U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
K-1 BUILDERS, INC.
------------------
(Name of small business issuer in its charter)
Nevada 87-0659918
----------------------- ---------------------------- --------------------
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
3945 So. Wasatch Blvd. #282
Holladay, Utah
84124
(801) 574-8000
-------------------------
(Address and telephone
number of principal executive
offices and principal
place of business)
Kevin Kirch, President,
Chief Executive Officer
K-1 BUILDERS, INC.
3945 So. Wasatch Blvd. Suite #282
Holladay, Utah
84124
(801) 574-8000
-------------------------
(Name, address and
telephone number of agent for
service)
Copies to:
Amy L. Clayton, Esq.
6337 So. Highland Dr. Suite 220
Salt Lake City, Utah
84121
(801) 550-1018
Fax (801) 944-1268
Approximate date of proposed sale to the public: As soon as practicable
from time to time after this registration statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
<PAGE> 1
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
Title of
Each Class Proposed
of Proposed Maximum
Securities Amount to Offering Aggregate Amount of
to be be Price per Offering Registra-
Registered Registered Share Price tion Fee
-----------------------------------------------------------------------------
Common 400,000 $0.50 per $200,000 $ 52.80
Stock, shares share
$0.001 par
value
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
Disclosure alternative used (check one):
Alternative 1 ; Alternative 2 X
<PAGE> 2
Table of Contents
------------------
Section Page
-------- ----
Prospectus Summary ....................................................... 5
Risk factors ............................................................ 5
Risks related to our financial condition............................. 5
Risks related to our business........................................ 6
Risks related to this offering ...................................... 7
Forward-looking statements ............................................... 9
Use of proceeds .......................................................... 9
Dilution .................................................................10
Comparative Data .........................................................11
Plan of Distribution .................................................... 11
Legal proceedings ........................................................12
Directors, Executive Officers, Promoters and Control Persons .............12
Security Ownership of Certain Beneficial Owners and Management ...........14
Description of Securities.................................................15
Experts Named in Registration Statement...................................16
Disclosure of Commission Position On Indemnification for
Securities Act Liabilities ...............................................16
Organization Within the Last Five Years ................................. 16
Description of Business.................................................. 17
Management's Discussion and Analysis of Plan of Operation ................21
Description of Property...................................................22
Certain Relationships and Related Party Transactions .....................22
Market for Common Equity and Related Stockholder Matters .................23
Executive compensation ...................................................23
Financial statements......................................................25
Changes in and Disagreements with Accounts............................... 25
<PAGE>
PROSPECTUS
K-1 BUILDERS, INC.
Maximum Offering: 400,000 shares of common stock
Offering Price: $.50 per share
------------------------------------------------------------------------
K-1 BUILDERS, INC. This is our initial public offering,
3945 So. Wasatch Blvd. #282 and no public market currently exists
Holladay, UT 84124 for our shares. The offering price
may not reflect the market price of
our shares after the offering.
The Offering
------------- Total There is no minimum offering amount
Per Share Maximum and no escrow of funds.
--------- --------
Public Price $0.50 $200,000
Underwriting
Discounts -0- -0-
Maximum
Proceeds to
K-1 BUILDERS, $0.50 $200,000*
INC.
----------------------------------------------------------------------------
These shares involve a high degree of risk. Investors should expect
immediate substantial dilution. Even if we succeed in raising the maximum
amount in the offering, it may not be sufficient to enable us to fully
commence our proposed business operations without additional fund raising.
(See "risk factors" page 6). The shares offered should not be purchased by
any investor who cannot afford to sustain the total loss of their
investment.
These shares have not been approved or disapproved by the Securities
and Exchange Commission or any state securities agency nor has the
Commission or any agency passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
This offering is self underwritten and will be managed by us. The
shares will be offered and sold by our officers without any discounts or
other commissions.
The shares are being offered by K-1 BUILDERS, INC. subject to prior sale,
receipt and acceptance by K-1 BUILDERS, INC., approval of certain matters by
counsel, and certain other conditions. We reserve the right to withdraw or
cancel such offers and reject any order, in whole or in part.
This offering will commence with the date of this prospectus and will
end 120 days from that date. There will be no extensions of time in which
to continue this offering.
The date of this prospectus is ____________________, 2000.
* Proceeds to K-1 BUILDERS, INC. are shown before deducting estimated offering
costs of $10,000 including legal and accounting fees and printing costs
payable by K-1 BUILDERS, INC.
<PAGE> 4
DELIVERY OF PROSPECTUS BY DEALERS
Dealers may be required to deliver a prospectus to anyone wishing to
purchase registered shares of K-1 BUILDERS, INC. within 90 days after their
effective date of this prospectus regardless of whether they are participating
in this distribution. This is in addition to the dealer's obligation to
deliver a prospectus when acting as underwriters to their unsold allotments
or subscriptions.
Prior to investing, prospective investors should read the entire
prospectus.
PROSPECTUS SUMMARY
The Company
K-1 BUILDERS, INC. has been formed to address what management believes is
an unmet demand for a single entity with the ability to provide an extensive
array of commercial real estate development and facility expansion services
to major U.S. and multinational corporations. Management believes that the
growing need of large corporations to establish facilities throughout the
United States and the world from which to expand into the global economy has
created demand for employee housing, ex-patriot compounds, office space,
manufacturing and related production facilities. K-1 BUILDERS, INC. believes
development, construction and management capabilities on a world-wide basis
can be met most efficiently by a single provider, which we believe we can
offer on a cost effective basis.
To date, we are a start-up business with very small operations and
minimal revenues.
The Offering
Securities Offered: 400,000 shares of common stock.
Offering Price: $0.50 per share
Summary Selected
Financial Data: We are a start-up, development stage company and
have recently started operations but as yet have
no earnings or income from operations. As of
August 31, 2000, our financial data is as
follows:
Total Assets $16,900
Total Liabilities 0
Shareholder Equity $16,900
Net Tangible Book Value $16,900
Net Tangible Book Value per Share $.02
RISK FACTORS
An investment in the shares offered hereby involves a high degree of
risk. Prospective investors should carefully consider the following risk
factors, in addition to the other information set forth elsewhere in this
<PAGE> 5
prospectus, including the Consolidated Financial Statements and Notes,
prior to making an investment in K-1 BUILDERS, INC.
We have recently commenced start-up, development stage operations. We
may suffer significant losses commencing our operations and our future
profitability remains uncertain. We will not significantly expand operations
until the proceeds of this offering are available, therefore, we have little
operating history. Because we are just starting-up and in our initial stage
of development, we may suffer significant losses from which we cannot recover.
We will face all of the challenges of a new business enterprise, including but
not limited to, locating suitable office space, engaging the services of
qualified support personnel and consultants, establishing budgets,
implementing appropriate financial controls and internal operating policies
and procedures. We do not have any significant cash and have no significant
operations since our inception. As noted in the Independent Accountants
opinion, there is substantial doubt about our ability to continue as a
going concern without the realization of additional adequate financing.
