U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form SB-2
Amendment #3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
K-1 BUILDERS, INC.
------------------
(Name of small business issuer in its charter)
333-46682
-------------------------
(Commission File No.)
Nevada 87-0659918
----------------------- ---------------------------- --------------------
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
198 Union Blvd. Suite #200
Lakewood, Colorado
80228
(801) 420-6400
-------------------------
(Address and telephone
number of principal executive
offices and principal
place of business)
Kevin Kirch, President,
Chief Executive Officer
K-1 Builders, Inc.
198 Union Blvd. Suite #200
Lakewood, Colorado
80228
(801) 420-6400
-------------------------
(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
<PAGE> 1
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. [ ]
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 4,000,000 $0.05 $200,000 $ 52.80
Stock, shares per 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
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Section Page
-------- ----
Prospectus Summary ....................................................... 5
Risk factors ............................................................ 6
Expectation of Future Losses......................................... 6
Challenges of a New Business......................................... 6
Our Competitive Disadvantage ........................................ 6
Compliance With Governmental Regulations ............................ 6
Compliance With Environmental Regulations ........................... 7
Going Concern........................................................ 7
Lack of Sufficient Funding............................................7
Self Underwritten Best Efforts Offering...................... ........7
No Assurance of Public Market.........................................7
Arbitrary Offering Price..............................................8
Designation of Our Stock as a Penny Stock ............................8
Immediate and Substantial Dilution ...................................8
Limited Information Available ....................................... 8
Forward-looking statements ............................................... 9
Use of proceeds ..........................................................10
Dilution .................................................................11
Comparative Data .........................................................12
Plan of Distribution .................................................... 13
Legal proceedings ........................................................13
Directors, Executive Officers, Promoters and Control Persons .............13
Security Ownership of Certain Beneficial Owners and Management ...........15
Description of Securities.................................................16
Experts Named in Registration Statement...................................17
Disclosure of Commission Position On Indemnification for
Securities Act Liabilities ...............................................18
Organization Within the Last Five Years ................................. 18
Description of Business.................................................. 18
Management's Discussion and Analysis of Plan of Operation ................22
Description of Property...................................................24
Certain Relationships and Related Party Transactions .....................24
Market for Common Equity and Related Stockholder Matters .................24
Executive Compensation ...................................................25
Determination of Offering Price...........................................26
Financial statements......................................................26
Changes in and Disagreements with Accounts............................... 26
<PAGE> 3
PROSPECTUS
K-1 Builders, Inc.
Maximum Offering: 4,000,000 shares of common stock
Offering Price: $.05 per share
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K-1 Builders, Inc. This is our initial public offering,
198 Union Blvd., Suite #200 and no public market currently exists
Lakewood, CO 80228 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 $0.05 $200,000
Underwriting
Discounts -0- -0-
Maximum
Proceeds to
K-1 Builders, $0.05 $200,000*
Inc.
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K-1 Builders, Inc. is a new development stage company planning to exploit
the need for commercial real estate development and facility expansion
services to major U.S. and multinational corporations.
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.
The shares offered should not be purchased by any investor who cannot afford
to sustain the total loss of their investment.
"See Risk Factors beginning on page 6 for a description of the risks you
should carefully consider before investing." Prospective investors should
carefully consider all of the risk factors, in addition to the other
information set forth in this prospectus.
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.
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.
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.
The date of this prospectus is ____________________, 2000.
<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 opportunity for us to provide 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: 4,000,000 shares of common stock.
Offering Price: $0.05 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
<PAGE> 5
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
prospectus, including the Consolidated Financial Statements and Notes,
prior to making an investment in K-1 Builders, Inc.
Expectation of Future Losses
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 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.
The Market May Not Accept Our New Business
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. We
have not undertaken any independent market studies to determine the
feasibility of our services or its potential market acceptance.
We Have a Serious Competitive Disadvantage
There are many well established concerns which have vastly greater
financial and personnel resources than our Company. In view of the our
extremely limited financial resources and limited number of management
personnel, the company expects to be at a serious competitive disadvantage
compared to our Company's competitors.
If We Fail to Raise Adequate Capital We Will Be Unable to Continue As a Gong
Concern
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 will need additional capital as 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 May Have a Lack of Sufficient Funding
<PAGE> 6
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.
This is a Self Underwritten Best Efforts Offering
The shares are being 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 our 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.
