SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 000-31883
BENTLEYCAPITALCORP.COM INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
WASHINGTON 91-2022700
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO)
5076 ANGUS DRIVE
VANCOUVER, BC V6M 3M5 CANADA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(604) 269-9881
ISSUER'S TELEPHONE NUMBER
CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION
13 OR 15(D) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR SUCH SHORTER
PERIOD THAT THE COMPANY WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES |X| NO | |
As of August 14, 2002, there were outstanding 2,250,000 shares of common stock,
par value $.0001
Transitional Small Business Issuer Format Yes | | No |X|
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Bentleycapitalcorp.com Inc.
(A Development Stage Company)
Balance Sheets
(expressed in U.S. dollars)
June 30, December 31,
2002 2001
$ $
(unaudited) (audited)
Assets
Current Assets
Cash 9,303 11,432
License (Notes 3 and 4(a)) - -
---------------------------------------------------------------------------------------
Total Assets 9,303 11,432
=======================================================================================
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable 1,129 469
Accrued liabilities 4,000 2,000
Note payable (Note 4(b)) - 28,000
Due to a related party (Note 4(c)) - 5,000
---------------------------------------------------------------------------------------
Total Liabilities 5,129 35,469
---------------------------------------------------------------------------------------
Stockholders' Deficit
Common Stock, 100,000,000 common shares authorized
with a par value of $0.0001; 20,000,000 preferred shares
with a par value of $.0001; 2,250,000 common shares
issued and outstanding 225 225
Additional Paid in Capital 29,775 29,775
---------------------------------------------------------------------------------------
30,000 30,000
Preferred Stock, 20,000,000 preferred shares
authorized with a par value of $0.0001; none issued - -
Deficit Accumulated During the Development Stage (25,826) (54,037)
---------------------------------------------------------------------------------------
Total Stockholders' Deficit 4,174 (24,037)
---------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit 9,303 11,432
=======================================================================================
Contingent Liability (Note 1)
Commitment (Note 3)
Subsequent Event (Note 5)
F-1
(The accompanying notes are an integral part of the financial statements)
Bentleycapitalcorp.com Inc.
(A Development Stage Company)
Statements of Operations
(expressed in U.S. dollars)
(unaudited)
From
March 14, 2000 Three Months Six Months
(Date of Inception) Ended Ended
to June 30, June 30, June 30,
2002 2002 2001 2002 2001
$ $ $ $ $
Revenue - - - - -
-----------------------------------------------------------------------------------------------------------------------
Expenses
Accounting and audit 4,675 225 425 750 725
Amortization of license 6,187 - - - -
Bank charges 42 - - - -
Legal 7,500 2,500 5,000 2,500 5,000
License fee 1,000 - - 500 -
License written-off 18,563 - - - -
Organizational expenses and offering costs 8,000 - - - -
Transfer agent and regulatory fees 2,794 1,021 - 1,080 1,181
Less: Interest income (185) (21) (24) (41) (63)
Forgiveness of debt (Note 4) (33,000) (33,000) - (33,000) -
-----------------------------------------------------------------------------------------------------------------------
Net Loss for the Period (15,576) (29,275) (5,401) (28,211) (6,843)
=======================================================================================================================
Net Loss Per Share .01 (.01) .01 (.01)
=======================================================================================================================
Weighted Average Shares Outstanding 2,250,000 2,000,000 2,250,000 2,000,000
=======================================================================================================================
(Diluted loss per share has not been presented as the result is anti-dilutive)
F-2
(The accompanying notes are an integral part of the financial statements)
Bentleycapitalcorp.com Inc.
(A Development Stage Company)
Statements of Cash Flows
(expressed in U.S. dollars)
(unaudited)
Six Months
Ended
June 30,
2002 2001
$ $
Cash Flows to Operating Activities
Net income (loss) for the period 28,211 (6,843)
Adjustment to reconcile net income (loss) to cash
Forgiveness of debt (33,000) -
Less non-cash working capital items
Accounts payable and accrued liabilities 2,660 4,925
------------------------------------------------------------------------
Net Cash Used by Operating Activities (2,129) (1,918)
------------------------------------------------------------------------
Decrease in cash (2,129) (1,918)
Cash - beginning of period 11,432 9,838
------------------------------------------------------------------------
Cash - end of period 9,303 7,920
========================================================================
Non-Cash Financing Activities - -
========================================================================
Supplemental Disclosures
Interest paid - -
Income tax paid - -
F-3
(The accompanying notes are an integral part of the financial statements)
Bentleycapitalcorp.com Inc.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
1. Development Stage Company
Bentleycapitalcorp.com Inc. herein (the "Company") was incorporated in the
State of Washington, U.S.A. on March 14, 2000. The Company acquired a
license to market and distribute vitamins, minerals, nutritional
supplements, and other health and fitness products in the Province of
British Columbia, Canada. The grantor of the license offers these products
for sale from various suppliers on their Web Site.