We need additional capital, current funds are insufficient to finance
our operations. We could be required to cut back or stop operations if we
are unable to raise or obtain needed funding. We presently have no
significant operating capital and are totally dependent upon receipt of the
proceeds of the offering to continue development and marketing of our
services. Start-up costs include design and construction of a pilot
scale marketing materials to determine whether our services are acceptable
for large scale commercial applications. We also intend to continue research
on the cost effectiveness of our services. Should we raise the maximum
offering, we will recognize a gross amount of $200,000 and believe this amount
will enable us to acquire needed equipment and cover the costs of marketing
and research. The full offering amount will enable us to continue operations
for three years and allow for the purchase of equipment that would enable us
to expand our operations. If we raise less than the full offering amount,
we will scale back our efforts. We believe that we can build our company
and perform testing for a period of one year with as little as $50,000. Even
if the entire offering amount is raised, the amount of capital available to us
will be extremely limited, and may not be sufficient to enable us to fully
expand our business operations without additional fund raising. We have no
commitments for additional cash funding beyond the proceeds expected to be
received from this offering.
We are not certain our services will be accepted in the market. Our
business is based on our belief of the need for growth and expansion of
construction services. Acceptance of our services will be dependent on a
number of factors including:
- response from the industry;
- advertising and promotion;
- availability of competing services and technologies;
- pricing factors;
- other intangible factors.
These things change rapidly and cannot be predicted with certainty. Our
business will be subject to all the risks associated with introducing a
start-up business. There is substantial risk that our services may not be
commercially successful, resulting in costs not being recouped or
anticipated profits not being realized. We have not undertaken any
independent market studies to determine the feasibility of our services
<PAGE> 6
or its potential market acceptance.
Our services may not prove to be successful on a large scale.
Our services are in an early stage of development, and very small revenues
have been generated from the sale of our services. The development of our
business is highly uncertain and subject to a number of significant
risks. Our services that appear to be promising at this early stage of
development may not reach the market for a number of reasons. Such
services may be found to be ineffective, may be uneconomical, may fail to
achieve market acceptance or may be precluded from commercialization by
lack of sufficient capital.
These shares are offered on a "self underwritten" basis. If we are
not able to successfully sell our securities, we will be unable to raise
the needed capital to expand operations. There is no underwriter and no
firm commitment from anyone to purchase all or any of the shares. No
assurance can be given that all or any of the shares will be sold. If we
are unable to sell the shares we will have no funds available for
expanding our operations. If we sell less than the full 400,000 shares, we
will have to scale back and revise our plan of operations or seek other means
of financing. We have no commitments for any financing and are dependent upon
this offering to implement our operation.
There is no public market for our shares. Therefore an investment in
our securities may be an illiquid long-term investment. At present, our
shares are not traded publicly. There is no assurance that a trading
market will develop or, if developed, that it will be sustained. We will
not list the securities on any exchange or NASDAQ because we will not be
able to meet the financial criteria for any such listing. Therefore, any
investment in the shares will be very non-liquid. A purchaser of shares
may, therefore, find it difficult to re-sell the shares should he desire to
do so. Furthermore, the shares are not marginal and it is unlikely that a
lending institution would accept the shares as collateral for a loan.
We have arbitrarily determined the offering price, which exceeds the
book value of the securities; Investors may be unable to recoup their
investment if the value of our securities does not materially increase. We
arbitrarily selected the price for the common stock. Since an underwriter
has not been retained to offer the securities, our establishment of the
offering price of the shares has not been determined by negotiation with an
underwriter as is customary in underwritten public offerings. The offering
price does not bear any relationship whatsoever to our assets, earnings,
book value or any other objective standard of value. Therefore, investors
may be unable to recoup their investment if the value of our securities
does not materially increase.
We are not certain we can build up or expand our operations if less than
the full offering amount is realized. We believe that the net proceeds from
the sale of the shares, assuming that all shares are sold, will provide us
with sufficient capital to fund our initial expansion marketing and operating
costs. If we receive less than the full offering amount, we will limit our
operations to a regional or local basis only . Many factors may, however,
affect our cash needs, including our possible failure to generate revenues
from the sale of our services.
Investors may have limited information available on which to access
<PAGE> 7
our status because we have only limited SEC reporting requirements.
Because we are only subject to Section 15(d) of the Exchange Act, we will
not be subject to the proxy rules, short-swing profits regulations,
beneficial ownership report regulations and the bulk of the tender offer
regulations. Therefore, we may only be required to file periodic reports
for a limited period of time. We do intend to provide our shareholders
with annual reports containing audited financial statements from our
independent accountants and other periodic reports as we feel necessary.
However, in view of the fact that we may have limited reporting
requirements, the investor will have less information available with which
to assess our status.
Investors in this offering will contribute a disproportionately
greater amount of capital than the ownership they will receive. Therefore,
current shareholders will benefit disproportionately if we are successful
while investors in this offering will suffer a greater loss of cash if we
are not successful. Collectively the existing shareholders own 900,000
shares of our presently outstanding stock, for which they paid $900.00 cash.
If the maximum number of shares offered hereby are sold, upon completion of
the offering present stockholders will own 70% of the then outstanding shares,
and investors in the offering will own the other 30%, for which they will have
paid $200,000 cash. Thus, investors in the offering will contribute to the
capital of K-1 BUILDERS, INC. a disproportionately greater percentage than the
ownership they receive. Present stockholders will benefit from a greater share
of K-1 BUILDERS, INC. if successful, while investors in the offering risk a
greater loss of cash invested if we are not successful.
AVAILABLE INFORMATION
K-1 BUILDERS, INC. has filed with the United States Securities and
Exchange Commission (the "Commission") a registration statement on Form SB-2,
under the Securities Act of 1933, (the "Securities Act"), with respect to the
shares offered hereby. As permitted by the rules and regulations of the
Commission, this prospectus does not contain all of the information
contained in the registration statement. For further information regarding
both K-1 BUILDERS, INC. and the shares offered, reference is made to the
registration statement, including all exhibits and schedules thereto, which
may be inspected without charge at the public reference facilities of the
Commission's Washington, D.C. office, 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies may be obtained from the Washington, D.C. office upon
request and payment of the prescribed fee.
We will not file a Form 8-A or other registration statement under the
Securities Exchange Act and will only be subject to Section 15(d) following
the effective date. The proxy rules, short-swing profits regulations,
beneficial ownership reporting regulations and the bulk of the tender offer
regulations will not apply to us.
We intend to furnish our stockholders with annual reports containing
consolidated financial statements audited and reported upon by our
independent accounting firm and such other periodic reports as we may
determine to be appropriate or as may be required by law.
We are an electronic filer. The Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The
<PAGE> 8
Commission's Web site address is "http://www.sec.gov."
As of the date of this prospectus, we became subject to the
informational requirements of the Securities Exchange Act of 1934, (the
"Exchange Act") and will file reports and other information with the
Commission. Reports and other information filed by us with the Commission
will be available for inspection and copying at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the
Commission: New York regional Office, Seven World Trade Center, 13th Floor,
New York, New York 10048; Chicago Regional Office, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material may be obtained from the
public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
REPORTS TO SECURITY HOLDERS
Copies of our Annual, Quarterly and other Reports which will be filed
by us with the Commission commencing with the Quarterly Report for the
first quarter ended after the date of this prospectus, which is due 45 days
after the end of such quarter, will also be available upon request, without
charge, by writing K-1 BUILDERS, INC., 3945 So. Wasatch Blvd. #282, Holladay,
Utah 84124.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus discuss future
expectations, contain projections of results of operation or financial
condition or state other "forward-looking" information. Those statements
are subject to known and unknown risks, uncertainties and other factors
that could cause the actual results to differ materially from those
contemplated by the statements. The forward-looking information is based
on various factors and was derived using numerous assumptions.
