SECURITIES AND EXCHANGE
COMMISSION
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AMENDMENT
NO.1 TO
FORM S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
==================================
Buyer
Group International, Inc.
(Exact
Name of Small Business Issuer in its Charter)
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Nevada
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20-8490081
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(State
of Incorporation)
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(Primary
Standard Classification Code)
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(IRS
Employer ID No.)
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Buyer
Group International, Inc.
812
Creekline Way
McKinney,
TX 75070
(
866) 980-2974
Address
and Telephone Number of Registrant’s Principal
Executive
Offices and Principal Place of Business)
Buyer
Group International, Inc.
812
Creekline Way
McKinney,
TX 75070
(866)
980-2974
(Name,
Address and Telephone Number of Agent for Service)
Copies of
communications to:
GREGG
E. JACLIN, ESQ.
ANSLOW
& JACLIN, LLP
195
Route 9 South, Suite204
Manalapan,
NJ 07726
TELEPHONE
NO.: (732) 409-1212
FACSIMILE
NO.: (732) 577-1188
Approximate
date of commencement of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective. If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933, check the following box.
|X|
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act of 1933, please check the following box and list
the Securities Act registration Statement number of the earlier effective
registration statement for the same offering. |_|
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_| If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act of 1933, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.|_|
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box. |_|
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Large
accelerated filer
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o
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Accelerated
filer
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o
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Non-accelerated
filer
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o
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Smaller
reporting company
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x
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(Do
not check if a smaller reporting company)
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CALCULATION
OF REGISTRATION FEE
Title
of Each Class Of Securities to be Registered
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Common
Stock, par value $0.001(1)(2)
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5,000,000
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$
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0.03
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$
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150,000
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$
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5.90
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Total
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5,000,000
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$
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150,000
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$
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5.90
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(1) The
shares of our Common Stock being registered hereunder are being registered for
resale by Dutchess Private Equities Fund, Ltd named in the prospectus. For
purposes of estimating the number of shares of our Common Stock to be included
in this registration statement, we calculated a good faith estimate of the
number of shares that we believe may be issuable pursuant to the equity line
financing to account for market fluctuations.
(2) The
number of shares being registered for the financing is 5,000,000 which is
1/3 of our 15,000,000 non-affiliate outstanding common shares issued
and outstanding as of June 12, 2008.
(3)
Our Common Stock is registered under Section 12(g)
of the Securities
Exchange Act of 1934, as amended,
and can be traded on the over-the-counter
market on the Pink Sheets under the symbol
"BYRG." As of August 13 , 2008, our shares were trading at a price of
$0.02 per common share. Selling security holders may sell
their shares for the prevailing market
prices or privately negotiated prices.
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
securities act of 1933 or until the registration statement shall become
effective on such date as the commission, acting pursuant to said Section 8(a),
may determine.
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION
DATED AUGUST __, 2008
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
securities act of 1933 or until the registration statement shall become
effective on such date as the commission, acting pursuant to said section 8(a),
may determine.
BUYER
GROUP INTERNATIONAL, INC.
5,000,000
SHARES OF
COMMON
STOCK
This
prospectus relates to the resale of up to 5,000,000 shares of our Common
Stock, par value $.001 per share ("Common Stock") of which 5,000,000 are
issuable to Dutchess Private Equities Fund, Ltd. ("Dutchess"), (collectively
“The Selling Security Holders”). The Selling Security holders may sell their
common stock from time to time at prevailing market prices.
Our
common stock is quoted on the over-the-counter market and prices are
reported on the Pink Sheets under the symbol "BYRG." As of August 13 , 2008
our shares were trading at a price of $0.02 per common share. Selling
security holders may sell their shares for the prevailing market prices or
privately negotiated prices.
THIS
COMPANY IS CONSIDERED TO BE IN UNSOUND FINANCIAL CONDITION. PERSONS
SHOULD NOT INVEST UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENTS.
THE PURCHASE OF
THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS
DESCRIBED UNDER THE
HEADING "RISK FACTORS" BEGINNING ON PAGE 5.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
TABLE OF CONTENTS
ITEM
3. Summary Information, Risk Factors and Ratio of Earnings to Fixed
Charges.
PROSPECTUS SUMMARY
This
summary highlights selected information contained elsewhere in this
prospectus. This summary does not contain all the information that
you should consider before investing in the common stock. You should
carefully read the entire prospectus, including “Risk Factors”, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
the Consolidated Financial Statements, before making an investment decision
.
About
Our Company
Buyer
Group International, Inc., (“BGI”) was incorporated in November 1994 in the
State of Nevada under the name Curlew Resource Corporation. In December of
2006, we filed a certificate of amendment changing our name to Buyer Group
International, Inc. In May of 2008, we filed a certificate of
amendment increasing our authorized shares to 400,000,000.
BGI
currently invests in areas of existing housing, and residential lots slated for
build-out or development closeout, less than marketable condition or
situations where property may be acquired through
bankruptcy, foreclosure or back taxes owed on the land.
Services
performed
Leasing
management – we manage rental property, contract for repairs, and shares in
profits upon sales of any properties. We have a marketing agreement
or master lease agreement to manage the property, allocate funds for expenses,
pay debt, disburse profits, etc. If we conduct a sale of the property
or any investor’s beneficial interest in the trust holding the property we are
indentured to receive pro rate share of net profits. The result of
leasing operations generates additional cash flow that is used to pay us revenue
in the form of management fees.
Real
Estate Development – We help develop the long term plan and strategy to finance
community projects. We partner with land owners and setup financing
sources as conduits for our clients to conduct operational development whereas
we receive long term fixed income and a percentage of the profit share in each
project we engage in. If it’s a new development we charge our
fees on the back end in the form of equity carry into the project. If
it is a recapitalization, we defray legal costs with upfront consulting fees
generated to offset costs associated with legal and accounting
expenses.
Restructuring
and Capitalization Consulting – financial analysis and capitalization of
business financials, business development. We generate fee based
revenue from analysis and strategic planning of balance sheet debt
restructurings.
Property
ownership – we currently do not own any property. The special trust
entities are established that vest interest in property ownership, whereas title
is held trust. This allows us to buy into a minority interest for a
specific percentage of project participation. Whether interest is taken in
financing, management on a master lease, development of a specific subset of
units from a minority shareholder position, etc. we are always secondary
beneficiary of the entity.
Where
You Can Find Us
We presently
maintain our principal offices at 812 Creekline Way, McKinney,
Texas 75070 and a field office at 1301 Live Oak Rd. Leander, TX
78641 .
Our phone number is (866) 980-2974.
THE
OFFERING
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COMMON
SHARES OUTSTANDING PRIOR TO OFFERING
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Common
Stock, $0.001 par value
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60,000,000
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Common
Stock Offered by Selling Securityholders
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5,000,000
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Use
of Proceeds
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We
will not receive any proceeds from the sale by the Selling Security
holders of shares in this offering, except upon draw downs made pursuant
to the equity line.
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Risk
Factors
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An
investment in our common stock involves a high degree of risk and could
result in a loss of your entire investment.
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OTC
Symbol
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BYRG.PK
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Executive
Offices
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Currently,
our executive offices are located at:
812
Creekline Way
McKinney,
Texas 75070.
Our
phone number is
(866)
980-2974.
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DISCLOSURE
REGARDING OUR RECENT FINANCING
Terms of
Financing Documents
Transaction
with Dutchess Private Equities Fund LTD.
On June
12, 2008 we entered into an Investment Agreement (the “Agreement”) and a
Registration Rights Agreement with Dutchess Private Equities Fund, Ltd. (the
“Investor”). Pursuant to this Agreement, the Investor shall commit to purchase
up to $10,000,000 of our common stock over the course of thirty-six (36) months.
The Agreement provides that, from time to time, we may deliver a notice to the
Investor. Such notices will state the dollar amount of common stock that we
desire the Investor to purchase subject to the limits of the Agreement. Upon
receipt of a put notice, the Investor is obligated to purchase from us, during
the relevant pricing period, shares having an aggregate purchase price equal to,
at our election, either (i) up to $250,000 or (ii) 200% of the average daily
volume (U.S. market only) of the common stock for the ten (10) trading days
prior to the applicable Put Notice Date, multiplied by the average of the three
(3) daily closing bid prices immediately preceding the Put Date. The put date
shall be the date that the Investor receives a put notice of a draw down by us.
During the Open Period, the Company shall not be entitled to submit a Put Notice
until after the previous Closing has been completed. The Purchase Price shall be
set at ninety-three percent (93%) of the Lowest Closing Best Bid price of the
Common Stock during the pricing period. The Pricing Period shall be the five (5)
consecutive trading days immediately after the put notice date. There are put
restrictions applied on days between the put date and the closing date with
respect to that particular put. During this time, we shall not be entitled to
deliver another put notice. Further, we shall reserve the right to withdraw that
portion of the put that is below seventy-five percent (75%) of the lowest
closing bid prices for the 10-trading day period immediately preceding each put
notice.
We are
obligated to file a registration statement with the Securities and Exchange
Commission (“SEC”) covering 5,000,000 shares of the common stock underlying the
Investment Agreement within 15 days after the closing date. In addition, we are
obligated to use all commercially reasonable efforts to have the registration
statement declared effective by the SEC within 90 days after the closing date.
We shall have an ongoing obligation to register additional shares of our common
stock as necessary underlying the draw downs.
Conditions
To Investor's Obligation To Purchase Shares. We shall not be entitled to deliver
a Put Notice and the Investor shall not be obligated to purchase any Shares at a
Closing (as defined in Section 2(G)of the Agreement) unless each of the
following conditions are satisfied:
(I)
a
Registration Statement shall have been declared effective and shall remain
effective and available for the resale of all the Registrable Securities (as
defined in the Registration Rights Agreement) at all times until the Closing
with respect to the subject Put Notice;
(II)
at all times
during the period beginning on the related Put Notice Date and ending on and
including the related Closing Date, the Common Stock shall have been listed on
the Principal Market and shall not have been suspended from trading thereon for
a period of two (2) consecutive Trading Days during the Open Period and the
Company shall not have been notified of any pending or threatened proceeding or
other action to suspend the trading of the Common Stock;
(III)
the
Company has complied with its obligations and is otherwise not in breach of or
in default under, this Agreement, the Registration Rights Agreement or any other
agreement executed in connection herewith which has not been cured prior to
delivery of the Investor’s Put Notice Date;
(IV)
no injunction
shall have been issued and remain in force, or action commenced by a
governmental authority which has not been stayed or abandoned, prohibiting the
purchase or the issuance of the Securities; and
(V)
the
issuance of the Securities will not violate any shareholder approval
requirements of the Principal Market.
If any of
the events described in clauses (I) through (V) above occurs during a Pricing
Period, then the Investor shall have no obligation to purchase the Put Amount of
Common Stock set forth in the applicable Put Notice.
Mechanics Of Purchase Of
Shares By Investor.
Subject
to the satisfaction of the conditions set forth in Sections 2(E), 7 and 8 of the
Agreement, the closing of the purchase by the Investor of Shares (a "Closing")
shall occur on the date which is no later than seven (7) Trading Days following
the applicable Put Notice Date (each a "Closing Date"). Prior to each Closing
Date, (I) the Company shall deliver to the Investor pursuant to this Agreement,
certificates representing the Shares to be issued to the Investor on such date
and registered in the name of the Investor; and (II) the Investor shall deliver
to the Company the Purchase Price to be paid for such Shares, determined as set
forth in Section 2(B) of the Agreement. In lieu of delivering physical
certificates representing the Securities and provided that the Company's
transfer agent then is participating in The Depository Trust Company ("DTC")
Fast Automated Securities Transfer ("FAST") program, upon request of the
Investor, the Company shall use all commercially reasonable efforts to cause its
transfer agent to electronically transmit the Securities by crediting the
account of the Investor's prime broker (as specified by the Investor within a
reasonably in advance of the Investor's notice) with DTC through its Deposit
Withdrawal Agent Commission ("DWAC") system.
The
Company understands that a delay in the issuance of Securities beyond the
Closing Date could result in economic damage to the Investor. After the
Effective Date, as compensation to the Investor for such loss, the Company
agrees to make late payments to the Investor for late issuance of Securities
(delivery of Securities after the applicable Closing Date) in accordance with
the following schedule (where "No. of Days Late" is defined as the number of
trading days beyond the Closing Date, with the Amounts being
cumulative.):
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LATE
PAYMENT FOR EACH
NO.
OF DAYS LATE
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$10,000
WORTH OF COMMON STOCK
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1
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$100
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2
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$200
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3
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$300
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4
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$400
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5
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$500
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6
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$600
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7
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$700
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8
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$800
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9
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$900
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10
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$1,000
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Over
10
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$1,000
+ $200 for each
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Business
Day late beyond 10 days
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The
Company shall make any payments incurred under this Section in immediately
available funds upon demand by the Investor. Late payments shall
continue to accrue cumulatively on a daily basis at a rate in accordance with
the Late Payment schedule directly above. For example: should we deliver $10,000
worth of our common stock three days late, we would be responsible for a late
payment penalty of $600. If we should deliver $30,000 worth of our common stock
three days late, we would be responsible for a late payment penalty of $1,800.
If we should deliver $10,000 worth of our common stock twelve days late, we
would be responsible for a late payment penalty of $8,100. If we should deliver
$30,000 worth of our common stock twelve days late, we would be responsible for
a late payment penalty of $24,300. There is no maximum late payment penalty.
Late payment penalties shall cease to accrue upon the issuance date of our
common stock due under the terms of the Investment Agreement. We shall remain
liable to the Investor for all late payment penalties accrued up to the date of
issuance until such penalties are paid to or released by the Investor. Under the
terms of the Investment Agreement, any outstanding late payment penalty balance
will not be subject to an interest rate or additional fee. The failure of the
Investor to make a demand upon the Company for any payments under this section
shall not excuse the Company from its obligation to make any such payments in
the future. Nothing herein shall limit the Investor's right to pursue actual
damages for the Company's failure to issue and deliver the Securities to the
Investor, except that such late payments shall offset any such actual damages
incurred by the Investor, and any Open Market Adjustment Amount. The
Open Market Adjustment Amount is the amount equal to the excess, if any of the
Investor’s total purchase price (including brokerage commissions, if any) for
the Open Market Share Purchase minus the net proceeds
(after brokerage commissions, if any) received by the Investor from
the sale of the Put Shares Due. The “open market adjustment amount”
would be incurred if, by the (3
rd
) business day after the
Closing Date, the Company fails to deliver any portion of the shares of the Put
to the Investor (the “Put Shares Due”) and the Investor purchases, in an open
market transaction or otherwise, shares of Common Stock necessary to make
delivery of shares which would have been delivered if the full amount of the
shares to be delivered to the Investor by the Company (the “Open Market Share
Purchase”), then the Company shall pay to the Investor, in addition to any other
amounts due to the Investor pursuant to the Put, and not in lieu thereof, the
Open Market Adjustment Amount. In the case where an Open Market Adjustment
amount is incurred, the Company shall pay to the Investor the Open Market
Adjustment amount in addition to any late fees as described above.
Overall Limit On Common
Stock Issuable.
