U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE YEAR ENDED: May 31, 2004
[_] TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES ACT OF 1934
COMMISSION FILE NUMBER: 000-32563
NATIONAL BUSINESS HOLDINGS, INC.
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(Name of Small Business Issuer in its Charter)
Florida 65-0710392
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
4878 Ronson Court
San Diego, California 92111
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(Address of Principal Executive Office) (Zip Code)
(858) 243-2615
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(Issuer's Telephone Number)
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: None
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 registrant was required to file such reports), and (2) has been
subject to such filings requirements for the past 90 days. Yes [_] No [X]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to the Form 10-KSB. [_]
The Issuer's revenues for the fiscal year ended May 31, 2004 was: -0-.
The aggregate market value of voting common equity held by non-affiliates as of
May 28, 2004 was approximately $153,932.40.
As of May 28, 2004 there were 3,484,831 shares of common stock issued and
outstanding.
Transitional Small Business Disclosure Format: Yes [_] No [X]
TABLE OF CONTENTS
PART I
Item 1 Description of Business 4
Item 2 Description of Property 12
Item 3 Legal Proceeding 12
Item 4 Submission of Matters to a Vote of Security Holders 13
PART II
Item 5 Market for Common Equity and Other Shareholder Matters 13
Item 6 Management's Discussion and Analysis or Plan of Operation 14
Item 7 Financial Statements 15
Item 8 Changes In and Disagreements With Accountants 15
Item 8A Controls and Procedures 16
PART III
Item 9 Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act 16
Item 10 Executive Compensation 19
Item 11 Security Ownership of Certain Beneficial Owners and Management 19
Item 12 Certain Relationships and Related Transactions 20
Item 13 Exhibits and Reports on Form 8-K 20
Item 14. Principal Accountant Fees and Services 21
SIGNATURES 22
FINANCIAL STATEMENTS--INDEPENDENT AUDITOR'S REPORT F-1
Caution Regarding Forward Looking Information
Certain statements contained in this annual filing, including, without
limitation, statements containing the words "believes", "anticipates", "expects"
and words of similar import, constitute forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, among others, the following: international, national and
local general economic and market conditions: demographic changes; the ability
of the Company to sustain, manage or forecast its growth; the ability of the
Company to successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-KSB and investors are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to publicly
announce the result of any revisions to any of the forward-looking statements
contained herein to reflect future events or developments.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
National Business Holdings, Inc., a Florida corporation, was incorporated on
November 26, 1996 as Stirus Research & Development, Inc. The Company was
originally in the business of development and sales distribution of medical
devices. The Company later changed its name to Mecaserto, Inc. on November 9,
1998, when it acquired a French subsidiary, Mecaserto, S.A., whose business was
the manufacture and sale of a medical imaging device.
On or about May 1, 2002, Pieter Durand loaned the Company $25,000 to support its
working capital requirements. The indebtedness is evidenced by a Convertible
Note, convertible into the Common Stock of the Company at the election of the
holder.
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On or about May 5, 2003, the Company's French subsidiary faced liquidation in a
French court and the Company relinquished its ownership interest in the
subsidiary to the Company's French shareholders in exchange for such holders'
agreement to assume the debts and liabilities of the subsidiary. Since the
conclusion of this transaction, the Company has no assets, liabilities or
business operations except its Convertible Note indebtedness and miscellaneous
current payables.
On or about February 2, 2004, the Company accepted a subscription from Gala
Enterprises Ltd. for 10,000,000 shares of the Company's restricted, unregistered
common stock for cash proceeds of $25,000 in order to support the Company's
short-term working capital requirements. The Company relied upon Section 4(2) of
the Securities Act of 1933, as amended ("Securities Act"), and Rule 506 of
Regulation D promulgated thereunder. This transaction did not involve a public
offering and was exempt from registration under the Securities Act. No
underwriters were used in connection with this transaction.
On February 2, 2004, Pieter Durand, the principal of Gala Enterprises Ltd., was
appointed to serve as a member of the Board of Directors of the Company until
the next meeting of the shareholders in which directors are elected.
Subsequently, Dennis Rault, the Company's sole officer and director, tendered
his resignation on February 6, 2004, leaving Mr. Durand as the Company's sole
officer and director.
On May 4, 2004, the Board of Directors of the Company ratified and accepted and
the majority shareholders approved by written consent an Amended and Restated
Articles of Amendment to the Articles of Incorporation, filed with the State of
Florida on May 11, 2004, changing the Company's name from Mecaserto, Inc. to
National Business Holdings, Inc. The Company's Restated Articles of
Incorporation allow the Company to issue up to 300,000,000 shares of common
stock, par value of $.001, of which 3,484,801 shares are issued and outstanding
at the present time. The Restated Articles of Incorporation also allow the
Company to issue up to 25,000,000 shares, no par value, of preferred stock of
the Company with the specific terms, conditions, limitations and preferences to
be determined by the Board of Directors without shareholder approval.
On May 10, 2004, the Company's Board of Directors ratified and accepted and a
majority of shareholders approved by written consent a subdivision of the issued
and outstanding common stock of the Company (a reverse split) at a ratio of one
(1) share for each forty (40) shares of common stock issued and outstanding,
effective May 24, 2004.
On May 28, 2004, National and Shava, Inc. ("Shava") entered into a Share
Exchange Agreement, whereby National acquired one hundred percent (100%) of all
the outstanding shares of common stock ("Common Stock") of Shava from Roger E.
Pawson, Shava's sole officer, director and shareholder, in exchange for
3,100,000 post-reverse split shares of common stock of the Company in order to
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effect a reverse acquisition of Shava. As a part of the transaction, the Company
changed its fiscal year end from December 31 to May 31. Its periodic filing in
accordance with the Securities Exchange Act of 1934 is this Form 10-KSB for the
transition period from January 1, 2004 to May 31, 2004.
After the May 28, 2004 change in control, the Company has decided to initiate a
new business plan of lending and investing. The Company intends to and has
formed a new wholly-owned subsidiary for the purpose of implementing such line
of business. Other general business services may be offered in the future,
however, these plans and services have not been defined by management as of the
date of this filing.
