Unassociated Document

As filed with the Securities and Exchange Commission on July 15, 2004

=============================================================================================================

WASHINGTON, D.C. 20549

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Nevada	Bad Toys, Inc.		94-3371514
(State or Other Jurisdiction of Incorporation	(Name of Registrant in Our Charter)		(I.R.S. Employer Identification No.)
or Organization)
			Larry N. Lunan
2344 Woodridge Avenue			2344 Woodridge Avenue
Kingsport, Tennessee 37664			Kingsport, Tennessee 37664
(423) 247-9560	3751		(423) 247-9560
(Address and telephone number of Principal	(Primary Standard Industrial		(Name, address and telephone number
Executive Offices and Principal Place of Business)	Classification Code Number)		of agent for service)
Copies to:
Clayton E. Parker, Esq. Kirkpatrick & Lockhart LLP 201 S. Biscayne Boulevard, Suite 2000 Miami, Florida 33131 Telephone: (305) 539-3300 Telecopier:(305) 358-7095		Christopher K. Davies, Esq. Kirkpatrick & Lockhart LLP 201 S. Biscayne Boulevard, Suite 2000 Miami, Florida 33131 Telephone:(305) 539-3300 Telecopier:(305) 358-7095

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

CALCULATION OF REGISTRATION FEE

Title Of Each Class Of Securities To Be Registered	Amount To Be Registered	Proposed MaximumOffering PricePer Share ⁽¹⁾	Proposed MaximumAggregateOffering Price ⁽¹⁾	Amount Of RegistrationFee

Common Stock, par value $0.001 per share	6,877,652shares ⁽²⁾	$1.75	$12,035,891	$1,525.47

TOTAL	6,877,652shares ⁽²⁾	$1.75	$12,035,891	$1,525.47

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933. For the purposes of this table, we have used the average of the closing bid and asked prices as of a recent date.

(2) Of these shares, 6,654,836 are being registered under a Standby Equity Distribution Agreement and 217,246 were issued to Cornell Capital Partners, LP, as a one-time commitment fee under a Securities Purchase Agreement.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PROSPECTUS

Subject to completion, dated July 15, 2004

BAD TOYS, INC.

6,877,652 Shares of Common Stock

This prospectus relates to the sale of up to 6,877,652 shares of common stock of Bad Toys, Inc. (“Bad Toys”) by certain persons who are stockholders of Bad Toys, Inc., including Cornell Capital Partners, L.P. (“Cornell Capital Partners”) who is beneficially a stockholder of Bad Toys. Please refer to “Selling Stockholders” beginning on page 11. Bad Toys is not selling any shares of common stock in this offering and therefore will not receive any proceeds from this offering. Bad Toys will, however, receive proceeds from the sale of common stock under the Standby Equity Distribution Agreement (the “Equity Distribution Agreement”), which was entered into on June 2, 2004, between Bad Toys and Cornell Capital Partners, and no other stockholders. All costs associated with this registration will be borne by Bad Toys. Bad Toys has agreed to allow Cornell Capital Partners to retain 5% of the proceeds raised under the Equity Distribution Agreement that is more fully described below.

The shares of common stock are being offered for sale by the selling stockholders at prices established on the Over-the-Counter Bulletin Board during the term of this offering. On July 14, 2004, the last reported sale price of our common stock was $1.75 per share. Our common stock is quoted on the Over-the-Counter Bulletin Board under the symbol “BTOI”. These prices will fluctuate based on the demand for the shares of common stock. From June 15, 2004 to July 15, 2004 our stock price fluctuated between $1.84 to $1.75 per share.

The selling stockholders include Cornell Capital Partners, who intends to sell up to 6,872,082 shares of common stock, 6,654,836 of which are under the Equity Distribution Agreement and 217,246 shares of common stock we issued to Cornell Capital Partners as a one-time commitment fee under the Equity Distribution Agreement. In addition to Cornell Capital Partners, Newbridge Securities Corporation, our placement agent, intends to sell up to 5,570 shares of common stock. Upon issuance, the 6,654,836 shares of common stock issued under the Equity Distribution Agreement will equal 45.43% of our then-outstanding shares of common stock.

Cornell Capital Partners is an “underwriter” within the meaning of the Securities Act of 1933 in connection with the sale of common stock under the Equity Distribution Agreement. Cornell Capital Partners will pay Bad Toys 98% of the market price of its common stock, which is defined as the lowest volume weighted average price of the common stock during the five trading days following the notice date. In addition, Cornell Capital Partners will retain 5% of each cash advance we receive under the Equity Distribution Agreement. Cornell Capital Partners also received a one-time commitment fee in the form of 217,246 shares of our common stock. The 5% retainage and the 217,246 shares of common stock are underwriting discounts payable to Cornell Capital Partners. In addition, we entered into a Placement Agent Agreement dated June 2, 2004, with Newbridge Securities Corporation, a registered broker-dealer. Pursuant to that Agreement we paid Newbridge Securities Corporation, a one-time placement agent fee of 5,570 shares of common stock for its services.

Brokers or dealers effecting transactions in these shares should confirm that the shares are registered under the applicable state law or that an exemption from registration is available.

These securities are speculative and involve a high degree of risk.

Please refer to “Risk Factors” beginning on page 7.

With the exception of Cornell Capital Partners, which is an “underwriter” within the meaning of the Securities Act of 1933, no other underwriter or person has been engaged to facilitate the sale of shares of common stock in this offering. This offering will terminate twenty-four months after the accompanying registration statement is declared effective by the Securities and Exchange Commission (“SEC”). None of the proceeds from the sale of stock by the selling stockholders will be placed in escrow, trust or any similar account.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The information in this prospectus is not complete and may be changed. Neither the selling stockholders nor we may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

The date of this prospectus is July ____, 2004.

TABLE OF CONTENTS

PROSPECTUS SUMMARY		1
THE OFFERING		2
RISK FACTORS		5
FORWARD-LOOKING STATEMENTS		10
SELLING STOCKHOLDERS		11
USE OF PROCEEDS		13
DILUTION		14
STANDBY EQUITY DISTRIBUTION AGREEMENT		15
PLAN OF DISTRIBUTION		17
MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATIONS		19
DESCRIPTION OF BUSINESS		23
MANAGEMENT		25
DESCRIPTION OF PROPERTY		27
LEGAL PROCEEDINGS		28
PRINCIPAL STOCKHOLDERS		29
CERTAIN RELATIONSHIPS AND RELATEDTRANSACTIONS		31
MARKET PRICE OF AND DIVIDENDSON THE REGISTRANT'S COMMON EQUITY AND OTHER
STOCKHOLDER MATTERS		32
DESCRIPTION OF SECURITIES		33
CHANGES IN AND DISAGREEMENTSWITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
MATTERS		34
EXPERTS		34
LEGAL MATTERS		34
HOW TO GET MORE INFORMATION		34
FINANCIAL STATEMENTS		F-1
PART II		II-1


	i

PROSPECTUS SUMMARY

The following is only a summary of the information, financial statements and notes included in this prospectus. You should read the entire prospectus carefully, including “Risk Factors”and our Financial Statements and the notes to the Financial Statements before making any investment decision regarding Bad Toys.

Overview

Bad Toys was incorporated on June 1, 2000, in the State of Nevada under the name BTMC, Inc. We are engaged in the manufacture and servicing of customized motorcycles. Our sales revenues are primarily derived from an area encompassing a two hundred mile radius of Kingsport, Tennessee. We changed our name to Bad Toys, Inc. before we commenced operations in early September 2000. Bad Toys is the successor to a motorcycle business, which was founded by one of our major shareholders, Larry N. Lunan, and previously conducted business under another corporate entity that also used the name Bad Toys, Inc.

Bad Toys manufactures for sale V-twin motorcycles from component parts, maintains a customizing and motorcycle servicing operation and special orders premium accessories, parts, customizing items and apparel related to Harley-Davidson motorcycles. We offer retail parts and product sales as well as motorcycle service to our customers seven days a week. We already have developed a line of custom motorcycles for the upscale retail market. Several of these motorcycles have been constructed.

Going Concern

We have been the subject of a going concern opinion from or independent auditors. Our independent auditors have expressed substantial doubt as to our ability to continue as a going concern due to the fact that we have suffered recurring losses from our operations and have a significant capital deficiency. Management recognizes that we must generate capital and revenue resources to enable it to continue to operate. Ultimately, we must achieve profitable operations. Management is planning to obtain additional capital from revenue generated from operations and through the sale of equity securities. The realization of assets and satisfaction of liabilities in the normal course of business is dependent upon us obtaining additional revenues and equity capital and ultimately achieving profitable operations. Our financial statements do not include any adjustments that might result from the outcome of our financial uncertainty. A failure to achieve positive cash flow by the end of 2004 could be fatal to our business. While the financing we may obtain through our agreements with Cornell Capital Partners may improve our working capital position, there can be no assurance that we will be successful in accomplishing our objectives.

About Us

Our principal executive offices are located at 2344 Woodridge Avenue, Kingsport, Tennessee 37664. Our telephone number is (423) 247-9560.


	1

THE OFFERING

This offering relates to the sale of common stock by certain persons who are, or beneficially deemed to be, stockholders of Bad Toys. Cornell Capital Partners intends to sell up to 6,872,082 shares of common stock, 6,654,836 of which are under the Equity Distribution Agreement and 217,246 shares of our common stock that Cornell Capital Partners received from Bad Toys as a one-time commitment fee under the Equity Distribution Agreement. In addition, Newbridge Securities Corporation, our placement agent, intends to sell up t o 5,570 shares of our common stock. The commitment amount of the Equity Distribution Agreement is $12,000,000. At an assumed price of $1.84 per share, we should be able to receive the entire $12,000,000 in gross proceeds assuming the sale of the entire 6,654,836 shares being registered under this registration statement.