Important factors that may cause actual results to differ from
projections include, for example;
- the success or failure of our efforts to expand our business
strategy;
- our ability to raise sufficient capital to proceed with our
growth and expansion of services;
- our ability to negotiate and maintain favorable contractual
arrangements;
- the effect of changing economic conditions;
- the effect of rapidly changing technology;
- other risks which may be described in our future filings with the
SEC.
We do not promise to update forward-looking information to reflect
actual results or changes in assumptions or other factors that could affect
those statements.
USE OF PROCEEDS
The following table sets forth management's present estimate of the
allocation of net proceeds expected to be received from this offering. The
uses set forth below are based on estimated costs, actual costs may vary
<PAGE> 9
from these estimates. If such occurs, we may invest the net proceeds in
investment-grade, short-term, interest-bearing securities.
If Maximum If 200,000 If 100,000
Amount Sold Shares Sold Shares Sold
------------ ------------ ------------
Total Proceeds $ 200,000 $ 100,000 $ 50,000
Less:
Offering Expenses 10,000 10,000 10,000
Filing Fees
Net Proceeds from
Offering Available 190,000 90,000 40,000
Use of Net Proceeds
Sales and 80,000 30,000 25,000
marketing expenses
Equipment Rent(1) 42,000 25,000 10,000
Consultant
Compensation(1) 30,000 20,000 5,000
Administrative Costs 26,000 10,000 -0-
Legal fees 12,000 5,000 -0-
----------------------------------------------------------------------------
Total Use of Net Proceeds $ 190,000 $ 90,000 $ 40,000
----------------------------------------------------------------------------
(1) These items might cost much more than we estimate. In such event,
monies allocated to administrative costs and legal fees, if any, will be
reduced equally to cover the additional costs of the operations.
Administrative costs include continued accounting, telecommunications,
travel, etc. We anticipate incurring legal fees for the preparation of
business contracts and regulatory filings in the United States and possible
foreign countries.
Should we realize less than the full offering, we intend to scale back
our initial operations and first allocate any funds to business sales and
marketing on a local basis.
DILUTION
As of the date of this offering, we had 900,000 shares issued and
outstanding and a net tangible book value of $16,900 or $.02 per share.
<PAGE> 10
The proceeds from the sale of shares will vary depending on the total
number of shares sold.
If all 400,000 shares are sold, there would be a total of 1,300,000
shares issued and outstanding. If the maximum 400,000 shares are sold,
the net proceeds to us after deducting offering costs of $10,000 would be
$190,000. Adding the net proceeds to the net tangible book value, the
total net tangible book value of K-1 BUILDERS, INC. would be $206,900.
Dividing the net worth of K-1 BUILDERS, INC. by the number of shares
outstanding discloses a per share book value of approximately $0.16 per share.
Therefore, the shareholders who purchased pursuant to the offering will suffer
an immediate dilution in the book value of their shares of approximately $0.34
or approximately 68.0% and the present shareholders will receive an immediate
book value increase of approximately $0.14 per share.
Offering price per share $0.50
before deduction of operating expense
Net tangible book value per share $0.02
before the offering
Net tangible book value per share $0.16
after the offering
Dilution to new investors $0.34
per share
Dilution to new investors 68.0%
as a percentage
COMPARATIVE DATA
The following chart illustrates the pro forma proportionate ownership
in K-1 BUILDERS, INC. upon completion of the offering if the maximum amount is
sold, of present stockholders and of investors in the offering, compared to
the relative amounts paid and contributed to the capital of K-1 BUILDERS, INC.
by present stockholders and by investors in this offering, assuming no changes
in net tangible book value other than those resulting from the offering.
Shares Cash Average
Owned Percent Paid Percent Price
/Share
------- -------- -------- -------- --------
Present 900,000 70% $ 900 0.005% $ 0.001
Shareholders
New 400,000 30% $200,000 99.995% $ 0.50
Investors
PLAN OF DISTRIBUTION
The offering will not be sold through selling agents. Our officers
will sell the shares on a self underwritten offering basis. In the past,
we have received unsolicited indications of interest in K-1 BUILDERS, INC.
from friends and persons within the industry. Our officers will deliver
prospectuses to these individuals and to others who they believe might have
interest in investing in purchasing all or part of this offering.
<PAGE> 11
LEGAL PROCEEDINGS
To the knowledge of management, there is no material litigation
pending or threatened against K-1 BUILDERS, INC. or our management. Further,
we are not aware of any material pending or threatened litigation to which we
or any of our directors, officers or affiliates are or would be a party.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
The following table sets forth our directors, executive officers,
promoters and control persons, their ages, and all offices and positions
held within K-1 BUILDERS, INC. Directors are elected for a period of one year
and thereafter serve until their successor is duly elected by the stockholders
and qualified. Officers and other employees serve at the will of the Board of
Directors.
Name of Director Age Term served as Position with Company
---------------- ---- --------------------- ---------------------
Kevin Kirch 41 Since August 22, 2000 President, Director
John Chris Kirch 43 Since August 22, 2000 Secretary, Treasurer
And Director
The above individuals currently serve as our officers and/or directors.
We also acknowledge that Kevin and John Kirch are brothers. A brief
description of their positions, duties and their background and business
experience follows:
Kevin Kirch, Chairman of the Board, President, and Director. Age 41.
Mr. Kirch has been an officer and director of the Company since its
inception on August 22, 2000.
Prior to becoming an officer and Director of this Company, Kevin Kirch
has had multi-disciplined professional expertise which stems from running his
own business as a managing engineer in the building, development, and
construction industry for over 13 years. Since 1987, as a contract manager, he
has facilitated the start-up marketing, accounting, financial reporting and
daily operation of an entrepreneurial business, which has provided project
development and management services through-out the Western United States.
Mr. Kirch has provided management services for local and national
corporate clients, while developing interpersonal networks to expedite
contract demands. He has specialized in analyzing feasibility studies with
long-term investment planning for capital projects, as well as responsibility
for stewardship of schedules, budgets, and reporting. Mr. Kirch has served
many times as a key liaison for planned residential developments with
supporting infrastructure, and utilities management.
John Chris Kirch, Secretary, Treasurer and Director. Age 43.
<PAGE> 12
Mr. Kirch is an original incorporator, director and officer of the
Company from its inception on August 22, 2000.
Prior to the incorporation of this company Mr. Kirch had been Chairman of
Txon International Development Corporation for the past two years since its
inception in January of 1998. This company specialized in providing building
and construction services to expanding corporations. Mr. Kirch's main role in
this Company was to facilitate the company's funding needs and promotional
requirements until his resignation in June 2000.
Beginning in January of 1997, Mr. Kirch spent part time working on
business expansion plans with Weston Hotels and Properties, Inc. until May
1998 when he resigned. Also from May 1997 to present Mr. Kirch has spent part
time working on growth and development plans for Weston Caribbean Corp. now
called Zurickirch of which he remains an officer and director in the field of
nutritional health products.
From April of 1994 to December of 1996 Mr. Kirch was a cofounder and
director of planning for ABT Global Pharmaceutical Corporation. His specific
role in this start up and development stage company was to prepare its initial
business plan and arrange for start-up funding for the corporation through a
private placement offering.