There is No Assurance of a Public Market
There is no public market for our shares and an active trading market for
our common stock may not develop or continue after this offering. Therefore
an investment in our securities may be an illiquid long-term investment.
Additionally, with this offering being on a best efforts basis with no minimum
there is a risk of losing your entire investment if the offering is
substantially undersold.
This Has an Arbitrary Offering Price
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.
Because Our Stock Will Be Subject To the "Penny Stock," Rules, We May
Experience a Decreased Trading Market For Our Shares
Our shares will be subject to Rule 15g-9, whereby a broker-dealer must
make a special suitability determination for the purchaser and have received
the purchaser's written consent to the transaction prior to sale.
Consequently, the rule may affect the ability of broker-dealers to sell our
shares and may affect the ability of holders to sell their shares in the
secondary market.
This rule imposes additional sales practice requirements on
broker-dealers that sell low-priced securities designated as "penny stocks" to
persons other than established customers and institutional accredited
investors. The SEC's regulations define a "penny stock" to be any equity
security that has a market price less than $5.00 per share or with an exercise
price of less than $5.00 per share, subject to certain exceptions. Initially
our stock will be a penny stock. We cannot assure you that our shares will
ever qualify for exemption from these restrictions.
<PAGE> 7
There Will Be Immediate and Substantial Dilution
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 $45,000.00
cash and services . If the maximum number of shares offered hereby are
sold, upon completion of the offering present stockholders will own 18%
of the then outstanding shares, and investors in the offering will own the
other 82% , 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.
There Are Severe Penalties for Non-Compliance With Governmental Regulations
The construction and development industry is highly regulated. The
Company will be required to comply with a variety of federal, state and local
laws relating to its proposed building activities, the building materials it
uses, and the designs of its 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.
There Are Severe Penalties for Non-Compliance With Environmental Regulations
There are many strict regulations in connection with construction and
development projects of which our Company could be held liable in part or in
whole, including the cost of remedial action with respect to many
environmental issues. 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
our Company's business and results of operations.
Investors Have Limited Information Availability
Investors may have limited information available on which to access
our status because we have only limited SEC reporting requirements.
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.
<PAGE> 8
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
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., 198 Union Blvd. Suite #200,
Lakewood CO, 80228.
<PAGE> 8
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
from these estimates. If such occurs, we may invest the net proceeds in
investment-grade, short-term, interest-bearing securities.
If Maximum If 2,000,000 If 1,000,000
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
<PAGE> 10
Consultant
Compensation(1) 30,000 20,000 5,000
Administrative Costs 26,000 10,000 -0-
Legal fees 12,000 5,000 -0-
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Total Use of Net Proceeds $190,000 $90,000 $40,000
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(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.
The proceeds from the sale of shares will vary depending on the total
number of shares sold.
If all 4,000,000 shares are sold, there would be a total of
4,900,000 shares issued and outstanding. If the maximum 4,000,000
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 $0.04
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 $0.01 or approximately 20.0% and the present
shareholders will receive an immediate book value increase of approximately
$0.02 per share.
Offering price per share $0.05
before deduction of operating expense
Net tangible book value per share $0.02
before the offering
Net tangible book value per share $0.04
after the offering
Dilution to new investors $0.01
per share
Dilution to new investors 20.0%
as a percentage
<PAGE> 11
The following table illustrates the dilution per share to new investors on a
percentage of completion basis:
Assumes Assumes Assumes
500,000 1,000,000 4,000,000
shares shares shares
------- ------- -------
Initial public offering price $.05 $.05 $.05
per share
Pro forma net tangible book $.02 $.02 $.02
value per share as of
August 31, 2000
Pro-forma net tangible book $.00 $.00 $.02
value increase per share
attributable to new
shareholders
As adjusted net tangible book $.00 $.01 $.04
value per share after offering
Dilution per share to new $.05 $.04 $.01
shareholders
______________________
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
Shareholders 900,000 18% $ 45,000 18% $0.05
New
Investors 4,000,000 82% $200,000 82% $0.05
<PAGE> 12
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.
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 Chris 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 named Kirch-Co, as a managing engineer in the building,
development, and construction industry from March 1987 through August 2000. In
his position as President and CEO of this company 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.
Additionally, as CEO of Kirch-Co. Mr. Kirch has provided management
services for local and national corporate clients, while developing
<PAGE> 13
interpersonal networks to expedite contract demands. He has expertise 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 in his position at Kirch-Co. as a
key liaison for planned residential developments with supporting
infrastructure, and utilities management.