On June 2, 2004, we entered into an Equity Distribution Agreement with Cornell Capital Partners. Under the Equity Distribution Agreement, we may issue and sell to Cornell Capital Partners common stock for a total purchase price of up to $12,000,000. The purchase price for the shares is equal to 98% of their market price, which is defined in the Equity Distribution Agreement as the lowest volume weighted average price of the common stock during the five trading days following the notice date. The amount of each cash advance is subject to a maximum advance amount of $225,000, with no cash advance occurring within seven trading days of a prior advance. Cornell Capital Partners will pay us 98% of, or a 2% discount to the lowest volume weighted average price of the common stock during the five consecutive trading day period immediately following the notice date. Cornell Capital Partners received a one-time commitment fee of 217,246 shares of our common stock. We will pay Cornell Capital Partners a fee equal to 5% of each advance, which will be retained by Cornell Capital Partners from each cash advance we receive. On June 2, 2004, we entered into a Placement Agent Agreement with Newbridge Securities Corporation. Pursuant to the Placement Agent Agreement, we paid Newbridge Securities Corporation a one-time placement agent fee of 5,570 restricted shares of common stock equal to approximately $10,000 based on our stock price on June 2, 2004.

Common Stock Offered	6,877,652 shares by selling stockholders

Offering Price	Market price

Common Stock Outstanding Before the Offering¹	7,993,016 shares as of July 6, 2004

Use of Proceeds	We will not receive any proceeds of the shares offered by the selling stockholders. Any proceeds we receive from the sale of common stock under the Equity Distribution Agreement will be used for general working capital purposes. See “Use of Proceeds.”

Risk Factors	The securities offered hereby involve a high degree of risk and immediate substantial dilution. See “Risk Factors” and “Dilution.”

Over-the-Counter Bulletin Board Symbol	BTOI

_______________

1 Excludes 6,654,836 shares of common stock to be issued under the Equity Distribution Agreement.


	2

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

STATEMENT OF INCOME (LOSSES)	FOR MARCH 31, 2004 (UNAUDITED)			FOR THE YEAR ENDED DECEMBER 31, 2003			FOR THE YEAR ENDED DECEMBER 30, 2002


REVENUES:
Sales	$	63,214		$	207,237		$	104,376
Cost of Sales		61,812			215,072			77,277

Gross Profit (Loss)		1,402			(7,835	)		27,099


COSTS AND EXPENSES:
General and Administrative Expenses		105,274			311,809			22,269


Income (Loss) From Operations Before Interest Expense		(103,872	)		(319,644	)		(199,170	)

Other Income/Expense:
Gain on Sale of Assets		0			47,428			-0-
Interest Income		3,162			3			-0-
Interest Expense		(32,818	)		(115,040	)		(113,565	)

Total Other Income/Expense					(67,609	)		(113,565	)


Net Loss	$	(133,528	)	$	(387,253	)	$	(312,735	)


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BALANCE SHEET DATA	FOR MARCH 31, 2004 (UNAUDITED)		FOR THE YEAR ENDED DECEMBER 31, 2003

ASSETS:
Current Assets:
Cash and Cash Equivalents	$	27,510	$	18,275
Accounts Receivable		86,982		26,972
Inventory		285,210		315,017
Prepaid Expenses		593		2,310

Total Current Assets	$	400,295	$	362,574


Property and Equipment:
Property and Equipment, Net of Depreciation		17,453		17,104



Other Assets		389,337		134,208
Utility Deposits		609		609

Total Other Assets		389,946		134,817


TOTAL ASSETS	$	807,694	$	514,495


LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current Liabilities:
Accounts Payable	$	48,274	$	47,925
Wages Payable		36,000		18,000
Sales Tax Payable		4,009		7,347
Payroll Taxes Payable		66,024		59,454
Customer Deposit		17,860		0
Note Payable		10,500		49,866

Total Current Liabilities		182,667		182,592

Non-Current Liabilities:

Note Payable – Shareholder		594,990		305,838


TOTAL LIABILITIES	$	777,657	$	488,430


	4

RISK FACTORS

We are subject to various risks that may materially harm our business, financial condition and the results of our operations. You should carefully consider the risks and uncertainties described below and the other information in this filing before deciding to purchase our common stock. If any of these risks or uncertainties actually occurs, our business, financial condition or operating results could be materially harmed. In that case, the trading price of our common stock could decline and you could lose all or part of your investment.

Risks Related To Our Business

Bad Toys Has Historically Lost Money And Losses May Continue In The Future, Which May Cause Us To Curtail Operations

Since our inception we have not been profitable and have lost money on both a cash and non-cash basis. For the years ended December 31, 2003 and December 31, 2002 we incurred net losses of $387,253 and $312,735 respectively. For the three months ended March 31, 2004 we incurred a net loss of $133,528 and had an accumulated operating deficit of $2,620,651 as of March 31, 2004. Future losses are likely to occur, as we are dependent on spending money to pay for our operations. No assurances can be given that we will be successful in reaching or maintaining profitable operations. Accordingly, we may experience liquidity and cash flow problems. If our losses continue, our ability to operate may be severely impacted.

We May Need To Raise Additional Capital Or Debt Funding To Sustain Operations

Unless we can become profitable with the existing sources of funds we have available and our operations, we will require additional capital to sustain operations and we may need access to additional capital or additional debt financing to grow our sales. In addition, to the extent that we have a working capital deficit and cannot offset the deficit from profitable sales we may have to raise capital to repay the deficit and provide more working capital to permit growth in revenues. We cannot give assurance that financing whether from external sources or related parties will be available if needed or on favorable terms. Our inability to obtain adequate financing will result in the need to reduce the pace of business operations. Any of these events could be materially harmful to our business and may result in a lower stock price.

We Have Been The Subject Of A Going Concern Opinion For The Years Ended December 31, 2003 And December 31, 2002 From Our Independent Auditors, Which Means That We May Not Be Able To Continue Operations Unless We Can Become Profitable Or Obtain Additional Funding

Our independent auditors have added an explanatory paragraph to their audit opinions issued in connection with our financial statements for the years ended December 31, 2003 and December 31, 2002, which states that the financial statements raise substantial doubt as to our ability to continue as a going concern. Our ability to make operations profitable or obtain additional funding will determine our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. We expect to be able to continue operations for twelve months with the cash anticipated from our operations and from the Securities Purchase Agreement and the Equity Distribution Agreement we entered into with and Cornell Capital Partners, which were signed on June 2, 2004. Should the funds be unavailable, our ability to operate will be severely affected.

We Are Subject to Price Volatility Due to Our Operations Materially Fluctuating

As a result of the evolving nature of the markets in which we compete, as well as the current nature of the public markets and our current financial condition, we believe that our operating results may fluctuate materially, as a result of which quarter-to-quarter comparisons of our results of operations may not be meaningful. If in some future quarter, whether as a result of such a fluctuation or otherwise, our results of operations fall below the expectations of securities analysts and investors, the trading price of our common stock would likely be materially and adversely affected. You should not rely on our results of any interim period as an indication of our future performance. Additionally, our quarterly results of operations may fluctuate significantly in the future as a result of a variety of factors, many of which are outside our control. Factors that may cause our quarterly results to fluctuate include, among others:


	5

our ability to retain existing clients and customers;
our ability to attract new clients and customers at a steady rate;
our ability to maintain client satisfaction;
the extent to which our products gain market acceptance;
the timing and size of client and customer purchases;
introductions of products and services by competitors;
price competition in the markets in which we compete;
our ability to attract, train, and retain skilled management,
the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations, and infrastructure; and
general economic conditions and economic conditions specific to the custom motorcycle industry.

Our Common Stock May Be Affected By Limited Trading Volume And May Fluctuate Significantly, Which May Affect Our Shareholders’ Ability To Sell Shares Of Our Common Stock

Prior to this filing, there has been a limited public market for our common stock and there can be no assurance that a more active trading market for our common stock will develop. An absence of an active trading market could adversely affect our shareholders’ ability to sell our common stock in short time periods, or possibly at all. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to enter the market from time to time in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our stock will be stable or appreciate over time. These factors may negatively impact shareholders’ ability to sell shares of our common stock.

Our Common Stock Is Deemed To Be “Penny Stock,” Which May Make It More Difficult For Investors To Sell Their Shares Due To Suitability Requirements

Our common stock is deemed to be “penny stock” as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline. Penny stocks are stock:

With a price of less than $5.00 per share;
That are not traded on a “recognized” national exchange;
Whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ listed stock must still have a price of not less than $5.00 per share); or
In issuers with net tangible assets less than $2.0 million (if the issuer has been in continuous operation for at least three years) or $10.0 million (if in continuous operation for less than three years), or with average revenues of less than $6.0 million for the last three years.

Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor.


	6

We Could Fail To Attract Or Retain Key Personnel, Which Could Be Detrimental To Our Operations

Our success largely depends on the efforts and abilities of Larry Lunan, our Chief Executive Officer. The loss of the services of Mr. Lunan could materially harm our business because of the cost and time necessary to find a successor. Such a loss would also divert management attention away from operational issues. We do not presently maintain key-man life insurance policies on Mr. Lunan. We also have other key employees who manage our operations and if we were to lose their services, senior management would be required to expend time and energy to replace and train their replacements. To the extent that we are smaller than our competitors and have fewer resources we may not be able to attract the sufficient number and quality of staff.