Key Consultants
-----------------
Stephanie Harnicher, MBA, Age 43, has over 20 years experience in real
estate development, construction management, and real estate financial
services. From January 1998 to June 2000 Ms. Harnicher has been President of
Txon International Development Corporation. From 1992 through 1997, prior to
joining Txon Ms. Harnicher owned and operated a mortgage loan business where
she and her staff arranged mortgage loans for both home owners and business
owners. From 1981 to 1992 Ms. Harnicher worked in several key positions at
Exxon, where she was active in strategy, investment analysis, financing, real
estate development and marketing of commercial and residential real estate
projects worth $950 million. Ms. Harnicher was a key person in the development
and marketing for Exxon of many shopping centers, office complexes and
large-scale land development projects. During her tenure at Exxon, Ms.
Harnicher managed various leasing and sales personnel. She further coordinated
the construction, design, legal and property management functions.
Ms. Harnicher received her undergraduate degree from Goucher College (top
5%), and her MBA in the honors program from the George Washington University,
Washington, D.C. Her business/professional history includes almost two decades
of multifaceted management experience in finance, marketing, and real estate
development.
Seymour M. Tatar, age 67, has been Vice President, and a director of the
Planning and Design for Txon International Development Corporation Company
since from January of 1998 to June 2000. Prior to this Mr. Tatar has been an
independent architect for over 25 years with a highly successful professional
career completing over 300 projects in architecture, urban design, site
planning, contracting, construction management, and real estate development.
Mr. Tatar's expertise includes site landscape and project design,
programming, space planning, feasibility, urban renewal, city planning, civic
<PAGE> 13
and tax increment district design, engineering and specialized consultant
coordination, educational and library behavioral research, on-site
construction management services for both public and private sector clients.
Mr. Tatar is accomplished at bringing together teams of specialized
professional consultants, directing them to accomplish specific complex tasks
in a comprehensive manner. He is also has a strong background at analyzing
cost control, site selection, lighting, acoustics, environmental assessments.
real estate appraisal, traffic, food handling, asbestos removal, marketing,
legal, business and economic feasibility - all in response to an assignment's
special needs.
Mr. Tatar has been professionally registered in fourteen states, is currently
accredited by the National Council of Architectural Registration Board, and
participates in several professional and civic associations.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The term "beneficial owner" refers to both the power of investment and
the right to buy and sell shares of K-1 BUILDERS, INC. It also refers to
rights of ownership or the right to receive distributions from K-1 BUILDERS,
INC. and proceeds from the sale of K-1 BUILDERS, INC. shares. Since these
rights may be held or shared by more than one person, each person who has a
beneficial ownership interest in shares is deemed to be the beneficial owners
of the same shares because there is shared power of investment or shared
rights of ownership.
Type of Amount & Nature of % of Class
Security Name and Address Beneficial Ownership After Offering
--------- ----------------------- -------------------- ---------------
Common Kevin Kirch 600,000 46%
3378 W. 7000 S.
West Jordan,
Utah 84084
Common John Chris Kirch 300,000 24%
3672 E. Cove Point Dr.
Salt Lake City,
Utah 84109
----------------------------------------------------------------------------
All officers and directors 900,000 70%
as a group (2 persons)
============================================================================
TOTAL 900,000 70%
----------------------------------------------------------------------------
DESCRIPTION OF THE SECURITIES
The following summary describes the material provisions of our
<PAGE> 14
Articles of Incorporation and Bylaws relating to the securities, copies of
which will be furnished to an investor upon written request therefor.
Pursuant to our Articles of Incorporation and By-laws, no director
or officer shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
person as a director or officer. Notwithstanding the foregoing sentence, a
director or officer shall be liable to the extent provided by applicable
law, (i) for acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law, or (ii) for the payment of dividends in
violation of NRS 78.300.
The foregoing limitations do not affect the standards to which
directors must conform in discharging their duties to stockholders or
modify the availability of equitable relief for breach of duty. Further,
the foregoing limitations do not affect the availability of relief under
causes of action based on Federal law, including the Federal securities
laws.
The shares being registered pursuant to the registration statement of
which this prospectus is a part are shares of common stock, all of the same
class and entitled to the same rights and privileges as all other shares of
common stock.
Description of Common Stock. Our authorized capital stock consists of
50,000,000 shares of common stock with a $.001 par value, and 10,000,000
shares of preferred stock with a par value of $.0001. As of the date
of this Registration Statement, we had outstanding 900,000 shares of common
stock and no preferred, of which all common shares outstanding are validly
issued, fully paid and non-assessable. Holders of our shares are entitled to
receive dividends when declared by the Board of Directors out of funds legally
available therefore. Any such dividends may be paid in cash, property or
shares. We have not paid any dividends since our inception. All dividends
will be subject to the discretion of our Board of Directors, and will depend
upon, among other things, our operating and financial conditions, our capital
requirements and general business conditions. Therefore, there can be no
assurance that any dividends on the shares will be paid in the future.
All shares have equal voting rights and, when validly issued and
outstanding, will have one vote per share on all matters to be voted upon
by the shareholders. Cumulative voting in the election of directors is not
allowed, and a quorum for shareholder meetings shall result from a majority
of the issued and outstanding shares present in person or by proxy.
Accordingly, the holders of a majority of the shares present, in person or
by proxy at any legally convened shareholders' meeting at which the Board
of Directors is to be elected, will be able to elect all directors and the
minority shareholders will not be able to elect a representative to the
Board of Directors.
Shares have no preemptive or conversion rights, no redemption or
sinking fund provisions, and are not liable for further call or assessment.
Each share is entitled to share pro rata any assets available for
distribution to holders of its equity securities upon our liquidation.
During the pendency of the offering, subscribers will have no rights
as stockholders until the offering has been completed and the shares have
been issued to them.
<PAGE> 15
Description of Stock Options. The Board of Directors has not issued a
stock option plan at this time. To date we have not issued any options and no
option shares are being registered under this registration statement.
Transfer Agent. The company is currently acting as its own transfer
agent, however, upon completion of this registration we have contacted
Interwest Transfer Company, Inc., 1981 East 4800 South, Suite 100, Salt Lake
City, Utah 84117, Telephone (801) 272-9294, which has agreed to serve as our
transfer agent and registrar.
EXPERTS NAMED IN REGISTRATION STATEMENT
None of the experts named herein was or is a promoter, underwriter,
voting trustee, director, officer or employee of K-1 BUILDERS, INC. Further,
none of the experts was hired on a contingent basis and none of the experts
named herein will receive a direct or indirect interest in K-1 BUILDERS, INC.
COUNSEL TO THE ISSUER WITH RESPECT
TO THE PROPOSED OFFERING
Amy L. Clayton, Esq.,6337 So. Highland Dr. Suite 220 Salt Lake City, Utah
84121.
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
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 following 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. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of
K-1 BUILDERS, INC. in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the shares being registered, we will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
ORGANIZATION WITHIN THE LAST FIVE YEARS
We are a start-up company and have only recently begun operating
activities. As soon as the money from this offering is made available, we
expect to make all arrangements necessary so that we can build and expand our
operations.
<PAGE> 16
DESCRIPTION OF BUSINESS
Company History
We incorporated under the laws of the state of Nevada on August 22, 2000
as K-1 BUILDERS, INC. We were formed to further develop and market building
construction services for expanding companies. Our management believes our
services are less expensive and faster than current competitors.