The Company is in the development stage. In a development stage company,
management devotes most of its activities in developing a market for its
products. Planned principal activities have not yet begun. The ability of
the Company to emerge from the development stage with respect to any
planned principal business activity is dependent upon its successful
efforts to raise additional equity financing and/or attain profitable
operations. There is no guarantee that the Company will be able to raise
any equity financing or sell any of its products at a profit. There is
substantial doubt regarding the Company's ability to continue as a going
concern.
The Company filed an SB-2 Registration Statement with the U.S. Securities
Exchange Commission which was declared effective November 2, 2000. The
Company completed its offering and issued 500,000 common shares at $.01 per
share for cash proceeds of $5,000.
The Company also raised $10,000 pursuant to a private placement of 250,000
shares at $0.01 per share to one Canadian investor on October 2, 2001.
These shares are restricted under Rule 144.
2. Summary of Significant Accounting Policies
(a) Year End
The Company's fiscal year end is December 31.
(b) Long Lived Assets
The carrying value of long lived assets are evaluated in each reporting
period to determine if there were events or circumstances which would
indicate a possible inability to recover the carrying amount. Such
evaluation is based on various analyses including assessing the Company's
ability to bring the commercial applications to market, related
profitability projections and undiscounted cash flows relating to each
application which necessarily involves significant management judgment.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of
three months or less at the time of issuance to be cash equivalents.
(d) Revenue Recognition
The Company will receive from the Grantor of the license, commissions of
one-half of all the profit on all sales made through the Grantor's Web
Site. The commission revenue will be recognized in the period the sales
have occurred. The Company will report the commission revenue on a net
basis as the Company is acting as an Agent for the Grantor and does not
assume any risks or rewards of the ownership of the products. This policy
is prospective in nature as the Company has not yet generated any revenue.
(e) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the periods. Actual results could differ from those estimates.
F-4
(The accompanying notes are an integral part of the financial statements)
2. Summary of Significant Accounting Policies (continued)
(f) Offering Costs
In accordance with SEC staff accounting Bulletin No. 5 offering costs may
properly be deferred and charged against proceeds of the offering. The
Company has elected to charge such offering costs to operations.
(g) Interim Financial Statements
These interim unaudited financial statements have been prepared on the same
basis as the annual financial statements and in the opinion of management,
reflect all adjustments, which include only normal recurring adjustments,
necessary to present fairly the Company's financial position, results of
operations and cash flows for the periods shown. The results of operations
for such periods are not necessarily indicative of the results expected for
a full year or for any future period.
3. License
The Company's only asset is a license to market vitamins, minerals,
nutritional supplements and other health and fitness products in the
Province of British Columbia, Canada, through the Grantor's Web Site. The
Company desires to market these products to medical practitioners,
alternative health professionals, martial arts studios and instructors,
sports and fitness trainers, other health and fitness practitioners, school
and other fund raising programs and other similar types of customers. The
license was acquired on March 20, 2000 for a term of three years with
renewal rights. The Company must pay an annual fee of $500 for maintenance
of the Grantor's Web Site commencing on the anniversary date. The Grantor
of the license retains 50% of the profits. The License was written-off to
operations in fiscal 2000. However it is the Company's intention to
determine if it is economically feasible to commercially exploit a business
plan.
See Note 4 for consideration paid to a related party for the assignment of
this license.
