UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
Commission File Number: 0-4006
BAYNON INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
NEVADA 88-0285718
(State or other (I.R.S. Employer
jurisdiction of incorporation Identification)
or organization)
266 CEDAR STREET, CEDAR GROVE, NEW JERSEY 07009
(Address of principal executive offices, including zip code)
(973) 239-2952
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Exchange Act:
Common Stock, par value $0.001 per share
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in 405 of the Securities Act. Yes [ ] No [x]
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes [ ] No [x]
Indicate by check mark whether the registrant: (1) has 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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
2
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer," and "smaller reporting company" in Rule 12b-2 of
the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller Reporting Company [x]
(Do not check if smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [x] No [ ]
As of February 28, 2010, no market price existed for voting and non-
voting common equity held by non-affiliates of the registrant.
As of February 28, 2010, the Registrant had outstanding 25,860,192
shares of Common Stock with a par value of $0.001 per share.
DOCUMENTS INCORPORATED BY REFERENCE
None
3
TABLE OF CONTENTS
ITEM PAGE
PART I
1. BUSINESS 4
1A. RISK FACTORS 4
1B. UNRESOLVED STAFF COMMENTS 4
2. PROPERTIES 5
3. LEGAL PROCEEDINGS 4
4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 5
PART II
5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES 6
6. SELECTED FINANCIAL DATA 6
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF
OPERATION 7
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 9
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 9
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURES 9
9A(T).CONTROLS AND PROCEDURES 9
9B. OTHER INFORMATION 10
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS,
CONTROL PERSONS, AND CORPORATE GOVERNANCE; 11
11. EXECUTIVE COMPENSATION 12
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 13
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE 14
14. PRINCIPAL ACCOUNTING FEES AND SERVICES 15
PART IV
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 15
4
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Baynon International Corp., formerly known as "Technology Associates
Corporation", was originally incorporated on February 29, 1968, under
the laws of the Commonwealth of Massachusetts. On December 28, 1989,
Baynon reincorporated under the laws of the State of Nevada. Baynon
was formerly engaged in the technology marketing business. Baynon has
not engaged in any business operations for at least the last seven
years.
Baynon is considered a blank check company for purposes of this report.
As defined in Section 7(b)(3) of the Securities Act of 1933, as
amended, a blank check company is a development stage company that has
no specific business plan or purpose or has indicated that its business
plan is to engage in a merger or an acquisition with an unidentified
company or companies and is issuing "penny stock" securities as defined
in Rule 3(a)(51) of the Securities Exchange Act of 1934, as amended.
Baynon's current business plan is to attempt to identify and negotiate
with a business target for the merger of that entity with and into
Baynon. In certain instances, a target company may wish to become a
subsidiary of Baynon or may wish to contribute or sell assets to Baynon
rather than to merge. No assurances can be given that Baynon will be
successful in identifying or negotiating with any target company.
Baynon seeks to provide a method for a foreign or domestic private
company to become a reporting or public company whose securities are
qualified for trading in the United States secondary markets.
A business combination with a target company normally will involve the
transfer to the target company of the majority of the issued and
outstanding common stock of Baynon, and the substitution by the target
company of its own management and board of directors. No assurances
can be given that Baynon will be able to enter into a business
combination, or, if Baynon does enter into such a business combination,
no assurances can be given as to the terms of a business combination,
or as to the nature of the target company.
Baynon has not engaged in any business operations for at least the last
seven years. The current and proposed business activities described
herein classify Baynon as a blank check company. The Securities and
Exchange Commission and many states have enacted statutes, rules and
regulations limiting the sale of securities of blank check companies.
Management does not intend to undertake any efforts to cause a market
to develop in Baynon's securities until such time as Baynon has
successfully implemented its business plan described herein.
ITEM 1A. RISK FACTORS
Not applicable
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable
5
ITEM 2. PROPERTIES
Baynon has no properties and at this time has no agreements to acquire
any properties. Baynon currently uses for its principal place of
business the home office of Pasquale Catizone, an officer and director
of Baynon, at no cost to Baynon, an arrangement which management
expects will continue until Baynon completes an acquisition or merger.
ITEM 3. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against Baynon.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this report, no
matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise.
6
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND
ISSUER PURCHASES OF EQUITY SECURITIES
(a) Market Information.
There has been no trading market for Baynon's Common Stock for at least
the last five years. There can be no assurance that a trading market
will ever develop or, if such a market does develop, that it will
continue.
