UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the fiscal year ended:
OR
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification) |
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(
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Securities registered pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $0.001 per share
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in 405 of the Securities Act. Yes [ ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ]
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.
Large accelerated filer [ ] |
| Accelerated filer [ ] |
| Smaller reporting company | |
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. The market value of the registrant’s voting $
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant's only class of common stock, as of March 26, 2020 was
DOCUMENTS INCORPORATED BY REFERENCE
None
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TABLE OF CONTENTS
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PART I
ITEM 1. BUSINESS
Baynon International Corp. (“Baynon”), formerly known as Technology Associates Corporation, was originally incorporated on February 29, 1968, under the laws of the Commonwealth of Massachusetts. On December 28, 1989, Baynon reincorporated under the laws of the State of Nevada. Baynon was formerly engaged in the technology marketing business. Baynon has not engaged in any business operations since 2003.
Baynon is considered a blank check company for purposes of this report. As defined in Section 7(b)(3) of the Securities Act of 1933, as amended, a blank check company is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or an acquisition with an unidentified company or companies and is issuing "penny stock" securities as defined in Rule 3(a)(51) of the Securities Exchange Act of 1934, as amended.
Baynon's current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into Baynon. In certain instances, a target company may wish to become a subsidiary of Baynon or may wish to contribute or sell assets to Baynon rather than to merge. No assurances can be given that Baynon will be successful in identifying or negotiating with any target company. Baynon seeks to provide a method for a foreign or domestic private company to become a reporting or public company whose securities are qualified for trading in the United States secondary markets.
A business combination with a target company normally will involve the transfer to the target company of the majority of the issued and outstanding common stock of Baynon, and the substitution by the target company of its own management and board of directors. No assurances can be given that Baynon will be able to enter into a business combination, or, if Baynon does enter into such a business combination, no assurances can be given as to the terms of a business combination, or as to the nature of the target company.
Baynon has not engaged in any business operations since 2003. The current and proposed business activities described herein classify Baynon as a blank check company. The Securities and Exchange Commission and many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies. Management does not intend to undertake any efforts to cause a market to develop in Baynon's securities until such time as Baynon has successfully implemented its business plan described herein.
ITEM 1A. RISK FACTORS
Not applicable to a smaller reporting company.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
Baynon has no properties and at this time has no agreements to acquire any properties. Baynon currently uses for its principal place of business the home office of Pasquale Catizone, an officer and director of Baynon, at no cost to Baynon, an arrangement which management expects will continue until Baynon completes an acquisition or merger.
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ITEM 3. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against Baynon.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable
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PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
(a) Market Information. There has been no trading market for Baynon's common stock for at least the last ten years. There can be no assurance that a trading market will ever develop or, if such a market does develop, that it will continue.
Holders. There were approximately 533 record holders of Baynon's common stock as of March 26, 2020. The issued and outstanding shares of Baynon's common stock were issued in accordance with the exemptions from registration afforded by Sections 3(b) and 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder.
Dividends. Holders of the registrant's common stock are entitled to receive such dividends as may be declared by its board of directors. No dividends on the registrant's common stock have ever been paid, and the registrant does not anticipate that dividends will be paid on its common stock in the foreseeable future.
Securities authorized for issuance under equity compensation plans. No securities are authorized for issuance by the registrant under equity compensation plans.
Performance graph. Not applicable.
Sale of unregistered securities. None.
(b) Use of Proceeds. Not applicable.
(c) Purchases of Equity Securities by the issuers and affiliated purchasers. None.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable to a smaller reporting company.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-looking Statements
Statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operation, as well as in certain other parts of this Annual report on Form 10-K (as well as information included in oral statements or other written statements made or to be made by Baynon) that look forward in time, are forward-looking statements made pursuant to the safe harbor provisions of the Private Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, expectations, predictions, and assumptions and other statements which are other than statements of historical facts. Although Baynon believes such forward-looking statements are reasonable, it can give no assurance that any forward-looking statements will prove to be correct. Such forward-looking statements are subject to, and are qualified by, known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by those statements. These risks, uncertainties and other factors include, but are not limited to Baynon’s ability to estimate the impact of competition and of industry consolidation and risks, uncertainties and other factors set forth in Baynon’s filings with the Securities and Exchange Commission, including without limitation to this Annual Report on Form 10-K.
Baynon undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-K.
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Critical Accounting Policies
The following discussion as well as disclosures included elsewhere in this Form 10-K, are based upon our audited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. These financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America.
The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingencies. Baynon continually evaluates the accounting policies and estimates used to prepare the financial statements. Baynon bases its estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management.
Trends and Uncertainties
There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on our limited operations. There are no known causes for any material changes from period to period in one or more line items of Baynon’s financial statements.
Liquidity and Capital Resources
At December 31, 2019, Baynon had a cash balance of $5,349 which represents a $8,459 decrease from the $13,808 balance at December 31, 2018. Net cash used in operations totaled $28,459. During 2019 and 2018, Baynon did not pursue any investing activities. During 2019, Baynon received proceeds from a related party’s note payable of $20,000, resulting in net proceeds provided by financing activities of $20,000. During 2018, Baynon did not purse any financing activities. The decrease in cash was primarily the result of satisfying the requirements of a reporting company.