We have commenced limited business operations, though to date, have
worked mostly on organizational and administrative functions.
Business of the Company
The nature of the company's business is to seek out major U.S. companies
that are expanding their business operations and are in need of real estate
development and construction services to help them grow and expand. K-1
BUILDERS, INC. is offering these services to growing companies based on the
background and experience of its officers and directors and key consultants
who have spent several years working in this field. The Company maintains its
principal place of business at its office at 3945 So. Wasatch Blvd. Suite
#282, Holladay, Utah 84124.
We have formed this Company to address what management believes is an
unmet demand for a single entity with the ability to provide an extensive
array of commercial real estate development and facility expansion services
to major U.S. and multinational corporations. Management believes that the
growing need of large corporations to establish facilities throughout the
United States and the world from which to expand into the global economy has
created demand for employee housing, ex-patriot compounds, office space,
manufacturing and related production facilities. We believe as a Company we
have development, construction and management capabilities that can be used on
a world-wide basis, and that we can offer these services on an attractive cost
effective basis.
The company does not have any significant assets. We belief that we
will be able to provide marketable services based solely on the skill,
experience and contacts of the individuals who are affiliated with the
Company. At the present time we have no employees and are relying on the
officers and directors of the company to develop our business without current
salaries due to us being in a start-up development stage.
We anticipate that our first projects will involve provision of
development services to companies who will themselves fund the acquisition,
development and construction of the real estate facilities they require.
No assurances can be given that the Company will be successful in
locating or reaching agreements with businesses willing to engage the our
services to develop, build or manage real estate projects, or that we will be
able to find financing sources sufficient to permit us to build such projects
ourselves.
We plan to give any and all bid proposals out at no cost to the company
on a speculative basis. Any potential project forthcoming will be based on a
periodic draw basis to cover needed working capital.
<PAGE> 17
As a start-up, development stage company K-1 BUILDERS, INC. to date has
undertaken sales efforts to achieve short term, local projects since
inception. This is due to our minimal start-up working capital, which has
created the likely inability to continue as a going concern absent a
substantial infusion of capital through the sale of additional securities.
Still we believe as a result of our management's and our key consultant's
long term employment as real property development professionals and with the
Company's management having formed friendships and associations with experts
in many of the areas in which K-1 BUILDERS, INC. seeks to provide real estate
related services to large national and international corporations seeking to
build a variety of physical facilities worldwide, that these relationships
will permit K-1 BUILDERS, INC. to obtain business income through consulting
agreements, joint venture agreements, subcontracts, and other opportunities,
from persons and organizations who will be willing to retain the Company for
servicing their needs and custom requirements wherever they may occur. We hope
that these past and present relationships, coupled with the skill of our
inside management, will help to establish us one day as a leader in the field
of large-scale development and facility expansion services.
Our Development and Construction Services business is intended to include
site acquisition services, procurement of approvals and permits, design and
engineering coordination, construction bidding and management, tenant finish
coordination, general contracting and complete project advisory services.
These services are fee based for third party clients.
We anticipate that approximately 90% of the Company's projects and clients
will come from opportunities in other locations other than Utah, where the
Company's executive offices are located. The company is currently focusing on
potential projects with former associates and former clients who have
expressed a potential interest to work with us on a contract basis to build
projects in several locations throughout the United States, at this time,
however there are no assurances that any potential projects will come to
fruition.
We believe the broad geographic service area that our management team and
key consultants have worked in with former relationships and associations will
lead to valuable business opportunities of labor, design and construction.
Members of the Company's management and key consultants have successfully
developed properties in many segments of the commercial real estate industry.
We believe that the experience and skill of its management may permit it to
operate in the large-scale development services industry despite the fact that
we do not not currently have assets with which to fund any portion of our
business plan except the offering of real estate development services,
through our existing management.
Marketing and Advertising
We intend to market our services through personal contact by members of
Management with persons and organizations known to have real property
expansion needs. We believe the most effective way to identify and target
potential clients is by personal contact of past working relationships and
then working through those circles of influence. The next area of marketing
company services is through secondary service providers such as planners,
architects, commercial real estate agents, mortgage bankers, investor groups
<PAGE> 18
and community service groups. The industries or project types in which this
company has particular expertise is in commercial and residential development
and master-planned community development.
K-1 BUILDERS, INC. has already been approached by a few landowners to
assist them in feasibility studies and joint development of properties. Most
of these potential business opportunities have come by way of our key
consultant's contacts developed prior to their association with our Company
while they were engaged in commercial real estate development, architecture,
construction, and engineering while employed by others. Some of our contacts
have evolved from the involvement of our management and consultants in civic,
philanthropic and professional associations. Specifically, we have have
approached developers who have pending plans for the construction of
facilities in Utah, Texas, Arizona, and California with a view to
participating in the planning and construction of the facilities either on a
contract basis, or as a joint venture if funding can be developed. As of this
date there is still no assurance that a final development contract for the
Company in any of these potential projects will be forthcoming. Other than
having many preliminary discussions and investigative conferences the company
has not entered into negotiations, bid on specific projects, or otherwise come
into a contractual relationship regarding any potential development projects.
Competition
The strong U.S. economy over the past few years has created an atmosphere
of business growth and expansion. Along with this growth has come an increase
in development opportunity seekers looking to secure large projects with large
revenue potential. Our competitors, and potential competitors have greater
financial and marketing resources than we do. Also, there can be no assurance
that we will not encounter increased competition in the future which could
limit our ability to establish, maintain or increase any market share, which
could adversely affect the Company's financial results in the near or distant
future. There can be no assurance that a continual increase in competition
will not be severely detrimental to our Company's viability and longevity.
There are many well established, large corporations which have vastly
greater financial and personnel resources than we do. In view of the Company's
extremely limited financial resources and limited number of management
personnel, we expect the company to be at a competitive disadvantage compared
to our competitors.
Competition in the real estate development business is based on scope of
services provided, fees charged and results achieved. Some of our competitors
in this area have been in business longer, have more established business
relationships and have large dedicated research staffs which this Company does
not have. However, we believe that the knowledge, experience and historical
achievements of our management personnel over many years allow us to find
suitable business opportunities.
We believe the greatest competitive advantage any business has is created
by building trust and confidence established through good, quality working
relationships. All businesses rely on relationships and alliances to build
on. To our benefit, K-1 BUILDERS, INC. management and key consultants through
their past business experiences have established good working relationships to
build on.
<PAGE> 19
According to the National Real Estate Investor Association the largest
Real Estate Developers in the United States, based on total square feet under
development in North America are as follows:
* Gerald Hines Corporation in Houston, Texas
* Trammel Crow Corporation in Dallas, Texas
* Morrison Knudsen in Boise, Idaho
* Opus Group in Minnetonka, Minnesota
* Westcor Partners in Phoenix Arizona
* Carter-Oncor in Atlanta Georgia
* Zeckendorf Corp. in New York, New York
* Homart Company in Chicago, Illinois
Research and Development
As a start-up business with extremely limited financial and human
resources we have not spent time establishing significant research and
development activities since inception, except for our personal investigations
into our potential business opportunities.
