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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of The Securities Exchange Act of 1934
SENTRY BUILDERS CORP.
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(Name of Small Business Issuer in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation or Organization)
11-215-9633
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(I.R.S. Employer Identification No.)
38 Hartman Hill Road
Huntington, New York 11743
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(Address of Principal Executive Offices)
(631) 367-7450
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(Issuer's Telephone Number)
Securities to be registered under Section 12(b) of the Act:
None
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $0.01
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TABLE OF CONTENTS
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PART I.......................................................................... 1
ITEM 1. DESCRIPTION OF BUSINESS.......................................... 1
History and Business Development......................... 1
Our Business Plan........................................ 2
Source of Business Opportunities......................... 2
Evaluation Criteria...................................... 3
Competition.............................................. 4
Employees................................................ 5
Governmental Regulations on the Business................. 5
Costs and Effects of Compliance with Environmental Laws.. 5
Reports to Security Holders.............................. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION........................................................ 6
Plan of Operation........................................ 7
ITEM 3. DESCRIPTION OF PROPERTY.......................................... 8
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT... 8
Security Ownership of Certain Beneficial Owners.......... 8
Security Ownership of Management......................... 9
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS................................. 9
Compliance with Section 16(A) of the Securities
Exchange Act of 1934...................................10
ITEM 6. EXECUTIVE COMPENSATION...........................................10
Involvement in Certain Legal Proceedings.................11
Board Compensation.......................................12
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................12
ITEM 8. DESCRIPTION OF SECURITIES........................................12
Common Stock.............................................12
PART II.........................................................................13
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS....................13
ITEM 2. LEGAL PROCEEDINGS................................................13
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS....................13
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES..........................13
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS........................14
PART F/S..................................................................F-1
PART III. Index and Description of Exhibits...................................15
SIGNATURES......................................................................16
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PART I
This discussion in this Registration Statement regarding our company
and its business and operations contain "forward-looking statements." Such
statements consist of any statement other than a recitation of historical fact
and can be identified by the use of forward-looking terminology such as "may,"
"expect," "anticipate," "estimate" or "continue" or the negative thereof or
other variations thereon or comparable terminology. The reader is cautioned that
all forward-looking statements are necessarily speculative and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward-looking statements. We do not
have a policy of updating or revising forward-looking statements and thus it
should not be assumed that silence by its management over time means that actual
events are bearing out as estimated in such forward-looking statements.
ITEM 1. DESCRIPTION OF BUSINESS
(a) HISTORY AND BUSINESS DEVELOPMENT.
We were incorporated as a Delaware corporation on January 14, 1970,
under the name Sentry Builders Corp. On January 15, 1970, we acquired all of the
issued and outstanding capital stock of Sentry Builders Corp., a New York
corporation, whose business at the time involved construction in and around the
metropolitan area of New York City. Included within its business operations at
the time were U.S. Housing and Urban Development renovation and rehabilitation
projects, private commercial and industrial general construction as well as
acting as consultants to the building trades industry.
In 1971, we issued 113 shareholders an aggregate of 53,730 common
shares pursuant to the exemption from registration under Regulation A of the
Securities Act of 1933. We received gross proceeds of $167,190 in this
transaction. In 1979, after the completion of all outstanding construction
projects, we ceased operations as did public trading in the Company's shares.
After a twenty-one-year dormancy, we will attempt to actively seek,
through acquisition or merger, potential operating businesses and business
opportunities with a particular focus on the hospitality (hotel) industry. We
have not yet commenced principal operations or earned significant revenues. As
of the date of filing, we have no agreements with any third party to commence
such operations.
Any target acquisition or merger candidate will become subject to the
same reporting requirements as us upon consummation of any such business
combination. Thus, in the event that we successfully complete an acquisition or
merger with another operating business, the resulting combined business must
provide audited financial statements for at least the two most recent fiscal
years, or in the event that the combined operating business has been in business
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less than two years, audited financial statements will be required from the
period of inception of the target acquisition or merger candidate.
We anticipate the cost of funding our proposed business plan could
range between $500,000 and $1,000,000 million dollars. To date there has been no
financing of the Company's proposed operations. While no commitments have been
received to provide the funding, we believe that there are persons or entities
that will provide the balance of any needed financing on terms offered by us.