The focus of Baynon’s efforts is to acquire or develop an operating business. Despite no active operations at this time, management intends to continue in business and has no intention to liquidate Baynon. Baynon has considered various business alternatives including the possible acquisition of an existing business, but to date has found possible opportunities unsuitable or excessively priced. Baynon does not contemplate limiting the scope of its search to any particular industry. Management has considered the risk of possible opportunities as well as their potential rewards. Management has invested time evaluating several proposals for possible acquisition or combination; however, none of these opportunities were pursued. Baynon presently owns no real property and at this time has no intention of acquiring any such property. Baynon’s sole expected expenses are comprised of professional fees primarily incident to its reporting requirements.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, Baynon has incurred losses of $28,129 and $23,265 for the years ended December 31, 2019 and 2018, respectively, has a working capital and stockholder’s deficiency and lack of revenue generating operations, all which raise substantial doubt about the Company’s ability to continue as a going concern.
Management believes the Company will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional equity or debt financing to sustain its operations until it can achieve profitability and positive cash flows, if ever. Management plans to seek additional debt and/or equity financing for the Company but cannot assure that such financing will be available on acceptable terms.
The Company’s continuation as a going concern is dependent upon its ability to ultimately attain profitable operations, generate sufficient cash flow to meet its obligations, and obtain additional financing as may be required.
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Our auditors have included a going concern qualification in their auditors’ report dated March 26, 2020. Such a going concern qualification may make it more difficult for us to raise funds when needed. The outcome of this uncertainty cannot be assured.
The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that management will be successful in implementing its business plan or that the successful implementation of such business plan will actually improve Baynon’s operating results.
Results of Operations for the Year Ended December 31, 2019 compared to the Year Ended December 31, 2018
Baynon incurred a net loss of $28,129 in 2019 versus a net loss of $23,265 in 2018. General and administrative expenses were $21,935 in 2019 compared to $17,882 in 2018, an increase of $4,053. The increase was a result of an increase of legal and stock transfer fees charged.
General and administrative expenses, which consist of fees paid for legal, accounting, auditing and stock transfer services, were incurred primarily to enable Baynon to satisfy the requirements of a reporting company.
During the current and prior year, Baynon did not record an income tax benefit due to the uncertainty associated with Baynon’s ability to merge with an operating company, which might permit Baynon to avail itself of these advantages and the Company’s ability to utilize the net operating loss carryforwards may be limited by a potential merger.
Recently Issued Accounting Standards
Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements.
Off Balance Sheet Arrangements
None.
Disclosures of Contractual Obligations
None.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Baynon International Corp.
Index to
Financial Statements
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Statements of Operations for the years ended December 31, 2019 and 2018 |
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Statements of Stockholders' Deficiency for the years ended December 31, 2019 and 2018 |
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Statements of Cash Flows for the years ended December 31, 2019 and 2018 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Baynon International Corporation
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Baynon International Corporation (the "Company") as of December 31, 2019 and 2018, and the related statements of operations, stockholders’ deficiency, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company's recurring losses from operations, stockholders’ deficiency and working capital deficiency, and lack of revenue generating operations, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
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 are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/Rotenberg Meril Solomon Bertiger & Guttilla, P.C.
ROTENBERG MERIL SOLOMON BERTIGER & GUTTILLA, P.C.
We have served as the Company’s auditor since 2005.
Saddle Brook, New Jersey
March 26, 2020
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BAYNON INTERNATIONAL CORP.
BALANCE SHEETS
DECEMBER 31, 2019 AND 2018
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Assets: |
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Current Assets: |
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Cash and cash equivalents | $ | $ |
Total Current assets | | |
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Total Assets | $ | $ |
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Liabilities and Stockholders’ Deficiency: | ||
Current liabilities: |
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Accounts payable and accrued expenses | $ | $ |
Convertible notes payable – related parties | ||
Accrued interest – related parties | | |
Total Current Liabilities | ||
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Total Liabilities | ||
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Stockholders’ Deficiency: |
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Common stock, par value $ | ||
Additional paid-in capital | ||
Accumulated deficit | ( | ( |
Total Stockholders’ Deficiency | ( | ( |
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Total Liabilities and Stockholders’ Deficiency | $ | $ |
The accompanying notes are an integral part of these financial statements.
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BAYNON INTERNATIONAL CORP.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
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Revenues |
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General and administrative expenses |
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Operating loss |
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Other Income (Expense): |
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Interest income |
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Interest expense – related parties |
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Total Other Income (Expense) |
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Net Loss |
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Loss per share: |
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Basic and diluted loss per common share |
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Basic and diluted common shares outstanding |
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he accompanying notes are an integral part of these financial statements.
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BAYNON INTERNATIONAL CORP.
STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
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Balance, January 1, 2018 | $ | $ | $( | $( | |
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Net loss for the year | - | ( | ( | ||
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Balance, December 31, 2018 | $ | $ | $( | $( | |
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Net loss for the year | - | ( | ( | ||
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Balance, December 31, 2019 | $ | $ | $( | $( | |
The accompanying notes are an integral part of these financial statements.