We May Not Be Able To Compete Effectively In Markets Where Our Competitors Have More Resources

Many of our competitors have longer operating histories, larger customer bases, longer relationships with clients, and significantly greater financial, technical, marketing, and public relations resources than Bad Toys. Based on total assets and annual revenues, we are significantly smaller many of our competitors. Similarly, we compete against significantly larger and better-financed companies in our business. We may not successfully compete in any market in which we conduct currently or in the future. The fact that we compete with established competitors who have substantially greater financial resources and longer operating histories than us, enables them to engage in substantial advertising and promotion and attract a greater number of customers and business than we currently attract. While this competition is already intense, if it increases, it could have an even greater adverse impact on our revenues and profitability.

Our Limited Operating History Makes It Difficult To Forecast Our Future Results

As a result of our limited operating history, our historical financial and operating information is of limited value in predicting our future operating results. We may not accurately forecast customer behavior and recognize or respond to emerging trends, changing preferences or competitive factors facing us, and, therefore, we may fail to make accurate financial forecasts. Our current and future expense levels are based largely on our investment plans and estimates of future revenue. As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which could force us to curtail or cease our business operations.

Future Acquisitions May Disrupt Our Business And Deplete Our Financial Resources

Any future acquisitions we make could disrupt our business and seriously harm our financial condition. We intend to consider investments in complementary companies and products. While we have no current agreements to do so, we anticipate buying businesses in the future in order to fully implement our business strategy. In the event of any future acquisitions, we may:

issue stock that would dilute our current stockholders’ percentage ownership;
incur debt;
assume liabilities;
incur amortization expenses related to goodwill and other intangible assets; or
incur large and immediate write-offs.

The use of debt or leverage to finance our future acquisitions should allow us to make acquisitions with an amount of cash in excess of what may be currently available to us. If we use debt to leverage up our assets, we may not be able to meet our debt obligations if our internal projections are incorrect or if there is a market downturn. This may result in a default and the loss in foreclosure proceedings of the acquired business or the possible bankruptcy of our business.

Our operation of any acquired business will also involve numerous risks, including:

integration of the operations of the acquired business and its products;
unanticipated costs;
diversion of management’s attention from our core business;
adverse effects on existing business relationships with suppliers and customers;
risks associated with entering markets in which we have limited prior experience; and
potential loss of key employees, particularly those of the purchased organizations.


	7

Risks Related To This Offering

Future Sales By Our Stockholders May Negatively Affect Our Stock Price And Our Ability To Raise Funds In New Stock Offerings

Sales of our common stock in the public market following this offering could lower the market price of our common stock. Sales may also make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price that our management deems acceptable or at all. Of the 7,993,016 shares of common stock outstanding as of July 6, 2004, 3,311,429 shares are, or will be, freely tradable without restriction, unless held by our “affiliates”. The remaining 4,681,587 shares of common stock, which will be held by existing stockholders, including the officers and directors, are “restricted securities” and may be resold in the public market only if registered or pursuant to an exemption from registration. Some of these shares may be resold under Rule 144. In addition, we have issued, or will issue, secured debentures convertible into shares of common stock at a floating discount rate.

Existing Shareholders Will Experience Significant Dilution From Our Sale Of Shares Under The Equity Distribution Agreement

The sale of shares pursuant to the Equity Distribution Agreement will have a dilutive impact on our stockholders. For example, if the offering occurred on June 15, 2004 at an assumed offering price of $1.84 per share, the new stockholders would experience an immediate dilution in the net tangible book value of $1.0180 per share. As a result our net income per share could decrease in future periods, and the market price of our common stock could decline. In addition, the lower our stock price, the more shares of common stock we will have to issue in order to receive the maximum cash advance allowed under the Equity Distribution Agreement. If our stock price is lower, then our existing stockholders would experience greater dilution.

Cornell Capital Partners Will Pay Less Than The Then-Prevailing Market Price Of Our Common Stock Under The Equity Distribution Agreement

The common stock to be issued under the Equity Distribution Agreement will be issued at a 2% discount to the lowest volume weighted average price for the five days immediately following the notice date of any cash advance we receive. In addition, Cornell Capital Partners will retain 5% from each advance. These discounted sales could cause the price of our common stock to decline.

The Selling Stockholders Intend To Sell Their Shares Of Common Stock In The Market, Which Sales May Cause Our Stock Price To Decline

As of July 6, 2004, we had 7,993,016 shares of common stock outstanding and 818,888 shares of preferred stock outstanding that could be converted into 8,188,880 shares of common stock. Up to an additional 6,654,836 shares of common stock may be issued under the Equity Distribution Agreement. The selling stockholders intend to sell into the public market 6,877,652 shares of common stock being registered in this offering. That means that up to 6,877,652 shares may be sold pursuant to this registration statement. Such sales may cause our stock price to decline. Our officers and directors and those shareholders who are significant shareholders as defined by the SEC will continue to be subject to the provisions of various insider trading and Rule 144 regulations.


	8

Our Common Stock Trades Sporadically; The Market Price Of Our Securities May Be Volatile

Our common stock currently trades sporadically on the Over-the-Counter Bulletin Board. Our common stock has traded as low as $0.35 and as high as $1.92 between November 11, 2003 and June 15, 2004. From time to time after this offering, the market price of our common stock may experience significant volatility. Our quarterly results, failure to meet analysts expectations, announcements by us or our competitors regarding acquisitions or dispositions, loss of existing clients, new procedures or changes in general conditions in the economy, and general market conditions could cause the market price of the common stock to fluctuate substantially. In addition, the stock market has experienced significant price and volume fluctuations that have particularly affected the trading prices of equity securities of many companies. These price and volume fluctuations often have been unrelated to the operating performance of the affected companies.

The Sale Of Our Stock Under Our Equity Distribution Agreement Could Encourage Short Sales By Third Parties, Which Could Contribute To The Future Decline Of Our Stock Price

In many circumstances the provision of financing based on the distribution of equity for companies that are traded on the Over-the-Counter Bulletin Board has the potential to cause a significant downward pressure on the price of common stock. This is especially the case if the shares being placed into the market exceed the market’s ability to take up the increased stock or if Bad Toys has not performed in such a manner to show that the equity funds raised will be used to grow Bad Toys. Such an event could place further downward pressure on the price of our common stock. Under the terms of our Equity Distribution Agreement, we may request numerous cash advances. Even if we use the cash advances to grow our revenues and profits or invest in assets that are materially beneficial to us, the opportunity exists for short sellers and others to contribute to the future decline of our stock price. If there are significant short sales of stock, the price decline that would result from this activity will cause the share price to decline more so which in turn may cause long holders of the stock to sell their shares thereby contributing to sales of stock in the market. If there is an imbalance on the sell side of the market for our stock, the price will likely decline.

It is not possible to predict the circumstances whereby short sales could materialize or how low the share price could drop. In some companies that have been subjected to short sales the stock price has dropped to near zero. This could happen to our stock.

The Price You Pay In This Offering Will Fluctuate And May Be Higher Or Lower Than The Prices Paid By Other People Participating In This Offering

The price in this offering will fluctuate based on the prevailing market price of the common stock on the Over-the-Counter Bulletin Board. Accordingly, the price you pay in this offering may be higher or lower than the prices paid by other people participating in this offering.

We May Not Be Able To Access Sufficient Funds Available Under The Equity Distribution Agreement When Needed

We are dependent on external financing to fund our operations. Our financing needs are expected to be substantially provided from the Equity Distribution Agreement we entered with Cornell Capital Partners. No assurances can be given that such financing will be available in sufficient amounts or at all when needed, in part, because we are limited to a maximum cash advance of $225,000 during any seven trading day period. If the actual average price at which we sell shares of common stock under the Equity Distribution Agreement were less than our current offering price per share, we would need to register additional shares to fully utilize the funds available to us under the Equity Distribution Agreement.

We May Not Be Able To Obtain A Cash Advance Under The Equity Distribution Agreement If Cornell Capital Partners Holds More Than 9.9% Of Our Common Stock

In the event Cornell Capital Partners holds more than 9.9% of our then-outstanding common stock, we will be unable to obtain a cash advance under the Equity Distribution Agreement. A possibility exists that Cornell Capital Partners may own more than 9.9% of our outstanding common stock at a time when we would otherwise plan to make an advance under the Equity Distribution Agreement. In that event, if we are unable to obtain additional external funding or generate revenue from the sale of our products, we could be forced to curtail or cease our operations.


	9

FORWARD-LOOKING STATEMENTS

Information included or incorporated by reference in this prospectus may contain forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology.

This prospectus contains forward-looking statements, including statements regarding, among other things, (a) our projected sales and profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our future financing plans and (e) our anticipated needs for working capital. These statements may be found under “Management’s Discussion and Analysis” and “Description of Business,” as well as in this prospectus generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this prospectus generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this prospectus will in fact occur.


	10

SELLING STOCKHOLDERS

The following table presents information regarding the selling stockholders. The selling shareholders are the entities who have assisted in or provided financing to Bad Toys. A description of each selling shareholder’s relationship to Bad Toys and how each selling shareholder acquired the shares to be sold in this offering is detailed in the information immediately following this table.

