SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended March 31,June 30, 2008
- -OR-
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities And Exchange Act of 1934 for the transaction period from
_________ to________
Commission File Number 0-4006
Baynon International Corp.
(Exact name of Registrant
in its charter)
Nevada 88-0285718
- ------------------------------- ----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
266 Cedar Street, Cedar Grove, New Jersey 07009
- ----------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Baynon's Telephone Number, Including Area Code: (973) 239-2952
Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerate filer, or a small
reporting company as defined by Rule 12b-2 of the Exchange Act):
Large accelerated filer [ ] Non-accelerated filer [ ]
Accelerated filer [ ] Smaller reporting company [x]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes [x] No [ ]
The number of outstanding shares of the registrant's common stock,
May 15,July 31, 2008:
Common Stock - 21,152,692
2
BAYNON INTERNATIONAL CORP.
FORM 10-Q
For the quarterly period ended March 31,June 30, 2008
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosure About
Market Risk 14
Item 4T. Controls and Procedures 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 1516
Item 1A. Risk Factors 1516
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 1516
Item 3. Defaults upon Senior Securities 1516
Item 4. Submission of Matters to a Vote of Security
Holders 1516
Item 5. Other Information 1516
Item 6. Exhibits 1516
SIGNATURES
3
PART I
Item I - FINANCIAL STATEMENTS
BAYNON INTERNATIONAL CORP.
BALANCE SHEETS
March 31,JUNE 30, December 31,
2008 2007
------------- ------------
(UNAUDITED) (AUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,9645,648 $ 14,513
------------ ------------
TOTAL CURRENT ASSETS 2,9645,648 14,513
------------ ------------
TOTAL ASSETS $ 2,9645,648 $ 14,513
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 16,27020,359 $ 19,470
Related Party Loan 5,000 -
Note payable, stockholder 20,000 20,000
Accrued interest, stockholder 362694 62
------------ ------------
TOTAL CURRENT LIABILITIES 36,63246,053 39,532
------------ ------------
TOTAL LIABILITIES 36,63246,053 39,532
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, par value $.001,
authorized 50,000,000 shares, issued
and outstanding 21,152,692 shares 21,153 21,153
Additional paid-in-capital 136,580 136,580
Accumulated deficit (191,401)(198,138) (182,752)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (33,668)(40,405) (25,019)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,9645,648 $ 14,513
============ ============
The accompanying notes are an integral part
of these financial statements
4
BAYNON INTERNATIONAL CORP.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 ---- ----2008 2007
---------- ---------- ---------- ---------
Revenues $ - $ - $ - $ -
Cost of Revenuesrevenue - - ----------- ------------ -
-------- -------- -------- --------
Gross Profit - - - -
-------- -------- -------- --------
Other Cost:Costs:
General and administrative
8,380 10,704expenses 6,413 4,892 14,793 15,596
-------- -------- -------- --------
Total Other Cost 8,380 10,704
----------- -----------6,413 4,892 14,793 15,596
-------- -------- -------- --------
Other Income
Interest income 8 72 39 219
Interest expense (332) (299) (632) (595)
-------- -------- -------- --------
Total Other Income (Expense) Interest income 31 147
Interest expenses (300) (296)
----------- -----------
Net, Other Income (Expense) (269) (149)
----------- -----------(324) (227) (593) (376)
-------- -------- -------- --------
Net Loss $ (8,649) $ (10,853)
=========== ===========before Income Taxes (6,737) (5,119) (15,386) (15,972)
Income Taxes - - - -
-------- -------- -------- --------
Net Loss (6,737) (5,119) (15,386) (15,972)
======== ======== ======== ========
Earning (loss) per share:
Basic and diluted earnings (loss)net loss per
common share $ 0.00- $ 0.00
=========== ===========- $ - $ -
======== ======== ======== ========
Basic and diluted weighted
average common shares 10,431,465 19,032,692 10,431,465 19,032,692
outstanding 21,152,692 19,032,692
=========== ===================== ========== ========== ==========
The accompanying notes are an integral part
of these financial statementsstatements.
5
BAYNON INTERNATIONAL CORP.