If during
the Open Period the Company becomes listed on an exchange that limits the number
of shares of Common Stock that may be issued without shareholder approval, then
the number of Shares issuable by the Company and purchasable by the Investor,
shall not exceed that number of the shares of Common Stock that may be issuable
without shareholder approval (the "Maximum Common Stock
Issuance"). If such issuance of shares of Common Stock could cause a
delisting on the Principal Market, then the Maximum Common Stock Issuance shall
first be approved by the Company's shareholders in accordance with applicable
law and the By-laws and Amended and Restated Certificate of Incorporation of the
Company, if such issuance of shares of Common Stock could cause a delisting on
the Principal Market. The parties understand and agree that the Company's
failure to seek or obtain such shareholder approval shall in no way adversely
affect the validity and due authorization of the issuance and sale of Securities
or the Investor's obligation in accordance with the terms and conditions hereof
to purchase a number of Shares in the aggregate up to the Maximum Common Stock
Issuance limitation, and that such approval pertains only to the applicability
of the Maximum Common Stock Issuance limitation provided in Section 2(H) of the
Agreement.
(I) If,
by the third (3rd) business day after the Closing Date, the Company fails to
deliver any portion of the shares of the Put to the Investor (the "Put Shares
Due") and the Investor purchases, in an open market transaction or otherwise,
shares of Common Stock necessary to make delivery of shares which would have
been delivered if the full amount of the shares to be delivered to the Investor
by the Company (the "Open Market Share Purchase") , then the Company shall pay
to the Investor, in addition to any other amounts due to Investor pursuant to
the Put, and not in lieu thereof, the Open Market Adjustment Amount (as defined
below). The "Open Market Adjustment Amount" is the amount equal to
the excess, if any, of (x) the Investor's total purchase price (including
brokerage commissions, if any) for the Open Market Share Purchase minus (y) the
net proceeds (after brokerage commissions, if any) received by the Investor from
the sale of the Put Shares Due. The Company shall pay the Open Market
Adjustment Amount to the Investor in immediately available funds within five (5)
business days of written demand by the Investor. By way of
illustration and not in limitation of the foregoing, if the Investor purchases
shares of Common Stock having a total purchase price (including brokerage
commissions) of $11,000 to cover an Open Market Purchase with respect to shares
of Common Stock it sold for net proceeds of $10,000, the Open Market Purchase
Adjustment Amount which the Company will be required to pay to the Investor will
be $1,000.
Limitation
On Amount Of Ownership. in no event shall the Investor be entitled to purchase
that number of Shares, which when added to the sum of the number of shares of
Common Stock beneficially owned (as such term is defined under Section 13(d) and
Rule 13d-3 of the 1934 Act), by the Investor, would exceed 4.99% of the number
of shares of Common Stock outstanding on the Closing Date, as determined in
accordance with Rule 13d-1(j) of the 1934 Act.
Number of
Shares Underlying The Equity Line. There is no limit to the number of shares
that we may be required to obtain funds from the Equity Line as it is dependent
upon our share price, which varies from day to day. This could cause significant
downward pressure on the price of our common stock. The following table shows
the effect on the number of shares required for a Put Notice for the value of
the full Equity Line, in the event the common stock price declines by 25%, 50%
and 75% from the trading price.
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Price
Decreases By
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06/12/2008
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25
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%
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50
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%
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75
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%
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Lowest
Closing Best Bid Price during the Purchase Period (as defined
above)
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$
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0.03
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$
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0.0225
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$
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0.015
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$
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0.0075
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Purchase
Price (defined above as 93% of the Lowest Closing Best Bid
Price)
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$
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0.0291
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$
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0.02095
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$
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0.01395
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$
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0.006975
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Number
Subject to the Put if 100% of the Equity Line is Executed.
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343,642,611
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477,326,968
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716,845,878
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1,433,691,756
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The
Company entered into the Investment Agreement with the intention to grow its
business and expand its operating level, which in turn should increase the value
of the Company. Because of the nature of the Investment Agreement it appears
unlikely that the Company will be able to draw down the full $10,000,000 without
significant positive value being added to the Company as a result of the
aggregate draw downs.
The
Company is limited to the number of shares it may register in connection with
its equity line agreement by Rule 415. Under Rule 415, the Company may register
a maximum of 1/3 of its outstanding non-affiliated shares. As of June 12, 2008,
the Company has 15,000,000 non-affiliate shares outstanding. Therefore the
Company has the option of registering up to 5,000,000 shares in this
registration statement. However, under the terms of the Registration Rights
Agreement entered into by the Company in conjunction with the equity line
Agreement, the Company is obligated to register 5,000,000 shares of its stock.
Should the Company draw down from the equity line to where the shares registered
in this registration statement are depleted, the Company may register additional
shares in subsequent registration statements to draw down upon.
The
monetary value of each of the Company’s draw downs under the equity line is tied
directly to the Company’s share price, creating an inverse relationship between
the Company’s share price and the number of shares the Company will be required
to transfer to the Investor per each dollar of the equity agreement that the
Company draws down upon. The Company understands that each Put executed by the
Company under the agreement will have an immediate negative effect on its stock
price. The Company also understands that it is limited by Rule 415 as to how
many shares it may register in connection with this equity line agreement.
Therefore, the limit imposed upon the Company by Rule 415 as to how many
shares may be registered to satisfy the agreement, decreases the likelihood that
the Company will have enough registered shares to draw down the full $10,000,000
equity line.
Because
the Company’s ability to draw down upon the equity line is directly connected to
the market price of the Company’s common stock, it is in the Company’s best
interest to maximize its effective use of the funds to ensure its ability to
draw additional funds from the equity line.
Conversion
Limitation.
The
Investors have contractually agreed to restrict their ability to receive Notice
of a Put and receive shares of our common stock such that the number of shares
of our common stock held by them and their affiliates after such conversion does
not exceed 4.99% of the then issued and outstanding shares of our common
stock.
Value of
Shares
The
market price for the Company’s common stock on the Issuance Date was $0.03 per
share based upon the closing price that day. Using this market price per share,
the maximum dollar value of the 5,000,000 common shares the Company is
registering under this Registration Statement is $150,000.
Fees and Payments Associated
with Transaction
The
following table discloses the dollar amount of each payment (including the
dollar value of any payments to be made in common stock) in connection with the
financing that the Company has paid, or may be required to pay to any Selling
Stockholder, any affiliate of a Selling Stockholder, or any person with whom any
Selling Stockholder has a contractual relationship regarding the transaction.
The table also reflects the potential net proceeds to the Company from the Puts
and the total possible payments to all selling shareholders and any of their
affiliates in the first year following the execution of the Put. We intend to
use all proceeds received in connection with the financing transaction for
general corporate, business development and working capital
purposes. For purposes of this table, we assumed that the Company
executed a Put for $250,000.
There are
no other persons with whom any Selling Stockholder has a contractual
relationship with regarding the transaction.
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Structuring,
Due Diligence and Legal
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Possible
Interest
Payments(3)
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Maximum
First
Year Payments(6)
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Maximum
Possible
Payments(6)
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$
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0
|
|
|
$
|
27,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
223,000
|
|
____________________
|
(1)
|
A
Placement Agent was not involved in this
financing.
|
|
|
|
|
(2)
|
The
Company paid $27,000 in structuring, due diligence and legal
fees to Anslow & Jaclin, LLP, our legal counsel in connection
with the transaction.
|
|
|
|
|
(3)
|
The
Financing agreement does not include instruments which bear
interest.
|
|
|
|
|
(4)
|
The
Financing agreement does not include instruments bearing a premium for
early redemption.
|
|
|
|
|
(5)
|
The
Financing agreement does not provide for liquidated
damages.
|
|
|
|
|
(6)
|
The
Financing agreement is not structured in a way where any payments are to
be made directly by the Company.
|
|
|
|
|
(7)
|
Total
net proceeds to the Company including the structuring and due diligence
fees and legal fees of $27,000.
|
Puts
The
following table discloses the total possible profit Selling Stockholders could
realize as a result of the conversion discount for the securities involved in
the June 12, 2008 Equity Line Financing.
Lowest
Closing Best
Bid
Price during the
Purchase
Period (1)
|
|
|
|
|
|
|
|
|
Combined
Market
Price
of Shares(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.03
|
|
|
$
|
0.0279
|
|
|
|
358,422,939
|
|
|
$
|
10,752,688
|
|
|
$
|
10,000,000
|
|
|
$
|
752,688
|
|
|
(1)
|
Market
price per share of our common stock on the Date of the Agreement (June 12,
2008).
|
|
|
|
|
(2)
|
The
Purchase Price per share of our common stock underlying the Equity Line on
the Date of the Agreement is calculated as the lowest closing best bid
price during the purchase period, where the purchase period is the five
(5) consecutive trading days following the Put Date, less a 7%
discount.
|
|
|
|
|
(3)
|
Total
number of shares of common stock underlying the Equity Line assuming the
Company issued a Put for the entire Equity Line as of the Issuance Date.
Since the Purchase Price may fluctuate as market prices fluctuate, the
actual number of shares that underlie the Equity Line will also
fluctuate.
|
|
|
|
|
(4)
|
Total
market value of shares of common stock underlying the Equity Line assuming
full conversion as of the Date of the Agreement based on the market price
on the Issuance Date.
|
|
|
|
|
(5)
|
Total
value of shares of common stock underlying the Equity Line assuming the
Company issued a Put for the Entire Equity Line as of the Issuance Date
based on the Purchase Price.
|
|
|
|
|
(6)
|
Discount
to market price calculated by subtracting the total Purchase Price (result
in footnote (5)) from the Combined Market Price (result in footnote
(4)).
|
Prior
Securities Transactions with Selling Stockholders
We have
not engaged in any prior securities transactions with the Selling Stockholders,
any affiliates of the Selling Stockholders, or any person with whom any Selling
Stockholder has a contractual relationship regarding the transaction (or any
predecessors of those persons).
Shares
Outstanding Prior to the Transaction
The
following table discloses certain information comparing the number of shares
outstanding prior to the transaction, number of shares registered by the Selling
Stockholders, or their affiliates, in prior registration statements (along with
that number still held and number sold pursuant to such prior registration
statement) and the number of shares registered for resale in this Registration
Statement relating to the financing transaction.
|
Number
of shares outstanding prior to Equity Line Financing transaction held by
persons other than the Selling Stockholders, affiliates of the Company and
affiliates of the Selling Stockholders.
|
|
|
60,000,000
|
|
|
|
|
|
|
|
|
Number
of shares registered for resale by Dutchess or affiliates in prior
registration statements.
|
|
|
0
|
|
|
|
|
|
|
|
|
Number
of shares registered for resale by Dutchess or affiliates of Dutchess that
continue to be held by Dutchess or affiliates of Dutchess.
|
|
|
0
|
|
|
|
|
|
|
|
|
Number
of shares sold in registered resale by Dutchess or affiliates of
Dutchess.
|
|
|
0
|
|
|
|
|
|
|
|
|
Number
of shares registered for resale on behalf of Dutchess or affiliates of
Dutchess in current transaction.
|
|
|
5,000,000
|
|
Shorting
and Prior Transactions with Selling Stockholders
To the
best of our knowledge, and based on information obtained from the Selling
Stockholders, none of the selling shareholders have an existing short position
in the Company’s common stock.
Other
than entering into the June 12, 2008 Financing Agreement, the Company has not in
the past three (3) years, engaged in any securities transaction the Selling
Stockholder, any affiliates of the Selling Stockholder, or, after due inquiry
and investigation, to the knowledge of the management of the Company, any person
with whom any Selling Stockholder has a contractual relationship regarding the
transaction (or any predecessors of those persons).
Pursuant
to Section 3 (C) of the Investment Agreement, the Investor has agreed not to
sell the Company’s stock short, either directly or indirectly through its
affiliates, principals or advisors, the Company’s common stock during the term
of the Investment Agreement. However, a sale of the Company’s
common stock that is the subject of the put, prior to delivery of the put shares
is contemplated by the “open market adjustment” period of the Investment
Agreement. The “open market adjustment amount” contemplates
a sale prior to delivery of the put shares because the Investor is able to
sell of the Company’s common stock prior to the Company delivering put
shares due. The Open Market Adjustment Amount is the amount equal to
the excess, if any of the Investor’s total purchase price (including brokerage
commissions, if any) for the Open Market Share Purchase minus the net proceeds
(after brokerage commissions, if any) received by the Investor from
the sale of the Put Shares Due. In the instance where the Investor
has to purchase shares to cover the put shares due, the Open Market Adjustment
amount may increase due to our small and thinly traded public
float.
Other
than Section 3(c) of the Investment Agreement there are no restrictions on the
ability of the Investor to sell short our common stock.
Warrants
No
warrants were issued in connection with the June 12, 2008 financing
transaction.
Notes
No notes
were issued in connection with the June 12, 2008 financing
transaction.
SUMMARY INFORMATION AND RISK FACTORS
The
following summary financial data should be read in conjunction with
"Management's Discussion and Analysis and Plan of Operation" and the Financial
Statements and Notes thereto, included elsewhere in this prospectus. The
statement of operations and balance sheet data for the years ended December 31,
2007 and 2006 are derived from our audited financial statements. The statement
of operations and balance sheet data for the three months ended May 31, 2008 is
derived from our unaudited financial statements.
|
|
FOR
THE
THREE
MONTHS
ENDED
MARCH 31
,
2008
|
|
YEAR
ENDED
DECEMBER
31,
2007
|
|
YEAR
ENDED
DECEMBER
31,
2006
|
|
|
|
(unaudited)
|
|
(audited)
|
|
(audited)
|
|
|
STATEMENT
OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS
OF
MARCH 31
,
2008
|
|
AS
OF
DECEMBER
31, 2007
|
|
|
BALANCE
SHEET DATA
|
(unaudited)
|
|
(audited)
|
|
|
|
|
|
|
|
|
|
|
$
|
45,148
|
|
|
$
|
223
|
|
|
|
|
|
67,311
|
|
|
|
13,165
|
|
|
|
|
|
44,425
|
|
|
|
45,285
|
|
|
|
|
|
22,886
|
|
|
|
(32,120
|
)
|
WHERE CAN
YOU FIND US
We presently
maintain our principal offices at 812 Creekline Way, McKinney,
Texas 75070. Our phone number is (866)
980-2974.
RISK FACTORS
An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business operating results and financial condition could be seriously
harmed. Please note that throughout this prospectus, the words "we", "our", or
"us" refer to the Company and not the selling stockholders.
WE HAVE A
LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE LIKELIHOOD OF
OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES,
COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL DEVELOPING
COMPANY.
This
investment has a high degree of risk. Before you invest you should carefully
consider the risks and uncertainties described below and the other information
in this report. If any of the following risks actually occur, our business,
operating results and financial conditions could be harmed and the value of
our stock could go down. This means you could lose all or a part of your
investment.
UNLESS WE
GENERATE ADDITIONAL CAPITAL THROUGH REVENUES OR FINANCINGS, WE RISK
FAILURE.
We expect
to incur significant capital expenses in pursuing our plans to grow our business
and obtaining additional financing through stock offerings, or other feasible
financing alternatives. We may also seek funding for the development and
marketing of our services through strategic partnerships and other arrangements
with investment partners. It is possible that such collaborative arrangements or
additional funds will not be available when needed, or on terms acceptable to
us, if at all.