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BAYNON INTERNATIONAL CORP.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
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Cash flows from Operating Activities: |
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Net loss | $ ( | $ ( |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Increase (decrease) in accounts payable and accrued expenses | ( | |
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Decrease in Cash and Cash Equivalents | ( | ( |
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Cash and Cash Equivalents, beginning of year | | |
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Cash and Cash Equivalents, end of year | $ | $ |
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Income taxes | $ | $ |
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Interest | $ | $ |
The accompanying notes are an integral part of these financial statements.
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BAYNON INTERNATIONAL CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 AND 2018
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Convertible notes payable and accrued interest – related parties (weighted average) |
On
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had a term of one year. The note has been extended through
On
On
At December 31, 2019 and 2018 convertible notes payable – stockholders were $
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Net operating loss carry forwards | $ | $ |
Accrued interest | | |
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Less: Valuation allowance | ( | ( |
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Total | $ | $ |
A 100% valuation allowance was provided at December 31, 2019 and 2018 as it is uncertain if the deferred tax assets would be utilized. The increase in the valuation allowance was a result from the increase in the Company’s net operating loss carry forward and accrued interest.
At December 31, 2019, the Company has unused federal net operating loss carry forwards of approximately $477,530, $39,800 of which can be carried forward indefinitely and $437,730 expiring between tax years 2019 through 2037. The Company has New Jersey net operating loss carry forwards of approximately $233,100 expiring between 2030 and 2039.
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The Company files its federal and New Jersey income tax returns under varying statutes of limitations. The 2016 through 2019 tax years generally remain subject to examination by the federal and New Jersey tax authorities.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of December 31, 2019. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Based on this evaluation, our chief executive officer and chief financial officer have concluded such controls and procedures to be not effective as of December 31, 2019 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is the process designed by and under the supervision of our chief executive officer and chief financial officer, or the persons performing similar functions, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. These officers have evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control over Financial Reporting – Guidance for Smaller Public Companies.
Our chief executive officer and chief financial officer have assessed the effectiveness of our internal control over financial reporting as of December 31, 2019 and concluded that it was not effective because of the material weakness described below:
In connection with the preparation of our financial statements for the year ended December 31, 2019, due to resource constraints, material weaknesses became evident to management regarding our inability to generate all the necessary disclosure for inclusion in our filings with the Securities and Exchange Commission due to the lack of resources and segregation of duties. A material weakness is a significant deficiency in one or more of the internal control components that alone or in the aggregate precludes our internal controls from reducing to an appropriately low level the risk that material misstatements in our consolidated financial statements will not be prevented or detected on a timely basis.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the registrant’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the registrant to provide only management’s report in this annual report.
Evaluation of Changes in Internal Control over Financial Reporting
Our chief executive officer and chief financial officer have evaluated changes in our internal controls over financial reporting that occurred during the year ended December 31, 2019. Based on that evaluation, our chief executive officer and chief financial officer, or those persons performing similar functions, did not
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identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Remediation Plan for Material Weaknesses
At such time that it is economically feasible, we will aggressively recruit experienced professionals to ensure that we maintain adequate segregation of duties and have controls in place to ensure proper disclosures are in our filings with the Securities and Exchange Commission. Although we believe that these corrective steps will enable management to conclude that the internal controls over our financial reporting are effective when the staff is trained, we cannot assure you these steps will be sufficient. We may be required to expend additional resources to identify, assess and correct any additional weaknesses in internal control.
Important Considerations
The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.
ITEM 9B. OTHER INFORMATION
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS, AND CORPORATE GOVERNANCE
Identity of Officers and Directors
Set forth below are the names of the directors and officers of Baynon, all positions and offices with Baynon held, the period during which he has served as such, and his business experience during at least the last five (5) years:
Name |
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| Director Since |
Pasquale Catizone |
| 79 |
| President, Director |
| May 1988 |
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Daniel Generelli |
| 57 |
| Secretary, Treasurer, Director |
| October 1, 2001 |
Pasquale Catizone. Mr. Catizone has been president and a director of Baynon since May 1998. Mr. Catizone has been self-employed as a financial consultant for several years.
Daniel Generelli. Mr. Generelli has been Baynon's secretary, treasurer, and a director since October 1, 2001. Since February 1, 2002, Mr. Generelli has been employed as a data base analyst in the Totowa, New Jersey office of IMS Health Inc., a New York Stock Exchange listed firm engaged in data management and processing. Prior thereto from December 1989 to July 1996, Mr. Generelli was Secretary, Treasurer, and a director of J & E Beauty Supply, Inc., a retail and wholesale beauty supply distributor. Prior thereto since 1984, Mr. Generelli was employed as a distribution supervisor by Tags Beauty Supply, a retail and wholesale beauty supply distributor in Fairfield, New Jersey. Mr. Generelli received a Bachelor of Science degree in Business Administration from Ramapo College of New Jersey in June 1984.