The Company has very limited capital, and it is unlikely that the Company will
be able to take advantage of more than one such business opportunity. The
Company intends to seek opportunities demonstrating the potential of long-term
growth as opposed to short-term earnings. However, at the present time, the
Company has not identified any business opportunity that it plans to pursue, nor
has the Company reached any agreement or definitive understanding with any
person concerning an acquisition.
The Company intends to either develop its new business plan; initiate other
business plan(s) - either related or unrelated to previous ventures, or to
locate and combine with an existing, privately-held company which is profitable
or, in management's view, has growth potential, irrespective of the industry in
which it is engaged.
In the event that a business combination transaction is explored in the future,
it is anticipated that the Company's officers and directors will contact
broker-dealers and other persons with whom they are acquainted who are involved
with corporate finance matters to advise them of the Company's existence and to
determine if any companies or businesses that they represent have a general
interest in considering a merger or acquisition with a blind pool or blank check
or shell entity. No direct discussions regarding the possibility of merger are
expected to occur in the immediate future. No assurance can be given that the
Company will be successful in finding or acquiring a desirable business
opportunity, given the limited funds that are expected to be available for
acquisitions. Furthermore, no assurance can be given that any acquisition, which
does occur, will be on terms that are favorable to the Company or its current
stockholders. The Company does not foresee that it will enter into a merger or
acquisition transaction with any business with which its officers or directors
are currently affiliated.
Competition
The Company expects to encounter competition in its new business plan to make
medium to high risk unsecured loans to individuals, corporations and/or other
entities or to invest in early-stage, early-growth, pre-IPO companies. The
competition may in part come from business development companies, venture
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capital partnerships and corporations, small investment companies, brokerage
firms, and the like. Some of these types of organizations are likely to be in a
better position than the Company because they may be able to offer immediate
access to limited amounts of cash, or for a variety of other reasons. The
Company also will experience competition from other public companies with
similar business purposes, some of which may also have funds available for use.
Employees
The Company is in the development stage and currently has no employees.
Management of the Company expects to use consultants, attorneys and accountants
as necessary, and does not anticipate a need to engage any full-time employees
so long as it is seeking and evaluating business opportunities. The need for
employees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in specific business
opportunities.
Dilution
In order to fund its growth, the Company will almost certainly need to raise
investment capital in the near future, either through a private placement or a
public distribution of securities. Should the Company sell any or all shares of
common stock pursuant to a private or public sale of securities, the
proportional interests of the existing stockholders shall be diluted.
Dividend Policy
The Company has never declared or paid cash dividends on its Common Stock. The
payment of dividends rests within the discretion of our Board of Directors. The
declaration and payment of dividends will depend upon, among other
considerations, the Company's need for working capital, industry regulations,
and its financial condition at the time. Management does not anticipate the
Company will pay dividends in the foreseeable future.
Directors, Executive Officers, Promoters and Control Persons
The directors and executive officers of the Company, their ages and positions
held as of the date of this filing are set forth below:
Name Age Position(s) with Company
--------------- --- ---------------------------
Roger E. Pawson 52 Sole Officer and Director (1)
---------------
(1) All directors hold office until the next annual meeting of our shareholders
and until their successors have been elected and qualify. Officers serve at
the pleasure of the Board of Directors. The officers and directors will
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devote such time and effort to the business and affairs of the Company as
may be necessary to perform their responsibilities as our executive
officers and/or directors.
Business Experience
Roger E. Pawson, age 52, is the Company's sole officer and director. In 1996,
Mr. Pawson was the President and Chief Executive Officer of TLCO Software, Inc.
and majority shareholder. TLCO Software's primary business at that time was the
development of advanced yet user friendly web authoring software using its
proprietary code. In 1997 TLCO Software launched the "Web Factory"(TM) family of
products, which included Web-Factory, Author, Web-Factory, Site Builder Web
Factory, Professional Edition. These products were the foundation of TLCO
Software's expansion into Software Publishing, OEM & Electronic Markets. Mr.
Pawson subsequently sold his interest in the company in 2001. Between 2001 and
2004, Mr. Pawson became the President and Chief Executive Officer of National
Developers, an Arizona based development company that specialized in the design
and construction of custom homes, shopping malls and strip centers. Mr. Pawson
is presently an independent business consultant and advisor to various
corporations. Mr. Pawson received a Masters in Business Studies degree from
Leeds University in Yorkshire, England in 1971.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the date of this filing,
regarding the ownership of the Company's Common Stock by each shareholder known
by the Company to be the beneficial owner of more than five percent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Except as otherwise indicated, each of the shareholders
has sole voting and investment power with respect to the share of Common Stock
beneficially owned.
Name and Address of Title of Amount and Nature of Percent of
Beneficial Owner (1) Class Beneficial Owner Class
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Roger E. Pawson Common 3,100,000 89.0%
All Executive Officers and Common 3,100,000 89.0%
Directors as a Group
(One (1) person)
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(1) The address for the above is c/o National Business Holdings, Inc., 4878
Ronson Court, San Diego, California 92111.
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Risk Factors
Conflicts of Interest. Certain conflicts of interest may exist between the
Company and its officer/director. He has other business interests to which he
currently devotes his attention, and is expected to continue to do so. As a
result, conflicts of interest may arise that can be resolved only through his
exercise of judgment in a manner which is consistent with his fiduciary duties
to the Company.
It is anticipated that the Company's principal shareholders may actively
negotiate or otherwise consent to the purchase of a portion of their common
stock as a condition to, or in connection with, a proposed merger or acquisition
transaction. In this process, the Company's principal shareholders may consider
their own personal pecuniary benefit rather than the best interest of other
Company shareholders. Depending upon the nature of a proposed transaction,
Company shareholders other than the principal shareholders may not be afforded
the opportunity to approve or consent to a particular transaction.
