3,000
Deficit accumulated during the
development stage -
___________
Total Stockholders' Equity 4,000
___________
$ 4,000
____________
The accompanying notes are an integral part of this financial statement.
23
<PAGE>
KJMC ACQUISITION CORPORATION
[A Development Stage Company]
STATEMENT OF OPERATIONS
From Inception
on June 12,
2000 Through
June 30,
2000
__________
REVENUE $ -
EXPENSES:
General and Administrative -
__________
LOSS BEFORE INCOME TAXES -
CURRENT TAX EXPENSE -
DEFERRED TAX EXPENSE -
__________
NET LOSS $ -
___________
LOSS PER COMMON SHARE $ -
___________
The accompanying notes are an integral part of this financial statement.
24
<PAGE>
KJMC ACQUISITION CORPORATION
[A Development Stage Company]
STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION ON JUNE 12, 2000
THROUGH JUNE 30, 2000
Deficit
Accumulated
Preferred Stock Common Stock Capital in During the
______________________________ Excess of Development
Shares Amount Shares Amount Par Value Stage
_______________________________________________________
BALANCE, June 12, 2000 - $ - - $ - $ - $ -
Issuance of 1,000,000
shares common stock for
cash at $.004 per share,
June 30, 2000 - - 1,000,000 1,000 3,000 -
Net loss for the period
ended June 30, 2000 - - - - - -
___________________________________________________
BALANCE, June 30, 2000 - $ - 1,000,000 $ 1,000 $ 3,000 $ -
____________________________________________________
The accompanying notes are an integral part of this financial statement.
25
<PAGE>
KJMC ACQUISITION CORPORATION
[A Development Stage Company]
STATEMENT OF CASH FLOWS
NET INCREASE (DECREASE) IN CASH
From Inception
on June 12,
2000 Through
June 30,
2000
__________
Cash Flows Provided by Operating Activities:
Net loss $ -
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in assets and liabilities -
__________
Net Cash Provided (Used) by Operating Activities -
__________
Cash Flows Provided by Investing Activities -
__________
Net Cash Provided by Investing Activities -
__________
Cash Flows Provided by Financing Activities:
Proceeds from issuance of common stock 4,000
__________
Net Cash Provided by Financing Activities 4,000
__________
Net Increase in Cash 4,000
Cash at Beginning of Period -
__________
Cash at End of Period $ 4,000
___________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ -
Income taxes $ -
Supplemental Schedule of Noncash Investing and Financing Activities:
For the period ended June 30, 2000:
None.
The accompanying notes are an integral part of this financial statement.
26
<PAGE>
KJMC ACQUISITION CORPORATION
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - KJMC Acquisition Corporation (the Company) was
organized under the laws of the State of Nevada on June 12, 2000. The
Company has not commenced planned principal operations and is
considered a development stage company as defined in SFAS No. 7. The
Company is seeking potential business ventures. The Company has, at
the present time, not paid any dividends and any dividends that may be
paid in the future will depend upon the financial requirements of the
Company and other relevant factors.
Loss Per Share - The computation of loss per share is based on the
weighted average number of shares outstanding during the period
presented in accordance with Statement of Financial Accounting
Standards No. 128, "Earnings Per Share". [See Note 6]
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosures of contingent
assets and liabilities at the date of the financial statements, and
the reported amount of revenues and expenses during the reported
period. Actual results could differ from those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities", SFAS No. 134,
"Accounting for Mortgage-Backed Securities.", SFAS No. 135,
"Rescission of FASB Statement No. 75 and Technical Corrections", SFAS
No. 136, "Transfers of Assets to a not for profit organization or
charitable trust that raises or holds contributions for others", and
SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - deferral of the effective date of FASB statement No. 133
( an amendment of FASB Statement No. 133.)," were recently issued.
SFAS No. 132, 133, 134, 135, 136 and 137 have no current applicability
to the Company or their effect on the financial statements would not
have been significant.
NOTE 2 - CAPITAL STOCK
Preferred Stock - The Company has authorized 10,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences and
designations and to be issued in such series as determined by the
Board of Directors. No shares are issued and outstanding at June 30,
2000.
Common Stock - During June 2000, in connection with its organization,
the Company issued 1,000,000 shares of its previously authorized, but
unissued common stock. The shares were issued for cash of $4,000 (or
$.004 per share).
27
<PAGE>
KJMC ACQUISITION CORPORATION
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes".
FASB 109 requires the Company to provide a net deferred tax
asset/liability equal to the expected future tax benefit/expense of
temporary reporting differences between book and tax accounting
methods and any available operating loss or tax credit carryforwards.
At June 30, 2000 there were no material deferred tax assets or
liabilities, current or deferred tax expense, or net operating loss
carryforwards.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - As of June 30, 2000, the Company has not
paid any compensation to any officer or director of the Company.
Office Space - The Company has not had a need to rent office space.
An officer/shareholder of the Company is allowing the Company to use
his/her offices as a mailing address, as needed, at no expense to the
Company.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company
was only recently formed and has not yet been successful in
establishing profitable operations. These factors raise substantial
doubt about the ability of the Company to continue as a going concern.
In this regard, management is proposing to raise any necessary
additional funds not provided by operations through loans or through
additional sales of its common stock. There is no assurance that the
Company will be successful in raising this additional capital or
achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
28
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KJMC ACQUISITION CORPORATION
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
From Inception
on June 12,
2000 Through
June 30,
2000
__________
Loss from continuing operations
available to common shareholders
(numerator) $ -
___________
Weighted average number of
common shares outstanding used
in loss per share for the period
(denominator) 1,000,000
___________
29
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