Other than Mr. Catizone and Mr. Generelli, Baynon did not have any significant employees as of the date of this Report. There were no family relationships between any of the officers or directors of Baynon. During the fiscal year covered by this Report, there were no changes to the procedures by which security holders could recommend nominees to Baynon's board of directors.
At this time, Baynon does not have an audit committee because Baynon has not engaged in any business operations since 2003. Baynon's board of directors acts as its audit committee. Similarly, Baynon's board of directors has determined that it does not have an audit committee financial expert as defined under Securities and Exchange Commission rules.
Current Blank Check Companies
No directors or officers of Baynon are presently officers, directors or shareholders in any blank check companies except for Baynon. However, one or both of the officers/directors may, in the future, become involved with additional blank check companies.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires Baynon's officers and directors, and persons who beneficially own more than ten (10%) percent of a class of equity securities registered pursuant to Section 12 of the Exchange Act, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the principal exchange upon which such securities are traded or quoted. Reporting Persons are also required to furnish copies of such reports filed pursuant to Section 16(a) of the Exchange Act with Baynon.
Based solely on review of the copies of such forms furnished to Baynon, Baynon's two (2) directors did not file their reports on a timely basis.
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Code of Ethics
Baynon has not yet adopted a code of ethics. The board of directors anticipates that it will adopt a code of ethics upon identifying and negotiating with a business target for the merger of that entity with and into Baynon, although there is no guarantee that Baynon will be able to enter into such a transaction.
Corporate Governance
We have no change in any state law or other procedures by which security holders may recommend nominees to our board of directors. In addition to having no nominating committee for this purpose, we currently have no specific audit committee and no audit committee financial expert. Based on the fact that our current business affairs are simple, any such committees are excessive and beyond the scope of our business and needs.
ITEM 11. EXECUTIVE COMPENSATION
To date, Baynon has not entered into employment agreements nor are any contemplated.
| Annual Compensation |
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Name and Position | Year | Salary | Bonus | Other Annual | Restricted | Securities | LTIF | All Other |
Pasquale Catizone | 2019 | - | - | - | - | - | - | - |
President | 2018 | - | - | - | - | - | - | - |
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Daniel Generelli | 2019 | - | - | - | - | - | - | - |
Secretary | 2018 | - | - | - | - | - | - | - |
Treasurer |
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|
Compensation Discussion and Analysis
As of the date of this report, while seeking a business combination, Baynon's management anticipates devoting up to five (5) hours per month to the business of Baynon. Baynon's current officers and directors do not receive any compensation for their services rendered to Baynon, have not received such compensation in the past, and are not accruing any compensation pursuant to any agreement with Baynon.
The officers and directors of Baynon will not receive any finder's fees, either directly or indirectly, as a result of their efforts to implement Baynon's business plan outlined herein. However, the officers and directors of Baynon anticipate receiving benefits as shareholders of Baynon.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by Baynon for the benefit of its employees.
Baynon has not entered into any employment agreements with any of its officers, directors, or other persons, and no such agreements are anticipated in the immediate future.
Baynon has no other executive compensation elements that would require the inclusion of tabular disclosure or narrative discussion.
Board of Directors Compensation
Members of the board of directors may receive an amount yet to be determined annually for their participation and will be required to attend a minimum of four meetings per fiscal year. To date, Baynon has not paid any directors' fees or expenses.
22
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 26, 2020, certain information regarding the ownership of the common stock by (i) each person known by Baynon to be the beneficial owner of more than five (5%) percent of Common Stock, (ii) each of Baynon's Directors and Named Executive Officers, as such term is defined under Item 402(a)(3) of Regulation S-K under the Securities Act, and (iii) all of Baynon's Executive Officers and Directors as a group. Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under Rule 13d-3 certain shares may be deemed to be beneficially owned by more than one person (such as where persons share voting power or investment power). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon the exercise of an option) within sixty (60) days of the date as of which the information is provided. In computing the ownership percentage of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person's actual ownership or voting power at any particular date. This table has been prepared based on 43,465,233 common shares outstanding as of March 26, 2020.
Name and address of | Amount and nature of | Percentage of |
Pasquale Catizone (2)(3) | 19,867,315 | 45.71 % |
266 Cedar Street |
|
|
Cedar Grove, NJ 07009 |
|
|
|
|
|
Daniel Generelli | 50,000 | 0.12 % |
c/o Baynon International Corp. |
|
|
266 Gedar Street |
|
|
Cedar Grove, NJ 07009 |
|
|
|
|
|
All Executive Officers and |
|
|
Directors as a Group | 19,917,315 | 45.82 % |
(consisting of two persons) |
|
|
|
|
|
Other 5% shareholders |
|
|
Carmine Catizone (1)(2)(4) | 15,763,041 | 36.27 % |
10 1.2 Walker Avenue |
|
|
Morristown, NJ 07960 |
|
|
(1) Includes: (a) an aggregate of 500,000 shares held in a custodial account for the benefit of Carrie Catizone, Mr. Carmine Catizone's adult daughter who does not reside with him; and (b) 500,000 shares held in a custodial account for the benefit of Sherri Catizone, Mr. Carmine Catizone's adult daughter who does not reside with him. Mr. Carmine Catizone served as an executive officer and director of Baynon from May 1998 through October 1, 2001.