4. Related Party Transactions
(a) The License referred to in Note 3 was assigned to the Company by the
sole director and President of the Company for consideration of
1,500,000 shares having a fair market value of $15,000 and a note
payable of $20,000. The Company has estimated the cost of the license
to its President at $24,750. The estimate is based on an allocation of
the President's cash outlay of $33,000 for common stock of Gentry
Resources, Inc., by virtue of which the President obtained the license
as well as his continued ownership of Gentry Resources, Inc. The fair
market value of $35,000, based on comparable transactions at the time
of acquisition, was allocated to note payable as to $20,000, par value
as to $150 and additional paid in capital as to $14,850. The excess of
fair market value over predecessor cost, being $10,250, is treated as
a dividend which increased the deficit. The Grantor of the License is
not related to the Company.
(b) The President of the Company also paid for organizational expenses and
offering costs in the amount of $8,000 which was added to the $20,000
note payable. The note payable is unsecured, non-interest bearing and
has no specific terms of repayment. The $28,000 note payable was
forgiven on June 3, 2002.
(c) The Company received $5,000 from Ucellit.com Inc., a company
controlled by the sole director. During fiscal 2001 the director
loaned $5,000 to the Company to repay the loan from Ucellit.com. The
advance is unsecured, non-interest bearing and has no specific terms
of repayment. This balance owing was forgiven on June 3, 2002.
5. Subsequent Event
The Company intends to enter into an Agreement and Plan of Reorganization
pursuant to which Proton Laboratories, LLC ("Proton"), a California limited
liability company controlled by the majority shareholder, will merge with
the Company. Proton's owners will exchange 100% of Proton for shares in the
Company and such other consideration that may be agreed to by the parties.
F-5
Item 2. Management's Discussion and Analysis, and Plan of Operation
Certain statements contained in this Report, including, without limitation,
statements containing the words, "believes," "anticipates," "expects," and other
words of similar import, constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
Bentleycapitalcorp.com, Inc. to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. Bentleycapitalcorp.com, Inc.
disclaims any obligation to update any such factors or to announce publicly the
results of any revision of the forward-looking statements contained or
incorporated by reference herein to reflect future events or developments.
The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the unaudited financial
statements and accompanying notes and the other financial information appearing
elsewhere in this Form 10-QSB. This Form 10-QSB contains, in addition to
historical information, forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from the results discussed
in the forward-looking statements. Factors that could cause or contribute to
such differences include those discussed below, as well as those discussed
elsewhere in this Form 10-QSB.
The following discussion and analysis of Bentley's financial condition and
results of operations should be read in conjunction with the Financial
Statements and accompanying notes and the other financial information appearing
elsewhere in this report.
PLAN OF OPERATION
During the period from March 14, 2000 through June 30, 2002 Bentley has engaged
in no significant operations other than organizational activities, acquisition
of the rights to market Vitamineralherb, preparation for registration of its
securities under the Securities Act of 1933, as amended, and capital raising. No
revenues were received by Bentley during this period.
For the second quarter of 2002, we incurred a loss as a result of expenses
associated with setting up a company structure to begin implementing its
business plan. Bentley anticipates that until these procedures are completed, it
will not generate revenues, and may continue to operate at a loss thereafter,
depending upon the performance of the business.
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
Bentley remains in the development stage and, since inception, has experienced
no significant change in liquidity or capital resources or shareholders' equity.
Bentley's business plan is to determine the feasibility of selling
Vitamineralherb.com products to targeted markets. In order to determine the
feasibility of its business plan, Bentley plans, during the next six to twelve
months, to conduct research into these various potential target markets. Should
Bentley determine that the exploitation of the license is feasible, it will
engage salespeople to market the products. Based primarily on discussions with
the licensor, Bentley believes that during its first operational quarter
(whenever that might be in the future), it will need a capital infusion of
approximately $55,000 to achieve a sustainable sales level where ongoing
operations can be funded out of revenues. This capital infusion is intended to
cover costs of advertising, hiring and paying two salespeople, and
administrative expenses. In addition, Bentley will need approximately $260,000
in the event it determines that its customers will not pay in advance and it
will have to extend credit. Bentley will have to obtain additional financing
through an offering or capital contributions by current shareholders.
Bentley will need additional capital to carry out its business plan or to engage
in a business combination. No commitments to provide additional funds have been
made by management or other shareholders. Accordingly, there can be no assurance
that any additional funds will be available on terms acceptable to Bentley or at
all. Bentley has no commitments for capital expenditures.
In addition, Bentley may engaged in a combination with another business. Bentley
has engaged in discussions concerning potential business combinations, but has
not entered into any agreement for such a combination.