THE
INVESTMENT AGREEMENT WITH DUTCHESS PRIVATE EQUITIES FUND, LTD. CONTEMPLATES A
SALE OF OUR COMMON STOCK PRIOR TO DELIVERY OF THE PUT SHARES WHICH COULD CAUSE
THE PRICE OF OUR COMMON STOCK TO FLUCTUATE.
The “open
market adjustment amount” contemplates a sale of our common stock that is the
subject of the put, prior to the delivery of put shares due to Dutchess Private
Equities Fund, Ltd. because Dutchess Private Equities Fund, Ltd. may sell our
common shares prior to delivery of a put as described in the Investment
Agreement. If we fail to deliver the put due to Dutchess Private
Equities Fund, Ltd., by the 3rd business day after the closing date the Dutchess
Private Equities Fund, Ltd., covering of the sale of our stock may cause our
stock to fluctuate because of our small and thinly traded public
float. Our common stock price may rise and fall based on the Dutchess
Private Equities Fund, Ltd., selling of our common stock prior to delivery of
the put shares.
THE
INVESTMENT AGREEMENT WITH DUTCHESS PRIVATE EQUITIES FUND, LTD. DOES NOT RESTRICT
THE ABILITY OF DUTCHESS PRIVATE EQUITIES FUND, LTD. TO SELL OUR COMMON STOCK
SHORT.
Other
than Section 3(c) of the Investment Agreement there are no restrictions on the
ability of the Dutchess Private Equities Fund, Ltd. to sell short our common
stock. Our common stock price may rise and fall based on Dutchess
Private Equities Fund, Ltd., short selling our common
stock.
DUTCHESS
PRIVATE EQUITIES FUND, LTD. WILL PAY LESS THEN THE THEN-PREVAILING MARKET PRICE
OF OUR COMMON STOCK WHICH COULD CAUSE THE PRICE OF OUR COMMON STOCK TO
DECLINE.
Our
common stock to be issued under the Investment Agreement will be purchased at
the seven percent (7%) discount to the lowest closing bid price during the five
trading days immediately following our notice to Dutchess Private Equities Fund,
Ltd. of our election to exercise our "put" right. Dutchess Private Equities
Fund, Ltd. has a financial incentive to sell our shares immediately upon
receiving the shares to realize the profit between the discounted price and the
market price. If Dutchess Private Equities Fund, Ltd. sells our shares, the
price of our common stock may decrease. If our stock price decreases, Dutchess
Private Equities Fund, Ltd. may have a further incentive to sell such shares.
Accordingly, the discounted sales price in the Investment Agreement may cause
the price of our common stock to decline.
EXISTING
STOCKHOLDERS MAY EXPERIENCE SIGNIFICANT DILUTION FROM THE SALE OF OUR COMMON
STOCK PURSUANT TO THE INVESTMENT AGREEMENT.
The sale
of our common stock to Dutchess Private Equities, Ltd. in accordance with the
Investment Agreement may have a dilutive impact on our shareholders. As a
result, our net income per share could decrease in future periods and the market
price of our common stock could decline. In addition, the lower our stock price
is at the time we exercise our put option, the more shares of our common stock
we will have to issue to Dutchess Private Equities Fund, Ltd. in order to
drawdown on the Equity Line. If our stock price decreases, then our existing
shareholders would experience greater dilution.
The
perceived risk of dilution may cause our stockholders to sell their shares,
which would contribute to a decline in the price of our common stock. Moreover,
the perceived risk of dilution and the resulting downward pressure on our stock
price could encourage investors to engage in short sales of our common stock. By
increasing the number of shares offered for sale, material amounts of short
selling could further contribute to progressive price declines in our common
stock.
OUR
INDEPENDENT AUDITORS HAVE INCLUDED A GOING CONCERN OPINION AND RELATED
DISCUSSION IN THE NOTES TO OUR FINANCIAL STATEMENTS.
It should
be noted that our independent auditors have included a going concern opinion and
related discussion in the notes to our financial statements. The auditors have
included the going concern provision because
the Company showed a net
loss of $94,414 during the period of January 1, 2006 through March 31, 2008
after one time organization related expenses of $160,000. Although the company's
assets exceed the liabilities by $22,886, the retained earnings (deficit) is
$94,414. . Until such time we receive additional debt or equity
financing, there is a risk that our auditors will continue to include a going
concern provision in the notes to our financial statements. We may continue to
incur losses as we spend additional capital to develop and market our products
and services and establish our infrastructure and organization to support
anticipated operations. We cannot be certain whether we will ever earn a
significant amount of revenues or profit, or, if we do, that we will be able to
continue earning such revenues or profit. Any of these factors could cause our
stock price to decline and result in your losing a portion or all of your
investment.
WE MAY
HAVE DIFFICULTY IN ATTRACTING AND RETAINING MANAGEMENT AND OUTSIDE INDEPENDENT
MEMBERS TO OUR BOARD OF DIRECTORS AS A RESULT OF THEIR CONCERNS RELATING TO
THEIR INCREASED PERSONAL EXPOSURE TO LAWSUITS AND STOCKHOLDER CLAIMS BY VIRTUE
OF HOLDING THESE POSITIONS IN A PUBLICLY HELD COMPANY.
The
directors and management of publicly traded corporations are increasingly
concerned with the extent of their personal exposure to lawsuits and stockholder
claims, as well as governmental and creditor claims which may be made against
them, particularly in view of recent changes in securities laws imposing
additional duties, obligations and liabilities on management and directors. Due
to these perceived risks, directors and management are also becoming
increasingly concerned with the availability of directors and officers liability
insurance to pay on a timely basis the costs incurred in defending such claims.
We currently do not carry limited directors and officers liability insurance.
Directors and officers liability insurance has recently become much more
expensive and difficult to obtain. If we are unable to provide directors and
officers liability insurance at affordable rates, it may become increasingly
more difficult to attract and retain qualified outside directors to serve on our
board of directors.
We may lose potential independent
board members and management candidates to other companies that have
greater directors and officers liability insurance to insure them from
liability or to companies that have revenues or have received
greater funding to date which can offer greater compensation packages. The
fees of directors are also rising in response to their increased duties,
obligations and liabilities as well as increased exposure to such risks. As a
company with a limited operating history and limited resources, we
will have a more difficult time attracting and retaining management and
outside independent directors than
a more established company due to
these enhanced duties, obligations and liabilities.
LEGISLATIVE
ACTIONS AND POTENTIAL NEW ACCOUNTING PRONOUNCEMENTS ARE LIKELY TO IMPACT OUR
FUTURE FINANCIAL POSITION AND RESULTS OF OPERATIONS.
There
have been regulatory changes, including the Sarbanes-Oxley Act of 2002, and
there may potentially be new accounting pronouncements or additional regulatory
rulings, which will have an impact on our future financial position and results
of operations. The Sarbanes-Oxley Act of 2002 and other rule changes as well as
proposed legislative initiatives have increased our general and administrative
costs as we have incurred increased legal and accounting fees to comply with
such rule changes. Further, proposed initiatives are expected to result in
change in certain accounting rules, including legislative and other proposals to
account for employee stock options as a compensation expense. These and other
potential changes could materially increase the expenses we report under
accounting principles generally accepted in the United State of America, and
adversely affect out operating results.
DEPENDENCE
ON KEY EMPLOYEES.
Our
business is dependent upon our chief executive officer David Bryant, who is
responsible for our operations, including marketing and business
development.
Should
Mr. Bryant leave our employ, our business may be adversely affected. In the
event of future growth in administration, marketing and customer support
functions, we may have to increase the depth and experience of our management
team by adding new members. Our success will depend to a large degree upon the
active participation of our key officers and employees. Loss of services of Mr.
Bryant could have a significant adverse effect on our operations and
prospects.
There can be no
assurance that we will be able to employ qualified persons on
acceptable terms to replace
officers who become unavailable.
CERTAIN
NEVADA CORPORATION LAW PROVISIONS COULD PREVENT A POTENTIAL TAKEOVER, WHICH
COULD ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
We are
incorporated in the State of Nevada. Certain provisions of Nevada corporate law
could adversely affect the market price of our common stock. Because Nevada
corporate law, NRS Sections 78.378 to 78.3793, contain provisions with respect
to acquisition of a controlling interest in a corporation, it would be more
difficult for someone to acquire control of us. Nevada corporate law also
discourages proxy contests making it more difficult for you and other
stockholders to elect directors other than the candidate or candidates nominated
by our board of directors.
TAXATION
OF DIVIDENDS.
In the
absence of an applicable treaty between the United States and the government of
the country of which a stockholder is a citizen, if such stockholder is not a
United States citizen or a resident alien of the United States, pursuant to
United States income tax law, all dividends payable by us on our capital stock
to any such stockholder are subject to withholding rate of 30 percent. As of the
effective date of this report, there is no way to determine which of our
potential stockholders may be subject to the 30 percent withholding
requirement.
FINANCIAL
PROJECTIONS; DISTRIBUTIONS OF CASH.
Any
projections and related assumptions discussed in this report were based on
information about circumstances and conditions existing as of the date of this
report. The projections and estimated financial results are based on estimates
and assumptions that are inherently uncertain and, though considered reasonable
by us, are subject to significant business, economic, and competitive
uncertainties and contingencies, all of which are difficult to predict and many
of which are beyond our control. Accordingly, there can be no assurance that the
projected results will be realized or that actual results will not be
significantly lower than projected. We do not intend to update the projections.
The inherent uncertainties in results increase materially for years closer to
the end of the projected period. Neither we nor any other person or entity
assumes any responsibility for the accuracy or validity of the
projections.
OUR
COMMON STOCK IS THINLY TRADED, SO YOU MAY BE UNABLE TO SELL AT OR NEAR ASK
PRICES OR AT ALL IF YOU NEED TO SELL YOUR SHARES TO RAISE MONEY OR OTHERWISE
DESIRE TO LIQUIDATE YOUR SHARES.
Our
common stock has historically been sporadically or "thinly-traded" on the Pink
Sheets, meaning that the number of persons interested in purchasing our common
stock at or near ask prices at any given time may be relatively small or
non-existent. As of June 12, 2008, our average trading volume per day for the
past thirty days was approximately 29,150 shares a day. This situation is
attributable to a number of factors, including the fact that we are a small
company which is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that generate or
influence sales volume, and that even if we came to the attention of such
persons, they tend to be risk-averse and would be reluctant to follow an
unproven company such as ours or purchase or recommend the purchase of our
shares until such time as we became more seasoned and viable.
As a
consequence, there may be periods of several days or more when trading activity
in our shares is minimal or non-existent, as compared to a mature issuer which
has a large and steady volume of trading activity that will generally support
continuous sales without an adverse effect on share price. It is possible that a
broader or more active public trading market for our common stock will not
develop or be sustained, or that current trading levels will
continue.
YOU MAY
BE UNABLE TO SELL YOUR COMMON STOCK AT OR ABOVE YOUR PURCHASE PRICE, WHICH MAY
RESULT IN SUBSTANTIAL LOSSES TO YOU.
The
following factors may add to the volatility in the price of our common stock:
actual or anticipated variations in our quarterly or annual operating results;
government regulations, announcements of significant acquisitions, strategic
partnerships or joint ventures; our capital commitments; and additions or
departures of our key personnel. Many of these factors are beyond our control
and may decrease the market price of our common stock, regardless of our
operating performance. We cannot make any predictions or projections as to what
the prevailing market price for our common stock will be at any time, including
as to whether our common stock will sustain its current market price, or as to
what effect that the sale of shares or the availability of common stock for sale
at any time will have on the prevailing market price.
VOLATILITY
IN OUR COMMON STOCK PRICE MAY SUBJECT US TO SECURITIES LITIGATION.
The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
In the past, plaintiffs have often initiated securities class action litigation
against a company following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs and liabilities and could divert
management's attention and resources.
OUR
COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE TRADING
MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK
CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions.
Inasmuch as the current bid and ask price of our common stock is less than $5.00
per share, our shares are classified as "penny stock" under the rules of the
SEC. For any transaction involving a penny stock, unless exempt, the rules
require that a broker or dealer approve a person's account for transactions in
penny stocks; and that the broker or dealer receives from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased.
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must: obtain financial information and investment experience objectives
of the person; and make a reasonable determination that the transactions in
penny stocks are suitable for that person and the person has sufficient
knowledge and experience in financial matters to be capable of evaluating the
risks of transactions in penny stocks. The broker or dealer must also deliver,
prior to any transaction in a penny stock, a disclosure schedule prescribed by
the SEC relating to the penny stock market, which, in highlight form, sets forth
the basis on which the broker or dealer made the suitability determination; and
that the broker or dealer received a signed, written agreement from the investor
prior to the transaction. Generally, brokers may be less willing to execute
transactions in securities subject to the "penny stock" rules. This may make it
more difficult for investors to dispose of our common stock and cause a decline
in the market value of our stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
THE
MARKET FOR PENNY STOCKS HAS SUFFERED IN RECENT YEARS FROM PATTERNS OF FRAUD AND
ABUSE.
Stockholders
should be aware that, according to SEC Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include: control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; manipulation of
prices through prearranged matching of purchases and sales and false and
misleading press releases; boiler room practices involving high-pressure sales
tactics and unrealistic price projections by inexperienced sales persons;
excessive and undisclosed bid-ask differential and markups by selling
broker-dealers; and the wholesale dumping of the same securities by promoters
and broker-dealers after prices have been manipulated to a desired level, along
with the resulting inevitable collapse of those prices and with consequential
investor losses.
Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
The occurrence of these patterns or practices could increase the volatility of
our share price.
VOTING
CONTROL OF OUR COMMON STOCK IS POSSESSED BY DAVID BRYANT. ADDITIONALLY, THIS
CONCENTRATION OF OWNERSHIP COULD DISCOURAGE OR PREVENT A POTENTIAL TAKEOVER OF
BUYER GROUP INTERNATIONAL THAT MIGHT OTHERWISE RESULT IN YOUR RECEIVING A
PREMIUM OVER THE MARKET PRICE FOR YOUR COMMON STOCK.
The
voting control of our common stock is in David Bryant, our chief executive
officer. Mr. Bryant owns 39,000,000 shares of our common. Holders of
our common stock are entitled to one non-cumulative vote on all matters
submitted to our stockholders. The result of Mr. Bryant's voting control is that
he has the ability to control all matters submitted to our stockholders for
approval and to control our management and affairs, including extraordinary
transactions such as mergers and other changes of corporate control, and going
private transactions. Additionally, this concentration of voting power could
discourage or prevent a potential takeover of the company that might otherwise
result in your receiving a premium over the market price for your common
stock.
THE
ELIMINATION OF MONETARY LIABILITY AGAINST OUR DIRECTORS, OFFICERS AND EMPLOYEES
UNDER OUR ARTICLES OF INCORPORATION AND THE EXISTENCE OF INDEMNIFICATION RIGHTS
TO OUR DIRECTORS, OFFICERS AND EMPLOYEES MAY RESULT IN SUBSTANTIAL EXPENDITURES
BY BUYER GROUP INTERNATIONAL AND MAY DISCOURAGE LAWSUITS AGAINST OUR DIRECTORS,
OFFICERS AND EMPLOYEES.