John Chris Kirch, Secretary, Treasurer and Director. Age 43.
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.
Txon, a development stage company, had no revenues or earnings through
its latest 12-month reporting period. Total assets and shareholders equity as
of the Company's latest 10-Q filing was $642. Total losses since inception
were $361,766.
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.
Zurichkirch Corp., a development stage company, has had no revenues or
earnings in its latest 12-month period. Total assets and shareholders equity
according to the company's latest audited financials are $16,039. Total
losses since inception are $119,051.
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.
ABT Global Pharmaceutical Corp. now called Pharmaprint, Inc. in its
latest 12-month 10-K filings with the S.E.C. reported revenues of $6,492,868,
with earnings of a net loss of $5,023,828. Total assets were $2,579,942.
Shareholders equity was a negative $12,011,202. Total losses since inception
were reported as $74,007,636.
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
<PAGE> 14
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 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 12%
3378 W. 7000 S.
West Jordan,
Utah 84084
Common John Chris Kirch 300,000 6%
3672 E. Cove Point Dr.
Salt Lake City,
Utah 84109
----------------------------------------------------------------------------
All officers and directors 900,000 18%
as a group (2 persons)
============================================================================
TOTAL 900,000 18%
----------------------------------------------------------------------------
DESCRIPTION OF THE SECURITIES
The following summary describes the material provisions of our
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
<PAGE> 16
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.
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.
<PAGE> 17
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.
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 198 Union Blvd. Suite #200,
Lakewood, CO 80228.
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,
<PAGE> 18
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.
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
<PAGE> 19
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
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
<PAGE> 20
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.
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
<PAGE> 21
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
In connection with any development and construction project we pursue
there will be various federal, state, local and foreign environmental laws,
ordinances and regulations that must be strictly adhered to. Such laws often
impose liability without regard to whether the owner or operator knew of, or
was responsible for the environmental damages. Our Company could be held
liable in part or in whole for the cost of remedial action with respect to any
such environmental infractions and claims related to them. 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 design 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.
<PAGE> 22
Plan of Operation
During the next 12 months, our plan of operation consists of the
following:
- Attempt to raise up to $200,000 in this offering; (three months)
- Finalize development and construction contracts with a suitable
companies within the area; (one to two months)
- Begin target marketing of services; (two to three months)
- Hire and train approximately three to five employees; (one
to two months)
- Commence expanding sales and construction operations;
(three to six months) and
- Work towards making the business profitable. (twelve months)
Accomplishing our 12 month plan of operations is dependent on our company
being able to raise capital by successfully completing this offering. Becoming
profitable will also depend on additional factors, some of which are beyond
our control. As of the date of this prospectus we have no commitments for any
portion of this offering.
Our current cash is sufficient to pay all the expenses of this offering.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Our activities to date have been limited to our formation, services
development study, and the preparation of this offering.
Liquidity and Capital Reserves
Presently our liquid resources are sufficient to pay all of the costs of
this offering and some marketing preparations. We are dependent on completing
this offering successfully in order to obtain the funding necessary to
implement our business plan described above. Our auditors have issued a
"going concern" opinion in Note 4 of our audited financial statements which
forms a part of this prospectus, indicating that we do not have an established
source of revenues sufficient to cover our operating costs and to allow us to
continue as a going concern. It is our intent to complete this offering to
provide us with the funds to build and operate a health and nutritional
supplements business.
To the extent we are able to obtain substantial capital for our use and
purposes from this offering, we will be able to move out of the planning and
pre-implementation stage and proceed with our business plan.
Our business plan requires substantial funding which we are seeking
through this offering. If we successfully complete a partial offering but
raise less than the maximum offering, we do not expect to seek debt financing.
The officers and directors decided at the time of incorporation that
<PAGE> 23
we would offer shares of our common stock in an attempt to finance our initial
capital needs. We have successfully arranged short term financing as
reflected in our financial statements.
Together with existing funds, the net proceeds from the sale of the
offering as outlined within this prospectus, we believe we will have
sufficient working capital to meet anticipated capital needs for the next 12
months. After that, additional funds will need to be generated either from
internal operations or be obtained from equity or debt financing, for which we
have no commitments.
Since we can provide no assurance that our efforts in this offering will
be successful, we intend to actively pursue other financing or funding
opportunities. Agreements for these types of financing arrangements will only
be entered into if, in our opinion, they provide a less expensive and/or more
stable form of financing or funding.
DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to
acquire any properties.
The company originally had its offices located at 3945 So. Wasatch
Blvd. #282, Holladay, UT 84124, in order to significantly reduce overhead
costs while the company is experiencing current start-up financial challenges
which office space was donated by the company secretary. The company has
recently changed its address to 198 Union Blvd. Suite #200, Lakewood, CO
80228.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The company has engaged in one related transaction in that office space
has been donated to the company at no charge for an indefinite period by John
Chris Kirch an officer of the company. See "Description of Property."
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 4,000,000 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.
<PAGE> 24
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. At present, we cannot accurately estimate the
point when revenues and operating cash flows will be sufficient enough to
implement an appropriate compensation plan, nor are we 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.
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.
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.
Option Grants in Last Fiscal Year
K-1 Builders, Inc. has not granted any options prior to the date of this
offering.
Indebitedness 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.
<PAGE> 25
Stock Option Plans
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.
DETERMINATION OF OFFERING PRICE
The offering price of $.05 per Share for the Shares we are
offering has been arbitrarily determined by our management. This price bears
no relation to our assets, book value, or any other customary investment
criteria. Among factors considered by us in determining the offering price
were estimates of our business potential, our limited financial
resources, the amount of equity and control desired to be retained by our
present shareholders, the amount of dilution to public investors and the
general condition of the securities markets.
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> 26
FINANCIALS
K-1 BUILDERS, INC.
(A Development Stage Company)
-:-
INDEPENDENT AUDITOR'S REPORT
AUGUST 31, 2000
<PAGE> 27
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> 28
<Letterhead ROBISON, HILL & CO.
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/ Robison, 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 801/272-9942
<PAGE> 29
K-1 BUILDERS, INC.
(A Development Stage Company)
BALANCE SHEETS
August 31,
2000
-------------
Assets:
Cash & Cash Equivalents $ 16,900
-------------
Total Assets $ 16,900
=============
Liabilities - Advances $ 20,000
-------------
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 44,100
Deficit Accumulated During Development Stage (48,100)
-------------
Total Stockholders' Equity (3,100)
-------------
Total Liabilities and Stockholders' Equity $ 16,900
=============
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE> 30
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:
General & Administrative 48,100 48,100
------------- -------------
Net Loss $ (48,100) $ (48,100)
------------- -------------
Basic & Diluted loss per share $ (0.05) $ (0.05)
============= =============
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 31
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 cash and
Services at $0.O5 per
share 900,000 900 44,100 -
Net Loss - - - (48,100)
------------ ------------ ------------ -------------
Balance at August 31,
2000 900,000 $ 900 $ 44,100 $ (48,100)
============ ============ ============ =============
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 32
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 $ (48,100) $ (48,100)
Common Stock Issued for Services 44,100 44,100
Increase (Decrease) in Advances 20,000 20,000
--------------- ---------------
Net Cash Used in operating activities 16,000 16,000
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by investing activities - -
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Common Stock 900 900
--------------- ---------------
Net Cash Provided by Financing Activities 900 900
--------------- ---------------
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> 33
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> 34
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 $ (48,100) 900,000 $ (0.05)
=========== ========= ==========
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 $4,000 that may be offset
against future taxable income through 2020. 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> 35
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> 36
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 4,000,000 shares
K-1 Builders, Inc.
Common stock
________________________
Prospectus
__________________________
_______________, 2000
K-1 Builders, Inc.
198 Union Blvd., Suite #200
Lakewood, CO 80228
(801) 420-6400
<PAGE> 37
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> 38
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> 39
(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> 40
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)
10.3*** Consent of Independent Auditor
11* Opinion of Legality
27*** Financial Data Schedule
* Filed with initial filing on Form SB-2, September 27, 2000
** Filed with Amended filing on form SB-2, November 9, 2000
*** Filed herewith
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
<PAGE> 41
the plan of distribution.
(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 Lakewood,
State of Colorado on December 20, 2000.
K-1 BUILDERS, INC.
By: /s/ John Chris Kirch
-----------------
Its: Secretary, Treasurer
Director and Chief Accounting and
Financial Officer
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 December 20, 2000
---------------- --------------
Kevin Kirch,
President, & Director
/s/ John Chris Kirch
--------------------
Secretary, Treasurer, Director December 20, 2000
And Chief Accounting and --------------
Financial Officer