Government Approvals
Our Company must obtain certain government approvals and meet many
licensing requirements in order to provide the services we offer
in many States and foreign countries. We believe our existing
management and project affiliates will be able to meet the licensing and
project approval requirements in most states. Mr. Kevin Kirch the Company
President will act as the interface with the appropriate oversight bodies
regarding regulations to maintain compliance. His 26 years experience in the
Construction Industry has familiarized him with DOC, DOE, OSHA, HHS, DOI and
DOL regulations and the requirements of the Uniform Building Code adopted by
many states. Most approvals are granted pursuant to evaluation criteria which
are generally consistent among the majority of states. Though our Company's
management and key consultants have many years of experience in dealing with
local, state, federal and international government regulations and approval
processes, no assurance can be given that our Company's experience and
financial capabilities will be sufficient to meet the requirements of the
jurisdictions in which we intend to operate.
Effects of Governmental Regulations
The construction and development industry is highly regulated. Our
Company will be required to comply with a variety of federal, state and local
laws relating to our building activities, the building materials we use, and
the designs of our construction projects. These requirements vary
widely, depending on the location. While we believe we will be able to remain
in material compliance with all such laws, if it should be determined that our
Company is not in compliance with the law, our Company could become subject to
cease and desist orders, injunctive proceedings, civil fines and other
penalties.
Compliance with Environmental Laws
Under various federal, state, local and foreign environmental laws,
ordinances and regulations ("Environmental Laws"), a current or previous owner
or operator of real property may be liable for the cost of removal or
<PAGE> 20
remediation of hazardous or toxic substances, on, under, or in such property.
Such laws often impose liability without regard to whether the owner or
operator knew of, or was responsible for the release of such hazardous or
toxic substances. The presence of contamination from hazardous or toxic
substances, or the failure to remediate such contaminated property properly,
may adversely affect the owner's ability to sell or rent such real property or
to borrow using such real property as collateral. Persons who arrange for the
disposal or treatment of hazardous or toxic substances also may be liable for
the cost of removal or remediation of such substances at the disposal or
treatment facility, whether or not such facility is or ever was owned or
operated by such person. The operation and removal of certain underground
storage tanks also are regulated by federal and state laws.
In connection with the development, future ownership and or operation of
properties, including properties owned, leased or managed by other companies,
our Company could be held liable in part or in whole for the cost of remedial
action with respect to such regulated substances and storage tanks and claims
related to them. In addition to clean-up actions brought by federal, state and
local agencies, the presence of hazardous or toxic substances on a property
also could result in personal injury or similar claims by private plaintiffs.
There can be no assurance that federal, state and local agencies or private
plaintiffs will not bring such actions in the future, or that such actions, if
adversely resolved, would not have a material adverse effect on the Company's
business and results of operations.
Employees
We currently have no employees aside from officers and directors who
work on a part time, as needed basis with no commitment for full time
employment. All of our Company's key consultants support K-1 BUILDERS, INC.
on a consulting basis. We do not foresee hiring any further employees until
revenues and operations warrant the addition of employees.
MANAGEMENT'S DISCUSSION OF PLAN OF OPERATION
Our purpose is to engage in the business development and construction
services, first on a local and regional basis, and second on a national and
international basis. We initially intend to obtain contracts to build
facilities as needed for growing companies on a national and potentially
international basis.
We intend to offer our services in an efficient and timely manner to our
customers. We intend to offer our customers quality desaign and construction
at fair and competitive prices. We intend to compete vigorously in the
construction industry beginning within the Salt Lake City area, Rocky Mountain
region.
Our plan of operation for the next twelve months is to raise funds
through the offering, develop an attractive marketing campaign in order to
secure job contracts and expand business operations as reasonably practicable.
In addition to providing capital to help defray various start-up expenditures,
management believes that a principal use of the offering proceeds will be to
provide initial working capital necessary for operations until revenues are
generated to cover such operating expenditures. In order to achieve
satisfactory business operations management is engaging in a number of
development stage and preliminary activities. These activities include the
<PAGE> 21
following:
- Procure building contracts within the local, and regional area;
- Construct buildings and related facilities and property improvements
on a project specific basis;
- Adequately furnish the corporate offices with equipment necessary
to the business;
- Eventually hire and train employees for increasing sales,
administrative management, and labor;
- Work towards making the business profitable.
Start-up costs include the costs of contract proposals and bids, rental
equipment, bonding fees, legal fees, and administrative fees. We anticipate
that we will be able to rent heavy equipment and purchase construction
materials with less than the full offering amount being raised. However,
we anticipate that additional equipment, which will allow us to expand our
commercial operation, can be purchased if the maximum offering is raised.
Further, we anticipate that the maximum offering will allow us to continue
operations for three years as opposed to a shorter period of operations if
less than the full offering is realized.
There is no assurance that the offering will be successful or that we
will receive any net proceeds there from. We have not entered into any
contracts or commitments for renting or purchasing of equipment. Therefore,
there is no assurance we will be able to acquire sufficient equipment,
contract for services or perform operations at a sustainable profit.
We have received indications of interest from outside sources of a
willingness or interest in using our services in commercial applications
However, to date we have no commitments or contracts.
DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to
acquire any properties.
In order to significantly reduce overhead costs while the company is
experiencing current start-up financial challenges for the time being we are
now using office space donated by the company secretary which mailing address
is 3945 So. Wasatch Blvd. #282 Holladay, Utah 84124.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
To date, no compensation has been paid to any person associated with
us and we presently have no formal employment agreements or other
contractual arrangements with the officers, directors or anyone else
regarding the commitment of time or the payment of salaries or other
compensation. We plan that compensation will be based on profit sharing of
<PAGE> 22
ten percent of the pre-tax profit of K-1 BUILDERS, INC. to the officers and
directors, to be divided equally amongst them.
MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
At present, our shares are not traded publicly. There is no assurance
that a trading market will develop, or, if developed, that it will be
sustained. A purchaser of shares may, therefore, find it difficult to
resell the securities offered herein should he or she desire to do so when
eligible for public resales. Furthermore, the shares are not marginal and
it is unlikely that a lending institution would accept the shares as
collateral for a loan.
Pursuant to this Registration Statement, we propose to publicly offer
a maximum of 400,000 shares. To date, no shares are subject to outstanding
options, warrants to purchase or securities convertible into common stock.
No shares have been sold pursuant to Rule 144 of the Securities Act. We
have agreed to register no shares held by existing security holders for
resale.
EXECUTIVE COMPENSATION
Mr. Kevin Kirch and John Chris Kirch have not received, nor are they
projected to receive, any compensation for their services, including their
capacities as Directors, other than the issuance of the Company's Common Stock
as set forth in this document. Should the Company become profitable and
produce commensurate cash flows from operations and/or through the sale of
strategic investments, there may be some level of compensation paid to them,
however, this will be subject to approval by the Company's Board of Directors.
It is the responsibility of the Company's Officers and its Board of Directors
to determine the timing of any remuneration for key personnel. Such
determination and timing thereof will be based upon such factors as positive
cash flow to include equity sales, operating cash flows, capital requirements,
and a positive cash flow balance in excess of $12,500 per month. At the time
cash flow reaches this point, and appears to be sustainable, the Officers and
Board of Directors will again address the compensation of its key personnel
and set forth a more formal and complete plan for remuneration in line with
operations of the Company. At present, the Company`s management cannot
accurately estimate the point when revenues and operating cash flows will be
sufficient enough to implement this compensation plan, nor are they able to
estimate the exact amount of compensation at this time. There are no annuity,
pension, or retirement benefits proposed to be paid to Officers, Directors, or
employees of the Company in the event of retirement at normal date pursuant to
any presently existing plan provided or contributed to by the Company, or any
of its subsidiaries, if any.