Possible Need for Additional Financing. The Company has very limited funds, and
such funds, may not be adequate to take advantage of any available business
opportunities. Even if the Company's currently available funds prove to be
sufficient to pay for its operations until it is able to acquire an interest in,
or complete a transaction with, a business opportunity, such funds will clearly
not be sufficient to enable it to exploit the opportunity. Thus, the ultimate
success of the Company will depend, in part, upon its availability to raise
additional capital. In the event that the Company requires modest amounts of
additional capital to fund its operations until it is able to complete a
business acquisition or transaction, such funds, are expected to be provided by
the principal shareholder. However, the Company has not investigated the
availability, source, or terms that might govern the acquisition of the
additional capital which is expected to be required in order to exploit a
business opportunity, and will not do so until it has determined the level of
need for such additional financing. There is no assurance that additional
capital will be available from any source or, if available, that it can be
obtained on terms acceptable to the Company. If not available, the Company's
operations will be limited to those that can be financed with its modest
capital.
Regulation of Penny Stocks. The Company's common stock has historically traded
at low prices and may become subject to the "Penny Stock" rules and regulations.
The Company's common stock may become subject to certain rules and regulations
promulgated by the Securities and Exchange Commission ("SEC") pursuant to the
Securities Enforcement Remedies and Penny Stock Reform Act of 1990 (the "Penny
Stock Act") which impose strict sales practice requirements on broker-dealers
who sell such securities to persons other than established customers and certain
"accredited investors." For transactions covered by the Penny Stock Act, a
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broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent for the transaction prior to
sale. Consequently, such act may affect the ability of broker-dealers to sell
the Company's common stock and may affect the ability of future purchasers to
sell any of the common stock acquired thereby.
The Penny Stock Act generally defines a "penny stock" to be any security not
listed on an exchange or not authorized for quotation on the Nasdaq Stock Market
that has a market price (as therein defined) less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transactions by broker-dealers involving a penny stock (unless exempt), the
act requires delivery, prior to a transaction in a penny stock, of a risk
disclosure document relating to the market for the penny stocks. Disclosure also
is required to be made regarding compensation payable to both the broker-dealer
and the registered representative and current quotations for the securities must
be provided. Finally, monthly statements are required to be sent disclosing
recent price information for the penny stocks.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate penny stocks. Such rules include Rule 3a51-1 under the
Securities Act of 1933, an Rules 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g- 6, and
15g-7 under the Securities Exchange Act of 1934, as amended. Because the
securities of the Company may constitute penny stocks within the meaning of the
rules, the rules would apply to the Company and to its securities. The rules may
further affect the ability of the Company's shareholders to sell their shares in
any public market, which might develop.
The foregoing penny stock restrictions will not apply to the Company's common
stock if such stock is listed on an exchange or quoted on the Nasdaq Stock
Market, has a certain price and volume information provided on a current and
continuing basis or if Bidville meets certain minimum net tangible asset or
average revenue criteria. There can be no assurance that the Company's common
stock will qualify for exemption from the Penny Stock Act. In any event, even if
the Company's common stock was exempt from the Penny Stock Rules, it would
remain subject to Section 15(b)(6) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which gives the SEC the authority to prohibit any
person who is engaged in unlawful conduct while participating in a distribution
of a penny stock from associating with a broker-dealer or participating in a
distribution of a penny stock, if the SEC finds that such a restriction would be
in the public interest. At such time as the Company's common stock is subject to
the rules on penny stocks, the market liquidity for the Company's common stock
could be severely and adversely affected.
Limited Operating History. The Company has a limited operating history and
currently has no revenues from operations or assets. The Company faces all of
the risks of a new business and the special risks inherent in the investigation,
acquisition, or involvement in a new business opportunity. The Company must be
regarded as a new or start-up venture with all of the unforeseen costs,
expenses, problems, and difficulties to which such ventures are subject.
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No Assurance of Success or Profitability. There is no assurance that the Company
will acquire a favorable business opportunity. Even if the Company should become
involved in a business opportunity, there is no assurance that it will generate
revenues or profits, or that the market price of the Company's outstanding
shares will be increased thereby.
Possible Business Not Identified and Highly Risky. The Company has identified
its future business plan as lending and investing for which the Company intends
to form a new wholly-owned subsidiary for the purpose of adding such a line of
business sometime in the near future. Other general business services may be
offered in the future, however, these plans and services have not been defined
by management as of the date of this filing. As a result, the Company is only
able to make general disclosures concerning the risks and hazards of acquiring a
business opportunity, rather than providing disclosure with respect to specific
risks and hazards relating to a particular business opportunity. As a general
matter, prospective investors can expect any potential business opportunity to
be quite risky.
Lack of Diversification. Because of the limited financial resources that the
Company has, it is unlikely that the Company will be able to diversify its
acquisitions or operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.
Other Regulation. A transaction made by the Company may be of a business that is
subject to regulation or licensing by federal, state, or local authorities.
Compliance with such regulations and licensing can be expected to be a
time-consuming, expensive process and may limit other investment opportunities
of the Company.
Dependence upon Management; Limited Participation of Management. The Company
will be entirely dependant upon the experience of its sole officer and director
in seeking, investigating, and acquiring a business and in making decisions
regarding the Company's operations. It is possible that, from time to time, the
inability of such person to devote their full time and attention to the Company
could be detrimental Because investors will not be able to evaluate the merits
of possible future business acquisitions by the Company, they should critically
assess the information concerning the Company's officers and directors. (See
Management.)
Lack of Continuity in Management. The Company does not have an employment
agreement with its officer/director, and as a result, there is no assurance that
he will continue to manage the Company in the future. In connection with
acquisition of a business opportunity, it is likely the current officer/director
of the Company may resign. A decision to resign will be based upon the identity
of the business opportunity and the nature of the transaction, and is likely to
occur without the vote or consent of the stockholders of the Company.