In its Independent Auditor's Report for the year ended December 31, 2001,
Bentley's independent auditor stated that Bentley's failure to generate revenues
and conduct operations since its inception raise substantial doubt about
Bentley's ability to continue as a going concern. Bentley will require
substantial working capital, and currently has inadequate capital to fund its
business. Bentley may be unable to raise the funds necessary for implementing
its business plan, which could severely limit its operations and cause its stock
to be worthless.
RESULTS OF OPERATIONS
During the period from March 14, 2000 (date of inception) through June 30, 2002,
the Company has engaged in no significant operations other than raising $15,000
for the issuance of 750,000 common shares, and organizational activities and
acquisition of the rights to market Vitamineralherb products. No revenues were
received by the Company during this period.
Tthe Company continues to anticipate incurring losses as a result of expenses
associated with setting up a company structure to begin implementing its
business plan. The Company's business plan is to determine the feasibility of
marketing the Vitamineralherb products in various markets, and, if the products
prove to be in demand, begin marketing and selling Vitamineralherb products.
We had a net loss of $29,275 for the quarter ended June 30, 2002 compared to a
net loss of $5,401 for the quarter ended June 30, 2001.
LIQUIDITY
The Company has historically satisfied its capital needs by borrowing from
related parties in the short-term, and by selling common stock. The operation,
development and expansion of our business will likely require additional capital
infusions for the foreseeable future. The deficit at June 30, 2002, was $25,826.
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
shareholders' equity. The Company's balance sheet as of June 30, 2002, reflects
total assets of $9,303 in the form of cash.
The original sole shareholder paid for organizational expenses and offering
costs in the amount of $8,000 which was added to the $20,000 note payable. The
note payable is unsecured non-interest bearing and has no specific terms of
repayment.
The Company's business plan is to determine the feasibility of selling
Vitamineralherb.com products to targeted markets in British Columbia, Canada. In
order to determine the feasibility of its business plan, the Company plans,
during the next twelve months, to conduct research into these various potential
target markets. Should the Company determine that the exploitation of the
license is feasible, it will engage salespeople to market the products. Based
primarily on discussions with the licensor, the Company believes that during its
first operational quarter, it will need a capital infusion of approximately
$55,000 to achieve a sustainable sales level where ongoing operations can be
funded out of revenues. This capital infusion is intended to cover costs of
advertising, hiring and paying two salespeople, and administrative expenses. In
addition, the Company will need approximately $260,000 in the event it
determines that its market will not pay in advance and it will have to extend
credit. The Company will have to obtain additional financing through an offering
or capital contributions by current shareholders.
The Company will need additional capital to carry out its business plan or to
engage in a business combination. No commitments to provide additional funds
have been made by management or other shareholders. Accordingly, there can be no
assurance that any additional funds will be available on terms acceptable to the
Company or at all. The Company has no commitments for capital expenditures.
In addition, the Company may engage in a combination with another business. The
Company has engaged in discussions concerning potential business combinations,
and in June 2002, a change of control in connection a reorganization occurred.
As a result, it is likely that the Company will abandon its efforts to market
Vitamineralherb.com products and enter a new business. See Item 5, Other
Information.
PART II - OTHER INFORMATION
Item 5. Other Information.
Subsequent Event
----------------
Change of Control. On June 3, 2002, Dr. Michael Kirsh, our Director,
-----------------
President and our the majority shareholder entered into a Stock Purchase
Agreement with Edward Alexander pursuant to which Mr. Alexander acquired
1,500,000 shares owned by Dr. Kirsh. In addition, Mr. Alexander acquired
250,000 shares owned by our minority shareholder, Brian Gruson. As a result,
Mr. Alexander now owns approximately 78% of our outstanding shares of common
stock. In conjunction with the Stock Purchase Agreement, Mr. Alexander and us
intend to enter into an Agreement and Plan of Reorganization pursuant to which
Proton Laboratorie's, LLC, a California limited liability company, will merge
with our -owned subsidiary, VWO I Inc. Proton's owners will exchange 100% of
Proton's shares for shares in Bentley and such other consideration that may be
agreed to by the parties. The Stock Purchase Agreement and Agreement and Plan of
Reorganization are part of a single integrated plan on the part of Mr. Alexander
to acquire control over us in connection with Bentley's acquisition of Proton.