Holders. There were approximately 540 record holders of Baynon's
common stock as of February 28, 2010. The issued and outstanding
shares of Baynon's common stock were issued in accordance with the
exemptions from registration afforded by Sections 3(b) and 4(2) of the
Securities Act and Rule 506 of Regulation D promulgated thereunder.
Dividends. Holders of the registrant's common stock are entitled to
receive such dividends as may be declared by its board of directors.
No dividends on the registrant's common stock have ever been paid, and
the registrant does not anticipate that dividends will be paid on its
common stock in the foreseeable future.
Securities authorized for issuance under equity compensation plans.
No securities are authorized for issuance by the registrant under
equity compensation plans.
Performance graph. Not applicable.
Sale of unregistered securities. On June 15, 2009, the Board of
Directors authorized the issuance of 2,587,500 shares of common stock
in satisfaction of two notes payable to stockholders in the amount of
$25,000 plus accrued interest of $875.
On December 12, 2008, the Board of Directors authorized the issuance of
2,120,000 shares of common stock in satisfaction of a note payable to a
stockholder in the amount of $20,000 plus accrued interest of $1,200.
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.
(b) Use of Proceeds. Not applicable.
(c) Purchases of Equity Securities. None
ITEM 6. SELECTED FINANCIAL DATA
Not applicable to a smaller reporting company.
7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Forward Looking Statements
Statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, as well as in certain other parts
of this Annual Report on Form 10-K (as well as information included in
oral statements or other written statements made or to be made by
Baynon) that look forward in time, are forward looking statements made
pursuant to the safe harbor provisions of the Private Litigation Reform
Act of 1995. Forward looking statements include statements concerning
plans, objectives, goals, strategies, future events or performance,
expectations, predictions, and assumptions and other statements which
are other than statements of historical facts. Although Baynon
believes such forward-looking statements are reasonable, it can give no
assurance that any forward-looking statements will prove to be correct.
Such forward-looking statements are subject to, and are qualified by,
known and unknown risks, uncertainties and other factors that could
cause actual results, performance or achievements to differ materially
from those expressed or implied by those statements. These risks,
uncertainties and other factors include, but are not limited to
Baynon's ability to estimate the impact of competition and of industry
consolidation and risks, uncertainties and other factors set forth in
Baynon's filings with the Securities and Exchange Commission, including
without limitation this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
The following discussion as well as disclosures included elsewhere in
this Form 10-K, are based upon our audited financial statements, which
have been prepared in accordance with accounting principles generally
accepted in the United States. These financial statements and
accompanying notes have been prepared in accordance with accounting
principles generally accepted in the United States of America. The
preparation of these consolidated financial statements requires
management to make estimates, judgments and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingencies. Baynon continually evaluates the
accounting policies and estimates used to prepare the financial
statements. Baynon 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.
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's financial
statements.
Liquidity and Capital Resources
At December 31, 2009, Baynon had a cash balance of $4,631 that
represents an $18,318 decrease from the $22,949 balance at December 31,
2008. This decrease was primarily the result of cash used to satisfy
8
the requirements of a reporting company. Baynon's working capital
deficit at December 31, 2009 was $30,514 as compared to a deficit of
$33,428.
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. Baynon's recurring losses
from operations, stockholders deficiency and working capital
deficiency, and lack of revenue generating operations, raise
substantial doubt about Baynon'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
Baynon, but cannot assure that such financing will be available on
acceptable terms.
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 a business
plan will actually improve Baynon's operating result.
Results of Operations for the Year Ended December 31, 2009, Compared to
the Year Ended December 31, 2008. Baynon incurred a net loss of
$22,960 in the current year versus a net loss of $29,609 in the prior
year. General and administrative expenses were $21,932 compared to
$28,499 in the prior year, a decrease of $6,567.
General and administrative expenses, which consist of fees paid for
legal, accounting, and auditing services, 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 for net operating losses generated due to the uncertainty of
their realization.
9
Recently Issued Accounting Standards
Effective July 1, 2009, the Financial Accounting Standards Board's
Accounting Standards Codification became the single official source of
authoritative, nongovernmental generally accepted accounting principles
in the United States. The historical GAAP hierarchy was eliminated and
the ASC became the only level of authoritative GAAP, other than
guidance issued by the Securities and Exchange Commission. Our
accounting policies were not affected by the conversion to ASC.