Selling Stockholder	Shares Beneficially Owned Before Offering	Percentage of Outstanding Shares Beneficially Owned Before Offering⁽¹⁾	Shares to be Acquired under the Equity Distribution Agreement	Percentage of Outstanding Shares to Be Acquired under the Equity Distribution Agreement	Shares to be Sold in the Offering	Percentage of Shares Beneficially Owned After Offering⁽¹⁾

Shares Acquired in Financing Transactions with Bad Toys
Cornell Capital Partners, L.P.	217,246⁽²⁾	2.72%	6,654,836	45.43 %	6,872,082⁽³⁾	0%
Consultants and Others
Newbridge Securities Corporation	5,570	*	--	--%	5,570	0%

Total	222,816	2.72 %	6,654,836	45.43 %	6,877,652	0%

_______________

*Less than 1%.

(1) Applicable percentage of ownership is based on 7,993,016 shares of common stock outstanding as of July 6, 2004, together with securities exercisable or convertible into shares of common stock within 60 days of July 6, 2004, for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to securities exercisable or convertible into shares of common stock that are currently exercisable or exercisable within 60 days of July 6, 2004, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding f or the purpose of computing the percentage ownership of any other person. Note that affiliates are subject to Rule 144 and Insider trading regulations – percentage computation is for form purposes only.

(2) 217,246 shares of common stock received by Cornell Capital Partners as a one-time commitment fee under the Equity Distribution Agreement.

(3) Includes the 6,654,836 shares to be acquired by Cornell Capital Partners under the Equity Distribution Agreement and the 217,246 shares of common stock received as a one-time commitment fee under the Equity Distribution Agreement.

The following information contains a description of each selling shareholder’s relationship to Bad Toys and how each selling shareholder acquired the shares to be sold in this offering is detailed below. None of the selling stockholders have held a position or office, or had any other material relationship, with Bad Toys, except as follows:

Shares Acquired In Financing Transactions With Bad Toys

Cornell Capital Partners. Cornell Capital Partners is the investor under the Equity Distribution Agreement and a holder of common stock issued by Bad Toys. All investment decisions of, and control of, Cornell Capital Partners are held by its general partner, Yorkville Advisors, LLC. Mark Angelo, the managing member of Yorkville Advisors, makes the investment decisions on behalf of and controls Yorkville Advisors. Cornell Capital Partners acquired all of the shares being registered in this offering in financing transactions with Bad Toys. Those transactions are explained below:

· Equity Distribution Agreement.On June 2, 2004, Bad Toys entered into an Equity Distribution Agreement with Cornell Capital Partners. Under the Equity Distribution Agreement, we may issue and sell to Cornell Capital Partners common stock for a total purchase price of up to $12,000,000. The purchase price for the shares is equal to 98% of the market price, which is defined as the lowest volume weighted average price of the common stock during the five trading days following the notice date. The amount of each advance is subject to an aggregate maximum advance amount of $225,000, with no advance occurring within seven trading days of a prior advance. Cornell Capital Partners receiv ed a one-time commitment fee of 217,246 shares of our common stock. In addition, Cornell Capital Partners is entitled to retain a fee of 5% of each cash advance.


	11

There are certain risks related to sales by Cornell Capital Partners, including:

The outstanding shares will be issued based on discount to the market rate. As a result, the lower the stock price around the time Cornell Capital Partners is issued shares, the greater likelihood that Cornell Capital Partners gets more shares. This could result in substantial dilution to the interests of other holders of common stock.
To the extent Cornell Capital Partners sells its common stock, the common stock price may decrease due to the additional shares in the market. This could allow Cornell Capital Partners to sell greater amounts of common stock, the sales of which would further depress the stock price.
The significant downward pressure on the price of the common stock as Cornell Capital Partners sells material amounts of common stocks could encourage short sales by Cornell Capital Partners or others. This could place further downward pressure on the price of the common stock.

Newbridge Securities Corporation. On June 2, 2004, we entered into a Placement Agent Agreement with Newbridge Securities Corporation. Pursuant to the Placement Agent Agreement, we paid Newbridge Securities Corporation a one-time placement agent fee of 5,570 restricted shares of common stock equal to approximately $10,000 based on our stock price on June 2, 2004.

With respect to the sale of unregistered securities referenced above, all transactions were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 (the “1933 Act”), and Regulation D promulgated under the 1933 Act. In each instance, the purchaser had access to sufficient information regarding Bad Toys and our business so as to make an informed investment decision. More specifically, we had a reasonable basis to believe that each purchaser was an “accredited investor” as defined in Regulation D of the 1933 Act and otherwise had the requisite sophistication to make an investment in our securities.


	12

USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be offered and sold from time to time by certain selling stockholders. We will not receive any proceeds from the sale of shares of common stock in this offering. However, we will receive the proceeds from the sale of 6,654,836 shares of common stock to Cornell Capital Partners under the Equity Distribution Agreement. The purchase price of the shares purchased under the Equity Distribution Agreement will be equal to 98% of the market price which is defined in the Equity Distribution Agreement as the lowest volume weighted average price of our common stock on the Over-the-Counter Bulletin Board for the five days immediately following the notice date. As an additional fee we will pay Cornell Capital Partners 5% of each cash advance we receive under the Equity Distribution Agreement. Pursuant to the Equity Distribution Agreement, we cannot receive a cash advance of more than $225,000 every seven trading days or more than $12,000,000 over the next 24 months.

For illustrative purposes only, we have set forth below our intended use of proceeds for the range of net proceeds indicated below to be received under the Equity Distribution Agreement. The table assumes estimated offering expenses of $85,000, plus 5% fee payable to Cornell Capital Partners under the Equity Distribution Agreement. The figures below are based on good faith estimates and for illustration purposes only. These figures may change due to various factors, including the timing of the receipt of the proceeds.

Gross proceeds	$	5,000,000	$	8,000,000	$	12,000,000

Net proceeds	$	4,665,000	$	7,515,000	$	11,315,000

No. of shares issued under the Equity Distribution Agreement at an assumed price of $1.84		2,772,848		4,436,557		6,654,836

USE OF PROCEEDS:		AMOUNT		AMOUNT		AMOUNT

Business Development	$	3,000,000	$	4,000,000	$	7,000,000
Infrastructure and Improvements		665,000		515,000		1,315,000
Operating Capital		1,000,000		3,000,000		3,000,000

Total	$	4,665,000	$	7,515,000	$	11,315,000


	13

DILUTION

The net tangible book value of Bad Toys as of March 31, 2004 was of $30,037 or $0.0040 per share of common stock. Net tangible book value per share is determined by dividing our tangible book value (our total tangible assets less our total liabilities) by the number of outstanding shares of our common stock. Since this offering is being made solely by the selling stockholders and none of the proceeds will be paid to Bad Toys, our net tangible book value will be unaffected by this offering. Our net tangible book value and our net tangible book value per share, however, will be impacted by the common stock to be issued under the Equity Distribution Agreement. The amount of dilution will depend on the offering price and number of shares to be issued under the Equity Distribution Agreement. The following example shows the dilution to new investors at an offering price of $1.84 per share, which is in the range of the recent share price.

If we assume that Bad Toys had issued 6,654,836 shares of common stock under the Equity Distribution Agreement at an assumed offering price of $1.84 per share, less retention fees of $600,000 and offering expenses of $85,000, our net tangible book value as of March 31, 2004 would have been $11,577,690 or $0.0040 per share. Note that at an offering price of $1.84 per share, we would receive gross proceeds of $12,000,000, or the entire amount available under the Equity Distribution Agreement. At an assumed offering price of $1.84, Cornell Capital Partners would receive a discount of $600,000 on the purchase of 6,654,836 shares of common stock. Such an offering would represent an immediate increase in net tangible book value to existing stockholders of $0.8179 per share and an immediate dilution to new stockholders of $1.0180 per share. The following table illustrates the per share dilution:

Assumed public offering price per share		$1.84
Net tangible book value per share before this offering	$0.0040
Increase attributable to new investors	$0.8179

Net tangible book value per share after this offering		$0.8220

Dilution per share to new stockholders		$1.0180

The offering price of our common stock is based on the then-existing market price. In order to give prospective investors an idea of the dilution per share they may experience, we have prepared the following table showing the dilution per share at various assumed offering prices:

ASSUMED OFFERING PRICE	NO. OF SHARES TO BE ISSUED	DILUTION PER SHARE TO NEW INVESTORS

$1.8400	6,654,836⁽¹⁾	$1.0180
$1.3800	6,654,836	$0.7645
$0.9200	6,654,836	$0.5110
$0.4600	6,654,836	$0.2574

(1) This represents the maximum number of shares of common stock that are being registered under the Equity Distribution Agreement at this time.


	14

STANDBY EQUITY DISTRIBUTION AGREEMENT

Summary

On June 2, 2004, we entered into an Equity Distribution Agreement with Cornell Capital Partners. Pursuant to the Equity Distribution Agreement, we may, at our discretion, periodically sell to Cornell Capital Partners shares of common stock for a total purchase price of up to $12,000,000. For each share of common stock purchased under the Equity Distribution Agreement, Cornell Capital Partners will pay us 98% of the lowest volume weighted average price of our common stock on the Over-the-Counter Bulletin Board or other principal market on which our common stock is traded for the five days immediately following the notice date. The number of shares purchased by Cornell Capital Partners for each cash advance is determined by dividing the amount of each advance by the purchase price for the shares of common stock. Further, Cornell Capital Partners will retain 5% of eac h cash advance we receive under the Equity Distribution Agreement. Cornell Capital Partners is a private limited partnership whose business operations are conducted through its general partner, Yorkville Advisors, LLC. In addition, we engaged Newbridge Securities Corporation, a registered broker-dealer, as our placement agent in connection with the Equity Distribution Agreement. For their services, we paid Newbridge Securities Corporation a fee of 5,570 shares of our common stock, equal to approximately $10,000 based on our stock price on June 2, 2004. The effectiveness of the sale of the shares under the Equity Distribution Agreement is conditioned upon us registering the shares of common stock with the SEC and obtaining all necessary permits or qualifying for exemptions under applicable state law s. The costs associated with this registration will be borne by us. There are no other significant closing conditions to cash advan c es under the Equity Distribution Agreement.