STATEMENTS OF CASH FLOWS
FOR THE THREESIX MONTHS ENDED MARCH 31,JUNE 30, 2008 AND 2007
(UNAUDITED)
2008 2007
---- ----
Cash Flows from Operating Activities:
Net loss $ (8,649)(15,386) $ (10,853)(15,972)
Adjustments to reconcile net loss to net cash used
in operating activities:
(Decrease) Increase in accounts payable and accrued expenses (2,900) 6,7181,521 10,617
----------- -----------
Net cash used in operating activities (11,549) (4,135)(13,865) (5,355)
----------- -----------
Cash Flows from Financing Activities
Proceeds from related party loan 5,000 -
----------- -----------
Decrease in Cash and Cash Equivalents (11,549) (4,135)(8,865) (5,355)
Cash and Cash Equivalents, beginning of period 14,513 12,940
----------- -----------
Cash and Cash Equivalents, end of period $ 2,9645,648 $ 8,8057,585
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash paid during year for:
Interest $ - $ -
----------- -----------
Income Taxes $ 520 $ -
----------- -----------
The accompanying notes are an integral part
of these financial statements
6
CREATIVE BEAUTY SUPPLY OF NEW JERSEY CORPORATIONBAYNON INTERNATIONAL CORP.
NOTES TO FINANCIAL STATEMENTS
MARCH 31,JUNE 30, 2008
1. THE COMPANY
Baynon International Corporation, formerly known as Technology
Associates Corporation (the "Company"), was originally incorporated on
February 29, 1968 under the laws of the Commonwealth of Massachusetts
to engage in any lawful corporate undertaking. On December 28, 1989,
the Company reincorporated under the laws of the State of Nevada. The
Company was formerly engaged in the technology marketing business and
its securities traded on the National Association of Securities Dealers
OTC Bulletin Board. The Company has not engaged in any business
operations for at least the last six fiscal years and has no operations
to date.
The Company will attempt to identify and negotiate with a business
target for the merger of that entity with and into the Company. In
certain instances, a target company may wish to become a subsidiary of
the Company or wish to contribute assets to the Company rather than
merge.
No assurance can be given that the Company will be successful in
identifying or negotiating with any target company. The Company
provides a means for a foreign or domestic private company to become a
reporting (public) company whose securities would be qualified for
trading in the United States secondary market.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Presentation
The December 31, 2007 balance sheet data was derived from audited
financial statements but does not include all disclosures required by
generally accepted accounting principles. In the opinion of
management, the accompanying unaudited financial statements contain all
normal and recurring adjustments necessary to represent fairly the
financial position of the Company as of March 31,June 30, 2008, its results of
operations for the three and six months ended March 31,June 30, 2008 and 2007
and its cash flows for the threesix months ended March 31,June 30, 2008 and 2007.
The statements of operations for the three and six months ended March 31,June
30, 2008 and 2007 are not necessarily indicative of the results for the
full year.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, these financial statements
should be read in conjunction with the financial statements and
accompanying notes included in the Company's Annualannual Report on Form
10KSB for the year ended December 31, 2007.
7
Use of Estimates
These financial statements and accompanying notes have been prepared in
accordance with GAAP. The preparation of these financial statements
requires management to make estimates, judgments and assumptions that
affect the reported amounts of assets, liabilities, revenues and
expenses. The Company continually evaluates the accounting policies
and estimates used to prepare the consolidated financial statements.
The Company bases its estimates on historical experiences and
assumptions believed to be reasonable under current facts and
circumstances. Actual amounts and results could differ from these
estimates made by management.
Earning (Loss) Per Share
The Company computes earnings or loss per share in accordance with
Statement of Financial Accounting Standards No. 128 (SFAS 128),
"Earning"Earnings Per Share". Basic earnings per share is computed by divingdividing
income available to common stockholders by the weighted average number
of common shares outstanding. Diluted earnings per share reflects the
potential dilution that could occur if securities or other agreements
to issue common stock were exercised or converted into common stock.
Diluted earnings per share is computed based upon the weighted average
number of common shares and dilutive common equivalent shares
outstanding, which includes convertible debentures, stock options and
warrants.