Board Committees
The Company's board of directors has periodically met (or acted through
unanimous written consent) since the date of incorporation. The Company
currently has no Board committees.
Certain Transactions
<PAGE> 23
In August 2000, the Company was incorporated and issued 900,000 in
private placement transactions to its founders through the sale shares of its
Common Stock. If applicable, the registration period shall commence
immediately after the effective date of this registration statement and the
Founding Security Holders after the required holding period will be able to
sell shares under Rule 144 promulgated under the Securities Act.
Compensation Committee Interlocks and Insider Participation
Not Applicable.
Conflicts
Except as disclosed herein, there are no material interests, direct or
indirect, of directors, senior officers or any shareholders who beneficially
own, directly or indirectly, more than 10% of the outstanding K-1 Builders,
Inc. Shares or any known associates or affiliates of such persons, in any
transaction since incorporation or in any proposed transaction which has
materially affected or would materially affect K-1 Builders, Inc.
The directors of K-1 Builders, Inc. in the future may be engaged in other
projects. Conflicts of interest, if any, which may arise will be subject to,
and governed by, procedures prescribed by the corporate by-laws, which require
a director or officer of a corporation who is a party to, who is a director or
an officer of, or who has a material interest with any person who is a party
to, a material contract or proposed material contract with the corporation, to
disclose his interest and, in the case of directors, to refrain from voting on
any matter in respect of such contract unless otherwise permitted under the
corporate by-laws.
Option Grants in Last Fiscal Year
K-1 Builders, Inc. has not granted any options prior to the date of this
offering.
Indebtedness of K-1 Builders, Inc. Directors and Senior Officers
Since incorporation, no indebtedness has been incurred nor does any
indebtedness currently exist between K-1 Builders, Inc. and the directors or
officers of K-1 Builders, Inc. or any of their associates or affiliates.
Employment Agreements
There are no employment agreements between the Issuer and its officers or
directors.
Summary Compensation Table
There were no stock awards, restricted stock awards, stock options, stock
appreciation rights, long-term incentive plan compensation or similar rights
granted to any of our officers or directors. None of our officers or
directors presently holds directly any stock options or stock purchase rights.
We have no retirement, pension profit sharing, or other plan covering any of
our officers and directors.
Stock Option Plans
<PAGE> 24
As of the date of this offering, we have no outstanding stock options
held directly by our officers or directors, and we have adopted no formal
stock option plans for our officers, directors and/or employees. We reserve
the right to adopt one or more stock options plans in the future. As of the
date of this offering, we have no plans to issue additional shares of our
common or preferred stock or options to acquire the same to our officers,
directors or their affiliates or associates.
FINANCIAL STATEMENTS
Our audited financial statements which consist of audited balance sheets
as of August 31, 2000, and audited related statements of operations,
stockholders' equity and cash flows from inception on August 22, 2000 through
August 31, 2000 and accompanying foot notes appear on the following pages.
Our audited financial statements appearing in this Registration
Statement have been examined by Robison Hill & Company, Certified Public
Accountants, as indicated in the report contained herein. The financial
statements are included in this Registration Statement in reliance upon the
report of that firm as an expert in auditing and accounting.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
<PAGE> 25
K-1 BUILDERS, INC.
(A Development Stage Company)
-:-
INDEPENDENT AUDITOR'S REPORT
AUGUST 31, 2000
<PAGE> 26
CONTENTS
Page
Independent Auditor's Report.......................................F - 1
Balance Sheet
August 31, 2000...................................................F - 2
Statements of Operations for the
Period From August 22, 2000 to August 31, 2000...................F - 3
Statement of Stockholders' Equity
Since August 22, 2000 (inception) to August 31, 2000.............F - 4
Statements of Cash Flows for the
Period From August 22, 2000 to August 31, 2000....................F - 5
Notes to Financial Statements......................................F - 6
<PAGE> 27
_____________________________________________________________________________
ROBISON, HILL & CO. Certified Public Accountants
A Professional Corporation
INDEPENDENT AUDITOR'S REPORT
K-1 Builders, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of K-1 Builders, Inc. (a
development stage company) as of August 31, 2000, and the related statements
of operations and cash flows for the period from August 22, 2000 to August 31,
2000, and the statement of stockholders' equity from August 22, 2000
(inception) to August 31, 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we 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. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of K-1 Builders, Inc.
(a development stage company) as of August 31, 2000 and the results of its
operations and its cash flows for the period from August 22, 2000 to August
31, 2000 in conformity with generally accepted accounting principles.
Respectfully submitted
/s/ Robinson, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
September 14, 2000
F-1
1366 East Murray-Holladay Road, Salt Lake City, Utah 84117-5050
Telephone 801/272-8045, Facsimile 801/277-9942
<PAGE> 28
K-1 BUILDERS, INC.
(A Development Stage Company)
BALANCE SHEETS
August 31,
2000
-------------
Assets:
Cash & Cash Equivalents $ 16,900
-------------
Total Assets $ 16,900
=============
Liabilities - Accounts Payable $ -
-------------
Stockholders' Equity:
Preferred Stock, Par value $.0001
Authorized 10,000,000 shares
No shares issued at August 31, 2000 -
Common Stock, Par value $.001
Authorized 50,000,000 shares, Issued
900,000 shares at August 31, 2000 900
Paid-In Capital 20,900
Deficit Accumulated During Development Stage (4,900)
-------------
Total Stockholders' Equity 16,900
-------------
Total Liabilities and Stockholders' Equity $ 16,900
=============
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE> 29
K-1 BUILDERS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative
since
For the period August 22, 2000
Ended Inception of
August 31, development
2000 stage
-------------- --------------
Revenues: $ - $ -
Expenses: 4,900 4,900
-------------- --------------
Net Loss $ (4,900) $ (4,900)
-------------- --------------
Basic & Diluted loss per share $ (0.02) $ (0.02)
============== ==============
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 30
K-1 BUILDERS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
SINCE AUGUST 22, 2000 (INCEPTION) TO AUGUST 31, 2000
Deficit
Accumulated
Since
August 22,
2000
Inception of
Common Stock Paid-In Development
Shares Par Value Capital Stage
----------- ------------ ------------ ------------
Balance at August 22, 2000
(inception) - $ - $ - $ -
August 28, 2000 Issuance of
Stock for services 900,000 900 - -
Capital contributed by
Shareholder - - 20,900 -
Net Loss - - - (4,900)
----------- ------------ ------------ ------------
Balance at August 31, 2000 900,000 $ 900 $ 20,900 $ (4,900)
=========== ============ ============ ============
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 31
K-1 BUILDERS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative
since
For the period August 22, 2000
Ended Inception of
August 31, development
2000 stage
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (4,900) $ (4,900)
Increase (Decrease) in Accounts Payable - -
-------------- --------------
Net Cash Used in operating activities (4,900) (4,900)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by investing activities - -
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Common Stock 900 900
Capital contributed by shareholder 20,900 20,900
-------------- --------------
Net Cash Provided by Financing Activities 21,800 21,800
-------------- --------------
Net (Decrease) Increase in
Cash and Cash Equivalents 16,900 16,900
Cash and Cash Equivalents
at Beginning of Period - -
-------------- --------------
Cash and Cash Equivalents at End of Period $ 16,900 $ 16,900
============== ==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ -
Franchise and income taxes $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES: None
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 32
K-1 BUILDERS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for K-1 Builders, Inc. is presented
to assist in understanding the Company's financial statements. The accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
--------------------------------------
The Company was incorporated under the laws of the State of Nevada on
August 22, 2000.