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Indemnification of Officers and Directors. The Company's By-Laws provide for the
indemnification of its, directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the Company. The Company will also
bear the expenses of such litigation for any of its directors, officers,
employees, or agents, upon such persons promise to repay the Company therefor if
it is ultimately determined that any such person shall not have been entitled to
indemnification. This indemnification policy could result in substantial
expenditures by the Company, which it may be unable to recoup.
Dependence upon Outside Advisors. To supplement the business experience of its
Officer/director, the Company may be required to employ accountants, technical
experts, appraisers, attorneys, or other consultants or advisors. The selection
of any such advisors will, be made by the Company's officers, without any input
by shareholders. Furthermore, it is anticipated that such persons may be engaged
on an as needed basis without a continuing fiduciary or other obligation to the
Company. In the event the officer/director of the Company considers it necessary
to hire outside advisors, he may elect to hire persons who are affiliates, if
those affiliates are able to provide the required services.
Competition. The search for potentially profitable business opportunities is
intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company. These competitive
conditions will exist in any industry in which the Company may become
interested.
No Foreseeable Dividends. The Company has not paid dividends on its Common Stock
and does not anticipate paying such dividends in the foreseeable future.
ITEM 2. DESCRIPTION OF PROPERTY
The Company currently maintains a mailing address at 4878 Ronson Court, San
Diego, CA 92111. The Company's telephone number is (858) 243-2615. Other than
this mailing address, the Company does not currently maintain any other office
facilities, and does not anticipate the need for maintaining office facilities
at any time in the foreseeable future. The Company pays no rent or other fees
for the use of the mailing address as these offices are used virtually full-time
by other businesses of the Company's President.
It is likely that the Company will not establish an office until it has
developed its lending business and it is not possible to predict what
arrangements will actually be made with respect to future office facilities.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company has not conducted any meetings of shareholders during the preceding
quarter or periods subsequent thereto. Shareholder consent resolutions and
activity approved thereby is fully disclosed in "Description of Business".
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market for Trading
The stock is quoted on the "Pink Sheets" but has not traded during the
applicable period.
Common Stock
The Company's Articles of Incorporation authorize the issuance of 300,000,000
shares of $0.001 par value Common Stock. Each record holder of Common Stock is
entitled to one vote for each share held on all matters properly submitted to
the stockholders for their vote. The Articles of Incorporation do not permit
cumulative voting for the election of directors.
Holders of outstanding shares of Common Stock are entitled to such dividends as
may be declared from time to time by the Board of Directors out of legally
available funds; and, in the event of liquidation, dissolution or winding up of
the affairs of the Company, holders are entitled to receive, ratably, the net
assets of the Company available to stockholders after distribution is made to
the preferred stockholders, if any, who are given preferred rights upon
liquidation. Holders of outstanding shares of Common Stock have no preemptive,
conversion or redemptive rights. All of the issued and outstanding shares of
Common Stock are, and all unissued shares when offered and sold will be, duly
authorized, validly issued, fully paid, and non-assessable. To the extent that
additional shares of the Company's Common Stock are issued, the relative
interests of then existing stockholders may be diluted.
Transfer Agent
The transfer agent is Interwest Transfer Co., Inc., 1981 East Murray Holiday
Road, Suite 100, Salt Lake City, UT 84117. Their telephone number is (801)
272-9294.
Reports to Stockholders
The Company plans to furnish its stockholders with an annual report for each
fiscal year ending May 31 containing financial statements audited by its
independent certified public accountants. In the event the Company enters into a
business combination with another Company, it is the present intention of
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management to continue furnishing annual reports to stockholders. Additionally,
the Company may, in its sole discretion, issue unaudited annual or other interim
reports to its stockholders when it deems appropriate. The Company intends to
comply with the periodic reporting requirements of the Securities Exchange Act
of 1934.
Dividend Policy
No dividends have been paid to date and the Company's Board of Directors does
not anticipate paying dividends in the foreseeable future. It is the current
policy to retain all earnings, if any, to support future growth and expansion.
Recent Sales of Unregistered Securities
On or about February 2, 2004, the Company accepted a subscription from Gala
Enterprises Ltd. for 10,000,000 shares of the Company's restricted, unregistered
common stock for cash proceeds of $25,000 in order to support the Company's
short-term working capital requirements. The Company relied upon Section 4(2) of
the Securities Act of 1933, as amended ("Securities Act"), and Rule 506 of
Regulation D promulgated thereunder. This transaction did not involve a public
offering and was exempt from registration under the Securities Act. No
underwriters were used in connection with this transaction.
On or about May 28, 2004, the Company issued a total of 3,100,000 shares of the
Company's restricted, unregistered common stock to Roger E. Pawson, pursuant to
a Share Exchange Agreement of the same date whereby the Company acquired 100% of
the issued and outstanding stock of Shava, Inc. The Company relied upon Section
4(2) of the Securities Act of 1933, as amended ("Securities Act"), and Rule 506
of Regulation D promulgated thereunder. This transaction did not involve a
public offering and was exempt from registration under the Securities Act. No
underwriters were used in connection with this transaction.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
The Company had no revenues for the years ended May 31, 2004 and December 31,
2003, respectively.
During the year ended May 31, 2004, the Company incurred expenses for
professional fees and EDGAR filing services of approximately $8,000. These costs
were directly related to curing the Company's deficiencies in filing periodic
reports as required by the Securities Exchange Act of 1934. For the twelve
months ended December 31, 2003, the Company had General and administrative
expenses of approximately $2,000.
During the year ended May 31, 2003, the Company paid a lawsuit settlement of
$15,000, and accrued interest expense of $520. For the twelve months ended
December 31, 2003, the Company accrued interest expense of $1,250.
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Future expenditure levels are expected to be nominal, generally for the purpose
of maintaining the Company's stockholder records and filing requirements to
comply with the Securities Exchange Act of 1934 and for initiating the Company's
current business plan, as discussed previously.
The Company does not expect to generate any meaningful revenue or incur
operating expenses for purposes other than fulfilling the obligations of a
reporting company under The Securities Exchange Act of 1934 unless and until
such time that the Company's operating subsidiary begins meaningful operations.