Going Concern
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As shown in the accompanying
financial statements, the Company has incurred operating losses and has
an accumulated deficit of $191,401$198,138 at March 31,June 30, 2008. The Company has
no revenue generating operations and has limited cash resources. These
factors raise substantial doubt about the ability of the Company to
continue as a going concern. Management believes that it will be able
to achieve a satisfactory level of liquidity to meet the Company's
obligations through December 31, 2008 by obtaining additional financing
from key officers, directors and certain investors. However, there can
be no assurance that the Company will be able to generate sufficient
liquidity to maintain its operations. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties.
Recently Issued Accounting Standards
In June 2006, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation No. 48, "Accounting For Uncertainty in Income Taxes,
an Interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48
clarifies the accounting for uncertainty in income taxes by prescribing
a two-step method of first evaluating whether a tax position has met a
more likely than not recognition threshold and second, measuring that
tax position to determine the amount of benefit to be recognized in the
financial statements. FIN 48 provides guidance on the presentation of
8
such positions within a classified statement of financial position as
well as on derecognition, interest and penalties, accounting in interim
periods, disclosure, and transition. FIN 48 is effective for fiscal
years beginning after December 15, 2006. The adoption of this statement
is not expected to have a material effect on the Company's future
reported financial position or results of operations.
In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements". This statement defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair
value measurements. SFAS 157 will be effective for the Company
beginning January 1, 2008. The adoption of SFAS No. 157 is not
expected to have a material effect on the Company's financial condition
or results of operations.8
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159
allows entities the option to measure eligible financial instruments at
fair value as of specified dates. Such election, which may be applied
on an instrument by instrument basis, is typically irrevocable once
elected. SFAS 159 is effective for fiscal years beginning after
November 15, 2007. The implementation of this guidance isCompany does not expectedexpect SFAS 159 to have any impacta
material effect on the Company's consolidated results of operations or
financial statements.position.
In December 2007, the FASB issued FAS 141(R), "Business Combinations - a
replacement of FASB statement No. 141", which significantly changes the
principles and requirements for how the acquirer of a business
recognizes and measures in its financial statements and identifiable
assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree. The statement also provides guidance for
recognizing and measuring the goodwill acquired in the business
combination and determines what information to disclose to enable users
of the financial statements to evaluate the nature and financial effects
of the business combination. This statement is effective prospectively,
except for certain retrospective adjustments to deferred tax balances,
for fiscal years beginning after December 15, 2008. This statement will
be effective for the Company beginning in fiscal 2009. The Company is
currently evaluating FAS 141(R), and has not yet determined the impact
if any, FAS 141(R) will have on its results of operations or financial
position.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests
in Consolidated Financial Statements - an amendment of ARB No. 51. This
Statement amends ARB 51 to establish accounting and reporting standards
for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling
interest in a subsidiary is an ownership interest in the consolidated
entity that should be reported as equity in the consolidated financial
statements. In addition to the amendments to ARB 51, this Statement
amends FASB Statement No. 128, Earnings per Share; so that earnings-per-
share data will continue to be calculated the same way those data were
calculated before this Statement was issued. This Statement is
effective for fiscal years, and interim periods within those fiscal
9
years, beginning on or after December 15, 2008. The implementation of
this guidance is not expected to have any impact on the Company's
financial statements.
3. RELATED PARTY TRANSACTIONS
The related party loan is due to the principle executive officer, is
unsecured, bears interest at 6% per annum and has no specific terms for
repayment.
4. CONVERTIBLE NOTE PAYABLE - STOCKHOLDER
On December 13, 2006, the Company issued an unsecured note payable to a
stockholder in exchange for $20,000 in cash, in order for the Company
to pay current invoices. The note bore interest at 6% per annum and
matured on December 13, 2007. The stockholder had the option to9
convert the note and accrued interest into the Company's common stock
at $.01 per share. The option was exercised on December 12, 2007 and
2,120,000 shares of common stock were issued in satisfaction for the
note and accrued interest.
On December 13, 2007, the Company issued an unsecured note payable to a
stockholder in exchange for $20,000 in cash, in order for the Company
to pay current invoices. The note bears interest at 6% per annum and
matures on December 13, 2008. The stockholder has the option to
convert the note and accrued interest into the Company's common stock
at $.01 per share. The option expires on December 13, 2008.