Our
articles of incorporation contain provisions, which eliminate the liability of
our directors for monetary damages to us and our stockholders. Our bylaws also
require us to indemnify our officers and directors. We may also have contractual
indemnification obligations under our agreements with our directors, officers
and employees. The foregoing indemnification obligations could result in our
incurring substantial expenditures to cover the cost of settlement or damage
awards against directors, officers and employees, which we maybe unable to
recoup. These provisions and resultant costs may also discourage us from
bringing a lawsuit against directors, officers and employees for breaches of
their fiduciary duties, and may similarly discourage the filing of derivative
litigation by our stockholders against our directors, officers and employees
even though such actions, if successful, might otherwise benefit us and our
stockholders.
OUR
DIRECTORS HAVE THE RIGHT TO AUTHORIZE THE ISSUANCE OF ADDITIONAL SHARES OF OUR
PREFERRED STOCK AND ADDITIONAL SHARES OF OUR COMMON STOCK.
Our
directors, within the limitations and restrictions contained in our articles of
incorporation and without further action by our stockholders, have the authority
to issue shares of preferred stock from time to time in one or more series and
to fix the number of shares and the relative rights, conversion rights, voting
rights, and terms of redemption, liquidation preferences and any other
preferences, special rights and qualifications of any such series. We have no
intention of issuing additional shares of preferred stock at the present time.
Any issuance of additional shares of preferred stock could adversely affect the
rights of holders of our common stock.
Should we
issue additional shares of our common stock at a later time, each investor's
ownership interest in our stock would be proportionally reduced. No investor
will have any preemptive right to acquire additional shares of our common stock,
or any of our other securities.
Item 4. Use of Proceeds.
We will
not receive any proceeds from the resale of the common stock by the selling
shareholder; however, we will receive up to $10,000,000 if we draw down the full
commitment under the equity line of credit. We will use such proceeds as working
capital for general corporate purposes.
Item
5.
Determination of Offering
Price
This
prospectus relates to the resale of up to 5,000,000 shares of our Common Stock,
par value $0.001 per share (“Common Stock”) of which 5,000,000 shares are
issuable to Dutchess Private Equities Fund, Ltd. (“Dutchess”). The
Selling Security holders may sell their common stock from time to time at
prevailing market prices.
Our
Common Stock is quoted on the over-the-counter market and prices are
reported on the Pink Sheets under the symbol “BYRG.” On June 12, 2008, the
closing price as reported was $.03.
Item
6.
Dilution.
The
sale of our common stock to Dutchess Private Equities Fund, Ltd. in accordance
with the Investment Agreement, may have a dilutive impact on our
shareholders.
Item
7.
Selling Security Holders.
We agreed
to register for resale shares of common stock by the selling security holders
listed below. The selling security holders may from time to time offer and sell
any or all of their shares that are registered under this prospectus. The
selling security holders, and any participating broker-dealers are
"underwriters" within the meaning of the Securities Act of 1933, as amended. All
expenses incurred with respect to the registration of the common stock will be
borne by us, but we will not be obligated to pay any underwriting fees,
discounts, commissions or other expenses incurred by the selling security
holders in connection with the sales of such shares.
The
following table sets forth information with respect to the maximum number of
shares of common stock beneficially owned by each of the selling security
holders named below and as adjusted to give effect to the sales of the shares
offered hereby. The shares beneficially owned have been determined in accordance
with rules promulgated by the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. The information in the
table below is current as of the date of this prospectus. All information
contained in the table below is based upon information provided to us by the
selling security holders and we have not independently verified this
information. The selling security holders are not making any representation that
any shares covered by the prospectus will be offered for sale. The selling
security holders may from time to time offer and sell pursuant to this
prospectus any or all of the common stock being registered.
Except as
indicated below, the selling security holders have never held any position or
office with us, nor are any of the selling security holders associates or
affiliates of any of our officers or directors. Except as indicated below, no
selling stockholder is the beneficial owner of any additional shares of common
stock or other equity securities issued by us or any securities convertible
into, or exercisable or exchangeable for, our equity securities. No selling
stockholder is a registered broker-dealer or an affiliate of a
broker-dealer.
For
purposes of this table, beneficial ownership is determined in accordance with
SEC rules, and includes voting power and investment power with respect to shares
and shares owned pursuant to warrants exercisable within 60 days. The "Number of
Shares Beneficially Owned After the Offering" column assumes the sale of all
shares offered.
As
explained below under "Plan of Distribution," we have agreed with the selling
security holders to bear certain expenses (other than broker discounts and
commissions, if any) in connection with the registration statement, which
includes this prospectus.
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Number
of Shares Beneficially
Owned
Prior to Offering(1)
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Number
of Shares Beneficially Owned After the Offering
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Dutchess
Private Equities Fund, Ltd. (2)
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5,000,000
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5,000,000
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0
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(1)
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The
actual number of shares of common stock offered in this prospectus,
and included in the registration statement of which
this prospectus is a part, includes such additional number of
shares of common stock as may be issued
or issuable upon draws under the Dutchess Equity
Line.
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(2)
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Michael
Novielli and Douglas Leighton are the directors of Dutchess Private
Equities Fund, Ltd.
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TRANSACTION
WITH DUTCHESS PRIVATE EQUITIES FUND LTD.
On June
12, 2008 we entered into an Investment Agreement with Dutchess Private Equities
Fund, Ltd. (the "Investor"). Pursuant to this Agreement, the Investor shall
commit to purchase up to $10,000,000 of our common stock over the course of
thirty-six (36) months. The amount that we shall be entitled to request from
each purchase ("Puts") shall be equal to, at our election, either (i) up to
$250,000 or (ii) 200% of the average daily volume (U.S. market only) of the
common stock for the ten (10) trading days prior to the applicable Put Notice
Date, multiplied by the average of the three (3) daily closing bid prices
immediately preceding the Put Date.
The put
date shall be the date that the Investor receives a put notice of a draw down by
us. During the Open Period, the Company shall not be entitled to submit a Put
Notice until after the previous Closing has been completed. The purchase price
shall be set at ninety-three percent (93%) of the lowest closing Best Bid price
of the Common Stock during the pricing period. The pricing period shall be the
five (5) consecutive trading days immediately after the put notice date. There
are put restrictions applied on days between the put date and the closing date
with respect to that particular put. During this time, we shall not be entitled
to deliver another put notice. Further, we shall reserve the right to withdraw
that portion of the put that is below seventy-five percent (75%) of the lowest
closing bid prices for the 10-trading day period immediately preceding each put
notice.
We are
obligated to file a registration statement with the Securities and Exchange
Commission ("SEC") covering 5,000,000 shares of the common stock underlying the
Investment Agreement within 15 days after the closing date. In addition, we are
obligated to use all commercially reasonable efforts to have the registration
statement declared effective by the SEC within 90 days after the closing date.
We shall have an ongoing obligation to register additional shares of our common
stock as necessary underlying the draw downs. The Agreement does not impose any
penalties on us for failure to meet either the 15 day or the 90 day obligation;
however, we shall endeavor to meet both such deadlines.
Item 8. Plan of Distribution.
Our
Common Stock is traded on the over-the-counter market on the Pink
Sheets under the symbol "BYRG." As of August 13, 2008, our common shares were
trading at $0.02 per share.
The
shares may be sold or distributed from time to time by the selling stockholders
directly to one or more purchasers or through brokers or dealers who act solely
as agents, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices, at negotiated prices or at fixed prices, which
may be changed.
The distribution of
the shares may be effected in one or more of the following methods:
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ordinary
brokers transactions, which may include long or short
sales;
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transactions
involving cross or block trades on any securities or market where our
common stock is trading;
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through
direct sales to purchasers or sales effected through
agents;
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short
sales after this registration statement becomes
effective;
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block
trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;
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Privately
negotiated transactions;
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Broker-dealers
may agree with the selling security holder to sell a specified number of
such shares at a stipulated price per share;
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through
transactions in options, swaps or other derivatives (whether exchange
listed of otherwise); or
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any
combination of the foregoing.
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Selling
security holders may sell the shares directly to market makers acting as
principals and/or broker-dealers acting as agents for themselves or their
customers. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling security holder and/or
the purchasers of shares for whom such broker-dealers may act as agents or to
whom they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that a selling stockholder will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price. The
selling security holders cannot assure that all or any of the shares offered in
this prospectus will be issued to, or sold by, the selling security holders. The
selling security holders and any brokers, dealers or agents, upon effecting the
sale of any of the shares offered in this prospectus, are "underwriters" as that
term is defined under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, or the rules and regulations under such
acts.
In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, attributable to the sale of
shares will be borne by a selling stockholder. The selling security holder may
agree to indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the shares if liabilities are imposed on that
person under the Securities Act of 1933.
The
selling security holders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgee or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or any other applicable provision of the Securities Act of 1933
amending the list of selling security holders to include the pledgee, transferee
or other successors in interest as selling security holders under this
prospectus.
We are
required to pay all fees and expenses incident to the registration of the shares
of common stock. We have agreed to indemnify the selling security holders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act of 1933.
The
selling security holders acquired the securities offered hereby in the ordinary
course of business and have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder.
If we are
notified by any selling stockholder that any material arrangement has been
entered into with a broker-dealer for the sale of shares of common stock, if
required, we will file a supplement to this prospectus.
The
anti-manipulation rules of Regulation M under the Securities Exchange Act of
1934 may apply to sales of our common stock and activities of the selling
security holders.
Notwithstanding
anything set forth herein, no NASD member will charge commissions that exceed 8%
of the total proceeds of the offering.
Item
9.
Description of Securities to be Registered.
General
Our
authorized capital stock consists of 400,000,000 Shares of common stock, $0.001
par value per Share and no shares of preferred stock. There are no provisions in
our charter or by-laws that would delay, defer or prevent a change in our
control.
Common
Stock
We are
authorized to issue 400,000,000 shares of common stock, $0.001 par value per
Share. Currently we have 60,000,000 common shares are issued and
outstanding.
The
holders of our common stock have equal ratable rights to dividends from funds
legally available if and when declared by our board of directors and are
entitled to share ratably in all of our assets available for distribution to
holders of common stock upon liquidation, dissolution or winding up of our
affairs. Our common stock does not provide the right to a preemptive,
subscription or conversion rights and there are no redemption or sinking fund
provisions or rights. Our common stock holders are entitled to one
non-cumulative vote per share on all matters on which shareholders may
vote.
All
shares of common stock now outstanding are fully paid for and non-assessable and
all shares of common stock which are the subject of this registration statement
are fully paid and non-assessable. We refer you to our Articles of
Incorporation, Bylaws and the applicable statutes of the state of Nevada for a
more complete description of the rights and liabilities of holders of our
securities. All material terms of our common stock have been
addressed in this section.
Holders
of shares of our common stock do not have cumulative voting rights, which means
that the holders of more than 50% of the outstanding shares, voting for the
election of directors, can elect all of the directors to be elected, if they so
choose, and, in that event, the holders of the remaining shares will not be able
to elect any of our directors.
Preferred
Stock
We have
no shares of preferred stock authorized.
Dividends
We have
not paid any cash dividends to shareholders. The declaration of any
future cash dividends is at the discretion of our board of directors and
depends upon our earnings, if any, our capital requirements and
financial position, our general economic conditions, and other pertinent
conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, in our
business operations.
Warrants
There are
no outstanding warrants to purchase our securities.
Options
There are
no options to purchase our securities outstanding.
Item 10. Interests of Named Experts and
Counsel
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had, or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant or any of its parents or subsidiaries. Nor was
any such person connected with the registrant or any of its parents or
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
director, officer, or employee.
The
financial statements included in this prospectus and the registration statement
have been audited by VanWassehnova & Associates to the extent and for the
periods set forth in their report appearing elsewhere herein and in the
registration statement, and are included in reliance upon such report given upon
the authority of said firm as experts in auditing and accounting.
Item
11. Information with Respect to the Registrant.
Organization Within Last Five Years
We were
incorporated in November 1994 in the State of Nevada under the name Curlew
Resource Corporation. In December of 2006, we filed a certificate of
amendment changing our name to Buyer Group International, Inc. In May
of 2008 we filed a certificate of amendment increasing our authorized shares to
400,000,000.
Description of Business
General
Buyer
Group International, Inc., (“BGI”) started with a focus on helping regular
people achieve home ownership investment without a lot of cash or existing
credit. The family business started small acquiring its first rental
property in 2004 and grew over the course of a 2 year period to 21 properties
managed for lease or sale. BGI has the ability to clear inventory (purchase or
sale) through either retail lease markets or wholesale market such as public
auctions and tax lien sales. We share in the benefit and obligations gaining tax
advantages. The initial investments were by family and friends and
equity participation from various sources. Initially, construction
operations were performed by Custom Home Builder Josten Equities on some profit
share basis. The company’s goal is to leverage off of existing
resources to grow the company’s inventory by showing consistent turnover and
effective pipeline management of new wholesale opportunities.
Market
BGI
currently invests in areas of existing housing, and residential lots slated for
build-out or development closeout, property requiring repairs to return to
marketable condition or even that can be acquired through bankruptcy,
foreclosure or back taxes owed on the land.
The
Dallas currently boasts annual 3.1% growth rate with Houston at 2.6% and
Austin at 4.4%.
(http://recenter.tamu.edu/data/popm/rankgMSAs.html) Lower
income and first-time homebuyers are more sensitive to the upward trend in
interest rates . However, the more mobile market segments,
luxury/move-up/active-adult, are less rate sensitive, have stronger household
balance sheets, and more discretionary purchasing power. The strength
of the active-adult market is felt in the 78 million baby boomers that will peak
in terms of homeownership in this decade, giving many reverse mortgage
opportunities to fund assisted living.
Population
growth is The population of the US overall is expected to grow to 335 million by
2020 and 363 million by 2030 (
http://www.census.gov/population/www/projections/usinterimproj/
).
The influx of some 60 million people in the next 15-20 years.will create a need
for housing for years to come. North Texas consistently ranks at least one
county in the top 10 index (
http://www.census.gov/popest/housing/HU-EST2006-top100.html
)
for annual growth, with Rockwall at 8.6% and Collin at
5.2%.
Strategy
Purchase
and develop properties that have been on the market for a longer than average
period of time, pre foreclosures, REO properties, or builder closeouts at a
discount to face value of the existing retail market . Establish
value by identifying highest and best use and marketability to facilitate rapid
exchange with end goal of selling property at highest price.
BGI will
take a flat fee or profit participation position in helping people who wish to
exchange their property for another and will provide add on services such as tax
deferments on capital gains and estate planning. For community
development we will work with builders that have excess inventory or need
closeout of their communities in the planning stage. We will work with them to
restructure their business and work to offload inventory to a network of
investors and buyers to promote more efficient sales of their product at deeper
market discounts, making owernship more affordable. In the commercial
mortgage space we will assist businesses with re-capitalization and
restructuring of their operations to facilitate more efficient use of capital
and participate in their business going forward.
Mission
Establish
BGI as an industry consolidator by consolidating companies that have financial
impairment, re-capitalize housing inventory, mortgage instruments, refinance
stalled community projects, and act as a clearinghouse for excess housing
inventory both residential and commercial.