Liquidity and Capital Resources
At May 31, 2004 and December 31, 2003, respectively, the Company had a working
capital deficit of approximately $25,500 and $26,979.
It is the intent of management and significant stockholders to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, there is no legal obligation for either
management or significant stockholders to provide additional future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative sources. Consequently, there is substantial doubt about the
Company's ability to continue as a going concern.
The Company's need for capital may change dramatically as a result of the
implementation of its current business plan.
Regardless of whether the Company's cash assets prove to be inadequate to meet
the Company's operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash. For information as to the
Company's policy in regard to payment for consulting services, see Certain
Relationships and Transactions.
ITEM 7. FINANCIAL STATEMENTS
The required consolidated financial statements begin on page F-1 of this
document.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
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ITEM 8A. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer have
concluded, based on an evaluation conducted within 90 days prior to the filing
date of this Annual Report on Form 10-KSB, that the Company's disclosure
controls and procedures have functioned effectively so as to provide those
officers the information necessary whether:
(i) this Annual Report on Form 10-KSB contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this Annual Report on Form
10-KSB, and
(ii) the financial statements, and other financial information included in
this Annual Report on Form 10-KSB, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of,
and for, the periods presented in this Annual Report on Form 10-KSB. There have
been no significant changes in the Company's internal controls or in other
factors since the date of the Chief Executive Officer's and Chief Financial
Officer's evaluation that could significantly affect these internal controls,
including any corrective actions with regards to significant deficiencies and
material weaknesses.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
The directors and executive officers serving the Company are as follows:
Name Age Position Held and Tenure
------------- ---- ---------------------------
Roger E.Pawson 52 President, Chief Executive Officer
and Chief Financial Officer
--------------------
The director named above will serve until the next annual meeting of the
Company's stockholders or until their successors are duly elected and have
qualified. Directors will be elected for one-year terms at the annual
stockholders meeting. Officers will hold their positions at the pleasure of the
board of directors, absent any employment agreement, of which none currently
exists or is contemplated. There is no arrangement or understanding between any
of the directors or officers of the Company and any other person pursuant to
16
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement, plan or understanding as to whether non-management
shareholders will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders that may directly or
indirectly participate in or influence the management of the Company's affairs.
The directors and officers will devote their time to the Company's affairs on an
as needed basis, which, depending on the circumstances, could amount to as
little as two hours per month, or more than forty hours per month, but more than
likely encompass less than ten hours per month. There are no agreements or
understandings for any officer or director to resign at the request of another
person, and none of the officers or directors are acting on behalf of, or will
act at the direction of, any other person.
Biographical Information
Roger E. Pawson, Sole Officer and Director
Roger E. Pawson, age 52, is the Company's sole officer and director. In 1996,
Mr. Pawson was the President and Chief Executive Officer of TLCO Software, Inc.
and majority shareholder. TLCO Software's primary business at that time was the
development of advanced yet user friendly web authoring software using its
proprietary code. In 1997 TLCO Software launched the "Web Factory"(TM) family of
products, which included Web-Factory, Author, Web-Factory, Site Builder Web
Factory, Professional Edition. These products were the foundation of TLCO
Software's expansion into Software Publishing, OEM & Electronic Markets. Mr.
Pawson subsequently sold his interest in the company in 2001. Between 2001 and
2004, Mr. Pawson became the President and Chief Executive Officer of National
Developers, an Arizona based development company that specialized in the design
and construction of custom homes, shopping malls and strip centers. Mr. Pawson
is presently an independent business consultant and advisor to various
corporations. Mr. Pawson received a Masters in Business Studies degree from
Leeds University in Yorkshire, England in 1971.
Indemnification of Officers and Directors.
The Company's By-Laws provide for the indemnification of its, directors,
officers, employees, and agents, under certain circumstances, against attorney's
fees and other expenses incurred by them in any litigation to which they become
a party arising from their association with or activities on behalf of the
Company. The Company will also bear the expenses of such litigation for any of
its directors, officers, employees, or agents, upon such persons promise to
repay the Company therefor if it is ultimately determined that any such person
shall not have been entitled to indemnification. This indemnification policy
could result in substantial expenditures by the Company, which it may be unable
to recoup.
17
Conflicts of Interest
None of the officers of the Company will devote more than a portion of his time
to the affairs of the Company. There will be occasions when the time
requirements of the Company's business conflict with the demands of the officers
other business and investment activities. Such conflicts may require that the
Company attempt to employ additional personnel. There is no assurance that the
services of such persons will be available or that they can be obtained upon
terms favorable to the Company.
The officers, directors and principal shareholders of the Company may actively
negotiate for the purchase of a portion of their common stock as a condition to,
or in connection with, a proposed merger or acquisition transaction, if any. In
the event that such a transaction occurs, it is anticipated that a substantial
premium may be paid by the purchaser in conjunction with any sale of shares by
the Company's officers, directors and principal shareholders made as a condition
to, or in connection with, a proposed merger or acquisition transaction. The
fact that a substantial premium may be paid to members of Company management to
acquire their shares creates a conflict of interest for them and may compromise
their state law fiduciary duties to the Company's other shareholders. In making
any such sale, members of Company management may consider their own personal
pecuniary benefit rather than the best interests of the Company and the
Company's other shareholders, and the other shareholders are not expected to be
afforded the opportunity to approve or consent to any particular buy-out
transaction involving shares held by members of Company management.
It is not currently anticipated that any salary, consulting fee, or finders fee
shall be paid to any of the Company's directors or executive officers, or to any
other affiliate of the Company except as described under Executive Compensation
below.
Although management has no current plans to cause the Company to do so, it is
possible that the Company may enter into an agreement with an acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's current stockholders to the acquisition candidate or principals
thereof, or to other individuals or business entities, or requiring some other
form of payment to the Company's current stockholders, or requiring the future
employment of specified officers and payment of salaries to them. It is more
likely than not that any sale of securities by the Company's current
stockholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such stockholders. Any payment to current
stockholders in the context of an acquisition involving the Company would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.