Proton will become our wholly-owned subsidiary through its merger with VWO I,
Inc. All of these matters were previously reported by us on three Form 8-K's.
Also previously reported on the same three Forms 8-k and on Schedule 14(f)(1) in
connection with the change of control, were the proposed changes of our
directors and officers. In approximately ten days from August 15, 2002, Dr.
Kirsh will resign as our Director and President. The following persons will
then become our directors and officers:
PROPOSED EXECUTIVE OFFICERS AND DIRECTORS
AFTER THE RESIGNATION OF MICHAEL KIRSH
------------------------------------------------------------------------
NAME AGE POSITION
------------------------------------------------------------------------
Edward Alexander 50 President, Director
------------------------------------------------------------------------
Dick Wullaert 64 Vice President, Chief Technical Officer, Director
------------------------------------------------------------------------
Micael Ledwith 59 Director
------------------------------------------------------------------------
Edward Alexander has been the owner and president of Proton Laboratories LLC
since January, 2001. Proton has structured the introduction of an electrolytic
water separation technology that has a wide array of uses in industry, product
formulations and as consumer products. From January, 1997 to July, 1998, he
served as owner and president of Advanced H2O, LLC, Alameda, California. In
July, 1998 he formed Advanced H2O, Inc. in Bellevue, Washington, to specialize
in bottled water production. He continues to serve as a consultant to Advanced
H2O, Inc. Prior to 1997, he served as General Manager, Tomoe Incorporated, South
San Francisco, California, and held various positions with various divisions of
the Navy Resale System. Mr. Alexander will serve as president and a director of
the Company.
Dr. Wullaert is currently President of Bioguard Industries, Inc., a small
technical service company specializing in water and materials science research.
He provides technical services for the production (system design, electrode
development), use (disinfection, food processing, beverages, nutraceuticals,
agriculture, etc.) and testing (conventional and new) of functional water. He
has held this position since 1994. Since 1997, he has also served as President
of the Functional Water Society of North America (FWSNA), a non profit
corporation dedicated to promoting the technology and applications of functional
water. As President, he has developed an extensive database of functional water
technology and applications, organized conferences on functional water in the
US, and participated in Functional Water Foundation Symposiums in Japan. From
March 2000 to June 2001, he served as Chief Technology Officer of Advanced H2O,
Inc., where he was responsible for research and development programs and the
laboratory. From 1991 to 1999, he served as Senior Materials Engineer, of SAIC,
a NRC program on the technical basis for extending the license for dry cask
storage of spent nuclear fuel. He managed several projects on the
electrochemical treatment of water, developed new business in water technology
and materials degradation, provided technical support to DOE-HQ on materials,
structural integrity, and life extension issues, and represented NRC and DOE on
national consensus committees. He received his Ph.D. in Materials Science from
Stanford in 1969. Dr. Wullaert will serve as Vice President, Chief Technical
Officer, and a director of the Company.
Dr. Micael F. Ledwith has been retired for the past five years. He was Professor
of Systematic Theology at the Pontifical University of Maynooth in Ireland from
1976 to 1994. He was later Dean of the Faculty, Head of Department and Editor of
"The Irish Theological Quarterly. He was later appointed a Consulting Editor of
the renowned international review "Communio" and still serves in that capacity.
He was appointed Vice-President of the University in 1980, re-appointed in 1983,
and was appointed President in 1985. He served as Chairman of the Committee of
Heads of the Irish Universities and was a Member of the Governing Bureau of the
European University Presidents' Federation (CRE). He retired from his
Professorship on September 30, 1996 and has since continued to pursue his
interest in research, writing, and lecturing in the field of actualizing human
potential. Since November 2001 he has been a partner in World of Star Stuff,
which markets whole food products.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
99.1 Certification.
(b) Reports on Form 8-K
On June 25, 2002, we filed a report on Form 8-K dated June 3, 2002 reporting
Item 1. Change in Control Of Registrant.
On August 2, 2002, we filed a report on Form 8-K Amendment Number 1 dated June
3, 2002 reporting Item 1. Change in Control Of Registrant.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this Report to be signed on its behalf by the undersigned thereunto duly
authorized._
BENTLEYCAPITALCORP.COM INC.
-------------------------------------
Date: August 15, 2002 By: /s/ Dr. Michael Kirsh
Dr. Michael Kirsh, Director,
President and Chief Accounting
Officer