(2) Pasquale and Carmine Catizone are brothers.
(3) There are 9,362,345 shares that can be issued upon conversion of a note payable. Upon the full conversion of the note, Pasquale Catizone would own 29,229,660 common shares of the now 52,827,578 common shares outstanding, or 55.33%.
(4) There are 902,050 shares that can be issued upon conversion of a note payable. Upon the full conversion of the note, Carmine Catizone would own 16,665,091 common shares of the now 44,367,283 common shares outstanding, or 37.56%.
23
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
On May 18, 2015, the Company issued an unsecured convertible note payable to Pasquale Catizone in exchange for $25,000 in cash for the Company’s working capital needs. The note bears interest at 6% per annum and originally had a term of one year. The note has been extended through May 18, 2020. Mr. Catizone has the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share.
On September 9, 2016, the Company issued an unsecured convertible note payable to Pasquale Catizone in exchange for $20,000 in cash for the Company’s working capital needs. The note bears interest at 6% per annum and originally had a term of one year. The note has been extended through September 9, 2020. Mr. Catizone has the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share.
On April 24, 2017, the Company issued an unsecured convertible note payable to Pasquale Catizone in exchange for $25,000 for the Company’s working capital needs. The note bears interest at 6% per annum and originally had a term of one year. The note has been extended through April 24, 2020. Mr. Catizone has the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share.
On November 16, 2017, the Company issued two unsecured convertible notes payable to Pasquale and Carmine Catizone in exchange for $20,000 ($10,000 each) in cash for the Company’s working capital needs. The notes bear interest at 6% per annum and originally had a term of one year. The notes have both been extended through November 16, 2020. Mr. Catizone and Mr. Catizone each have the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share.
On May 2, 2019, the Company issued an unsecured convertible note payable to a Pasquale Catizone in exchange for $20,000 in cash for the Company’s working capital needs. The note bears interest at 6% per annum and matures on May, 2, 2020. Mr. Catizone has the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share.
At December 31, 2019 and 2018 convertible notes payable – related parties were $110,000 and $90,000, respectively. At December 31, 2019 and 2018, accrued interest on the notes were $18,305 and $12,103, respectively. Interest expense amounted to $6,202 and $5,400 for the years ended December 31, 2019 and 2018, respectively.
Director Independence
Baynon’s board of directors consists of Pasquale Catizone and Daniel Generelli. Neither of them is independent as such term is defined by a national securities exchange or an inter-dealer quotation system.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees billed and estimated to be billed for the fiscal years ended December 31, 2019 and 2018 for professional services rendered by Rotenberg, Meril, Solomon, Bertiger & Guttilla, P.C. (RMSB&G) for the audit of the registrant's annual financial statements and review of the financial statements included in the registrant's Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2019 and 2018, were $8,000 and $10,000 respectively.
Audit related fees
We did not incur any aggregate audit related fees from RMSB&G for the 2019 and 2018 fiscal years for assurance and related services that are reasonably related to the performance of the audit or review of the registrant’s financial statements.
24
Tax Fees
We did not incur any aggregate tax fees and expenses from RMSB&G for the 2019 and 2018 fiscal years for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees
We did not incur any other fees from RMSB&G for the 2019 and 2018 fiscal years.
The board of directors, acting as the Audit Committee considered whether, and determined that, the auditor's provision of non-audit services was compatible with maintaining the auditor's independence. All of the services described above for fiscal year 2019 were approved by the board of directors pursuant to its policies and procedures. We intend to continue using RMSB&G solely for audit and audit-related services, tax consultation and tax compliance services, and, as needed, for due diligence in acquisitions.
25
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) List of financial statements included in Part II hereof:
Report of Independent Registered Public Accounting Firm
Balance Sheets at December 31, 2019 and 2018
Statements of Operations for the years ended December 31, 2019 and 2018
Statements of Stockholders’ Deficiency for the years ended December 31, 2019 and 2018
Statements of Cash Flows for the years ended December 31, 2019 and 2018
Notes to Financial Statements
(a)(2) List of financial statement schedules included in Part IV hereof:
None.
The following exhibits are included herewith:
Exhibit No. | Description |
31 | |
32 | |
101.SCH* | XBRL Taxonomy Extension Schema Document |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
Following are a list of exhibits which we previously filed in other reports which we filed with the SEC, including the Exhibit No., description of the exhibit and the identity of the Report where the exhibit was filed.
NO. | DESCRIPTION | FILED WITH | DATE FILED |
2.2 | Articles of Incorporation and By-laws as amended | Form 10SB12G | July 8, 1999 |
3.1 | Certificate of Incorporation of Baynon | Form 10-SB | July 8, 1999 |
3.2 | Bylaws of Baynon | Form 10-SB | July 8, 1999 |
7.1 | Listing of Selling Shareholders | Form S-2 | April 27, 2004 |
13.1 | Annual Form 10-KSB for the year ended December 31, 2003 | Form S-2 | April 27, 2004 |
99 | Certification of President and Treasurer Pursuant Section 906 of the Sarbanes-Oxley Act of 2002 | Form 10-KSB | March 31, 2003 |
26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BAYNON INTERNATIONAL CORP.