18
ITEM 10. EXECUTIVE COMPENSATION
Currently, management of the Company requires less than four (4) hours per
month. Accordingly, no officer or director has received any compensation from
the Company since the inception of the Company. Until the Company acquires
additional capital, it is not anticipated that any officer or director will
receive compensation from the Company.
The Company has no stock option, retirement, pension, or profit-sharing programs
for the benefit of directors, officers or other employees, but the Board of
Directors may recommend adoption of one or more such programs in the future.
Long-Term
Annual Compensation Compensation Awards Payouts
-------------------- --------------------- --------
(1) Other Restricted Securities All
Salary/ Annual Stock Underlying LTIP Other
Name/Title Year Bonus Compensation Awards Options/SARs Payouts Compensation
---------------- ----- -------- ------------- ---------- ------------- -------- ------------
Roger E. Pawson 2003 $-0- $-0- $-0- $-0- $-0- $-0-
Sole Officer 2002 N/A N/A N/A N/A N/A N/A
and Director
2001 N/A N/A N/A N/A N/A N/A
--------------------
(1) All other compensation includes certain health and life insurance benefits
paid by the Company on behalf of its employees.
(2) Mr. Pawson will not be compensated until the Company receives funding in
the amount of $100,000.00 or more and the Board of Directors thereafter
approves reasonable compensation.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this Registration Statement,
the number of shares of Common Stock owned of record and beneficially by
executive officers, directors and persons who hold 5% or more of the outstanding
Common Stock of the Company. Also included are the shares held by all executive
officers and directors as a group.
Name and address Number of Shares Beneficially Owned % of Class
-------------------- ---------------------------------- ----------
Roger E. Pawson 3,100,000 89%
All Directors and 3,100,000 89%
Executive Officers
(1 person)
---------------------
19
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company currently maintains a mailing address at 4878 Ronson Court, San
Diego, CA 92111. The Company's telephone number there is (858) 243-2615. This
address is maintained and controlled by Roger E. Pawson, the Company's
President. Other than this mailing address, the Company does not currently
maintain any other office facilities, and does not anticipate the need for
maintaining office facilities at any time in the foreseeable future. The Company
pays no rent or other fees for the use of the mailing address as these offices
are used virtually full- time by other businesses of the Company's President.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are incorporated herein by
reference, as follows:
Exhibit No. Description
---------- -------------------------------------
2.2 Share Exchange Agreement between Shava, Inc. and National
Business Holdings, Inc. dated May 28, 2004.
3(i).1 Amended and Restated Articles of Amendment to the Articles of
Incorporation of Mecaserto, Inc., A Florida Corporation
3(i).2 * Articles of Incorportation of National Business Investors, Inc.
3(ii).1 Bylaws of National Business Holdings, Inc.
31.1 * Section 302 Certification pursuant to 18 U.S.C. 1350.
32.1 * Section 906 Certification pursuant to 18 U.S.C. 1350.
* Filed herewith
(b) Reports filed on Form 8-K
On July 16, 2004 a Form 8-K/A was filed to amend the Form 8-K filed on June
9, 2004 by National Business Holdings, Inc., a Florida corporation formerly
reporting as Shava, Inc. The purpose of the amendment to Form 8-K was to provide
financial statements for National Business Holdings, Inc., a Florida
corporation, as required by Item 7 of Form 8-K.
On June 9, 2004 a Form 8-K was filed to report a change in control of the
Company and to change the Company's fiscal year end.
On May 7, 2004 a Form 8-K was filed to report a change in control of Shava,
Inc. and to change the Company's Certifying Accountant.
20
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Company paid or accrued the following fees in each of the prior two fiscal
years to its principal accountant, Lawrence Scharfman, CPA, P.A. of Palm Beach,
Florida.
Year ended Year ended
May 31, December 31,
2004 2003
-------------------------------
(1) Audit fees $ - $ -
(2) Audit-related fees - -
(3) Tax fees - -
(4) All other fees - -
--------- ---------
Totals $ - $ -
========= =========
There have been no non-audit services provied.
Financial Information System Design and Implementation. Lawrence Scharfman, CPA,
P.A. did not charge the Company any fees for financial information system design
and implementation fees.
The Company has no formal audit committee. However, the entire Board of
Directors (the "Board") is the Company's defacto audit committee. In discharging
its oversight responsibility as to the audit process, the Board obtained from
the independent auditors a formal written statement describing all relationships
between the auditors and the Company that might bear on the auditors'
independence as required by Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees." The Board discussed with the
auditors any relationships that may impact their objectivity and independence,
including fees for non-audit services, and satisfied itself as to the auditors'
independence. The Board also discussed with management, the internal auditors
and the independent auditors the quality and adequacy of the Company's internal
controls. The Board reviewed with the independent auditors their management
letter on internal controls.
The Board discussed and reviewed with the independent auditors all matters
required to be discussed by auditing standards generally accepted in the United
States of America, including those described in Statement on Auditing Standards
No. 61, as amended, "Communication with Audit Committees". The Board reviewed
the audited consolidated financial statements of the Company as of and for the
year ended May 31, 2004 with management and the independent auditors. Management
has the responsibility for the preparation of the Company's financial statements
and the independent auditors have the responsibility for the examination of
those statements. Based on the above-mentioned review and discussions with the
independent auditors and management, the Board of Directors approved the
Company's audited consolidated financial statements and recommended that they be
included in its Annual Report on Form 10-KSB for the year ended May 31, 2004,
for filing with the Securities and Exchange Commission. The Board also approved
the reappointment of Lawrence Scharfman, CPA, P.A. as independent auditors.
The Company's principal accountant, Lawrence Scharfman, CPA, P.A., did not
engage any other persons or firms other than the principal accountant's
full-time, permanent employees.
21
SIGNATURES
In accord with Section 13 or 15(d) of the Securities Act of 1933, as amended,
the Company caused this report to be signed on its behalf by the undersigned,
thereto duly authorized.
National Business Holdings, Inc.