Equity Distribution Agreement Explained

Pursuant to the Equity Distribution Agreement, we may periodically sell shares of common stock to Cornell Capital Partners to raise capital to fund our working capital needs. The periodic sale of shares is known as an advance. We may request an advance every seven trading days. A closing will be held the first trading day after the pricing period at which time we will deliver shares of common stock and Cornell Capital Partners will pay the advance amount. We may request cash advances under the Equity Distribution Agreement once the underlying shares are registered with the SEC. Thereafter, we may continue to request cash advances until Cornell Capital Partners has advanced us a total amount of $12,000,000 or 24 months after the effective date of the this registration statement, whichever occurs first.

The amount of each advance is subject to a maximum amount of $225,000, and we may not submit a request for an advance within seven trading days of a prior advance. The amount available under the Equity Distribution Agreement is not dependent on the price or volume of our common stock. Our ability to request advances is conditioned upon us registering the shares of common stock with the SEC. In addition, we may not request cash advances if the shares to be issued in connection with such advances would result in Cornell Capital Partners owning more than 9.9% of our outstanding common stock. We would be permitted to make draws on the Equity Distribution Agreement only so long as Cornell Capital Partners’ beneficial ownership of our common stock remains lower than 9.9% and, therefore, a possibility exists that Cornell Capital Partners may own more than 9.9% of our outstanding common stock at a time when we would otherwise plan to make an advance under the Equity Distribution Agreement.

We do not have any agreements with Cornell Capital Partners regarding the distribution of such stock, although Cornell Capital Partners has indicated that it intends to promptly sell any stock received under the Equity Distribution Agreement.

We cannot predict the actual number of shares of common stock that will be issued pursuant to the Equity Distribution Agreement, in part, because the purchase price of the shares will fluctuate based on prevailing market conditions and we have not determined the total amount of advances we intend to draw. Nonetheless, we can estimate the number of shares of our common stock that will be issued using certain assumptions. Assuming we issued the number of shares of common stock being registered in the accompanying registration statement at a recent price of $1.84 per share, we would issue 6,654,836 shares of common stock to Cornell Capital Partners for gross proceeds of $12,000,000. These shares would represent 45.43% of our outstanding common stock upon issuance. We are registering 6,654,836 shares of common stock for sale under the Equity Distribution Agreement. Assuming an offering price of $1.84 per share, we should be able to fully utilize the entire $12,000,000 available under the Equity Distribution Agreement. If the average price for which we sold shares under the Equity Distribution Agreement is lower than $1.84 per share, we will need to register additional shares of common stock to fully utilize the shares under the Equity Distribution Agreement.


	15

There is an inverse relationship between our stock price and the number of shares to be issued under the Equity Distribution Agreement. That is, as our stock price declines, we would be required to issue a greater number of shares under the Equity Distribution Agreement for a given advance. This inverse relationship is demonstrated by the following table, which shows the number of shares to be issued under the Equity Distribution Agreement at a recent price of $1.84 per share and 25%, 50% and 75% discounts to the recent price.

Purchase Price:	$ 1.8400	$ 1.3800	0.9200	0.4600
No. of Shares⁽¹⁾:	6,654,836	6,654,836	6,654,836	6,654,836
Total Outstanding⁽²⁾:	14,647,852	14,647,852	14,647,852	14,647,852
Percent Outstanding⁽³⁾:	45.43%	45.43%	45.43%	45.43%
Net Cash to Bad Toys:	$11,547,653	8,639,490	5,731,327	2,823,163

(1) Represents the number of shares of common stock to be issued to Cornell Capital Partners, under the Equity Distribution Agreement at the prices set forth in the table, assuming sufficient authorized shares are available.

(2) Represents the total number of shares of common stock outstanding after the issuance of the shares to Cornell Capital Partners, under the Equity Distribution Agreement.

(3) Represents the shares of common stock to be issued as a percentage of the total number shares outstanding.

Proceeds used under the Equity Distribution Agreement will be used in the manner set forth in the “Use of Proceeds” section of this prospectus. We cannot predict the total amount of proceeds to be raised in this transaction because we have not determined the total amount of the advances we intend to receive. Cornell Capital Partners has the ability to permanently terminate its obligation to purchase shares of our common stock under the Equity Distribution Agreement if there shall occur any stop order or suspension of the effectiveness of this registration statement for an aggregate of fifty (50) trading days other than due to acts by Cornell Capital Partners or if we fail materially to comply with certain terms of the Equity Distribution Agreement, which remain uncured for thirty (30) days after notice from Cornell Capital Partners.

All fees and expenses under the Equity Distribution Agreement will be borne by us. We expect to incur expenses of approximately $85,000 in connection with this registration, consisting primarily of professional fees. In connection with the Equity Distribution Agreement, Cornell Capital Partners received a one-time commitment fee in the form of 217,246 shares of common stock on June 2, 2004. In addition, we issued 5,570 shares of common stock to Newbridge Securities Corporation, an unaffiliated registered broker-dealer, as compensation for its services as a placement agent in connection with the Equity Distribution Agreement.


	16

PLAN OF DISTRIBUTION

The selling stockholders have advised us that the sale or distribution of our common stock owned by the selling stockholders may be effected by the selling stockholders as principals or through one or more underwriters, brokers, dealers or agents from time to time in one or more transactions (which may involve crosses or block transactions) (i) on the over-the-counter market or on any other market in which the price of our shares of common stock are quoted or (ii) in transactions otherwise than in the over-the-counter market or in any other market on which the price of our shares of common stock are quoted. Any of such transactions may be effected at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at varying prices determined at the time of sale or at negotiated or fixed prices, in each case as determined by the selling stockholders or by agreement between the selling stockholders and underwriters, brokers, dealers or agents, or purchasers. If the selling stockholders effect such transactions by selling their shares of common stock to or through underwriters, brokers, dealers or agents, such underwriters, brokers, dealers or agents may receive compensation in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of common stock for whom they may act as agent (which discounts, concessions or commissions as to particular underwriters, brokers, dealers or agents may be in excess of those customary in the types of transactions involved).

Cornell Capital Partners is an “underwriter” within the meaning of the Securities Act of 1933 in connection with the sale of common stock under the Equity Distribution Agreement. Cornell Capital Partners will pay us 98% of the lowest volume weighted average price of our common stock on the Over-the-Counter Bulletin Board or other principal trading market on which our common stock is traded for the five days immediately following a request by the Company for an advance. In addition, Cornell Capital Partners will retain 5% of the proceeds received by us under the Equity Distribution Agreement, and received a one-time commitment fee in the form of 217,246 shares of common stock on May 14, 2004. The 5% retainage and the 217,246 shares of common stock are underwriting discounts. In addition, we engaged Newbridge Securities Corporation, an unaffiliated registered broker-dealer, to act as our placement agent in connection with the Equity Distribution Agreement.

We will pay all the expenses incident to the registration, offering and sale of the shares of common stock to the public other than commissions, fees and discounts of underwriters, brokers, dealers and agents. If any of these other expenses exists, we expect the selling stockholders to pay these expenses. We have agreed to indemnify Cornell Capital Partners and its controlling persons against certain liabilities, including liabilities under the Securities Act. We estimate that the expenses of the offering to be borne by us will be approximately $85,000. The offering expenses consist of: a SEC registration fee of $1,525.47, printing expenses of $2,500, accounting fees of $15,000, legal fees of $50,000 and miscellaneous expenses of $15,974.53. We will not receive any proceeds from the sale of any of the sha res of common stock by the selling stockholders. We will, however, receive proceeds from the sale of common stock under the Equity Distribution Agreement.

Cornell Capital Partners was formed in February 2000 as a Delaware limited partnership. Cornell Capital Partners is a domestic hedge fund in the business of investing in and financing public companies. Cornell Capital Partners does not intend to make a market in our stock or to otherwise engage in stabilizing or other transactions intended to help support the stock price. Prospective investors should take these factors into consideration before purchasing our common stock.

Under the securities laws of certain states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. The selling stockholders are advised to ensure that any underwriters, brokers, dealers or agents effecting transactions on behalf of the selling stockholders are registered to sell securities in all fifty states. In addition, in certain states the shares of common stock may not be sold unless the shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and we have complied with them. The selling stockholders and any brokers, dealers or agents that participate in the distribution of common stock may be considered underwriters, and any profit on the sale of common stock by them and any discounts, concessions or commissions received by those underwriters, brokers, dealers or agents may be considered underwriting discounts and commissions under the Securities Act of 1933.