The
current national 1.7 million inventory level for homes that are
experience financial distress often clog the lending system with
unreasonable financial models that are outdated and often never see the end of a
mortgage paid to term any more. The 30 year fixed mortgage which
historically made banks the most money are often paid out in 2-5 years for first
time home owners and 7-10 for seasoned home owners. Rising interest
rates often keep home owners from trading up or getting “bang for their buck”
and can dissuade home owners from moving at a time when economically
advantageous due to lack of affordable financing, reasonable inventory costs, or
both. BGI will bring flexible financing to the markets allowing
existing interest rates to be carried forward when home owners wish to sell,
lease, exchange, or divest their property and give them the best tax advantage
available.
Services
Specific business
operations
Real
Estate Operations - Restructuring Operations Performance Income –
Distress Property is a property that is typically a property defined whereas the
owners or investors are in financial distress, such as foreclosure, bankruptcy,
or cash shortfall positions where the property has declined in value, the escrow
and taxes have gone beyond the owner’s ability to pay them, or there has been an
no decline in value, yet the owner has encountered a “life event” such as a
divorce, loss of job, or death of an income earner in the
family. Other distress situations may be of legal in nature such as a
lawsuit impairing their ability to pay timely the mortgage amounts due. Income
is derived in typically two fashions. There is lease income and there
is income from sales. The lease income is derived from leasing and management
operations of property whereas the sales income comes from a contract that
stipulates upon sale of the property any net equity derived from such a sale is
divided according to a prearrange indentured agreement. We have
pursued over 21 transaction involving properties of this type. We
currently do not intend to pursue this line of business. The FHA has
adopted a similar model and now corners the market. To date Buyer
Group International held through its subsidiary company BGI Group LC on a
consolidated basis held only one property, a lot in a neighborhood that was sold
just over a year later to the Frisco Independent School District for a
profit. All other properties BGI holds the right to receive lease
income or income through a division of positive net profits upon sale of a
property or financial assets associated with the property such as a second lien
note or mortgage held against the property. Other than the one lot we
have never held any other properties. All properties that were moved
in 2006 and 2007 were residential units with our first commercial projects
coming in late 2007, land development of 120 mix use units in a community
development. It is our intention to pursue commercial properties
going forward that involve office buildings, mixed use properties, raw land
development, and community project development.
Company’s
Short and Medium Range Goals
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Grow
Net Equity this year to Four Million through Strategic Investment and
Acquisition
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Increase
revenues by acquiring operations and financing
growth
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Develop
40-60 units in the next 24 months from land
projects
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In
exchange for project participation, we provide flexible financing to our clients
which can include equity or debt. As a result of our increased
contribution of capital in the form of equity or debt we may then seek either
private equity in the form of cash financing or bank financing to capitalize
their projects. We earn fees as a result of the placements of capital
and through the refinance of our client’s asset pool with the new capitalization
in place. We will provide on a private placement basis equity or convertible
debt as a contribution to a business partnership or project we are investing
in. We may earn fees as a result of our placements. We may
extend equity lines of credit in certain circumstances as well given enough
assets exist on their financial statement to justify the
obligation. The partnerships with investors and banks allow us to
place funds into projects that require capitalization for finance of operations
such as a real estate fund that put hard money. We intend to earn
fees for providing access to funding conduits. We intend to also earn
fees on a consulting basis.
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HomesDirect
SM
prospects interested sellers and enters into negotiations for sale or
exchange
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Structured
partnerships of the property establishes a beneficial equitable interest
in the property – deposit in EQUITYBANC
SM
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Matching
service for potential new owner on a lease/sales basis are processed
matching the home and arrange assumptions of ownership with cash/finance
available giving exit strategy for
owners
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Impute
the EQUITYBANC
SM
interest into a trust arrangement
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BGI
maintains interest for at five years and allows home owners access to
their equity until they sell to another
owner
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Equity
Accounts maintained through bank trust arrangements until
termination
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Keys to Success
|
1.
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Traditional
Buy and Hold – Accelerate Returns
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2.
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Partnership
Investing – Smart Builders, Lenders,
Investors
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3.
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Owner
Exchange - HomesDirect
SM
ChargeUp Cashflow
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4.
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Buy
Low – Turn around and sell high
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5.
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Protect
Property Values from Decline - EquityBanc
SM
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Market
Analysis
Growth
suggests people will need housing in the range of 2.5 Billion cubic feet in
the next 10 years. Utilizing a cost leadership strategy plus a quicker turn of
the existing asset base for with lower upfront capital employed we can turn the
asset generated returns from 25% to 141% in the same amount of time on
similar property. Our goal is to average no less than 75% return on
capital annualized for distressed deals. Market conditions and people
that historically were out of reach for homeownership provides us with
continuous ongoing pool of buyers regardless of market conditions and provides
for equity management for homeowners in a variety of situations. Home
ownership is a consistent wealth builder over the longer term however it
requires massive capital investment. BGI increases social
responsibility and provides new profit centers for home owners to take advantage
of by providing them solutions when the market is illiquid by
nature.
Home
ownership is a consistent wealth builder over the longer term however it
requires massive capital investment. BGI increases social
responsibility and provides new profit centers for home owners to take advantage
of by providing them solutions when the market is illiquid by
nature.
Market
and Cost Drivers
If a
house is available at wholesale pricing, in good shape, 40-60% LTV then we buy
it for cash. Private equity runs 10%-18% to borrow. But the equity in a house is
freely available. The key is to tap into it and create a public exchange that
shuffles equity between owners pro-rata to the size of their investment. The
company takes a profit of providing the service. There is an offer for exchange
on property that fits what home owners need and give them an exchange for their
old home and use equity as a financial tool. There is a flat fee or equity split
assigned to the investment group at final disposition.
Further
borrowing costs can be reduced by implementing equity and debt capital
management strategies to produce acceptable ranges of hurdle rates. The average
cost of borrowing may produce an average float somewhere between 7% and
12%.
Early to
market strategies and equity management in the asset inventory payoff the
remaining balance owed on the original note at final disposition, we get to
borrow capital at lower costs, reducing our average cost of capital range closer
to 5-8% even if rates continue to rise. The float we can create in this
financing arrangement is a powerful value generator in the business. The
opportunities we look at washed through formulaic criteria to establish a
benchmark.
ReducingCosts
In a
contrarian scenario the worse indicators turn the more information, time and
ability an investor has to wait out the competition and the forces that are
against the best deals. The exchange model of HomesDirect
SM
allows homeowners
to directly trade their homes up or down with the backing of a finance company
that offers support services available during the relocation window.
The fees are captured and assistance is provided financial on a per credit
basis for equity that home owners have already built up with termination dates
for their financial benefits and obligations held in
trust.
By
adopting a stakeholder framework, cutting edge equity and debt management
strategies and tested portfolio theories we can generate better cash flow off of
inventory turnover. The company can grow while acquiring inventory
and create a natural hedge against loss in value while creating value for
consistent, profitable, and sustainable growth.
DESCRIPTION OF PROPERTY
Our
business office is located at Buyer Group International, Inc., 812 Creekline
Way, McKinney, TX 75070.
LEGAL PROCEEDINGS
There are
no legal proceedings pending or threatened against us.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our
common stock is currently quoted on the Pink Sheets under the symbol “BYRG”. We
anticipate applying for trading of our common stock on the Over the Counter
Bulletin Board upon the effectiveness of the registration statement of which
this prospectus forms apart. However, we can provide no assurance that our
shares of common stock will be traded on the Bulletin Board or, if traded, that
a public market will materialize.
Holders of Our Common
Stock
As of the
date of this registration statement, we had 155 shareholders of our common
stock.
Rule 144
Shares
As of
June 23, 2008 there are 45,000,000 shares of our common stock held by control
persons, which are currently available for resale to the public and in
accordance with the volume and trading limitations of Rule 144 of the Act. Sales
under Rule 144 are subject availability of current public information about the
company.
Stock Option
Grants
To date,
we have not granted any stock options.
Registration
Rights
In
connection with the Investment Agreement we have entered into a Registration
Rights Agreement with the Investor which is filed as an exhibit.
AVAILABLE INFORMATION
We have
filed with the SEC a registration statement on Form S-1 under the Securities Act
with respect to the common stock offered hereby. This prospectus, which
constitutes part of the registration statement, does not contain all of the
information set forth in the registration statement and the exhibits and
schedule thereto, certain parts of which are omitted in accordance with the
rules and regulations of the SEC. For further information regarding our common
stock and our company, please review the registration statement, including
exhibits, schedules and reports filed as a part thereof. Statements in this
prospectus as to the contents of any contract or other document filed as an
exhibit to the registration statement, set forth the material terms of such
contract or other document but are not necessarily complete, and in each
instance reference is made to the copy of such document filed as an exhibit to
the registration statement, each such statement being qualified in all respects
by such reference.
We are
also subject to the informational requirements of the Exchange Act which
requires us to file reports, proxy statements and other information with the
SEC. Such reports, proxy statements and other information along with the
registration statement, including the exhibits and schedules thereto, may be
inspected at public reference facilities of the SEC at 100 F Street N.E ,
Washington D.C. 20549. Copies of such material can be obtained from
the Public Reference Section of the SEC at prescribed rates. You may call the
SEC at 1-800-SEC-0330 for further information on the operation of the public
reference room. Because we file documents electronically with the SEC, you may
also obtain this information by visiting the SEC’s Internet website at
http://www.sec.gov.
BUYER
GROUP INTERNATIONAL, INC.
BUYER
GROUP INTERNATIONAL, INC.
CONSOLIDATED
FINANCIAL STATEMENTS
DECEMBER
31, 2006
Independent
Auditors’ Report
To the
Board of Directors and Stockholders
Buyer
Group International, Inc.
We have
audited the consolidated balance sheet of Buyer Group International, Inc. and
subsidiary (a Texas corporation) as of December 31, 2006 and the related
statement of income, cash flows and shareholders’ equity for the year then
ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We
conducted our audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts 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. We believe that our audit provides a reasonable basis
for our opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Buyer Group
International, Inc. and subsidiary as of December 31, 2006, and the results of
their operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in the notes to the
financial statements, the Company has suffered losses from operations and has a
net capital deficiency that raises substantial doubt about its ability to
continue as a going concern. Management’s plans in regard to these
matters are also discussed in the notes. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
VanWassehnova
& Associates
Conroe,
Texas
December
29, 2007
|
BUYER
GROUP INTERNATIONAL, INC. AND SUBSIDIARY
|
|
|
(A
Development Stage Company)
|
|
|
Consolidated
Balance Sheet
|
|
|
December
31, 2006
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash
|
|
$
|
13,873
|
|
|
|
|
|
|
|
|
Property,
Plant & Equipment, net
|
|
|
88,285
|
|
|
|
|
|
|
|
|
Other
Assets-Investment Trusts
|
|
|
11,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
113,169
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders' Equity
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
|
16,231
|
|
|
Line
of credit
|
|
|
49,327
|
|
|
Current
portion of long-term debt
|
|
|
85,000
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
150,558
|
|
|
|
|
|
|
|
|
Long-Term
Debt
|
|
|
102,000
|
|
|
|
|
|
|
|
|
Commitments
and Contingencies
|
|
|
-
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
Capital
stock - par value $.001, 400,000,000 shares authorized
|
|
|
60,000
|
|
|
60,000,000
shares outstanding
|
|
|
|
|
|
Additional
paid in capital
|
|
|
200,000
|
|
|
Retained
earnings (deficit)
|
|
|
(199,389
|
)
|
|
Stock
subscriptions receivable
|
|
|
(200,000
|
)
|
|
|
|
|
|
|
|
Total
Shareholders' Equity
|
|
|
(139,389
|
)
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders' Equity
|
|
$
|
113,169
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements.
|
BUYER
GROUP INTERNATIONAL, INC. AND SUBSIDIARY
|
|
|
(A
Development Stage Company)
|
|
|
Consolidated
Statement of Income
|
|
|
For
the Period January 1, 2006 (Date of Inception) to December 31,
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
108,561
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
General
& Administrative
|
|
|
61,483
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
47,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Expenses
|
|
|
|
|
|
Interest
Expense
|
|
|
6,901
|
|
|
Organization
Costs
|
|
|
160,000
|
|
|
Investment
Trusts
|
|
|
79,566
|
|
|
|
|
|
|
|
|
Total
Other Income & Expenses
|
|
|
246,467
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(199,389
|
)
|
|
|
|
|
|
|
|
Net
Loss Per Share - based on 60,000,000 shares outstanding
|
|
$
|
(0.0033
|
)
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements.
|
BUYER
GROUP INTERNATIONAL, INC. AND SUBSIDIARY
|
|
|
(A
Development Stage Company)
|
|
|
Consolidated
Statement of Cash Flows
|
|
|
For
the Period January 1, 2006 (Date of Inception) to December 31,
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Operating Activities
|
|
|
|
|
Net
Income
|
|
$
|
(199,389
|
)
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
(Increase)
decrease in investment trusts
|
|
|
(11,011
|
)
|
|
Increase
(decrease) in accounts payables
|
|
|
16,231
|
|
|
|
|
|
|
|
|
Net
cash used by operating activities
|
|
|
(194,169
|
)
|
|
|
|
|
|
|
|
Cash
Flows from Investing Activities
|
|
|
|
|
|
Acquisition
of property and equipment
|
|
|
(88,285
|
)
|
|
|
|
|
|
|
|
Net
cash used by investing activities
|
|
|
(88,285
|
)
|
|
|
|
|
|
|
|
Cash
Flows from Financing Activities
|
|
|
|
|
|
Issuance
of stock
|
|
|
60,000
|
|
|
Proceeds
from line of credit
|
|
|
49,327
|
|
|
Proceeds
from long-term debt
|
|
|
187,000
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
296,327
|
|
|
|
|
|
|
|
|
Net
Increase in Cash
|
|
|
13,873
|
|
|
|
|
|
|
|
|
Cash
at Beginning of Year
|
|
|
-
|
|
|
|
|
|
|
|
|
Cash
at End of Year
|
|
$
|
13,873
|
|
|
|
|
|
|
|
|
Supplemental
Disclosures:
|
|
|
|
|
|
Cash
paid for interest
|
|
$
|
(6,901
|
)
|
|
|
|
|
|
|
|
Cash
paid for income taxes
|
|
$
|
-
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements.
|
BUYER
GROUP INTERNATIONAL, INC. & SUBSIDIARY
|
|
|
(A
Development Stage Company)
|
|
|
Consolidated
Statement of Shareholders' Equity
|
|
|
For
the Period January 1, 2006 (Date of Inception) to December 31,
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
|
|
|
Changes
|
|
|
December
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
Earnings
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Net
Income (Loss)
|
|
|
-
|
|
|
|
(199,389
|
)
|
|
|
(199,389
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Retained Earnings (Deficit)
|
|
|
-
|
|
|
|
(199,389
|
)
|
|
|
(199,389
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
-
|
|
|
|
60,000
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Paid in Capital
|
|
|
-
|
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Subscriptions Receivable
|
|
|
-
|
|
|
|
(200,000
|
)
|
|
|
(200,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Shareholders' Equity
|
|
$
|
-
|
|
|
$
|
(139,389
|
)
|
|
$
|
(139,389
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements.