We have not been involved in any bankruptcy, receivership or similar
proceeding. Nor have we been involved in any material reclassification, merger,
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
We are voluntarily filing this registration statement on Form 10-SB to
make information concerning our self more readily available to the public.
Management believes that being a reporting company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), could provide a prospective merger
or acquisition candidate with additional information concerning us. In addition,
management believes that this may make us more attractive to an operating
business opportunity as a potential business combination candidate. As a result
of filing our registration statement, we are obligated to file with the
Commission certain interim and periodic reports including an annual report
containing audited financial statements. We intend to continue to voluntarily
file these periodic reports under the Exchange Act even if our obligation to
file such reports is suspended under applicable provisions of the Exchange Act.
We will also endeavor to have our Common Stock approved for quotation on the OTC
Bulletin Board following the effectiveness of this Form 10-SB. There can be no
assurance, however, that even if our Common Stock is approved for quotation,
that any meaningful public market in our Common Stock will develop.
(b) OUR BUSINESS PLAN.
We are considered a development stage company, and due to our status as
a "shell" corporation, our principal business purpose is to acquire operating
assets or merge operating entities with our Company. We make no representation
that we will be able to carry out our activities profitably. Our emphasis will
be on the acquisition of hotels in the New York, New Jersey and Pennsylvania
tri-state area which are undercapitalized or financially distressed, although we
will not be limited by this type of project. We expect that we will utilize
local Realtors, advertisements in trade and other publications, and referrals
from persons with whom we may have pre-existing relationships as methods of
locating these properties. We are presently in the early stages of implementing
our business plan, including establishing various relationships with other
companies to assist us in the implementation of our business plan.
SOURCE OF BUSINESS OPPORTUNITIES. We intend to use various sources in
our search for potential business opportunities including our principal officer,
Richard Melius, consultants, securities broker-dealers, venture capitalists,
real estate brokers and members of the financial community and
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others who may present management with unsolicited proposals. We may investigate
and ultimately acquire a venture that is in its preliminary or development
stage, is already in operation, or in various stages of its corporate existence
or development. Management cannot predict at this time the status or nature of
any venture in which we may participate. The most likely scenario for a possible
business arrangement would involve the acquisition of or merger with an
operating business in the hospitality industry, e.g., hotels, motels,
restaurants, etc., which is financially distressed and which may be in need of
additional capital. We believe that our Company will attract private entities
interested in becoming a publicly held corporation without the time and expense
typically associated with an initial public offering.
We may obtain funds for acquisition by private placements, equity or
debt issues. Persons purchasing securities in these placements and other
shareholders will likely not have the opportunity to participate in the decision
relating to any acquisition. Investors will entrust their investment monies to
the Company's management before they have a chance to analyze any ultimate use
to which their money may be put. Consequently, the Company's potential success
is heavily dependent on the Company's management, which will have virtually
unlimited discretion in new construction or acquisition.
EVALUATION CRITERIA. Once we have identified a particular entity as a
potential acquisition or merger candidate, management will seek to determine
whether acquisition or merger is warranted or whether further investigation is
necessary. Such determination will generally be based on management's knowledge
and experience, or with the assistance of outside advisors and consultants
evaluating the preliminary information available to them. Management may elect
to engage outside independent consultants to perform preliminary analyses of
potential business opportunities. However, because of our limited access to
capital we may not have the necessary funds for a complete and exhaustive
investigation of any particular opportunity. Further, no member of management is
a professional business analyst and management will rely on its own business
judgment in formulating the types of businesses that we may acquire. It is quite
possible that management will not have any business experience or expertise in
the type of business engaged in by any potential acquisition or merger
candidate.
In evaluating such potential business opportunities, we will consider,
to the extent relevant to the specific opportunity, several factors including
potential benefits to our Company and our shareholders; working capital,
financial requirements and availability of additional financing; history of
operation, if any; nature of present and expected competition; quality and
experience of management; need for further research, development or exploration;
potential for growth and expansion; potential for profits; and other factors
deemed relevant to the specific opportunity. Because we have not located or
identified any specific business opportunity to date, there are certain
unidentified risks that cannot be adequately expressed prior to the
identification of a specific business opportunity. There can be no assurance
following consummation of any acquisition or merger that the business venture
will develop into a going concern or, if the business is already operating, that
it will continue to operate successfully. Many of the potential business
opportunities available to us may involve new and untested products, or market
strategies, which may not ultimately prove successful.