	17

The selling stockholders should be aware that the anti-manipulation provisions of Regulation M under the Exchange Act will apply to purchases and sales of shares of common stock by the selling stockholders, and that there are restrictions on market-making activities by persons engaged in the distribution of the shares. Under Registration M, the selling stockholders or their agents may not bid for, purchase, or attempt to induce any person to bid for or purchase, shares of our common stock while such selling stockholders are distributing shares covered by this prospectus. Accordingly, the selling stockholders are not permitted to cover short sales by purchasing shares while the distribution is taking place. The selling stockholders are advised that if a particular offer of common stock is to be made on terms constituting a material change from the informati on set forth above with respect to the Plan of Distribution, then, to the extent required, a post-effective amendment to the accompanying registration statement must be filed with the Securities and Exchange Commission.


	18

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION OR PLAN OF OPERATIONS

Introduction-Forward Looking Statements

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”), we are hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements made herein. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions of future events or performance are not statements of historical facts and may be forward-looking. These forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties, including but not limited to, economic, competitive, regulatory, growth strategies, available financing and other factors discussed elsewhere in this report and in documents we have filed with the SEC. Many of these factors are beyond our control. Actual results could differ materially from the forward-looking statements made. In light of these risks and uncertainties, there can be no assurance that the results anticipated in the forward-looking information contained in this report will, in fact, occur.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Going Concern

Financing Of Bad Toys

On August 23, 2000, we assumed $986,000 in loans owed to Larry N. and Susan H. Lunan, and took control of all motorcycle-related assets of our predecessor, the former Bad Toys, Inc. Between August 24, 2000, and March 31, 2001, we retired approximately $561,200 in debt owed principally to our majority shareholders, Larry N. and Susan H. Lunan, through the issuance of 3,605,621 shares of common stock to the Lunans at a price of $.10 per share and the issuance of 2,006,379 shares to others at a price of $.10 per share. The majority of these shares (4,680,064 shares) were issued on August 24, 2000 and the remaining shares (930,136 shares) were issued on March 31, 2001. On March 31, 2002, we converted the balance of the $500,000 in loans assumed from our predecessor into 500,000 shares of our preferred stock, at a price of $1.00 per share, which shares were primarily issued to the Lunan s. From August 24, 2000 to December 31, 2002, we borrowed an additional $768,900 from the Lunans and friends and family of the Lunans. Also on March 31, 2002, we converted into 527,000 shares of our preferred stock $527,000 of the $768,900 owed to the Lunans and friends and family of the Lunans. On December 31, 2002, we converted into 200,000 shares of our common stock $100,000 of debt owed to the Lunans at a price of $.50 per share. Thereafter, as of December 31, 2002 we owed the Lunans $140,245 and did not owe any money to friends and family of the Lunans. On September 30, 2003, and December 31, 2003, we converted into 200,000 shares of our common stock of debt owed to the Lunans at .50 per share. At various times during 2003, the Lunans advanced us $365,593 for working capital. After the debt conversion to common stock, we owe the Lunans $305,838.


	19

Results Of Operation For The Three Months Ended March 31, 2004 Compared To The Three Months Ended March 31, 2003

Revenues

Revenues for the three months ended March 31, 2004 were $63,214, which was an increase of $5,745 when compared with the revenue for the three months ended March 31, 2003 of $57,469. The increase is due to the new brokerage activity in our wholly owed subsidiary, Bad Boyz Toyzz, Inc., during the quarter ended March 31, 2004.

Cost Of Sales

Our cost of sales increased to $61,812 from $60,218 for the three months ended March 31, 2004 as compared to the three months ended March 31, 2003. The increase in our cost of sales of $1,594 was directly related to the increase in outside accounting services related to payroll activity for the three months ended March 31, 2004.

General And Administrative

We had general and administrative expenses for the three months ended March 31, 2004 of $105,274 as compared to $45,276 for the three months ended March 31, 2003. The increase of $55,847 was due principally to the cost of the new brokerage activity in Bad Boyz Toyzz, Inc., in the amount of approximately $12,000, offset by a decrease in depreciation expense of approximately the same amount plus an increase of $53,000 in legal and accounting fees and consulting costs associated with the purchase of Chambers Automotive, Inc. and Precision Tricks Customs, Inc., and other acquisition activities.

Net Loss

Our net loss for the three months ended March 31, 2004 was $133,525 as compared to $75,863 for the three months ended March 31, 2003. The increase in net loss of $57,665 was due principally to our acquisitions of Chambers Automotive, Inc. and Precision Tricks Customs, Inc.

Discussion Of Operations Comparing The Years Ended December 31, 2003 And December 31, 2002

Revenues

Revenues for the year ended December 31, 2003 were $207,237, which was an increase of $102,861 when compared with revenue for the year ended December 31, 2002 of $104,376. The increase was due to the greater number of motorcycles sold during 2003. During 2002, we sold only one custom motorcycle, accounting for $48,072 of 2002 revenues, or 46% of overall revenues. During 2003, we sold three custom motorcycles, accounting for $126,224 of 2003 revenues, or 61% of overall revenues. Customizing motorcycles accounted for approximately $29,266 of our annual revenues during fiscal year 2002, or 28% of overall revenues, and servicing motorcycles accounted for approximately $27,038 of our annual revenues during the same period, or 26% of overall revenues. Customizing motorcycles accounted for approximately $33,158 of our annual revenues during the year ended December 31, 2003, or 16% of over all revenues, and servicing motorcycles accounted for approximately $26,940 of our annual revenues during the same period, or 13% of overall revenues. Brokerage fees accounted for $21,000 of 2003 revenues, or approximately 10%.

Our revenues for 2002 were affected as a result of our president, Larry N. Lunan, being severely injured in October, 2001. This accident caused Mr. Lunan to be completely absent from the business until early March, 2002. From March through September 2002, Mr. Lunan worked on a periodic basis and returned to work full time in October, 2002. In March, 2002, we hired a full-time store manager. Management believes that by hiring a full-time store manager, the future absence of Mr. Lunan for a period of time from our operations will not have such a profound impact on our revenues.


	20

Cost Of Sales

Our cost of sales was $215,072 for the year ended December 31, 2003 as compared to $77,277 for the year ended December 31, 2002. The increase in our cost of sales, in the amount of $137,795 was related to the increase in revenues of approximately $103,000 for the year 2003, which accounted for approximately $56,000 of the cost of sales increase, and a $24,000 increase in labor for increased activity, the staffing related to the new brokerage business, and a new activity associated with the commencement of the custom car business. The balance of $23,000 is principally related to the brokerage activity.

General And Administrative Expenses

General and administrative expenses for the year ended December 31, 2003 was $311,809 as compared to $22,266 for the year ended December 31, 2002. The total increase of $85,540 was due principally to the activity of becoming a public trading company and legal fees associated with the Mycom lawsuit filed by our majority shareholders, Larry N. and Susan H. Lunan. These two activities accounted for $63,540 of the increase in expenses. Advertising and travel account for the remaining $22,000 in additional expenses.

Cash Flows

Cash and cash equivalents increased from $5,618 for the year ended December 31, 2002 to $18,275 for the year ended December 31, 2003, primarily due to loans from shareholders. Our management believes that cash on hand will not be sufficient to satisfy cash requirements over the next twelve months. See the section below entitled “Liquidity and Proposed Plan for the Next Twelve Months”.

Liquidity And Cash Flow For The Quarter Ended March 31, 2004 Compared To The Quarter Ended March 31, 2003

Cash and cash equivalents increased from $2,823 for the quarter ended March 31, 2003 to $27,520 for the quarter ended March 31, 2004, primarily due to loans from shareholders. Management believes that cash on hand will not be sufficient to satisfy cash requirements over the next twelve months. Our management believes that it will need to raise approximately $175,000 to $250,000 to cover expenses for the year 2004. We have funded our cash needs over the quarter ended March 31, 2004 with cash on hand, revenues, and loans from shareholders.

Liquidity And Proposed Plans For The Next Twelve Months

Our plan of operation for the next twelve months is to continue to improve our cash flow from operations. We expect our acquisition of Bad Boyz Toyzz, Inc., to provide positive cash flow. We are also continuing our efforts to increase motorcycle sales by establishing an east and west coast distributor. We are continuing our advertising via the internet and plan to commence advertising in the print media. In February 2004, we increased our product base and customer base by purchasing the assets of Chambers Automotive, Inc. and Precision Tricks Customs, Inc. We commenced operating these combined entities for approximately one month, at which time a legal controversy developed regarding the transfer of the assets. We are in the process of pursuing these legal remedies and expect to operate the custom car business before the end of 2004. (See the “Legal Proceedings” section.)

Management believes that it will need to raise approximately $175,000 to $250,000, exclusive of any merger activity, to cover expenses for the year 2004, in the event there is a delay in reactivating the custom car segment of our business. During 2003, we needed to raise $386,000 for our operating activities, which included a cash advance of $62,500 to our merger candidate. We believe that our primary operating expenses in 2004 will consist of employee (non-executive) salaries in the approximate amount of $100,000 and costs of leasing and maintaining our facility (including the costs of utilities) from which we operate in the approximate amount of $40,000. We believe that outside accounting and legal services and other miscellaneous expenses for 2004 will be approximately $60,000.

We plan, subject to the availability of capital, to add approximately $100,000 in inventory to the present approximately $315,000 in inventory we have in our Kingsport facility to offer a more complete line of equipment, helmets and soft goods. We plan next to add approximately $30,000 in plant equipment (benches, lifts, a milling machine and a drill press) to eliminate the present practice of subcontracting all our machine work. Should the above plans be realized, we believe we could add approximately seven employees to our Kingsport payroll at an approximate cost of $5,000 per week. We plan to raise the funds necessary to expand our Kingsport operations through the sale of our securities. There can be no assurance, however, that we will be able to successfully raise these funds through offering our securities or otherwise. If we are not able to raise these funds, we will not be a ble to expand our Kingsport operations during this time frame or possibly at all.