Dated: July 19, 2004 By: /s/ Roger E. Pawson
---------------------------
Roger E. Pawson
Chief Executive Officer,
Chief Financial Officer
In accordance with the Securities Exchange Act of 1934, as amended, this report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the date as indicated.
Dated: July 19, 2004 By: /s/ Roger E. Pawson
---------------------------
Roger E. Pawson
Chief Executive Officer,
Chief Financial Officer
22
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report.................................................F-2
Balance Sheet................................................................F-3
Statement of Operations......................................................F-4
Statement of Stockholders' Equity............................................F-5
Statement of Cash Flows......................................................F-6
Notes to Financial Statement.................................................F-7
F-1
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
National Business Holdings, Inc.
(f/k/a Mecaserto, Inc.)
San Diego, California
I have audited the accompanying balance sheet of National Business Holdings,
Inc., (f/k/a Mecaserto, Inc.), as of May 31, 2004 and December 31, 2003, and the
related statements of operations, stockholders' equity (deficit) and cash flows
for the seventeen months in the period ended May 31, 2004. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audits.
I conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audits provide a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of National Business Holdings, Inc.,
(f/k/a Mecaserto, Inc.) as of May 31, 2004 and December 31, 2003, and the
results of its operations and its cash flows for the seventeen months in the
period ended May 31, 2004, in conformity with U.S. generally accepted accounting
principles.
/s/ Lawrence Scharfman
Lawrence Scharfman, CPA.
Palm Beach, Florida
July 17, 2004
F-2
National Business Holdings, Inc.
(f/k/a Mecaserto, Inc.)
(A Development Stage Enterprise)
Balance Sheet
May 31, December 31,
2004 2003
---------------- ---------------
ASSETS
CURRENT ASSETS
Cash $ 2,000 $ 0
---------------- ---------------
Total current assets 2,000 0
---------------- ---------------
OTHER ASSETS
Goodwill 7,750 0
---------------- ---------------
Total other assets 7,750 0
---------------- ---------------
Total Assets $ 9,750 $ 0
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 0 $ 0
Demand promissory note 27,500 26,979
---------------- ---------------
Total current liabilities 27,500 26,979
---------------- ---------------
Total Liabilities 27,500 26,979
---------------- ---------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized
25,000,000 shares; 0 issued and outstanding 0 0
Common stock, $0.0001 par value, authorized
300,000,000 shares; 3,484,831 and 5,386,204
issued and outstanding, respectively 348 539
Additional paid-in capital 1,606,029 1,573,089
Accumulated deficit (1,624,127) (1,600,607)
---------------- ---------------
Total stockholders' equity (17,750) (26,979)
---------------- ---------------
Total Liabilities and Stockholders' Equity $ 9,750 $ 0
================ ===============
The accompanying notes are an integral part of the financial statements
F-3
National Business Holdings, Inc.
(f/k/a Mecaserto, Inc.)
(A Development Stage Enterprise)
Statement of Operations
Five Months Year Ended
Ended May 31, December 31,
2004 2003
----------------- -----------------
REVENUES $ 0 $ 0
COST OF SALES 0 0
----------------- -----------------
GROSS MARGIN 0 0
OPERATING EXPENSES
Salaries 0 0
General and administrative expenses 8,000 2,062
Depreciation 0 0
----------------- -----------------
Total expenses 8,000 2,062
----------------- -----------------
Loss from operations (8,000) (2,062)
OTHER INCOME (EXPENSE)
Interest expense (520) (1,250)
Lawsuit settlement (15,000) 0
----------------- -----------------
Total other income (expense) (15,520) (1,250)
----------------- -----------------
Net loss $ (23,520) $ (3,312)
================= =================
Loss per weighted average common share $ (0.05) $ (0.01)
================= =================
Number of weighted average common shares outstanding
446,015 5,386,204
================= =================
The accompanying notes are an integral part of the financial statements
F-4
National Business Holdings, Inc.
(f/k/a Mecaserto, Inc.)
(A Development Stage Enterprise)
Statement of Stockholders' Equity (Deficit)
Deficit
Accumulated
Additional During the Total
Number of Common Paid-In Development Stockholders'
Shares Stock Capital Stage Equity
------------ ---------- ----------- -------------- --------------
BEGINNING BALANCE, November 26, 1996 0 $ 0 $ 0 $ 0 $ 0
Shares issued for services - $0.001/sh. 1,000,000 100 800 0 900
Net loss 0 0 0 (900) (900)
------------ ---------- ----------- -------------- --------------
BALANCE, December 31, 1996 1,000,000 100 800 0 0
Shares issued for cash - $0.05/sh. 1,000,000 100 49,900 0 50,000
Shares issued for cash - $0.01/sh. 8,900,000 890 88,110 0 89,000
Net loss 0 0 0 (137,953) (137,953)
------------ ---------- ----------- -------------- --------------
BALANCE, December 31, 1997 10,900,000 1,090 138,810 (137,953) 1,047
Shares issued for cash - $1.45/sh. 325,000 32 472,695 0 472,727
Shares contributed back to company - $0.01/sh. (3,900,000) (390) (38,610) 0 (39,000)
Reverse split - 1 for 20 (6,938,796) (694) 694 0 0
Shares issued for cash - $0.20/sh. 5,000,000 500 999,500 0 1,000,000
Net loss 0 0 0 (434,453) (434,453)
------------ ---------- ----------- -------------- --------------
BALANCE, December 31, 1998 5,386,204 538 1,573,089 (572,406) 1,001,221
Net loss 0 0 0 (779,553) (779,553)
------------ ---------- ----------- -------------- --------------
BALANCE, December 31, 1999 5,386,204 538 1,573,089 (1,351,959) 221,668
Net loss 0 0 0 (208,764) (208,764)
------------ ---------- ----------- -------------- --------------
BALANCE, December 31, 2000 5,386,204 538 1,573,089 (1,560,723) 12,904
Net loss 0 0 0 (6,588) (6,588)
------------ ---------- ----------- -------------- --------------
BALANCE, December 31, 2001 5,386,204 538 1,573,089 (1,567,311) 6,316
Net loss 0 0 0 (29,983) (29,983)
------------ ---------- ----------- -------------- --------------
BALANCE, December 31, 2002 5,386,204 538 1,573,089 (1,597,294) (23,667)
Net loss 0 0 0 (3,312) (3,312)
------------ ---------- ----------- -------------- --------------
BALANCE, December 31, 2003 5,386,204 538 1,573,089 (1,600,606) (26,979)
Shares issued for cash - $0.0025/sh. 10,000,000 1,000 24,000 0 25,000
Reverse split - 1 for 40 (15,001,373) (1,500) 1,500 0 0
Shares issued for acquisition 3,100,000 310 7,440 0 7,750
Net loss 0 0 0 (23,520) (23,520)
------------ ---------- ----------- -------------- --------------
ENDING BALANCE, May 31, 2004 3,484,831 $ 348 $ 1,606,029 $ (1,624,126) $ (17,749)
============ ========== =========== ============== ==============
The accompanying notes are an integral part of the financial statements
F-5
National Business Holdings, Inc.