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Presently, we cannot predict the manner in which we might participate
in a prospective business opportunity. Each separate potential opportunity will
be reviewed and, upon the basis of that review, a suitable legal structure or
method of participation will be chosen. The particular manner in which we
participate in a specific business opportunity will depend upon the nature of
that opportunity, the respective needs and desires of our management and the
relative negotiating strength of the parties involved. Actual participation in a
business venture may take the form of an asset purchase, lease, joint venture,
license, partnership, stock purchase, reorganization, merger or consolidation.
We may act directly or indirectly through an interest in a partnership,
corporation, or other form of organization, however, we do not intend to
participate in opportunities through the purchase of minority stock positions.
We will target properties which we consider to be underutilized, over
leveraged or capital deficit companies where current owners are financially
immobilized because of capital, liquidity, and tax requirements. These types of
investments will be structured so that long term value will be restored in the
target property through increased utilization accomplished through marketing and
capital improvements.
(c) COMPETITION.
Because we have not yet identified any potential acquisition or merger
candidate, we are unable to evaluate the type and extent of our likely
competition. We are aware of the likelihood that there are other public
companies with only nominal assets that are also searching for operating
businesses and other business opportunities as potential acquisition or merger
candidates. We will be in direct competition with these other public companies
in their search for business opportunities and, due to our limited access to
funds, it may be difficult to successfully compete with these other companies.
We are also aware that the segment of the hospitality industry in which we are
seeking acquisitions is highly competitive. We will compete directly or
indirectly with many companies, a number of which are larger, better capitalized
and more established. There can be no assurance that the Company will be able to
compete favorably in the future.
Each of the hotels we intend to operate will compete with other hotels
in its geographic area. Like the hotel management business, the lodging
industry, in general, is highly competitive. The supply of hotel rooms in the
United States has increased substantially over the past several years, and we
expect that it will continue to grow. The hotels we will operate will compete
with other hotels on factors such as room rates, quality of accommodations, name
recognition, service levels, convenience of location and the quality and scope
of other amenities including food and beverage facilities.
In addition to the factors on which we compete discussed above, we
encounter competitive disadvantages, including the facts that we generally will
have less access to capital than larger companies and companies that own a
substantial amount of real estate.
Many of our competitors have substantially greater financial resources
and better name recognition than we do. We currently have no commitments for
capital to make such investments and, therefore, we will be required to obtain
financing to provide the necessary funds. We cannot assure
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you that we will be able to obtain such financing on commercially reasonable
terms, if at all.
(d) EMPLOYEES.
As of this date, we do not have any employees except our president,
Richard Melius. We have no plans for retaining employees until such time as our
business warrants the expense, or until we successfully acquire or merge with an
operating business. Management however, believes that its present employee is
adequate to support its current operations.
(e) GOVERNMENTAL REGULATIONS ON THE BUSINESS.
The lodging industry is subject to extensive government regulation,
including laws which regulate the licensing of hotels and restaurants, the sale
of food and liquor and the disposal of hazardous waste. We are also subject to
laws regarding our relationship with our employees, including minimum wage,
overtime, working conditions and work permit requirements. Under the Americans
With Disabilities Act of 1990, all public accommodations are required to meet
federal requirements relating to access and use by disabled persons. Should we
acquire hotel or restaurant properties, they will be substantially in compliance
with the requirements of the ADA. However, a determination that our hotels or
restaurants are not in compliance with the ADA could result in liability for
fines and damages.
Should we engage in hotel management, we are subject to extensive
governmental regulation, including laws which relate to the licensing of hotels
and restaurants, the preparation and sale of food and beverages, the adaptation
of public accommodations for use by the disabled, general building and zoning
requirements and the disposal of hazardous waste. We are also subject to laws
relating to our relationship with our employees, including minimum wage,
overtime, working conditions and work permit requirements. Although third-party
hotel owners are generally responsible for paying all costs, expenses and
liabilities incurred in the operation of the hotels we manage, including
compliance with laws (including environmental laws), we may be contingently
liable for liabilities for which we do not maintain insurance, including claims
arising under the ADA.
(f) COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS.