At March 31,June 30, 2008 and 2007, accrued interest on the note was $362$694 and
$62,$657, respectively. Interest expense amounted to $300$632 and $296$595 for the
threesix months ended March 31,June 30, 2008 and 2007, respectively.
4.5. COMMON STOCK
The authorized capital stock of the Company consists of 50,000,000
shares of common stock par value $.001 per share, of which 21,152,692
shares were issued and outstanding at March 31,June 30, 2008 and 19,032,692
shares were issued and outstanding at December 31, 2007.
On December 12, 2007, the Board of Directors authorized the issuance of
2,120,000 shares of common stock in satisfaction of a note payable to a
stockholder of $20,000 plus accrued interest of $1,200.
Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of
common stock do not have cumulative voting rights. Holders of common
stock are entitled to share ratably in dividends, if any, as may be
declared from time to time by the Board of Directors in its discretion
from funds legally available therefore. In the event of liquidation,
dissolution or winding up of the Company, the holders of common stock
are entitled to share pro rata in all assets remaining after payment in
full of all liabilities. All of the outstanding shares of common stock
are fully paid and non-assessable. Holders of common stock have no
preemptive rights to purchase the Company's common stock. There are no
conversions or redemption rights or sinking fund provisions with
respect to the common stock.
10
5.6. INCOME TAXES
The component of deferred tax assets at December 31,June 30, 2008 and 2007 is as
follows:
2008 2007
------ ------
Net operating loss carry forwards $ 61,10063,800 $ 57,700
Less: Valuation allowance (61,100)(63,800) (57,700)
--------- ---------
$ - $ -
========= =========
10
A 100% valuation allowance was provided at March 31,June 30, 2008 and 2007 as it
is uncertain if the deferred tax assets would be utilized. The
increase in the valuation allowance was as a result of the increase in
the Company's net operating loss.
At March 31,June 30, 2008, the Company has unused federal net operating loss
carry forwards of approximately $179,000$194,000 expiring between 2019 and 2028
and unused New Jersey net operating loss carry forwards of
approximately $143,000$159,000 expiring between 2008 and 2015.
11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Trends and Uncertainties
There are no material commitments for capital expenditure at this time.
There are no trends, events or uncertainties that have had or are
reasonably expected to have a material impact on our limited
operations. There are no known causes for any material changes from
period to period in one or more line items of the Baynon'sBaynon International
Corp.'s financial statements.
Liquidity and Capital Resources
At March 31,June 30, 2008, Baynon International Corp. had a cash balance of
$2,964,$5,648, which represents an $11,549$8,865 decrease from the $14,513 balance at
December 31, 2007. This decrease was primarily the result of cash
proceeds used to satisfy the requirements of a reporting company.
Baynon's working capital position at March 31,June 30, 2008 was ($33,668)40,405) as
compared to a December 31, 2007 balance of $(25,019)($25,019).
The focus of Baynon's efforts is to acquire or develop an operating
business. Despite no active operations at this time, management intends
to continue in business and has no intention to liquidate Baynon.
Baynon has considered various business alternatives including the
possible acquisition of an existing business, but to date has found
possible opportunities unsuitable or excessively priced. Baynon does
not contemplate limiting the scope of its search to any particular
industry. Management has considered the risk of possible opportunities
as well as their potential rewards. Management has invested time
evaluating several proposals for possible acquisition or combination,
however, none of these opportunities were pursued. Baynon presently
owns no real property and at this time has no intention of acquiring
any such property. Baynon's sole expected expenses are comprised of
professional fees primarily incident to its reporting requirements.
The accompanying financial statements have been prepared assuming
Baynon will continue as a going concern. As shown in the accompanying
financial statements, Baynon has incurred losses of $8,649$15,386 and $10,853$15,972
for the threesix months ended March 31,June 30, 2008 and 2007, respectively, and a
working capital deficiency which raises substantial doubt about the
Company's ability to continue as a going concern.
Management believes Baynon will continue to incur losses and negative
cash flows from operating activities for the foreseeable future and
will need additional equity or debt financing to sustain its operations
until it can achieve profitability and positive cash flows, if ever.