BUYER
GROUP INTERNATIONAL, INC. AND SUBSIDIARY
(A
Development Stage Company)
Notes
to the Financial Statements
December
31, 2006
Note
1 - Organization and Business
Buyer
Group International, Inc. (the Company), a Nevada corporation, is a privately
owned company with its principal offices in Dallas, Texas, with a subsidiary
office in Austin, Texas. The core business of the Company is purchasing
residential properties in distress, repairing them and returning them to retail
marketability. The Company's success is based upon its ability to
purchase real estate at lower than market value, in distressed conditions, in
need of repair and re-market the property on a lease or for-sale
basis. The downturn in the national real estate market provides ample
opportunity to purchase properties well below the market retail price of just a
year ago. Dallas is one of the most stable regions in the country
giving the comany a strategic edge in that it enjoys steadily increasing prices
even in down markets. The company seeks to grow by capitalizing into
other markets that share similar traits as Dallas and Texas as a
whole.
Note
2 - Summary of Significant Accounting Policies
Cash and Cash
Equivalents
Cash and
cash equivalents include money market accounts and highly liquid investments
with an original maturity of three months or less.
Concentration of Credit
Risk
The
Company maintains its cash in bank deposit accounts, which at times may exceed
federally insured limits. The Company has not experienced any losses
in such accounts and management believes that it is not exposed to any
significant credit risk for cash.
Principles of
Consolidation
The
accompanying consolidated financial statements present the consolidated balance
sheet, consolidated statement of income and consolidated statement of cash flows
of Buyer Group International, Inc. and its subsidiary. All significant
intercompany transactions and balances have been eliminated.
Investment
Trusts
Investment
Trusts consist of 14 different real estate trusts. The Company is a
90% beneficiary in 11 and a 100% beneficiary in the other 3. The
balance sheet amounts are stated at the amounts reported as taxable income or
loss for the year plus contributions made. The net asset value at December 31,
2006 was approximately $295,000.
BUYER
GROUP INTERNATIONAL, INC. AND SUBSIDIARY
(A
Development Stage Company)
Notes
to the Financial Statements
December
31, 2006
Advertising
The
Company's policy is to expense advertising costs as incurred and amounted to
$1,929 for 2006.
Property, Plant and
Equipment
Property,
plant and equipment are depreciated over their expected useful lives using the
straight-line method. Maintenance and repairs that do not extend the life of
assets are expensed as incurred. Expenditures which improve or extend the life
of assets are capitalized. Property, plant and equipment consist of property and
land with a cost of $88,285.
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts and 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
reporting period. Actual results could differ from those estimates.
Income
Taxes
The
Company recognizes deferred income tax assets and liabilities for the expected
future tax consequences of events that have been recognized differently for
financial reporting and tax reporting purposes. Under this method, deferred
income tax assets and liabilities are determined based on the difference between
the financial statement carrying amounts and tax basis of assets and liabilities
using enacted rates and laws in effect in the years in which the differences are
expected to reverse. Deferred income tax assets are evaluated for realization
based on a more-likely-than-not criteria in determining if a valuation allowance
should be provided. At December 31, 2006, no deferred income tax assets or
liabilities have been recorded.
Organization
Costs
In
accordance with generally accepted accounting principles, one time organization
costs of $160,000 have been expensed in the current year. No further
organization costs are anticipated by management.
Revenue
Recognition
The
Company's revenue is derived primarily from the rental and sale of real
estate. The revenue is recognized at the time of
closing. Costs of sales include the original purchase price of the
property plus improvements.
BUYER
GROUP INTERNATIONAL, INC. AND SUBSIDIARY
(A
Development Stage Company)
Notes
to the Financial Statements
December
31, 2006
Note
3 - Subsidiaries
The
following parent/subsidiary relationship exist:
Buyer Group
International, Inc.
BGI Group, LC
(100%)
Note
4 - Commitments and Contingencies
Operating
Leases
The
Company leases office space in Dallas, Texas which is accounted for as an
operating lease. Rent expense amounted to $24,000 for the year ended December
31, 2006. As of the end of 2006, the lease was on a month to month
basis.
Claims
The
Company is periodically involved in various claims and other actions arising in
the ordinary course of business. Management is not aware of any
asserted or unasserted claims that will have a material adverse effect on the
financial position or results of operations of the Company.
Going
Concern
As
indicated in the accompanying financial statements, the Company showed a net
loss of $199,389 during the year ended December 31, 2006 after one time
organization related expenses of $160,000. As of that date, the
Company's current liabilities of $150,558 exceeded its current assets by
$136,685 and its total liabilities exceeded in its total assets by $139,389.
Those factors create an uncertainty about the Company\'s ability to continue as a
going concern. Management has developed a plan to reduce its
liabilities through the sale of assets and through obtaining additional
capital. The ability of the Company to continue as a going concern is
dependent on acquiring this additional capital. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
Note
5 - Common Stock
Buyer
Group International, Inc. has authorized 400,000,000 shares of common stock with
a par value of $.001. As of December 31, 2006, 60,000,000 shares are
outstanding. Additional paid in capital of $200,000 in shareholders'
equity is financed from one shareholder and it is shown as a stock subscription
receivable under shareholders' equity.
BUYER
GROUP INTERNATIONAL, INC. AND SUBSIDIARY
(A
Development Stage Company)
Notes
to the Financial Statements
December
31, 2006
Note
6 - Line of Credit
The
Company maintains a line of credit agreement with Capital One for
$50,000. It is collateralized by accounts receivables and bears an
interest rate of 10.25% (prime plus 3.6%). The balance at December
31, 2006 was $49,327.
Note
7 - Long-Term Debt
At
December 31, 2006, long-term debt consisted of the following:
|
Real
estate loan collateralized by Lot 2 Cheyenne Crossing a short term CD of
$12,750. Interest only at prime plus 1%.
|
|
$
|
85,000
|
|
|
|
|
|
|
|
|
Business loan
payable to NKB Interests LLC with no term and not collateralized by assets
with balloon payment in equity or interest.
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business loan
payable to Texas Art Traders LLC with no term and not collateralized by
assets with balloon payment in equity or interest.
|
|
|
67,000
|
|
|
|
|
|
|
|
|
|
|
187,000
|
|
|
Less
Current Maturities
|
|
|
85,000
|
|
|
|
|
|
|
|
|
Long-Term
Debt
|
|
$
|
102,000
|
|
The
entire balance of long-term debt is due in 2009.
Note
8 - Development Stage Operations
The
Company was formed on January 1, 2006 and has issued 60,000,000
shares of common stock to 154 shareholders. Operations to date
consist, in part, of raising capital, obtaining financing and administrative
functions.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This
section of the Registration Statement includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from our
predictions.
Plan of Operation
During
the next twelve to thirty six months, we expect to take the following steps in
connection with the further development of our business and the implementation
of our plan of operations:
Stage
I - Corporate Formation/Capital Raising – 12 -18 months
We are a
development stage corporation, presently in our first stage of development. We
anticipate we will complete this stage in the next twelve to eighteen
months. We are establishing our corporate existence as a publicly traded
corporation, raising founder capital, and conducting strategic and operational
planning for the acquisition of real estate and both residential and
commercial.
This
phase of our development is designed to attract just small amount of customers
which is aimed at testing and refining our process to reach breakeven and create
customer awareness. We have budgeted for this first phase an initial operating
capital of $200,000 which is being provided by our founding principal, related
business consulting, and legal/accounting work. Following is a
breakdown of the anticipated budget expenses for the 12 months of
operations:
$15,000
FOR LEGAL
$11,500
FOR AUDIT
$5,500
FOR TRAVEL AND PROMOTION
$50,000
CAPITALIZATION OF ASSETS, EQUIPMENT, and LEASES
$118,000-WORKING
CAPITAL and PAYROLL, PERSONNEL FOR FIELD OFFICES
Revenues
are expected to be marginal or break even during this stage of
operation.
We are in
the process of negotiating for acquisition of excavation and mortgage operations
that will enhance our ability to vertically integrate into the markets. The
costs of acquisitions are negligible, usually requiring some accounting and
legal work totaling no more than $2,500. We intend to offer stock as
compensation for our acquisitions totaling 4,000 shares for MD Caperton Dirt
& Paving LLC’s previous and current members on a private placement that are
not subject to an effective registration and 100,000 shares to Island Stock
Transfer, the transfer agent for us, as per contractual agreement, subject to
S-8 registration later.
Our
business is located in McKinney, TX, one of the state’s top headquarter cities
with centers for Raytheon and United American Health Care (Torchmark) located
here. The business has field offices located in Amarillo, TX and Leander ,
TX. The business also has a web presence at
http://www.buyergroupint.com hosted by Go Daddy DNS and Web hosting
services.
Stage
II –Marketing and Distribution 18 -24 months
Towards
the end of stage I, we plan to aggressively expand our operation and business.
This phase of development is planned to be completed in 18 to 24
months. We want to establish 6 more field offices in regions around
the country to support expansion into other markets around the country that
support moderate to heavy growth but yet are experiencing turbulent
markets.
In Stage
I and stage II Mr. David Bryant will travel to New York, Bethesda, Houston,
Greenville, Georgia, and Florida to speak with regional prospects about
expanding into those markets with operations and ties to the local
markets. We will speak about the processes designed around purchasing
distressed properties and restoring them to market ready or profitable
conditions. We will seek to add a layer of financing to their
existing business models that re-capitalize those company’s abilities to finance
operations, purchase and sell properties, and integrate financial services
surrounding their lines of business.
We will
discuss funding of capital to branding the HomesDirect
SM
and
ConciergInternational
SM
models.
We will have published materials that break down the market economics for First
Timers, Move-Up and Active Adult, plus how to woo international purchasers and
market overseas. We will discuss how field offices should add budget
for contractor services and we will add mortgage operations to support the
acquisitions, repair, and financing of inventory. We will set growth
targets for each region and discuss pipeline inventory management of 15-20
projects per year with a profit margin of $20,000 per project. We
will help field offices establish first year sales targets and growth goals to
sustainably grow and maintain a pipeline of projects. This market
will mainly be to middle investors of accredited status or with a proven track
record in the industry. We anticipate capital expenditure for each field office
will run $250,000 capital and allocations of company stock, and about another
$500,000 for capital equipment, leases, and annualized expense
budgets.
Stage
III – Expanding Into Commercial Development 6 -36
months
Upon
completion of stage I and concurrently with stage II we will seek to establish
construction projects that help the company develop in the commercial
sector. We are entering into our third and final development
period while we enter into our stage I and II periods. We will
work to create , integrated commercial developments. In this final
stage, we plan to have the ability to purchase and hold, long term, raw
lands. We will work with land owners to contribute to partnerships
and hold until proper development windows are achieved. We will set
out plans to utilize contractor and construction companies, bring the raw land
to commercial grade. The development of residential units and pad
sites in above named regions we will further our inventory model, driven by
marketing and sales, we plan to expand inventory for home
owners.
We
plan to concentrate on creating and expanding strategic relationships with land
owners, commercial and residential builders, and also regional banks, to offer
improved and valuable property for sale to the public at large.
Capital
requirements are estimated to be $2,500,000 for this phase of operation
allocated as follows:
$500,000
project acquisitions
$25,000
legal and accounting
$25,000
for marketing and distribution
$250,000
working capital, expansion of payroll, etc.
$200,000
equipment and capital leases
$1,500,000
existing inventory re-capitalization
With the
addition of field offices in NY and Florida we anticipate that we will be able
to venture into commercial development that is consistent with our acquisition
models and re-capitalization of existing business to further growth and
development of residential and commercial opportunities. Thank you.
Strategy
and Implementation Summary
Exchange
Model
For each
asset acquired basic costs drivers associated:
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1.
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Acquisition
costs are roughly 5% of MV for each asset
acquired
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|
2.
|
Fix-up
costs run 1% - 10% of MV
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3.
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Vacancy
costs can be as much as 20% of annual revenue streams per asset, database
mining becomes critical
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4.
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Disposition
runs 3-6% of final sales price
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5.
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Title
company and mortgage costs add another
1-3%
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For each
asset acquired current revenue streams anticipated:
|
1.
|
Investment
deposit from new resident
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2.
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Flat
fees from exchange transactions
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3.
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Monthly
lease cash flows
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4.
|
10-90%
of equity remainder captured at final
dispositions
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5.
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Financial
fees for add-on services
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Capital
Resources, Liquidity , Results of Operations
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a.
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Full
Fiscal Years – Buyer Group International, Inc. (“BGI”), and terms
we, us, our and ours
are used interchangeably. The fiscal year reported by our
auditing firm is calendar year for consolidation operations and April
through March for excavation
operations.
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|
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The
trends over the last two fiscal years involved decreases in cash from
positioning capital into the trust partners for fix up and repair of
property to restore it to market condition. Other major
expenses involved the purchase of a public shell and legal and accounting
expenses related to the Merger. Prior to November, 2006 the
company operated strictly as a management company in the form of a Texas
LLC. We were able to invest cash and funds from credit lines at
leisure. After that period we change the capital structure to
reflect the parent public company as a separate entity and the wholly
owned subsidiary continued to manage leasing operations and pay expenses
associated with all aspects of the merger. One-time expenses
reduced our liquid cash. Leasing was also the bulk of our
business at the time. Over the past two fiscal years sales of
those properties generated revenues from sales but took sustainable
revenues away from our consolidated business. Each time a
revenue generating asset was fully liquidated by a trust partner we no
longer had a property to manage and hence no revenues to collect, further
affecting liquidity. Investments in trust properties failed to
return capital at a high enough cap rate or cash generated to generate
excess cash to pay these expenses, hence one time expenditures were
noted. Also, due to impaired operations cash flow and
liquidity was severely affected over a 9-12 month period. Other
factors affecting liquidity was time to recoup or recover investments that
were intended as short term 90 day receivables took 9-12 months to recover
as remedy had to be sought through judicial
processes.
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In
the coming fiscal years there will be increases in liquidity as a result
of our ability raise capital from sales of registered equities to Dutchess
Capital Advisors. Further, our strategic partners are better
capitalized due to we’re operating at the commercial level where banking
is a bit more open to financing certain operations, such as land
development. Known demands will come in the form of capital
required for infrastructure development, labor, materials, and costs
associated with sales and marketing of units
developed. Commitments will include our need to loan funds
raised to partnerships to cover “soft costs” associated with scoping and
design of the projects themselves. After that the projects
require “hard capital” such as bank financing, mezzanine financing, etc
that will be secured with adequate valuation provided by the land and the
equity partnerships involved.