(f/k/a Mecaserto, Inc.)
(A Development Stage Enterprise)
Statement of Cash Flows
Five Months
Ended Year Ended
May 31, December 31,
2004 2003
--------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (23,520) $ (3,312)
Adjustments to reconcile net loss to net cash
used by operating activities:
None
Changes in operating assets and liabilities:
Increase (decrease) in accrued interest 520 1,250
--------------- ----------------
Net cash used by operating activities (23,000) (2,062)
--------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
None 0 0
--------------- ----------------
Net cash from investment activities 0 0
--------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 25,000 0
Proceeds from issuance of demand promissory note 0 0
--------------- ----------------
Net cash provided by financing activities 25,000 0
--------------- ----------------
Net increase (decrease) in cash 2,000 (2,062)
--------------- ----------------
CASH, beginning of period 0 2,062
--------------- ----------------
CASH, end of period $ 2,000 $ 0
=============== ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
None $ 0 $ 0
=============== ================
Non-Cash Financing Activities:
Issuance of common stock to effectuate acquisition $ 7,750 $ 0
=============== ================
The accompanying notes are an integral part of the financial statements
F-6
National Business Holdings, Inc.
(f/k/a Mecaserto, Inc.)
(A Development Stage Enterprise)
Notes to Financial Statements
(1) SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
The Company National Business Holdings, Inc., (f/k/a Mecaserto, Inc.), (the
Company) is a Florida chartered corporation which conducts business from
its headquarters in San Diego, California. The Company was incorporated on
November 26, 1996 and had elected May 31st its fiscal year end. The Company
is seeking to develop a lending and financing business.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) USE OF ESTIMATES The financial statements have been prepared in
conformity with generally accepted accounting principles. In preparing the
financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as
of the date of the statements of financial condition and revenues and
expenses for the period then ended. Actual results may differ significantly
from those estimates.
b) NET LOSS PER SHARE Basic loss per weighted average common share is
computed by dividing the net loss by the weighted average number of common
shares outstanding during the period.
c) STOCK COMPENSATION FOR SERVICES RENDERED The Company issues shares of
common stock in exchange for services rendered. The costs of the services
are valued according to generally accepted accounting principles and have
been charged to operations.
d) CASH AND EQUIVALENTS The company considers investments with an initial
maturity of three months or less as cash equivalents.
(2) STOCKHOLDERS' EQUITY The Company has authorized 300,000,000 shares of
$0.0001 par value common stock, and 25,000,000 shares of no par value
preferred stock. Rights and privileges of the preferred stock are to be
determined by the Board of Directors prior to issuance. The Company had
3,484,831 shares of common stock issued and outstanding at May 31, 2004.
The Company had issued none of its shares of preferred stock at May 31,
2004.
F-7
National Business Holdings, Inc.
(f/k/a Mecaserto, Inc.)
(A Development Stage Enterprise)
Notes to Financial Statements
(2) STOCKHOLDERS' EQUITY, continued
In November 1996, the Company issued 1,000,000 shares of common stock to
its founders for services rendered in connection with the organization of
the Company, valued at $0.01 or $900. In May 1997, the Company issued
8,900,000 shares of common stock for $89,000 in cash, or $0.01 per share.
In January 1998, the Company issued 275,000 shares of common stock for
$400,000 in cash, or $1.45 per share. In February 1998, the Company issued
50,000 shares of common stock for $72,727 in cash, or $1.45 per share. In
September 1998, 3,900,000 shares that had been purchased for $39,000 were
contributed back to the Company. In October 1998 the Company retired
6,938,796 shares as a result of a 1 for 20 reverse split of the stock. In
December 1998, the Company issued 5,000,000 shares of common stock for
$1,000,000 in cash, or $0.20 per share.
In February 2004, the Company issued 10,000,000 shares of common stock for
$25,000 in cash, or $0.0025 per share. In May 2004, the Company retired
15,001,373 shares as a result of a 1 for 40 reverse split of the stock. In
May 2004, the Company issued 3,100,000 shares to acquire 100% of the issued
and outstanding shares of Shava, Inc. This transaction was valued at
$7,750, or $0.0025 per share.
(3) INCOME TAXES Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax and
financial reporting purposes. The Company had net operating loss
carry-forwards for income tax purposes of approximately $1,624,100 expiring
beginning December 31, 2012.
The amount recorded as deferred tax asset as of May 31, 2004 is
approximately $568,000 which represents the amount of tax benefit of the
loss carry-forward. The Company has established a 100% valuation allowance
against this deferred tax asset, as the Company has no history of
profitable operations.
(4) SUBSEQUENT EVENTS
a) SUBSIDIARIES In June 2004, the Company formed a new wholly owned
subsidiary in Florida, National Business Investors, Inc. With headquarters
in Falls Church, Virginia and San Diego, California. This subsidiary is
entering the business lending and financing arena as well as considering
other financial related lines of business.
F-8