The Company, like others in its industry, will be subject to various
federal, state, and local laws, ordinances and regulations that (i) govern
activities or operations that may have adverse environmental effects, such as
discharges to air and water, as well as handling and disposal practices for
solid and hazardous or toxic wastes, or (ii) may impose liability for the costs
of cleaning up, and certain damages resulting from, sites of past spills,
disposals or other releases of hazardous or toxic substances or wastes
(together, "Environmental Laws"). Various laws impose liability for the costs of
removal or remediation of hazardous or toxic substances on the properties we
operate, regardless of whether we knew of or were responsible for the presence
of such hazardous or toxic substances. Depending on the circumstances, we could
also be liable for personal injury associated with exposure to
asbestos-containing materials. Environmental laws also may restrict the manner
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in which property may be used or businesses may be operated, and these
restrictions may result in expenditures and require interruption of such
businesses.
In negotiating the acquisition of properties we will seek indemnity
agreements to protect us from environmental liabilities relating to the
properties. In addition, we will employ skilled inspectors to determine the
presence of asbestos-containing materials. While asbestos-containing materials
may be present in prospective properties, we intend to design and implement
operations and maintenance programs for abating any such asbestos-containing
materials at such properties. Based upon our business plan, we intend that the
presence of any asbestos-containing materials in facilities we may acquire will
not have a material adverse effect on our financial condition or results of
operations. We, however, cannot be sure that this will be the case. We cannot
currently anticipate the costs of complying with environmental regulations.
(g) REPORTS TO SECURITY HOLDERS.
We are not, until the effectiveness of this registration statement,
subject to the reporting requirements of the Securities & Exchange Act of 1934
and the rules and regulations promulgated thereunder, and, therefore, do not
file reports, proxy statements or other information with the Securities &
Exchange Commission. Copies of the registration statement, including the
exhibits to the Registration Statement and other material that is not included
herein, may be inspected, without charge, at the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and may be available at the following Regional Offices of the
Commission: Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, New York, New York 10048.
Copies of such materials may be obtained at prescribed rates from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Information on the operation of the Public Reference
Room may be obtained by calling the Commission at 1-800-SEC-0330. In addition,
the Commission maintains an Internet site on the World Wide Web at
HTTP://WWW.SEC.GOV that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Management's Discussion and Analysis or Plan of Operation contains
various "forward-looking statements" within the meaning of the Securities Act of
1933 and the Securities And Exchange Act of 1934, which represents the Company's
expectations or beliefs concerning future events, including without limitation
the following; fluctuations in the economy; ability of the Company to obtain
financing on terms and conditions that are favorable; ability of the Company to
improve levels of profitability and sufficiency of cash provided by operations.
The Company cautions that these statements are further qualified by important
factors that could cause actual results to differ materially from those
contained in the forward-looking statements, including without limitations,
general economic conditions, changes in the level of operating expense and the
present and future level of competition. Results actually achieved may differ
materially from expected results included in these statements.
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(a) PLAN OF OPERATION.
Our purpose is to reactivate our corporate vehicle to seek, investigate
and, if such investigation warrants, acquire one or more business opportunities
presented to us by persons or firms who or which desire to seek the perceived
advantage of a publicly held corporation. During the next twelve months, we will
actively seek and investigate possible opportunities with the intent to acquire
and merge with one or more business ventures. In our search for business
opportunities, management will follow the procedures outlined in Item 1 above.
Because we currently lack funds, it may be necessary for our principal officer,
director and shareholder to either advance funds to accrue expenses until such
time as a successful business consolidation can be made.
Management intends to hold expenses to a minimum and to obtain services
on a contingency basis when possible. As is customary in the industry, the
Company may pay a finder's fee for locating an acquisition prospect. If any such
fee is paid, it will be approved by the Company's Board of Directors and will be
in accordance with the industry standards. Such fees are customarily between 1%
and 5% of the size of the transaction, based upon a sliding scale of the amount
involved. Such fees are typically in the range of 5% on a $1,000,000 transaction
ratably down to 1% in a $4,000,000 transaction. Management has adopted a policy
that such a finder's fee or real estate brokerage fee could, in certain
circumstances, be paid to any employee, officer, director or 5% shareholder of
the Company, if such person plays a material role in bringing in a transaction
to the Company.
Management's discretion is unrestricted, and we may participate in any
business whatsoever that may in the opinion of management meet the business
objectives discussed herein. We intend to limit the scope of our search to the
New York, New Jersey and Pennsylvania region.