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With
the planned acquisition of MD Caperton Dirt & Paving LLC we hoped to
accomplish two things. We expected to extend into a profitable
construction operations from the first day. Second, we were looking to
qualify the existing business with Texas Department of Transportation
contracts. A business that employees female workers is granted
preferential bid qualification consideration. The company has
equipment and positive cash flow. However, upon finalizing the
agreement on May 27, 2008, their management having anticipated our stock
value at 10 to 15 cents was happy it opened at $.55 on opening
day. Over time as it dropped we kept indicating we had no news
to inform the public with. Management was tasked with
providing us information to release about new business and progress
on the company integration. We were in discussions about
salary quotas and were in the process of formalizing goals and
quotas. The management would get to keep $120,000 to $150,000 a
year and receive stock option bonuses based upon
performance. We had agreed in the acquisition to issue the
previous members of the company 4000 shares of new issue, restricted
stock. However, upon reconstructing the books we saw members
had taken distribution double that. The management had
expressed dissatisfaction at our stock decline but would never give us
full access to the books to reconcile and review the income as
reported. We agreed to establish performance quotas and offer
option, the management never followed through with any specific budgetary
items needed to support that. BGI went through the process of
filling out commercial credit applications for materials and
equipment. But the equipment vendors denied lines based upon
revenues not showing high enough. The management grew
increasingly hostile over time as we declined to buy new
equipment. They then demanded $500,000 in working
equipment and $50,000 in material lines of credit instead or they would
back out of the deal and post in public forums postings they thought would
be detrimental to our company. We had never discussed
purchasing any new equipment solely for their region of
operations. The equipment they had was enough to support them
for the seasonal four month backlog of business according to
management. However, it was becoming increasingly clear that
while they were ok on their own for the current business they were
generating, they wanted to receive more money from us as time went by and
have us buy new equipment. We were asked to apply for various
corporate credit with various materials suppliers. We agreed to
apply on behalf of BGI because we needed to gear up for growth and
qualification for Texas DOT contracts. Upon securing certain
credit lines for matierlas we were told by the Management that instead
they wished to have equipment. Again we denied committing any
expenditures for their current business for equipment. However,
we did apply for an equipment lease line with Indian Ink Leasing, Inc.
based upon their current equipment list and were turned down on given
their current reported revenues from the excavation operations were
soft. The requirement would have been 20% down payment on all
equipment procured, which is not in the budget at this time and was not
agreed to in a capitalization context. We were told that their
existing equipment was aging. A dispute arose between the management and
the BGI as we were told some of the equipment had been aging beyond its
usable life span. Other equipment would not be eligible for DOT
qualification. We sought to plug the gap with rental company
provisioning. This incenses the management of the
operations.
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|
|
We
made several requests for for full access to the books (two online
accounting systems were being kept) and detailing the process for a full
review management grew increasingly resistant to giving our auditor
access. Several requests were made for full access to the
accounting system to make adjustments to financials to comply with FASB
and GAAP standard. But full access was never granted to our
bookkeeper or auditing firm. Our ability to ascertain the
validity of the financials tendered by the Manager and still partial owner
of the subsidiary. Finally we recreated a backup set from payables and
bank statements. The communications we tendered to the public
state the results of the quarters operations, but it failed to account for
shareholder distributions taken by the existing management that were not
disclosed by the existing management, that shareholder equity was very
little as all retained earnings had been
distributed. Shareholder receivables will be recorded until we
find resolution or choose the best course of action that will flow back to
the company. Since the dispute, management has been given a
notice of relinquishment from its management contract. We were
then informed that there could exist a previous agreement between the
members of the LLC that preclude our agreement. The paperwork
we were presented indicated to us under oath the appropriate documentation
had been signed by all parties needed. Subject to statutory
code for Incorporation in the State of Texas, absent of fraud, we have a
right to a 90 day rescission of the agreement and issuance of our 4000
shares to the former managers and members. We believe there
exists misrepresentations on part of the management of the
company and possibly previous members of the business. We
are actively investigating the remedies and courses of action for
fraudulent mispresentation.
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|
|
We
are evaluating our options and disclosing that we are not anticipating any
increase in liquidity from operational cash flows are not counted at this
time, yet we will not suffer a decrease from these developments unless we
require the retainer of an attorney to pursue remedy under the
law. If we pursue specific performance of the contracts against
the management of MD Caperton Dirt & Paving LLC that may change in the
future as we look to attached some $134,000 in contractual receivables the
company is due to receive during the current quarter and bind the
company’s assets against existing member interest payables which could
lead to asset liquidation or re-assignment lowering our capital needs to
run the business increasing liquidity in the interim. This
liquidity could be used to secure new
equipment.
|
To
date there are no contractual obligations that require us to deliver a specific
amount of capital to any given partnership or subsidiary. However, we
have one strategic partnership that has provided capital to us to cover soft
expenditures related to legal fees and setup costs associated with the due
diligence and scoping of a land development project in Las Vegas “Asia
Town”. If we do not engage in the project we will be providing a
refund to the partner in the amount of $10,000 less accrued expenses for
consulting services rendered. This will be recorded as an expense to
the business as a break-up fee, categorized as prepaid on 2
nd
quarter
books. Regarding land development, there exist general uncertainties
related to future costs of materials, labor, prices, inflation, etc. that will
have an undetermined impact on profitability. There are uncertainties
related to the mortgage banking industries and real estate markets, the Federal
Government and its quasi-agencies, FHA, Fannie Mae, etc. that generate
uncertainty regarding liquidity of finance conduits in the mortgage
industry. We cannot ascertain if this will affect liquidity in a
material fashion either in a positive or negative way. If a material
deficiency is identified, indicate the course of action that the registrant has
taken or proposes to take to remedy the deficiency. Also identify and separately
describe internal and external sources of liquidity, and briefly discuss any
material unused sources of liquid assets.
To date we have material outstanding contractual commitments of
$77,000 total. $49,650 is a line of credit for BGI Group
LC. We anticipate the financing of a takeout of this commitment with
our first draw from the sale of registered securities. We are
currently anticipating a receivable of $20,000 off in placing private equity
through our hard money lenders to a client in Bethseda, MD. The fee is earned as
a result of our arranging an equity loan to the client against real estate
property they own. In two of our other trust partnerships we expect
capital resources to be provided by banking relationships of the primary
beneficiary parties in the total of $600,000 for development of land and
construction of roads and systems for property improvement. The loan
will be provided to the enterprise independent of our minority interest in the
partnership by another equity partner. The capital source will not
generate any material change to our financial condition or cause us to incur any
liability as it is provided by the primary beneficiaries. Our risk of
any equity is limited to contributions made unless they expire worthless to the
enterprise. We have applied for capital credit with Valero, Inc. and
Rental Services Corporation that if approved will supply us with capital sources
for supplying equipment and materials to the excavation operations utilized for
the purpose of land development.
We are identifying a trend towards making equity investments into
minority stakes in trust partnership enterprises. The primary
beneficiary’s equity contribution is maintained off-balance sheet for separate
accounting reasons. The other enterprises maintain their own capital
account for the sake of separate accounting since they will be consolidating the
entities. We contribute warrants as a finance conduit and the trust
guarantees a periodic payment in the form of a interest bearing debenture with a
deferment option up to 5 years. The enterprises grant of equity into
the trusts constitutes a sale of assets according to FASB 140. With
regard to FIN46R our contribution to the trust is a buy-in into a minority stake
with a profit share arrangement on residuals should the trust mange long term
residual income. We have no liability to absorb any losses of the
trust or of the primary enterprise. We risk no loss beyond our
initial contribution. We considered among alternatives a derivative
finance option by granting at-the-money 5 year renewable Warrants financing our
contribution. We apply these in the event after 5 years the development has not
generated any significant returns that we will keep the equity through the
payment of interest granted through the guarantee agreement. The
warrants are issue in aggregate of a dollar value and are convertible to common
shares. This creates a contingent liability for us since they are
often granted at the market price upon closing which gives us a contractual
liability in the amount of the Warrants issued to the non-affiliated enterprise
investing equity in the trust. This contingent liability is offset by
the Trust’s Guarantee of repayment of the cash generated as a result of
operations of the Trust Entity itself. The trusts are classified to
be self-sufficient. The trust is responsible for distribution of
profits, with income minus expense recorded then debt paid off and consolidated
before residuals are distributed. The debt is in provided by the
trust in a Guarantee Agreement in debenture form with up to a 5 year deferment
on the interest payments to the company, the 6% note maturing in 10
years.
The
enterprise is expected to obtain its own financing to produce the required
working capital to fund operations. However, if the enterprise needs
to liquidate or exercise warrants to raise additional capital they may do so at
their own discretion to make up payment gaps. Should they choose to
do so we could incur a material change in the capital structure of the company
provided we are granted ample notice and can conduct he appropriate notices and
disclosures to the public at large.
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3.
|
Results
of operations.
|
a.
For the period ending March 31, 2008, we had $37,100 in revenue.
Expenses for the period totaled $39,394 resulting in a Net loss of
$2,294.
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i.
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Results
of operations included in the description above that result in infrequent
events again included the vandalism of a series of properties resulting in
a liquidity problem and eventually a settlement of a lawsuit in the amount
of $47,500. Operations were impaired during the time of the
repairs to the properties. Also, operational cash flows were
used to pay for certain one-time legal items associated with the merger
roll-up plan. During the time of these events the overall
economic situation across the country in the real estate market could be
only described as a total implosion. In Dallas we were used to
a steady growth/steady foreclosure rate and so there wasn’t so much a
sharp increase as other parts of the country. The mortgage
industry as a whole was severely affected as the result of credit markets
impairing the ability of access to liquid mortgage capital in the
industry. Billions of dollars of subprime debt with variable
interest rates started to decay in liquidity over a period of time that
caused many mortgage companies to go out of business. Many
conduits for commercial project development also became
scarce. As the housing market sales deteriorated opportunities
became available. Even though we saw a slight trend increase in per unit
rental income from management operations, financing acquisitions became
tougher through affordable rates. Instead of pursuing more
expensive money, hard money or private equity, we decided to shift focus
by seeking new ways to offer services as placing private investment money
with clients who request project capital and we take equity participation
as a result of placing the funding sources with our
clients.
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|
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Tighter
lending standards and hundreds of thousands of foreclosures drove the
rental market up a few percentage in occupancy due to tighter credit
standards. Although the rental market has improved the
capitalization return rates are still not high enough to justify the
current interest rate environment. This trend has caused
illiquidity in the investment market, with properties going for 50-70% of
rental value vs. retail value for a family home. With a switch
to focusing on commercial clients we can offer our relationships between
private equity and real estate developers looking for
capital. Upon registration we are able to offer coverage of
“soft costs” for projects out of sales of stock in through Dutchess
Capital Advisors. Soft costs are defined as the upfront costs
that are sunk into a project that create design, development engineering,
seek permitting, all prior to construction being done. Whereas
the developers have run out of funds to cover soft costs we capitalized
based upon the project’s carry value for equity plus sunk costs
in. We evaluate the business model and financials and seek to
provide equity and debt, in the form of stock and warrants to recapitalize
the business model. We earn fees for consulting and placing of
capital to the client plus a participation cut of the
project. The valuation of the land is the driver of the
project’s capital structure so we seek market with steady land
values. We then look to structure finance packages of equity
and debt, private as well as public while increasing our Net Equity
valuation, allowing us to sell into the public markets with our registered
stock placed in this
registration.
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We
find this type of environment should give us ample opportunity to identify
and acquire companies interested in being acquired and transferring
operations that are cash flow positive. Currently, we are
looking for mortgage operations that have had good track records in the
past, avoided litigation, and a leads database along with a license in
effect. We also wish to acquire a title company that can be
integrated into the processes to vertically recover costs associated with
the real estate industry. We have identified a mortgage
brokerage group out of Bethesda with equity of about $1.3 million that has
been shelved (operations ceased) with clean books and over $25 million in
carry value on non-performing mortgage paper it owns and real estate
investments made. The acquisition would expand our operations
to six Atlantic states and allow us to open Texas for their product
offerings that would be available once operations resume. We
have put out an LOI detailing our participation interest of 30% in the
company’s capital stock and believe we will have a deal concluded sometime
in the next 90 days. To date we have earned $20,000 in consulting income
and have booked receivables of $20,000 more, with another $30,000 coming
upon completion of a private equity placement for the client currently in
negotiations.
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|
ii.
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On July 2, 2008 MD Caperton Dirt & Paving LLC reported
Fiscal Year Net Income of $224,338 after Expenses of $153,750 on Sales
Revenues of $378,087. Revenue is recognized as work is
completed, with receivables due upon invoice. Upon the
reconciliation by our accounting department of the bank statements we see
as of March 31, 2008 Shareholder Equity of $394 after shareholder draws
were taken prior to the acquisition of 85% of the company. There was
($2,490) held in suspense with a payable of ($4,877) we now have
classified shareholder equity totaling $5,272 as of June 30,
2008. 85% of that amount equals $4482 which is the adjusted
shareholder equity. To date we do not believe the company holds
title to the equipment, yet a list was disclosed and we were told some of
the equipment is in the company name but we have not been given access to
verify this information. Some of the equipment may have
significant market value. We would estimate if we did receive
the equipment through legal recourse we would see a liquidation value
approximating $120,000. We would anticipate legal expenditures of $15,000
to acquire and liquidate the assets previously held by the prior
management. With the release of the Caperton’s from the
management of operations we anticipate an impairment in the operational
cash flow as a result of management’s inability to manage for growth in
new markets. We sought to have an audit performed to qualify
for Texas Department of Transportation contracts. Management
objected on an unreasonable basis of “sensitive information” to the
process of audit and review. They also objected to some
tactical changes in the nature of operating the business, leasing
equipment versus owning equipment was one such objection. Our
financial analysis of their operations showed they were failing to employ
capital in a way that generates the most liquid returns, capital tied up
in equipment that sat idle. Since our analysis we have provided
notice to the management they have been released from their management
contract. We anticipate having to outsource new contract
personnel and equipment and until such time operational cash flow will not
be reflective of past trends. We believe the actions of
management will affect the reported income from continuing operations and
to the point the company may need to be shelved. What we would
like to retain from the company upon any liquidation is the Department of
Transportation’s Motor Carrier # that allows the company operate a freight
brokerage business. That side of the business carries a
book value of $2500 cash bond paid-in for insurance coverage on the
MC#. We feel the 4000 shares we agreed to issue are
compensation enough for the book value of the business, the motor carrier
registration and its carry
value.
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|
iii.
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To
the extent that the financial statements disclose material increases in
net sales or revenues, a narrative discussion would involve that such
increases are attributable to increases in prices of fuel oil and
aggregate that were passed on to the clients for the excavation
business. During the contract bid period for Deaf Smith county
oil prices continued to rise. The increases were passed along to the
customer. Material costs are often passed along to the customer
while the company’s own fuel requirements are absorbed by the company’s
operating margin.
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|
|
In
the real estate market the increase in carrying costs for any properties
with senior debt with adjustable interest rates could cause those
enterprises an impairment of cash flow for their
operations. Our business will not be affected as a result
unless a rental receivable is not enough to cover a mortgage
payables. The property owners would be responsible for any
deficiencies as a result may sell the property and we would lose rental
income as a result. Rising taxes, insurance, and interest rates
could have an adverse affect to the annual cash flow available to cover
expenses associated with the operations of the rental
properties. However, from an operational standpoint, BGI Group
LC manages just a few properties which are left in its investment
portfolios as of the preparation of this registration. Of the five
properties under management four have less than 50% loan to value debt
placed against them so we do not anticipate a significant impact of rising
costs associated with those properties for the time
being.
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iv.
|
Inflation has had little impact upon our operations as
costs are passed along to the customer whereas travel and legal is
concerned. We expect each acquisition to conduct their own
auditing and accounting operations and our expenses are fairly predictable
at this stage since most of the setup costs associated with the
registration and the one-time expenses due to legal have been paid to
date.
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Off-balance sheet arrangements.