Nature of Business
------------------
The Company has no products or services as of August 31, 2000. The
Company was organized as a vehicle to further develop and market building
construction services for expanding companies.
Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents to the extent the funds are not being held for
investment purposes.
Pervasiveness of Estimates
--------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
F-6
<PAGE> 33
K-1 BUILDERS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31, 2000
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Loss per Share
--------------
The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
Per-Share
Income Shares Amount
------------ ------------ ----------
(Numerator) (Denominator)
For the year ended August 31, 2000
------------------------------------
Basic Loss per Share
Loss to common shareholders $ (4,900) 300,000 $ (0.02)
=========== ============ ===========
The effect of outstanding common stock equivalents would be anti-dilutive
for August 31, 2000 and are thus not considered.
NOTE 2 - INCOME TAXES
As of August 31, 2000, the Company had a net operating loss carryforward
for income tax reporting purposes of approximately $4,900 that may be offset
against future taxable income through 2011. Current tax laws limit the amount
of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited. No tax benefit has been reported
in the financial statements, because the Company believes there is a 50% or
greater chance the carry forwards will expire unused. Accordingly, the
potential tax benefits of the loss carry forwards are offset by a valuation
allowance of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
F-7
<PAGE> 34
K-1 BUILDERS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31, 2000
(Continued)
NOTE 4 - COMMITMENTS
As of August 31, 2000 all activities of the Company have been conducted
by corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the company for the use of these
facilities and there are no commitments for future use of the facilities.
F-8
<PAGE> 35
Outside back cover page of prospectus
Until ___________, 2000, all dealers that effect transactions in these
securities, whether or not participating in the offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
No person is authorized to give any information or to make any
representation other than those contained in this prospectus, and if given or
made, such information or representation must not be relied upon as having
been authorized. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the shares offered
by this prospectus or an offer to sell or a solicitation of an offer to buy
the shares in any jurisdiction to any person to whom it is unlawful to make
such an offer or solicitation in such jurisdiction
____________________________________
Up to 400,000 shares
K-1 BUILDERS, INC.
Common stock
________________________
Prospectus
__________________________
_______________, 2000
K-1 BUILDERS, INC.
3945 S. Wasatch Bvd. Suite 282
Holladay, Utah 84124
(801) 574-8000
<PAGE> 36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
----------------------------------------------------------------------------
ITEM 24 - Indemnification of Directors and Officers
The statutes, charter provisions, bylaws, contracts or other
arrangements under which controlling persons, directors or officers of the
registrant are insured or indemnified in any manner against any liability
which they may incur in such capacity are as follows:
(a) Section 78.751 of the Nevada Business Corporation Act provides
that each corporation shall have the following powers:
1. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the
right of the corporation, by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and
in a manner which he reasonably believed to be in or not opposed
to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, does not, of itself
create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and that, with
respect to any criminal action or proceeding, he had reasonable
cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys'
fees actually and reasonably incurred by him in connection with
the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as
to which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be
liable to the corporation or for amounts paid in settlement to
<PAGE> 37
the corporation, unless and only to the extent that the court in
which the action or suit was brought or other court of competent
jurisdiction, determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
subsections 1 and 2, or in defense of any claim, issue or matter
therein, he must be indemnified by the corporation against
expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by
a court or advanced pursuant to subsection 5, must be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum
consisting of directors who were not parties to the act, suit or
proceeding;
(c) If a majority vote of a quorum consisting of directors
who were not parties to the act, suit or proceeding so orders, by
independent legal counsel, in a written opinion; or
(d) If a quorum consisting of directors who were not
parties to the act, suit or proceeding cannot be obtained, by
independent legal counsel in a written opinion.
5. The certificate or articles of incorporation, the bylaws or
an agreement made by the corporation may provide that the
expenses of officers and directors incurred in defending a civil
or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay
the amount if it is ultimately determined by a court of competent
jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any
rights to advancement of expenses to which corporate personnel
other than directors or officers may be entitled under any
contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
<PAGE> 38
(a) Does not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be
entitled under the certificate or articles of incorporation
or any bylaw, agreement, vote of stockholders of
disinterested directors or otherwise, for either an action
in his official capacity or an action in another capacity
while holding his office, except that indemnification,
unless ordered by a court pursuant to subsection 2 or for
the advancement of expenses made pursuant to subsection 5,
may not be made to or on behalf of any director or officer
if a final adjudication establishes that his acts or
omissions involved intentional misconduct, fraud or a
knowing violation of the law and was material to the cause
of action.
(b) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the
heirs, executors and administrators of such a person.
7. The registrant's Articles of Incorporation limit liability of its
Officers and Directors to the full extent permitted by the Nevada
Business Corporation Act.
ITEM 25 - Other Expenses of Issuance and Distribution
All expenses are estimates
Amount
Expense Maximum
------- -------
SEC Registration Fees $ 52.80
Blue Sky fees and expenses $ 1,000.00
Printing and shipping expenses $ 2,000.00
Legal fees and expenses $ 5,000.00
Accounting fees and expenses $ 1,000.00
Transfer and miscellaneous expenses $ 947.20
Total $10,000.00
ITEM 26 - Recent Sales of Unregistered Securities
The following unregistered securities were issued by K-1 BUILDERS, INC.:
On August 28, 2000, we issued 900,000 shares to Kevin Kirch and John
Chris Kirch as founders and officers and directors of the Company. The
transaction was effected pursuant to Section 4(2) of the Securities Act of
1933, as amended.
<PAGE> 39
ITEM 27- Exhibits
(A) Exhibits
Exhibit
Number Description
2.1 Articles of Incorporation
2.2 By-laws
10.1 Consent of Independent Auditor
10.2 Consent of Legal Counsel(Included in Exhibit 11)
11 Opinion of Legality
27 Financial Data Schedule
ITEM 28 - Undertakings
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of K-1 BUILDERS, INC. 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. In the event
that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by a director, officer or
controlling person of K-1 BUILDERS, INC. in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
K-1 BUILDERS, INC. hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 242(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) Include any additional or changed material information on
the plan of distribution.
<PAGE> 40
(2) For determining liability under the Securities Act treat each post-
effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
SIGNATURES
The issuer has duly caused this offering statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Salt
Lake City, State of Utah, on September 20, 2000.
K-1 BUILDERS, INC.
By: /s/ John Chris Kirch
-----------------
Its: Secretary, Treasurer &
Director
This offering statement has been signed by the following persons in the
capacities and on the dates indicated.
Name and Title Date
/s/ Kevin Kirch September 20, 2000
---------------- ------------------
Kevin Kirch,
President, & Director
/s/ John Chris Kirch September 20, 2000
-------------------- ------------------
Secretary & Director
<PAGE> 40