Our officer and directors will be primarily responsible for searching
for an appropriate merger or acquisition candidate. We recognize that as a
result of our limited financial, managerial or other resources, the number of
suitable potential businesses that may be available to it will be extremely
limited. Our principal business objective will be to seek long-term growth
potential in the business in which it participates rather than immediate,
short-term earnings. In seeking to attain our business objectives, we will not
restrict our search to any particular industry. Although we intend to focus on
the hospitality industry, we may investigate businesses of essentially any kind
or nature, including but not limited to finance, high technology, manufacturing,
service, research and development, communications, insurance, brokerage,
transportation and others. Management may also seek to become involved with
other development stage companies or companies that could be categorized as
"financially troubled." At the present time, we have not conducted any market
studies with respect to business property or industry.
As of the date hereof, we have not made any arrangements or definitive
agreements to use outside advisors or consultants to raise any capital. In the
event we do need to raise capital most likely the only method available to us
would be the private sale of our securities. Because of our nature as a
development stage company, it is unlikely we could make a public
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sale of securities or be able to borrow any significant sum, from either a
commercial or private lender. There can be no assurance that we will be able to
obtain additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to us.
We do not intend to use any employees, with the exception of our
president, and part-time clerical assistance on an as-needed basis. Outside
advisors, attorneys or consultants will only be used if they can be obtained for
a minimal cost or for a deferred payment basis. Management is confident that it
will be able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
While it is difficult to determine with accuracy, we anticipate that we
will require $500,000 in cash to operate in the first year of operations.
ITEM 3. DESCRIPTION OF PROPERTY
Our corporate headquarters are located at 38 Hartman Hill Road,
Huntington, New York 11743, with telephone number (631) 367-7450. We pay no rent
for this office space. We do not anticipate a change in our office space which
is currently located in a home.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of December 31, 1999 by (a) each
person known by us to be the beneficial owner of five percent or more of the
outstanding common stock and (b) all executive officers and directors both
individually and as a group. Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, we believe that
each of the shareholders named in this table has sole or shared voting and
investment power with respect to the shares indicated as beneficially owned.
Applicable percentages are based upon 253,700 shares of common stock
outstanding.
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
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NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
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<S> <C> <C> <C>
Common Stock Richard Melius 198,000 78%
38 Hartman Hill Road
Huntington, New York 11743
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(b) SECURITY OWNERSHIP OF MANAGEMENT.
<TABLE>
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NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
-------------- ------------------------- ------------------------ --------------
<S> <C> <C> <C>
Common Stock Richard Melius 198,000 78%
38 Hartman Hill Road
Huntington, New York 11743
Common Stock Theodore Daniels 1,000 .004%
4400 N. Federal Hwy., #210
Boca Raton, FL 33431
Common Stock Total Officers & Directors 199,000 78.004%
</TABLE>
There are no arrangements which may result in a change in control of
the Company.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
The following sets forth the names and ages of our executive officers
and directors. Directors are elected annually at our annual meeting of
stockholders, and serve for the one year term for which they are elected and
until their successors are duly elected and qualified. Vacancies in the Board of
Directors are filled by the remaining members of the Board until the next annual
meeting of shareholders. Our officers are elected by the Board of Directors at
its first meeting after each annual meeting of our shareholders and serve at the
discretion of the Board of Directors or until their earlier resignation or
death. Pursuant to our Bylaws we are authorized to maintain a minimum three
member Board of Directors, and executive officers as needed. The directors and
officers for fiscal 2000 were as follows:
<TABLE>
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NAME AGE POSITION TERM
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Richard Melius 64 President, CEO/Director 2000 - 2001
CFO/Director 2000 - 2001
Theodore Daniels 72 Secretary/Director 2000 - 2001
Vice President, Sales 2000 - 2001
Cathy Ballas 53 Director 2000 - 2001
</TABLE>
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Richard Melius has served as the Company's President, director and
principal shareholder, since its inception in 1970. From 1980 until the present
Richard Melius has served as President and CEO of North American Motor Inns, 259
Broadway Realty Corp, companies which are involved in the ownership and
operation of hotels and restaurants in the tri-state areas of New York, New
Jersey and Pennsylvania. From 1959 to 1979 Mr. Melius was engaged in the general
construction business.
Theodore Daniels has served as the Company's Secretary and Director
since its inception in 1970. Mr. Daniels has been a practicing attorney in the
State of New York and the State of Florida since 1954 and since 1981
respectively.