However, references to specific accounting standards in the footnotes
to our financial statements have been changed to refer to the
appropriate section of ASC.
Off Balance Sheet Arrangements
None.
Tabular Disclosure of Contractual Obligations
None.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Baynon's financial statements and associated notes are set forth
beginning on page 17.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
Changes in Internal Controls
During the year ended December 31, 2009, 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.
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 December 31, 2009. Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
controls and procedures to be effective as of December 31, 2009 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,
10
including its principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
Management's Report on Internal Control over Financial Reporting
Management of Baynon is responsible for establishing and maintaining
adequate internal control over financial reporting as derived in Rule
13a-15(f) under the Securities Exchange Act of 1934. We have assessed
the effectiveness of those internal controls as of December 31, 2009,
using the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") Internal Control Intergrated Framework as a basis
for our assessment.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate. All internal control systems, no matter how well
designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.
A material weakness in internal controls is a deficiency in internal
control, or combination of control deficiencies, that adversely affects
Baynon's ability to initiate, authorize, record, process, or report
external financial data reliably in accordance with accounting
principles generally accepted in the United States of America such that
there is more than a remote likelihood that a material misstatement of
Baynon's annual or interim financial statements that is more than
inconsequential will not be prevented or detected. In the course of
making our assessment of the effectiveness of internal controls over
financial reporting, we did not identify any material weakness in our
internal control over financial reporting. Therefore, it is our
conclusion that Baynon's internal controls over financial reporting
were effective as of December 31, 2009.
This annual report does not include an attestation report of Baynon's
registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to
attestation by Baynon's registered public accounting firm pursuant to
temporary rules of the Securities and Exchange Commission that permit
Baynon's to provide only management's report in this annual report.
ITEM 9B. Other Information
None.
11
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS,
AND CORPORATE GOVERNANCE
(a) Identity of Officers and Directors
During the fiscal year ended December 31, 2009, Baynon had three (3)
directors and two (2) officers as follows:
Name Age Position and Offices Held Director Since
- ---- --- ------------------------- --------------
Pasquale Catizone 69 President, Director May 1988
Daniel Generelli 46 Secretary, Treasurer October 1, 2001
Director
Robert L. Miller 53 Director March 12, 2002
Set forth below are the names of the directors and officers of Baynon,
all positions and offices with Baynon held, the period during which he
has served as such, and his business experience during at least the
last five (5) years:
Pasquale Catizone. Mr. Catizone has been President and a Director of
Baynon since May 1998. Mr. Catizone has been self-employed as a
financial consultant for more than five (5) years.
Daniel Generelli. Mr. Generelli has been Baynon's Secretary,
Treasurer, Chief Financial Officer, and a director since October 1,
2001. Since February 1, 2002, Mr. Generelli has been employed as a
data base analyst in the Totowa, New Jersey office of IMS Health Inc.,
a New York Stock Exchange listed firm engaged in data management and
processing. Simultaneously therewith and since 1995, Mr Generelli has
been the Secretary, Treasurer, and a director of Creative Beauty
Supply, Inc., a retail and wholesale beauty supply distributor in
Totowa, New Jersey. Prior thereto from December 1989 to July 1996, Mr.
Generelli was Secretary, Treasurer, and a director of J & E Beauty
Supply, Inc., a retail and wholesale beauty supply distributor. Prior
thereto since 1984, Mr. Generelli was employed as a distribution
supervisor by Tags Beauty Supply, a retail and wholesale beauty supply
distributor in Fairfield, New Jersey. Mr. Generelli received a Bachelor
of Science degree in Business Administration from Ramapo College of New
Jersey in June 1984.
Robert L. Miller. Mr. Miller, the president of Shawshank Holdings,
Limited, a New York Corporation, joined Baynon's Board of Directors on
March 12, 2002. Since June 1995, he has been President of Trippoak
Advisors, Inc., and President of The Trippoak Group, Inc. since May
2002, where he has worked as a consultant and private investor. Since
May 1999, he has also been Chairman of DM Management, LLC, where he has
worked as an investment advisor.
Other than Mr. Catizone and Mr. Generelli, Baynon did not have any
significant employees as of the date of this Report. There were no
family relationships between any of the officers or directors of
12
Baynon. During the fiscal year covered by this Report, there were no
changes to the procedures by which security holders could recommend
nominees to Baynon's Board of Directors.