	21

Name of Director/Executive Officer	Age	Position	Period Served

Larry N. Lunan	66	Chairman, Chief Executive Officer, and President	July 1994 to Present
Roger A. Warren	39	Director, Vice President, Chief Financial Officer and Principal Accounting Officer	August 2000 to Present
Clinton L. Hubbard	52	Director	August 2000 to Present


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Class⁽¹⁾


Common	Larry N. Lunan⁽³⁾⁽⁴⁾ 2344 Woodridge Avenue, Kingsport, TN 37664	12,594,501	85.14

	Susan H. Lunan⁽³⁾⁽⁵⁾ 2344 Woodridge Avenue, Kingsport, TN 37664	12,594,501	85.14

	Roger A. Warren 17130 Redhill Avenue, Irvine, CA 92714	50,000	*

	Clinton L. Hubbard 10 Rivera, Cote De Casa, CA 92679	245,000	3.07

	Al Kau 2344 Woodridge Avenue, Kingsport, TN 37664	400,000	5.0

	Total	12,889,501	93.21


SECURITY OWNERSHIP OF MANAGEMENT

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Class⁽¹⁾

Common	Larry N. Lunan⁽³⁾⁽⁴⁾ 2344 Woodridge Avenue, Kingsport, TN 37664	12,594,501	85.14
	Roger A. Warren 17130 Redhill Avenue, Irvine, CA 92714	50,000	*
	Clinton L. Hubbard 10 Rivera, Cote De Casa, CA 92679	245,000	3.07
Total	All Directors & Officers and Beneficial Owners as a Group⁽⁶⁾	12,889,501	88.21

YEAR 2003	High Bid	Low Bid

Quarter Ended December 31, 2003	$1.40	$0.35
(Beginning November 11 the First Available Date)
YEAR 2004	High Bid	Low Bid

Quarter Ended March 31, 2004	$1.74	$0.71
Quarter Ended June 30, 2004	$2.07	$0.52

Plan Category⁽¹⁾	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)(c)

Equity compensation plans approved by security holders	None	None	None
Equity compensation plans not approved by security holders	2,500,000	$ 0.90	2,500,000

Total	2,500,000	$ 0.90	2,500,00

		Annual Compensation			Long-Term Compensation

Name and Principal Position⁽²⁾	Year	Salary	Bonus ($)	Other Annual Compensation ($)	Awards Securities Underlying Options SARs (#)	Payouts LTIP Payouts ($)	All Other Compensation ($)

Larry N. Lunan	2003	$ 72,000	_____	_____	_____	_____	_____
President and Chief Executive	2002	$ 72,000	_____	_____	_____	_____	_____
Officer	2001	$ 72,000	_____	_____	_____	_____	_____

	PAGE

Financial Statements as of March 31, 2004 (Unaudited)
Independent Auditor’s Report	F-1
Balance Sheets for the Quarter Ended March 31, 2004 and 2003	F-2 F-3
Statement of Income for the Three Months Ended March 31, 2004 and 2003	F-4
Statement of Cash Flows for the Three Months Ended March 31, 2004 and 2003	F-5 F-6
Statement of Changes in Stockholders Equity for the Three Months Ended March 31, 2004	F-7
Notes to Consolidated Financial Statements	F-8 F-14
Financial Statements for December 31, 2003 and December 31, 2002 (Audited)
Independent Auditors Report	F-15
Balance Sheets for the Year Ended December 31, 2003	F-16 F-17
Statement of Income for the Years Ended December 31, 2003 and December 31, 2002	F-18
Statement of Cash Flows for the Years Ended December 31, 2003 and December 31, 2002	F-19 F-20
Statements of Changes in Stockholders Equity for the Years Ended December 31, 2003 and December 31, 2002	F-21
Notes to Consolidated Financial Statements	F-22 F-27

ASSETS

		March 31,		December 31,
		2004		2003

Current Assets:
Cash and Cash Equivalents	$	27,510	$	18,275
Accounts Receivable		86,982		26,972
Inventory		285,210		315,017
Prepaid Expenses		593		2,310


Total Current Assets	$	400,295	$	362,574

Property and Equipment:

Property and Equipment, net of Depreciation		17,453		17,104


Other Assets:

Other Assets		389,337		134,208
Utility Deposits		609		609


Total Other Assets		389,946		134,817


TOTAL ASSETS	$	807,694	$	514,495

LIABILITIES AND STOCKHOLDERS’ EQUITY		March 31,			December 31,
		2004			2003


Current Liabilities:
Accounts Payable	$	48,274		$	47,925
Wages Payable		36,000			18,000
Sales Tax Payable		4,009			7,347
Payroll Taxes Payable		66,024			59,454
Customer Deposit		17,860			0
Note Payable		10,500			49,866


Total Current Liabilities		182,667			182,592


Noncurrent Liabilities:
Note Payable-Officer		594,990			305,838


TOTAL LIABILITIES	$	777,657		$	488,430


Stockholders’ Equity:
10% Cumulative Preferred
Stock, $1.00 par value; Authorized
10,000,000; 7,430,200 issued and
outstanding at Dec. 31, 2003
Convertible 1:10 to common stock.		818,888			818,888

Common Stock, $.01 par value;
40,000,000 Authorized; 7,430,200
issued and outstanding at Mar. 31, 2004;		75,802			74,302

Additional Paid-in Capital		7,755,498			1,619,498
Accumulated Deficit		(2,620,651	)		(2,486,623	)


Total Stockholders’ Equity		30,037			26,065


TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY	$	807,694		$	514,495

	3 Months Ended			3 Months Ended			Year to date			Year to date
	March 31, 2004			March 31, 2003			March 31, 2004			March 31, 2003


REVENUES:
Sales	$	63,214		$	57,469		$	63,214		$	57,469
Cost of Sales		61,812			60,218			61,812			60,218


Gross Profit (Loss)		1,402			(2,749	)		1,402			(2,749	)


COSTS AND EXPENSES:
General and Administrative Expenses		105,274			45,276			105,274			45,276


Income (Loss) from Operations
before interest expense		(103,872	)		(48,025	)		(103,872	)		(48,025	)

Other Income/Expense:
Interest expense		(32,818	)		(27,841	)		(32,818	)		(27,841	)
Interest income		3,162			3			3,162			3
Gain on Sale of Assets		0			0			0			0


Net Income (Loss)	$	(133,528	)	$	(75,863	)	$	(133,528	)	$	(75,863	)


BASIC EARNINGS/(LOSS) PER
COMMON SHARE	$	(.02	)	$	(.01	)	$	(.02	)	$	(.01	)

	Number of						Number of
	Shares						Shares				Additional
	Preferred			Preferred			Common		Common		Paid-In			Accumulated
	Stock			Stock			Stock		Stock		Capital			Deficit			Total

Balance at beginning of period
January 1, 2002		0		$	0			5,610,200	$	56,102	$	1,051,270		$	(1,786,635	)	$	(679,263	)
Net Loss															(312,735	)		(312,735	)
Issuance of Preferred
Stock for debt reduction		1,027,000			1,027,000							36,428						1,063,428
Cancelled preferred
for inventory		(18,112	)		(18,112	)												(18,112	)
Conversion preferred to
Common Stock		(100,000	)		(100,000	)		200,000		2,000		98,000						0
Conversion of Debt to
Common Stock		0			0			200,000		2,000		98,000						100,000

Balance of
December 31, 2002		908,888		$	908,888			6,010,200	$	60,102	$	1,283,698		$	(2,099,370	)	$	153,318

Net Loss												(387,253	)		(387,253	)
Conversion preferred to
Common Stock		(90,000	)		(90,000	)		900,000		9,000		81,000						0
Conversion of Debt to
Common Stock								400,000		4,000		196,000						200,000
Stock issue Bad Boyz
Toyzz acquisition								120,000		1,200		58,800						60,000
Balance of
December 31, 2003		818,888		$	818,888			7,430,200	$	74,302	$	1,619,498		$	(2,486,623	)	$	26,065

Net Loss												(133,528	)		(133,528	)
Common Stock – Services								50,000		500		37,000						37,500
Common Stock-(note 12)								100,000		1,000		99,000						100,000

Balance: March 31, 2004		818,888		$	818,888			7,580,200	$	75,802	$	1,755,498		$	(2,620,151	)	$	30,037

	Years

Leasehold Improvements		5 years
Machinery and Equipment		3 to 10 years
Furniture and Fixtures		3 to 10 years

	Operating Losses

Year 17		142,525
Year 18		456,900
Year 19		312,735
Year 20		387,253
Year 20		96,028

	$	1,395,441

	2004			2003

Current	$	-0-		$	-0-
Deferred benefit		418,632			389,824
Valuation Allowance		(418,632	)		(389,824	)

Total	$	-0-		$	-0-

	For the Period Ended March 31, 2004

	Income			Shares		Per- Share
	(Numerator)			(Denominator)		Amount


Income from continuing operations	$	(133,528	)		7,580,200	$	(.02	)
Effect of dilutive securities:
Convertible related party debt		--			8,188,880		--

Income available to common
Stockholders-dilutive earnings per share	$	(133,528	)		15,619,080	$	(.02	)