Cathy Ballas owned and operated delicatessens in the New York area and
has been retired for the last ten years.
Unless otherwise noted, the address of each of the directors and
officers of the Company is 38 Hartman Hills Road, Huntington, New York 11743
(a) COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the outstanding common stock, to file with the Securities and
Exchange Commission (the"SEC") initial reports of ownership on Form 3 and
reports of changes in ownership of Common Stock on Forms 4 or 5. Such persons
are required by SEC regulation to furnish the Company with copies of all such
reports they file.
Based solely on its review of the copies of such reports furnished to
the Company or written representations that no other reports were required. The
Company believes that all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were complied
with during the year ended December 31, 1999.
ITEM 6. EXECUTIVE COMPENSATION
The following table sets forth summary information concerning the
compensation received for services rendered to us during the fiscal year ended
December 31, 1999. No executive officer of the Company has had annual
compensation in excess of $100,000. The following table shows for the year ended
December 31, 1999 to the present, that no the cash and other compensation was
paid by the Company to its President and Chairman or to the other directors or
officers.
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
--------------------------------------- ----------------------------
Awards
(a) (b) (c) (d) (e) (f) (g)
Name Other
and Annual Restricted Securities
Principal Compen- Stock Underlying
Position sation Award(s) Options
Year Salary ($) Bonus ($) ($) ($) SARs (#)
------------------ ---------- --------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Richard
Melius,
President
Theodore
Daniels,
Secretary
and
Director
Cathy Ballas,
Director
</TABLE>
(a) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
During the past five years, no director or officer of the Company has:
1. Filed or had filed against him a petition under the federal
bankruptcy laws or any state insolvency law, nor has a
receiver, fiscal agent or similar officer been appointed by a
court for the business or property of such person, or any
partnership in which he was a general partner, or any
corporation or business association of which he was an
executive officer at or within two years before such filings;
2. Been convicted in a criminal proceeding;
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3. Been the subject of any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining
such person from, or otherwise limiting his involvement in any
type of business, securities or banking activities;
4. Been found by a court of competent jurisdiction in a civil
action, the SEC or the Commodity Futures Trading Commission
("FTC") to have violated any federal or state securities or
commodities law, which judgment has not been reversed,
suspended, or vacated.
(b) BOARD COMPENSATION
Our directors do not receive cash compensation for their services as
Directors.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no material transactions, series of similar
transactions, or currently proposed transactions, to which we were or are to be
a party, in which the amount involved exceeded $60,000 and in which any director
or executive officer, or any security holder who is known to us to own of record
or beneficially more than five percent of our Common Stock, or any member of the
immediate family of any of the foregoing persons, had a material interest.
ITEM 8. DESCRIPTION OF SECURITIES
(a) COMMON STOCK.
We are authorized to issue 1,000,000 shares of common stock, par value
$0.01 per share, of which 253,730 shares were issued and outstanding as of
October 31, 2000. Two hundred (200,000) thousand shares were issued to the three
original officers pursuant to an exemption under Section 4(2) of the Securities
Act of 1933, not involving a public offering, and 53,730 were sold in the
Regulation A offering. All of the issued and outstanding common stock is fully
paid and non-assessable. We have no other class of stock.
Each share of common stock entitles the holder thereof to one vote in
the election of directors and all other matters upon which stockholders are
entitled to vote. There are no cumulative voting rights, which means that the
holders of more than 50% of the outstanding shares voting for the election of
directors can elect all of the directors to be elected, if they so choose. In
such event, the holders of the remaining shares will not be able to elect any of
our directors.
Each share of common stock entitles the holder thereof to receive cash
dividends as the Board of Directors may declare from funds legally available
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therefore. However, we do not intend to declare any dividend on our common stock
in the foreseeable future.
There are no preemptive rights with respect to our common stock. Upon
liquidation, dissolution or winding up of the affairs of the Company, and after
payment of creditors, the assets legally available for distribution will be
divided ratably on a share-for-share basis among the holders of the outstanding
shares of common stock.
The Company is the current transfer agent and registrar for our common
stock.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
There is no public trading market for our common stock. We have no
outstanding options, or other securities that could be converted into common
stock. As of October 25, 2000, there were approximately 113 holders of record of
our 253,700 shares of common stock outstanding. Our president, Richard Melius
owns 198,000 shares. We have not paid a cash dividend on the common stock since
inception. The payment of dividends may be made at the discretion of our Board
of Directors and will depend upon, among other things, our operations, our
capital requirements and our overall financial condition. Although there is no
restriction to pay dividends, as of the date of this registration statement, we
have no intention to declare dividends.