Management plans to seek additional debt and/or equity financing for
the Company, but cannot assure that such financing will be available on
acceptable terms. Baynon's continuation as a going concern is
dependent upon its ability to ultimately attain profitable operations,
generate sufficient cash flow to meet its obligations, and obtain
additional financing as may be required. The outcome of this
uncertainty cannot be assured.
12
The accompanying financial statements do not include any adjustments
that might result from the outcome of this uncertainty. There can be
no assurance that management will be successful in implementing its
business plan or that the successful implementation of such business
plan will actually improve Baynon's operating results.
Results of Operations for the ThreeSix Months Ended March 31,June 30, 2008, Comparedcompared
to the ThreeSix Months Ended March 31,June 30, 2007.
Baynon incurred a net loss of $8,649$15,386 in the current year versus a net
loss of $10,853$15,972 in the prior year. General and administrative expenses
were $8,380$14,793 compared to $10,704$15,596 in the prior year, a decrease of $2,324.$803.
General and administrative expenses were incurred primarily to enable
Baynon to satisfy the requirements of a reporting company.
During the current and prior year, Baynon did not record an income tax
benefit due to the uncertainty associated with Baynon's ability to
merge with an operating company, which might permit Baynon to avail
itself of those advantages.
Results of Operations for the Three Months Ended June 30, 2008,
Compared to the Three Months Ended June 30, 2007.
Baynon incurred a net loss of $6,737 in the current year versus a net
loss of $5,119 in the prior year. General and administrative expenses
were $6,413 compared to $4,892 in the prior year, an increase of
$1,521. General and administrative expenses were incurred primarily to
enable Baynon to satisfy the requirements of a reporting company.
The accompanying financial statements have been prepared assuming
Baynon will continue as a going concern. As shown in the accompanying
financial statements, Baynon has incurred a working capital deficiency
which raises substantial doubt about Baynon's ability to continue as a
going concern.
Management believes the Company will continue to incur losses and
negative cash flows from operating activities for the foreseeable
future and will need additional equity or debt financing to sustain its
operations until it can achieve profitability and positive cash flows,
if ever. Management plans to seek additional debt and/or equity
financing for Baynon, but cannot assure that such financing will be
available on acceptable terms. Baynon's continuation as a going
concern is dependent upon its ability to ultimately attain profitable
operations, generate sufficient cash flow to meet its obligations, and
obtain additional financing as may be required. The outcome of this
uncertainty cannot be assured.
13
The accompanying financial statements do not include any adjustments
that might result from the outcome of this uncertainty. There can be no
assurance that management will be successful in implementing its
business plan or that the successful implementation of such business
plan will actually improve our operating results.
Recently Issued Accounting Standards
In JuneSeptember 2006, the FASB issued Statement of Financial Accounting
Standards Board (FASB) issued
FASB Interpretation No. 48, "Accounting For Uncertainty in Income Taxes,
an Interpretation of FASB Statement No. 109"157, Fair Value Measurements ("FIN 48"SFAS 157"). FIN 48
clarifiesSFAS 157
provides a common definition of fair value and establishes a framework
to make the measurement of fair value in generally accepted accounting
for uncertainty in income taxes by prescribing
a two-step methodprinciples more consistent and comparable. SFAS 157 also requires
expanded disclosures to provide information about the extent to which
fair value is used to measure assets and liabilities, the methods and
assumptions used to measure fair value, and the effect of first evaluating whether a tax position has met a
more likely than not recognition threshold and second, measuring that
tax position to determine the amount of benefit to be recognized in the
financial statements. FIN 48 provides guidancefair value
measures on the presentation of
such positions within a classified statement of financial position as
13
well as on derecognition, interest and penalties, accounting in interim
periods, disclosure, and transition. FIN 48earnings. SFAS 157 is effective for fiscal years beginning
after DecemberNovember 15, 2006.2007 (2008 fiscal year), although early adoption is
permitted. In February 2008, the FASB formally provided a one-year
deferral for the implementation of SFAS 157 only with regard to certain
nonfinancial assets and liabilities (2009 fiscal year). The adoptionCompany has
not yet determined the impact, if any, of this statement
is not expected to have a material effectSFAS 157 on the Company's
future
reported financial position orconsolidated results of operations.