By: /s/ PASQUALE CATIZONE
Pasquale Catizone,
President
(Principal Executive Officer)
Dated: March 26, 2020
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ PASQUALE CATIZONE
Pasquale Catizone,
President
(Principal Executive Officer)
Dated: March 26, 2020
By: /s/ DANIEL GENERELLI
Daniel Generelli
Secretary, Treasurer
(Principal Financial Officer, Principal Accounting Officer)
Dated: March 26, 2020
27
302 CERTIFICATION
I, Pasquale Catizone, certify that:
1. I have reviewed this annual report on Form 10-K of Baynon International Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report, our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
Date: March 26, 2020
/s/Pasquale Catizone
Pasquale Catizone
Chief Executive Officer
302 CERTIFICATION
I, Daniel Generelli, certify that:
1. I have reviewed this annual report on Form 10-K of Baynon International Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report, our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
Date: March 26, 2020
/s/Daniel Generelli
Daniel Generelli
Chief Financial Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Baynon International Corp. (the "Company") on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Pasquale Catizone, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
/s/Pasquale Catizone
Pasquale Catizone
Chief Executive Officer
March 26, 2020
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Baynon International Corp. (the "Company") on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Daniel Generelli, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
/s/Daniel Generelli
Daniel Generelli
Chief Financial Officer
March 26, 2020
1. THE COMPANY |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Notes | |
| 1. THE COMPANY | 1.THE COMPANY Baynon International Corp. formerly known as Technology Associates Corporation (the “Company”), was originally incorporated on February 29, 1968 under the laws of the Commonwealth of Massachusetts to engage in any lawful corporate undertaking. On December 28, 1989, the Company reincorporated under the laws of the State of Nevada. The Company was formerly engaged in the technology marketing business and its securities traded on the National Association of Securities Dealers OTC Bulletin Board. The Company has not engaged in any business operations since 2013. The Company will attempt to identify and negotiate with a business target for the merger of that entity with and into the Company. In certain instances, a target company may wish to become a subsidiary of the company or wish to contribute assets to the Company rather than merge. No assurance can be given that the Company will be successful in identifying or negotiating with any target company. The Company provides a means for a foreign or domestic private company to become a reporting (public) company whose securities would be qualified for trading in the United States secondary market. |
BALANCE SHEETS - Parenthetical - $ / shares |
Dec. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Details | ||
| Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
| Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
| Common Stock, Shares, Issued | 43,465,233 | 43,465,233 |
| Common Stock, Shares, Outstanding | 43,465,233 | 43,465,233 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Going Concern (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Policies | |
| Going Concern | Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred continuing operating losses and has an accumulated deficit of $503,862 at December 31, 2019. The Company has no revenue generating operations and has limited cash resources. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management believes that it will be able to achieve a satisfactory level of liquidity to meet the Company’s obligations through December 31, 2020 by obtaining additional financing from key officers, directors and certain investors. However, there can be no assurance that the Company will be able to generate sufficient liquidity to maintain its operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Policies | |
| Use of Estimates | Use of Estimates These financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The Company continually evaluates the accounting policies and estimates used to prepare the financial statements. The Company bases its estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. |
5. COMMON STOCK |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Notes | |
| 5. COMMON STOCK | 5. COMMON STOCK On November 30, 2019, the Company’s board of directors approved the increase in the number of authorized shared from 50,000,000 to 200,000,000. On December 11, 2019, the Company filed with the State of Nevada a Certificate of Amendment to amend its Articles of Incorporation for the increase of its authorized shares to 200,000,000. The application was received and approved on December 24, 2019. Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Director in its discretion from funds legally available therefore. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share pro rata in all assets remaining after payment in full of all liabilities. All of the outstanding shares of common stock are fully paid and non-assessable. Holders of common stock have no preemptive rights to purchase the Company’s common stock. There are no conversions or redemption rights or sinking fund provisions with respect to the common stock. |
6. INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Tables) |
12 Months Ended | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||
| Schedule of Components of Income Tax Expense (Benefit) |
|
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Going Concern (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
| Details | ||
| Accumulated deficit | $ (503,862) | $ (475,733) |
| Revenues | $ 0 | $ 0 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Loss Per Share: Schedule of securities excluded from calculation of loss per share (Tables) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Tables/Schedules | |
| Schedule of securities excluded from calculation of loss per share |
STATEMENTS OF CASH FLOWS - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
| Cash flows from Operating Activities: | ||
| Net loss | $ (28,129) | $ (23,265) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||
| Increase in accrued interest to related parties | 6,202 | 5,400 |
| Increase (decrease) in accounts payable and accrued expenses | (6,532) | 7,653 |
| Net cash used in operating activities | (28,459) | (10,212) |
| Cash flows from Financing Activities: | ||