ITEM 2. LEGAL PROCEEDINGS.
We are currently unaware of any pending legal proceeding or any
proceeding contemplated by a governmental authority in which we may be involved.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have not had any resignation, dismissal or disagreements with our
principal independent accountants. As of the date of this registration
statement, F.X. Duffy & Co. located at 4265 Kelly Drive, Philadelphia,
Pennsylvania 19129-1722, serves as our independent accountants and have prepared
the audited statements included as exhibits hereto.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
There have been no sales of unregistered securities.
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<PAGE> 16
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
DELAWARE LAW. Our bylaws and articles of incorporation provide that no
officer or director of the Company shall be personally liable to the Company or
its shareholders for damages for breach of duty owned to the Company or its
shareholders to the fullest extent permitted by law. In addition, the Company
shall have the power to undertake to indemnify the officers and directors of the
company against any contingency or peril as may be determined to be in the best
interest of the Company.
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<PAGE> 17
PART F/S
F.X. DUFFY & COMPANY
CERTIFIED PUBLIC ACCOUNTANT
(Letterhead)
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Sentry Builders, Corp.
38 Hartman Hills Road
Huntingdon, NY 11743
We have audited the accompanying balance sheet of Sentry Builders, Corp. as of
July 31, 1999, and the related statement of income for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of the
United States. 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 of 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 Sentry Builders, Corp. as July
31, 1999 and the results of its operations and its cash flows and its (analysis
of net worth/changes in stockholders' equity) for the year then ended in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. Such information has been subjected to
the auditing procedures applied in te audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
/s/ F.X. Duffy & Co
------------------------------------
F.X. Duffy & Co.
July 21, 2000
F-1
<PAGE> 18
SENTRY BUILDERS, CORP.
BALANCE SHEET
AS OF JULY 31, 1999
ASSETS
CURRENT ASSETS:
TOTAL CURRENT ASSETS 0
TOTAL ASSETS $ 0
=====
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
F-2
<PAGE> 19
SENTRY BUILDERS, CORP.
BALANCE SHEET
AS OF JULY 31, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
TOTAL LIABILITIES $ 0
STOCKHOLDERS' EQUITY:
Common Stock (PAR VALUE .01(CENT)) 2,000
Additional Paid-in Capital 112,295
Retained Earnings (114,295)
----------
TOTAL STOCKHOLDERS' EQUITY 0
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 0
=====
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
F-3
<PAGE> 20
SENTRY BUILDERS, CORP.
STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED JULY 31, 1999
SALES $ 0
TOTAL COST OF GOODS SOLD 0
OPERATING EXPENSES:
Franchise Fees $ 0
--------
TOTAL OPERATING EXPENSES 0
---------
NET LOSS $ 0
=========
TOTAL ASSETS $ 0
=========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
F-4
<PAGE> 21
SENTRY BUILDERS, CORP.
NOTES TO FINANCIAL STATEMENT
FOR THE TWELVE MONTHS ENDED JULY 31, 1999
1. NATURE OF BUSINESS
Sentry Builders, Corp. (the "Company") is currently an inactive
corporation. A related company using the same name was incorporated in
1961 under the laws of the State of New York. In 1971 the Company was
incorporated in the State of Delaware, obtaining a Delaware charter,
and began public trading of stock ceased and the Company has remained
inactive since that time. The Company is authorized by its articles of
incorporation to issue 1,000,000 shares par value of .01(cent) of
common stock. 256,000 shares are presently issued and outstanding.
2. AMENDMENT TO THE ARTICLES OF INCORPORATION
The Company is presently amending its articles of incorporation to
authorize the issuance of an additional 19,000,000 shares of stock.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
F-5
<PAGE> 22
PART III. INDEX AND DESCRIPTION OF EXHIBITS
EXHIBIT DESCRIPTION PAGE
------------ ----------- -----
3.i Articles of Incorporation
3.ii Bylaws
5 Opinion of Allan M. Lerner
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
SENTRY BUILDERS CORP.
Dated: November 1, 2000 By: /s/
------------------- -----------------------
Richard Melius,
President and CEO
16