In a separately-captioned section, discuss the registrant's
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the registrant's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors. The
disclosure shall include the items specified in paragraphs (a)(4)(i)(A), (B),
(C) and (D) of this Item to the extent necessary to an understanding of such
arrangements and effect and shall also include such other information that the
registrant believes is necessary for such an understanding.
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A.
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The
nature and business purpose to the registrant of such off-balance sheet
arrangements; Off-balance sheet structuring with each land trust vests
title into a trust corpus. The contribution is divided up
between a primary beneficiary(s) (an unaffiliated enterprise) and Buyer
Group International, Inc. We match with Warrants with registration rights
of equivalent value. We do not have a majority stake. We do not
contribute cash but receive a interest bearing note from the trust and our
only residuals other than that are a pro rate minority portion of
beneficial interest in residual income. We have no obligation
to absorb losses, however, the primary beneficiary does and hence will
consolidate under FIN46R. The trusts are self-sufficient
statutory entities. The primary beneficiary can provide
additional senior financing and as according to FIN 46R and would be the
consolidating entity since they are the party responsible for absorbing
losses. The trust guarantee is made to us from the trust
against the assets of the trust. We are entitled to recover our
principal plus interest by way of repayment of the debentures privately
placed to us. The Warrants we place are recorded as a
contingent liability and noted in the financials, placing our contingent
debt subordinate to that of other financing the primary beneficiary may
obtain.
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|
B.
|
The importance to the registrant of such off-balance sheet
arrangements in respect of its liquidity, capital resources, market risk
support, credit risk support or other benefits; The importance of such
transactions allows our clients to obtain 100% financing of a trust
entity’s assets, such as land, a building, business operations, etc. while
having a long term steady fixed set of payments deferred up to five
years. By granting us such a financial arrangement we can
privately place the debt with institutional investors that would be
interest in a 10-15 year note with 2-5 year deferments and interest of
6-10%. The placement of such instruments to raise capital for
the project gives us the opportunity to earn fee income and book equity
for our company or we can keep the notes for future
income. Whereas prior arrangements were completely off-balance
sheet and we had to sell our interest in the trust in order to realize a
capital gain, an arrangement that translated to no shareholder value for
trust property that was being carried for a longer than a year, as we only
had a note to unrealized gains in our
financials.
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|
C.
|
The amounts of revenues are booked as the debenture
reaches a point where interest payments begin to accrue. The
cash flows that arise as a result of payments made to the registrant
arising from such arrangements is fixed and guaranteed over a period
certain. The nature of beneficiary interests retained is varies
from 30% to 50% of a trust depending on the arrangement. But at
no time do we assume liability beyond that of our equity contribution and
our voting rights are not vested in the interest of the
trust. We have no voting rights with regards to how the
operations manifest its returns. The associated enterprises are
unaffiliated to our business and often own secondary interests that are
granted as a result of the initial titling of the equity from an asset
into a trust, then the assignment in which we hold the minority interest,
thereby guaranteeing the debt obligations to the
registrant. The registrants current investment contribution
equals 49% in each trusts which is not reflected in Q1 financials but
noted in Q2 financials totals $4,844,000. The current
contingent liability totals$2,422,000 as a result of warrants placed with
the trusts in exchange for the 10 year notes. The reasonably
expected return of the payments from the debentures is subject to no
material adverse change in the valuation of the assets placed into the
trusts. The carry value equals the market value to date which was the
market value of the sale of the assets by the primary beneficiary into the
trust subject to FASF rule 140, consolidated under that enterprises
financials. The triggering events or circumstances that could
cause exercising of the warrants to compensate for any equity deficits as
a result of the devaluation of the asset in the trust resulting in a
lowering of the carrying value of the assets themselves. The exercising
would create a dilution factor with regard to our
stock. However, we do not expect that any of the warrants
currently in the money will be exercised until such time as there is ample
interest in the secondary market for the other enterprise to make a sale
of its position with regard to our stock. For that to happen we
expect we would need to be trading above $.25 cents per share to generate
sufficient interest in any warrants placed and the trusts entities have
indicated they are interested in a long term hold of the warrants with a
liquidation on a last effort if some unforeseen market condition existed
causing a decline in the asset value of the land(property)
itself.
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|
D.
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Currently we do not have any known events, demands,
commitments, trends or uncertainty surrounding any conditions that will
result in the termination, or material reduction in availability to the
registrant, of its off-balance sheet arrangements that provide material
benefits to us.
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As of
March 31, 2008 we had $45,148 in cash.
We are
a development stage corporation, presently in our first stage of development. We
anticipate we will complete this stage in the next twelve to eighteen months. We
are establishing our corporate existence as a publicly traded corporation,
raising founder capital, and conducting strategic and operational planning for
the acquisition of real estate and both residential and commercial.
(Legal, Auditing, Travel & Promotion, Capital Leases etc, Working Capital
& Payroll). We have trended towards offsetting our costs
associated with legal, travel, and promotion to clients. To date we have saved
about $35,000 by passing these expense items through to our
clients. Additional capital will come through either private
placement loans or the sale of our securities offered in this registration to
manage payroll for the following year and meet legal and auditing expenses
associated with our direct lines of business.
We
believe we can satisfy our cash requirements for the next twelve months with our
current cash given we adopt these policies of transferring costs to clients
and collect receivables due. However, if we are unable to satisfy
our cash requirements we may be unable to proceed with our plan of operations.
We do not anticipate the purchase or sale of any significant equipment. We also
do not expect any significant additions to the number of employees. The
foregoing represents our best estimate of our cash needs based on current
planning and business conditions. In the event we are not successful in reaching
our initial revenue targets, additional funds may be required, and we may not be
able to proceed with our business plan for the development and marketing of our
core services. Should this occur, we will suspend or cease
operations.
We
anticipate that depending on market conditions and our plan of operations, we
may incur operating losses in the foreseeable future. Therefore, our auditors
have raised substantial doubt about our ability to continue as a going
concern.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
There
have been no changes in or disagreements with accountants on accounting or
financial disclosure matters.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our
executive officer’s and director’s and their respective ages as of June 23, 2008
are as follows:
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David
A. Bryant
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35
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Chief
Executive Officer, Director
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Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years.
David A.
Bryant
David A.
Bryant is the current Director and CEO of Buyer Group International,
Inc. He is an M.B.A. and graduated from The University of Texas and
holds the Harvard Square L.I.F.A. Chartered Financial designation. He
identified a need in the marketplace to efficiently return properties to
occupancy, whether lease residence or homes that cycle into an expanding pool of
buyers. The strategic focus is buy cheap, fix up, sell
high. The need for a clearinghouse type of company that reduces
vacancy and foreclosure in the marketplace creates win-win situations for the
stakeholders involved, owners, investors, and bankers. Prior to developing his
real estate investing career, David was a marketing analyst and project manager
for Fortune 500 companies Motorola, Applied Materials, Apple Computer, Dell
Computers, and formerly as a Senior Sales Analyst for a public telecom
company. When he’s not working he can be found studying Aikido at a
local dojo in Dallas.
Term of
Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
EXECUTIVE COMPENSATION
Summary Compensation Table;
Compensation of Executive Officers
The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers paid by us during the period
ended December 31, 2007 in all capacities for the accounts of our executives,
including the Chief Executive Officer (CEO) and Chief Financial Officer
(CFO):
SUMMARY
COMPENSATION TABLE
Name
and Principal Position
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Non-Equity Incentive Plan
Compensation ($)
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Non-Qualified
Deferred Compensation Earnings
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David
A. Bryant, Chief Executive Officer, Principal Accounting
Officer and Director
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2007
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$
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0
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0
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0
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0
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0
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0
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0
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$
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0
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Option Grants
Table
.
There were
no individual grants of stock options to purchase our common stock made to the
executive officer named in the Summary Compensation Table through December 31,
2007.
Aggregated
Option Exercises and Fiscal Year-End Option Value Table
.
There were no stock options
exercised during period ending December 31, 2007 by the executive officer named
in the Summary Compensation Table.
Long-Term Incentive Plan
(“LTIP”) Awards Table
.
There were no awards made to a named executive officer in the last
completed fiscal year under any LTIP
Compensation of
Directors
Directors
are permitted to receive fixed fees and other compensation for their services as
directors. The Board of Directors has the authority to fix the compensation of
directors. No amounts have been paid to, or accrued to, directors in such
capacity.
Employment
Agreements
We do not
have any employment agreements in place with our officers or
directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table provides the names and addresses of each person known to us to
own more than 5% of our outstanding shares of common stock as of June 23, 2008
and by the officers and directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly.
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Common
Stock
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David
A. Bryant
812
Creekline Way
McKinney,
TX 75070
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39,000,000
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65%
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Common
Stock
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Charles
Christopher
812
Creekline Way
McKinney,
TX 75070
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6,000,000
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10%
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Common
Stock
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All
executive officers and directors as a group
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39,000,000
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65%
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(10)
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Based
upon 60,000,000 shares outstanding as of June 23,
2008.
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TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
In
November 2006 David Bryant purchased 45,000,000 shares of common stock from
Aidan Capital Management, LLC in exchange for $250,000.
Item
12A. Disclosure of Commission Position on Indemnification of Securities Act
Liabilities.
DISCLOSURE
OF COMMISSION POSITION OF INDEMNIFICATION OF SECURITIES ACT
LIABILITIES
Our
director and officer is indemnified as provided by the Nevada Statutes and our
Bylaws. We have agreed to indemnify each of our directors and certain officers
against certain liabilities, including liabilities under the Securities Act of
1933. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions described above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is against
public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court’s decision.
BUYER
GROUP INTERNATIONAL, INC.
5,000,000
SHARES OF COMMON STOCK
PROSPECTUS
YOU
SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE
REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION
THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS
NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
Until
_____________, all dealers that effect transactions in these securities whether
or not participating in this offering may be required to deliver a prospectus.
This is in addition to the dealer’s obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
The Date of This Prospectus
Is:
August
_, 2008
PART
II – INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item
13. Other Expenses Of Issuance And Distribution.
Securities
and Exchange Commission registration fee
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Accounting
fees and expenses
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Blue
Sky fees and expenses
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All
amounts are estimates other than the Commission’s registration fee. We are
paying all expenses of the offering listed above. No portion of these expenses
will be borne by the selling shareholders. The selling shareholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
Item
14. Indemnification Of Directors And Officers.
Our
director and officer is indemnified as provided by the Nevada Statutes and our
Bylaws. We have agreed to indemnify each of our directors and certain officers
against certain liabilities, including liabilities under the Securities Act of
1933. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions described above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is against
public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court’s decision.
Item
15. Recent Sales Of Unregistered Securities.
On
June 12, 2008 we entered into an Investment Agreement and a Registration Rights
Agreement with Dutchess Private Equities Fund, Ltd. Pursuant to this
Agreement, the Investor shall commit to purchase up to $10,000,000 of our common
stock over the course of thirty-six (36) months. The Agreement provides that,
from time to time, we may deliver a notice to the Investor. Such notices will
state the dollar amount of common stock that we desire the Investor to purchase
subject to the limits of the Agreement. These shares of our
Common Stock qualified for exemption under Section 4(2) of the Securities Act of
1933 since the issuance shares by us did not involve a public offering. The
offering was not a “public offering” as defined in Section 4(2) due to the
insubstantial number of persons involved in the deal, size of the offering,
manner of the offering and number of shares offered. We did not undertake an
offering in which we sold a high number of shares to a high number of investors.
In addition, Dutchess Private Equities Fund, Ltd. had the necessary investment
intent as required by Section 4(2). This restriction ensures that these shares
would not be immediately redistributed into the market and therefore not be part
of a “public offering.” Based on an analysis of the above factors, we have met
the requirements to qualify for exemption under Section 4(2) of the Securities
Act of 1933 for this transaction.
In
November 2006 David Bryant purchased 45,000,000 shares of common stock from
Aidan Capital Management, LLC in exchange for $250,000. These shares
of our Common Stock qualified for exemption under Section 4(2) of the Securities
Act of 1933 since the issuance shares by us did not involve a public offering.
The offering was not a “public offering” as defined in Section 4(2) due to the
insubstantial number of persons involved in the deal, size of the offering,
manner of the offering and number of shares offered. We did not undertake an
offering in which we sold a high number of shares to a high number of investors.
In addition, Mr. Bryant had the necessary investment intent as required by
Section 4(2) since he agreed to and received share certificates bearing a legend
stating that such shares are restricted pursuant to Rule 144 of the 1933
Securities Act. This restriction ensures that these shares would not be
immediately redistributed into the market and therefore not be part of a “public
offering.” Based on an analysis of the above factors, we have met the
requirements to qualify for exemption under Section 4(2) of the Securities Act
of 1933 for this transaction.
In
November 2006 David Bryant issued 6,000,000 shares to Charles Christopher in
exchange for services rendered to the Company. These shares of our
Common Stock qualified for exemption under Section 4(2) of the Securities Act of
1933 since the issuance shares by us did not involve a public offering. The
offering was not a “public offering” as defined in Section 4(2) due to the
insubstantial number of persons involved in the deal, size of the offering,
manner of the offering and number of shares offered. We did not undertake an
offering in which we sold a high number of shares to a high number of investors.
In addition, Mr. Christopher had the necessary investment intent as required by
Section 4(2) since he agreed to and received share certificates bearing a legend
stating that such shares are restricted pursuant to Rule 144 of the 1933
Securities Act. This restriction ensures that these shares would not be
immediately redistributed into the market and therefore not be part of a “public
offering.” Based on an analysis of the above factors, we have met the
requirements to qualify for exemption under Section 4(2) of the Securities Act
of 1933 for this transaction.
We have
never utilized an underwriter for an offering of our securities. Other than the
securities mentioned above, we have not issued or sold any
securities.
Item
16. Exhibits and Financial Statement Schedules.
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EXHIBIT
NUMBER
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DESCRIPTION
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3.1
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Articles of
Incorporation *
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3.2
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By-Laws *
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5.1
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Opinion of Anslow & Jaclin, LLP (Filed
herewith)
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10.1
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Investment
Agreement *
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10.2
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Registration
Rights Agreement *
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10.3
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Consulting
Agreement *
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23.1
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Consent of Vanwassehnova and
Associates (Filed herewith)
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23.2
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Consent
of Counsel, as in Exhibit 5.1
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24.1
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Power
of Attorney
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* FIled with the original registration statement on June 24,
2008 (SEC file Number
333-151886)
Item
17. Undertakings.
(A) The
undersigned Registrant hereby undertakes:
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(1)
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To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement
to:
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(i)
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To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
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(ii)
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Reflect
in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in
the effective registration statement; and
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(iii)
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Include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
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(2)
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That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
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(3)
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To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
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(B) The
issuer is subject to Rule 430C (ss. 230. 430C of this chapter): Each prospectus
filed pursuant to Rule 424(b)(ss. 230. 424(b) of this chapter) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A (ss. 230. 430A of this chapter), shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such date of first use.
SIGNATURES
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and authorized this registration statement
to be signed on its behalf by the undersigned, in McKinney, Texas on August
14 , 2008.
BUYER
GROUP INTERNATIONAL, INC.
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By:
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/
s/David
A. Bryant
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David
A. Bryant
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Chairman
of the Board of Directors,
Chief
Executive Officer,
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II-3