For the Period Ended March 31, 2003

		Income		Shares		Per- Share
		(Numerator)		(Denominator)		Amount


Income from continuing operations	$	(75,863	)	6,010,200	$	(.01	)
Effect of dilutive securities:
Convertible preferred stock		--		9,088,880		--
Convertible related party debt		--		1,896,950		--

Income available to common
Stockholders-dilutive earnings per share	$	(75,863	)	16,996,030	$	(.01	)

	2003			2002
REVENUES:

Sales	$	207,237		$	104,376
Cost of Sales		215,072			77,277

Gross Profit (Loss)		(7,835	)		27,099


COSTS AND EXPENSES:

General and Administrative Expenses		311,809			22,269


Income (Loss) from Operations before interest expense		(319,644	)		(199,170	)

Other Income/Expense:
Gain on sale of assets		47,428			-0-
Interest income		3			-0-
Interest expense		(115,040	)		(113,565	)

Total Other Income/Expense		(67,609	)		(113,565	)


Net Loss	$	(387,253	)	$	(312,735	)


BASIC AND DILUTED EARNINGS/(LOSS) PER COMMON SHARE	$	(.05	)	$	(.06	)

	2003			2002

CASH FLOWS FROM OPERATING ACTIVITIES:


Net Loss	$	(387,253	)	$	(312,735	)

Adjustments to Reconcile Net Loss to Net Cash Used for Operating Activities:

Depreciation and Amortization		17,700			45,651
Interest Expense		115,040			113,565
Gain on sale of assets		(60,521	)		-0-

Changes in Assets and Liabilities:

(Increase) Decrease in Accounts Receivable		(26,487	)		2,250
(Increase) Decrease in Prepaid Expenses and Other Assets		(128,681	)		(3,141	)
(Increase) Decrease in Inventories		65,904			11,004
Increase (Decrease) in Accounts Payable and Accrued Liabilities		17,803			14,819


Total Adjustments		758			184,148


Net Cash Used For Operating Activities		(386,495	)		(128,587	)

	Number of Shares Preferred Stock			Preferred Stock			Number of Shares Common Stock		Common Stock		Additional Paid-in capital		Accumulated Deficit			Total

Balance at beginning of period – January 1, 2002		-0-		$	-0-			5,610,200	$	56,102	$	1,051,270	$	(1,786,635	)	$	(679,263	)
Net Loss														(312,735	)		(312,735	)
Issuance of Preferred Stock for debt reduction		1,027,000			1,027,000							36,428					1,063,428
Cancelled preferred for inventory		(18,112	)		(18,112	)											(18,112	)
Conversion preferred to Common Stock		(100,000	)		(100,000	)		200,000		2,000		98,000					-0-
Conversion of Debt to Common Stock		-0-			-0-			200,000		2,000		98,000					100,000

Balance December 31, 2002		908,888		$	908,888			6,010,200	$	60,102	$	1,283,698	$	(2,099,370	)	$	153,318
Net Loss														(387,253	)		(387,253	)
Conversion preferred to Common Stock		(90,000	)		(90,000	)		900,000		9,000		81,000					-0-
Conversion of Debt to Common Stock								400,000		4,000		196,200					200,000
Stock issue Bad Boyz Toyzz acquisition								120,000		1,200		58,800					60,000

Balance December 31, 2003		818,888		$	818,888			6,710,200	$	74,302	$	1,619,498	$	(2,486,623	)	$	26,065

		Operating Losses

Year 2020	$	142,525
Year 2021		456,900
Year 2022		312,735
Year 2023		387,253

	$	1,299,413

Components-Current and Deferred
		2003			2002

Current	$	-0-		$	-0-
Deferred benefit		389,824			273,648
Valuation Allowance		(389,824	)		(273,648	)

Total	$	-0-		$	-0-

	For the Year Ended December 31, 2003

		Income		Shares		Loss Per- Share
		(Numerator)		(Denominator)		Amount

Income (loss) from continuing operations	$	(387,253	)	7,302,640	$	(.05	)
Effect of dilutive securities:

Convertible Preferred Stock		–		8,188,880		--
Convertible related party debt		--		3,058,380		--

Income (loss) available to common Stockholders-dilutive earnings per share	$	(387,253	)	18,549,900

(Other potential common stock is anti-dilutive)

	For the Year Ended December 31, 2002

		Income		Shares		Loss Per- Share
		(Numerator)		(Denominator)		Amount

Income (loss) from continuing operations	$	(312,735	)	5,611,296	$	(.06	)
Effect of dilutive securities:

Convertible Preferred Stock		–		9,088,880		--
Convertible related party debt		--		1,402,450		--

Income (loss) available to common Stockholders-dilutive earnings per share	$	(312,735	)	16,102,626

(Other potential common stock is anti-dilutive)

We have not authorized any dealer, salesperson or other person to provide any information or make any representations about Bad Toys, Inc., except the information or representations contained in this prospectus. You should not rely on any additional information or representations if made.

____________________

This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy any securities: o except the common stock offered by this prospectus; o in any jurisdiction in which the offer or solicitation is not authorized; o in any jurisdiction where the dealer or other salesperson is not qualified to make the offer or solicitation; o to any person to whom it is unlawful to make the offer or solicitation; or o to any person who is not a United States resident or who is outside the jurisdiction of the United States. The delivery of this prospectus or any accompanying sale does not imply that: o there have been no changes in the affairs of Bad Toys after the date of this prospectus; or o the information contained in this prospectus is correct after the date of this prospectus.	PROSPECTUS 6,877,652 Shares of Common Stock BAD TOYS, INC. July ___, 2004


____________________

Until _________, 2004, all dealers effecting transactions in the registered securities, whether or not participating in this distribution, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters.

Securities and Exchange Commission Registration Fee	$	1,525.47
Printing and Engraving Expenses	$	2,500.00
Accounting Fees and Expenses	$	15,000.00
Legal Fees and Expenses	$	50,000.00
Miscellaneous	$	15,974.53

TOTAL	$	85,000.00

Exhibit No.	Description	Location

2.1	Plan and Agreement of Merger dated March 31, 2000	Incorporated by reference to Exhibit 2 to the Company's 10-KSB filed on April 13, 2000

3.(i).1	Articles of Incorporation of the Company	Incorporated by reference to the Company’s Registration Statement filed on Form 10-SB filed October 31, 2002

3.(i).2	Amendment to Articles of Incorporation	Incorporated by reference to the Company’s Amended Registration Statement filed on Form 10-SB filed January 30, 2003

3.(i).3	Amendment to Articles of Incorporation	Incorporated by reference to the Company’s Amended Registration Statement filed as Exhibit 2.2 on Form 10-SB filed January 30, 2003

3.(i).4	Amendment to Articles of Incorporation	Incorporated by reference to the Company’s Amended Registration Statement filed as Exhibit 2.3 on Form 10-SB filed January 30, 2003

3.(ii).1	Bylaws of the Company	Incorporated by reference to the Company’s Amended Registration Statement filed as Exhibit 2.4 on Form 10-SB filed January 30, 2003

4.1	2004 Stock Compensation Plan	Incorporated by reference to the Company’s Form S-8 filed on March 12, 2004

5.1	Opinion of Legal Counsel	Filed by Amendment to this Form SB-2

10.1	Asset Purchase Agreement among Bad Toys, Jimmy Chambers, Chamber Automotive, Inc. and Precision Tricks Customs, Inc.	Filed as Exhibit 99.1 to the Company’s Form 8-K filed on February 18, 2004

10.2	Escrow Agreement with Cornell Capital Partners, LP and Butler Gonzalez, LLP, dated June 2, 2004	Provided herewith

10.3	Standby Equity Distribution Agreement, dated June 2, 2004, with Cornell Capital Partners, LP	Provided herewith

10.4	Registration Rights Agreement, dated June 2, 2004, with Cornell Capital Partners, LP	Provided herewith

10.5	Escrow Agreement, dated June, 2004, with Cornell Capital Partners, LP	Provided herewith

10.6	Placement Agent Agreement, dated June 2, 2004, with Newbridge Securities Corporation	Provided herewith

10.7	Securities Purchase Agreement, dated June 2, 2004, with Cornell Capital Partners, LP	Provided herewith

10.8	Secured Convertible Debenture, dated June 2, 2004	Provided herewith

10.9	Investor Registration Rights Agreement, dated June 2, 2004, with Cornell Capital Partners, LP	Provided herewith

10.10	Security Agreement, dated June 2, 2004, with Cornell Capital Partners, LP	Provided herewith

10.11	Warrant, dated June, 2004	Provided herewith

23.1	Consent of Legal Counsel	Incorporated by reference to Exhibit 5.1

23.2	Consent of T. Alan Walls, CPA, P.C.	Provided herewith

Date: July 14, 2004	Bad Toys, Inc.

	By: /s/ Larry Lunan
	____________________________________
	Name: Larry Lunan
	Title: President, Chief Executive Officer, and
	Chairman of the Board of Director


	By: /s/ Roger A. Warren
	____________________________________
	Name: Roger A. Warren
	Title: Chief Financial Officer and
	Principal Accounting Officer

SIGNATURE	TITLE	DATE

/s/ Larry Lunan
_______________________________________
Larry Lunan	Chairman of the Board of Directors, President and Chief Executive Officer	July 14, 2004

/s/ Roger A. Warren
_______________________________________
Roger A. Warren	Director, Chief Financial Officer and Principal Accounting Officer	July 14, 2004

/s/ Clinton L. Hubbard
_______________________________________
Clinton L. Hubbard	Director	July 14, 2004