| Proceeds from related party note payable | 20,000 | 0 |
| Net cash provided by financing activities | 20,000 | 0 |
| Decrease in Cash and Cash Equivalents | (8,459) | (10,212) |
| Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 13,808 | 24,020 |
| Cash and Cash Equivalents, at Carrying Value, Ending Balance | 5,349 | 13,808 |
| Supplemental Disclosures of Cash Flow Information: | ||
| Income taxes | 500 | 500 |
| Interest | $ 0 | $ 0 |
BALANCE SHEETS - USD ($) |
Dec. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Current Assets: | ||
| Cash and cash equivalents | $ 5,349 | $ 13,808 |
| Total Current assets | 5,349 | 13,808 |
| Total Assets | 5,349 | 13,808 |
| Current liabilities: | ||
| Accounts payable and accrued expenses | 27,536 | 34,068 |
| Convertible notes payable - related parties | 110,000 | 90,000 |
| Accrued interest - related parties | 18,305 | 12,103 |
| Total Current Liabilities | 155,841 | 136,171 |
| Total Liabilities | 155,841 | 136,171 |
| Stockholders' Deficiency: | ||
| Common Stock, Value | 43,465 | 43,465 |
| Additional paid-in capital | 309,905 | 309,905 |
| Accumulated deficit | (503,862) | (475,733) |
| Total Stockholders' Deficiency | (150,492) | (122,363) |
| Total Liabilities and Stockholders' Deficiency | $ 5,349 | $ 13,808 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Policies | |
| Basis of Presentation | Basis of Presentation The Company’s financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. |
4. CONVERTIBLE NOTES PAYABLE - RELATED PARTIES |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Notes | |
| 4. CONVERTIBLE NOTES PAYABLE - RELATED PARTIES | 4.CONVERTIBLE NOTES PAYABLE – RELATED PARTIES On May 18, 2015, the Company issued an unsecured convertible note payable to a stockholder in exchange for $25,000 in cash for the Company’s working capital needs. The note bears interest at 6% per annum and originally had a term of one year. The note has been extended through May 18, 2020. The stockholder has the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share. On September 9, 2016, the Company issued an unsecured convertible note payable to a stockholder in exchange for $20,000 in cash for the Company’s working capital needs. The note bears interest at 6% per annum and originally had a term of one year. The note has been extended through September 9, 2020. The stockholder has the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share. On April 24, 2017, the Company issued an unsecured convertible note payable to a stockholder in exchange for $25,000 for the Company’s working capital needs. The note bears interest at 6% per annum and originally had a term of one year. The note has been extended through April 24, 2020. The stockholder has the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share.
On November 16, 2017, the Company issued two unsecured convertible notes payable to stockholders in exchange for $20,000 ($10,000 each) in cash for the Company’s working capital needs. The notes bear interest at 6% per annum and originally had a term of one year. The notes have both been extended through November 16, 2019. The stockholders each have the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share.
On May 2, 2019, the Company issued an unsecured convertible note payable to a stockholder in exchange for $20,000 in cash for the Company’s working capital needs. The note bears interest at 6% per annum and matures on May 2, 2020. The stockholder has the option to convert the note and accrued interest into the Company’s common stock at $0.0125 per share.
At December 31, 2019 and 2018 convertible notes payable – stockholders were $110,000 and $90,000, respectively. At December 31, 2019 and 2018, accrued interest on the notes were $18,305 and $12,103, respectively. Interest expense amounted to $6,202 and $5,400 for the years ended December 31, 2019 and 2018, respectively. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Loss Per Share (Policies) |
12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||
| Policies | |||||||
| Loss Per Share | Loss Per Share The Company computes loss per share in accordance with the FASB ASC 260, “Earnings Per Share”. Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if securities or other agreements to issue common stock were exercised or converted into common stock. Diluted earnings per share is computed based upon the weighted average number of common shares and dilutive common equivalent shares outstanding, which includes convertible debentures, stock options and warrants. The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive:
|
5. COMMON STOCK (Details) - shares |
Dec. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Details | ||
| Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
1. THE COMPANY (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Details | |
| Entity Incorporation, Date of Incorporation | Feb. 29, 1968 |
| Entity Incorporation, State or Country Code | NV |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Fair Value of Financial Instruments (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Policies | |
| Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts payable, notes payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Notes | |
| 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. Use of Estimates These financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The Company continually evaluates the accounting policies and estimates used to prepare the financial statements. The Company bases its estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Cash and Cash Equivalents Short-term investments with an original maturity of ninety days or less and highly liquid investments are considered cash and cash equivalents. Cash and cash equivalents consist of a money market account. Income Taxes The Company utilizes the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC 740”), “Income Tax.” ASC 740 requires the recognition of deferred tax assets and liabilities for the expected future tax consequence of events that have been include in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities using enacting tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has adopted the provision of FASB ASC 740-10-05, “Accounting for Uncertainties in Income Taxes” (the “Subtopic”). The Subtopic clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The Subtopic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Loss Per Share The Company computes loss per share in accordance with the FASB ASC 260, “Earnings Per Share”. Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if securities or other agreements to issue common stock were exercised or converted into common stock. Diluted earnings per share is computed based upon the weighted average number of common shares and dilutive common equivalent shares outstanding, which includes convertible debentures, stock options and warrants. The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive: Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred continuing operating losses and has an accumulated deficit of $503,862 at December 31, 2019. The Company has no revenue generating operations and has limited cash resources. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management believes that it will be able to achieve a satisfactory level of liquidity to meet the Company’s obligations through December 31, 2020 by obtaining additional financing from key officers, directors and certain investors. However, there can be no assurance that the Company will be able to generate sufficient liquidity to maintain its operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Fair Value of Financial Instruments The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts payable, notes payable and accrued expenses approximate fair value based on the short-term maturity of these instruments. Recently Issued Accounting Standards Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements. |
STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
| Details | ||
| Revenues | $ 0 | $ 0 |
| General and administrative expenses | 21,935 | 17,882 |
| Operating loss | (21,935) | (17,882) |
| Other Income (Expense): | ||
| Interest income | 8 | 17 |
| Interest expense - related parties | (6,202) | (5,400) |
| Total Other Income (Expense) | (6,194) | (5,383) |
| Net Loss | $ (28,129) | $ (23,265) |
| Loss per share: | ||
| Basic and diluted loss per common share | $ 0 | $ 0 |
| Basic and diluted common shares outstanding | 43,465,233 | 43,465,233 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash and Cash Equivalents (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Policies | |
| Cash and Cash Equivalents | Cash and Cash Equivalents Short-term investments with an original maturity of ninety days or less and highly liquid investments are considered cash and cash equivalents. Cash and cash equivalents consist of a money market account. |
6. INCOME TAXES |
12 Months Ended | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||
| 6. INCOME TAXES | 6. INCOME TAXES The components of deferred tax assets at December 31, 2019 and 2018 are as follows:
A 100% valuation allowance was provided at December 31, 2019 and 2018 as it is uncertain if the deferred tax assets would be utilized. The increase in the valuation allowance was a result from the increase in the Company’s net operating loss carry forward and accrued interest.
At December 31, 2019, the Company has unused federal net operating loss carry forwards of approximately $477,530, $39,800 of which can be carried forward indefinitely and $437,730 expiring between tax years 2019 through 2037. The Company has New Jersey net operating loss carry forwards of approximately $233,100 expiring between 2030 and 2039.
The Company files its federal and New Jersey income tax returns under varying statutes of limitations. The 2016 through 2019 tax years generally remain subject to examination by the federal and New Jersey tax authorities. |
STATEMENTS OF STOCKHOLDERS' DEFICIENCY - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
| Common Stock | ||
| Equity Balance, Starting | $ 43,465 | $ 43,465 |
| Shares Outstanding, Starting | 43,465,233 | 43,465,233 |
| Net Income (Loss) | $ 0 | $ 0 |
| Shares Outstanding, Ending | 43,465,233 | 43,465,233 |
| Equity Balance, Ending | $ 43,465 | $ 43,465 |
| Additional Paid-in Capital | ||
| Equity Balance, Starting | 309,905 | 309,905 |
| Net Income (Loss) | 0 | 0 |
| Equity Balance, Ending | 309,905 | 309,905 |
| Retained Earnings | ||
| Equity Balance, Starting | (475,733) | (452,468) |
| Net Income (Loss) | (28,129) | (23,265) |
| Equity Balance, Ending | (503,862) | (475,733) |
| Equity Balance, Starting | (122,363) | (99,098) |
| Net Income (Loss) | (28,129) | (23,265) |
| Equity Balance, Ending | $ (150,492) | $ (122,363) |
3. CONCENTRATION OF CREDIT RISK |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Notes | |
| 3. CONCENTRATION OF CREDIT RISK | 3.CONCENTRATION OF CREDIT RISK The Company maintains its cash balance with a major bank. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor. At December 31, 2019 and 2018, all cash balances were insured. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Income Taxes (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Policies | |
| Income Taxes | Income Taxes The Company utilizes the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC 740”), “Income Tax.” ASC 740 requires the recognition of deferred tax assets and liabilities for the expected future tax consequence of events that have been include in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities using enacting tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has adopted the provision of FASB ASC 740-10-05, “Accounting for Uncertainties in Income Taxes” (the “Subtopic”). The Subtopic clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The Subtopic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. |
7. SUBSEQUENT EVENTS |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Notes | |
| 7. SUBSEQUENT EVENTS | 7. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date of the financials were issued. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Loss Per Share: Schedule of securities excluded from calculation of loss per share (Details) - USD ($) |
Dec. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Details | ||
| Convertible notes payable and accrued interest - related parties (weighted average) | $ 10,264,395 | $ 8,168,219 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Recently Issued Accounting Standards (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Policies | |
| Recently Issued Accounting Standards | Recently Issued Accounting Standards Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements. |
6. INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) |
Dec. 31, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Details | ||
| Deferred Tax Assets, Operating Loss Carryforwards | $ 114,200 | $ 108,058 |
| Financing Receivable, Accrued Interest, before Allowance for Credit Loss | 3,800 | 2,542 |
| Deferred Tax Assets, Valuation Allowance | (118,000) | (110,600) |
| Deferred Tax Assets, Net of Valuation Allowance | $ 0 | $ 0 |
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