In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements". This statement defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair
value measurements. SFAS 157 will be effective for the Company
beginning January 1, 2008. The adoption of SFAS No. 157 is not expected
to have a material effect on the Company'soperations or financial condition or
results of operations.position.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159
allows entities the option to measure eligible financial instruments at
fair value as of specified dates. Such election, which may be applied
on an instrument by instrument basis, is typically irrevocable once
elected. SFAS 159 is effective for fiscal years beginning after
November 15, 2007. The implementation of this guidance isCompany does not expectedexpect SFAS 159 to have any impacta
material effect on the Company's consolidated results of operations or
financial statements.position.
In December 2007, the FASB issued FAS 141(R), "Business Combinations - a
replacement of FASB statement No. 141", which significantly changes the
principles and requirements for how the acquirer of a business
recognizes and measures in its financial statements and identifiable
assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree. The statement also provides guidance for
recognizing and measuring the goodwill acquired in the business
combination and determines what information to disclose to enable users
of the financial statements to evaluate the nature and financial effects
of the business combination. This statement is effective prospectively,
except for certain retrospective adjustments to deferred tax balances,
for fiscal years beginning after December 15, 2008. This statement will
be effective for the Company beginning in fiscal 2009. The Company is
currently evaluating FAS 141(R), and has not yet determined the impact
if any, FAS 141(R) will have on its results of operations or financial
position.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests
in Consolidated Financial Statements - an amendment of ARB No. 51. This
Statement amends ARB 51 to establish accounting and reporting standards
for the noncontrolling interest in a subsidiary and for the
14
deconsolidation of a subsidiary. It clarifies that a noncontrolling
interest in a subsidiary is an ownership interest in the consolidated
entity that should be reported as equity in the consolidated financial
statements. In addition to the amendments to ARB 51, this Statement
amends FASB Statement No. 128, Earnings per Share; so that earnings-per-
share data will continue to be calculated the same way those data were
calculated before this Statement was issued. This Statement is
effective for fiscal years, and interim periods within those fiscal
14
years, beginning on or after December 15, 2008. The implementation of
this guidance is not expected to have any impact on the Company's
financial statements.
Forward-Looking Statements
This Form 10-Q contains forward-looking statements within the meaning
of the federal securities laws. These statements include those
concerning the following: Our intentions, beliefs and expectations
regarding the fair value of all assets and liabilities recorded; our
strategies; growth opportunities; product development and introduction
relating to new and existing products; the enterprise market and
related opportunities; competition and competitive advantages and
disadvantages; industry standards and compatibility of our products;
relationships with our employees; our facilities, operating lease and
our ability to secure additional space; cash dividends; excess
inventory, our expenses; interest and other income; our beliefs and
expectations about our future success and results; our operating
results; our belief that our cash and cash equivalents will be
sufficient to satisfy our anticipated cash requirements; our
expectations regarding our revenues and customers; investments and
interest rates. These statements are subject to risk and uncertainties
that could cause actual results and events to differ materially.
Baynon undertakes no obligation to update forward-looking statements to
reflect events or circumstances occurring after the date of this Form
10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not consider the effects of interest rate movements to be a
material risk to our financial condition. We do not hold any
derivative instruments and do not engage in any hedging activities.
Item 4T. Controls and Procedures.
During the threesix months ended March 31,June 30, 2008, there were no changes in our
internal controls over financial reporting (as defined in Rule 13a-
15(f) and 15d-15(f) under the Exchange Act) that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.15
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, we
conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, as
of March 31,June 30, 2008. Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
controls and procedures to be effective as of March 31,June 30, 2008 to ensure
that information required to be disclosed by the issuer in the reports
that it files or submits under the Act is recorded, processed,
summarized and reported, within the time periods specified in the
Commission's rules and forms and to ensure that information required to
be disclosed by an issuer in the reports that it files or submits under
the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
1516
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors. Not applicable for small reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
not applicable.None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits
Exhibit 31 - Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 32 - Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: May 15,August 12, 2008
BAYNON INTERNATIONAL CORP.
By: /s/ Pasquale Catizone
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Pasquale Catizone, Principal Executive Officer