At this time, Baynon does not have an audit committee because Baynon
has not engaged in any business operations for at least the last five
years. Baynon's board of directors acts as Baynon's audit committee.
Similarly, Baynon's board of directors has determined that Baynon does
not have an audit committee financial expert as defined under
Securities and Exchange Commission rules.
Current Blank Check Companies
Other than as disclosed above, no directors or officers of Baynon are
presently officers, directors or shareholders in any blank check
companies except for Baynon. However, one or both of the
officers/directors may, in the future, become involved with additional
blank check companies.
(b) Compliance with Section 16(a) of the Securities Exchange Act of
1934.
Section 16(a) of the Securities Exchange Act requires Baynon's officers
and directors, and persons who beneficially own more than ten (10%)
percent of a class of equity securities registered pursuant to Section
12 of the Exchange Act, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the principal
exchange upon which such securities are traded or quoted. Reporting
Persons are also required to furnish copies of such reports filed
pursuant to Section 16(a) of the Exchange Act with Baynon.
Based solely on review of the copies of such forms furnished to Baynon,
each of Baynon's three (3) directors did not file their reports on a
timely basis.
Code of Ethics. Baynon has not yet adopted a code of ethics. The board
of directors anticipates that it will adopt a code of ethics upon
identifying and negotiating with a business target for the merger of
that entity with and into Baynon, although there is no guarantee that
Baynon will be able to enter into such a transaction.
ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
As of the date of this report, while seeking a business combination,
Baynon's management anticipates devoting up to five (5) hours per month
to the business of Baynon. Baynon's current officers and directors do
not receive any compensation for their services rendered to Baynon,
have not received such compensation in the past, and are not accruing
any compensation pursuant to any agreement with Baynon.
13
The officers and directors of Baynon will not receive any finder's
fees, either directly or indirectly, as a result of their efforts to
implement Baynon's business plan outlined herein. However, the
officers and directors of Baynon anticipate receiving benefits as
shareholders of Baynon.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by Baynon for the
benefit of its employees.
Baynon has not entered into any employment agreements with any of its
officers, directors, or other persons, and no such agreements are
anticipated in the immediate future.
Baynon has no other executive compensation elements that would require
the inclusion of tabular disclosure or narrative discussion.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 28, 2010 certain
information regarding the ownership of the common stock by (i) each
person known by Baynon to be the beneficial owner of more than five
(5%) percent of Common Stock, (ii) each of Baynon's Directors and Named
Executive Officers, as such term is defined under Item 402(a)(3) of
Regulation S-K under the Securities Act, and (iii) all of Baynon's
Executive Officers and Directors as a group. Beneficial ownership has
been determined in accordance with Rule 13d-3 under the Exchange Act.
Under Rule 13d-3 certain shares may be deemed to be beneficially owned
by more than one person (such as where persons share voting power or
investment power). In addition, shares are deemed to be beneficially
owned by a person if the person has the right to acquire the shares
(for example, upon the exercise of an option) within sixty (60) days of
the date as of which the information is provided. In computing the
ownership percentage of any person, the amount of shares outstanding is
deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of these acquisition rights.
As a result, the percentage of outstanding shares of any person as
shown in the following table does not necessarily reflect the person's
actual ownership or voting power at any particular date.
Name and address Amount and Nature Percentage of
Of Beneficial Owner of Beneficial Ownership Class
Pasquale Catizone(1)(3)(6) 11,924,815 42.62%
266 Cedar Street
Cedar Grove, NJ 07009
Carmine Catizone (2)(3) 6,070,000 21.69%
10 1.2 Walker Avenue
Morristown, NJ 07960
Robert L. Miller (4) 3,750,000 13.40%
94 Anderson Avenue
Demarest, NJ 07627
14
Shawshank Holdings, Limited (5) 3,750,000 13.40%
94 Anderson Avenue
Demarest, NJ 07627
Daniel Generelli 50,000
c/o Baynon International Corp.
266 Cedar Street
Cedar Grove, NY 07009
Robyn Conforth 1,850,000 6.61%
266 Cedar Street
Cedar Grove, NJ 07009
All Executive Officers and
Directors as a Group 15,724,815 56.20%
(consisting of three persons)
* Less than 1%.
(1) Includes an aggregate of 1,850,000 shares (18.73% of the class)
held of record by Robyn Conforth, Mr. Catizone's adult step daughter.
Mr. Catizone disclaims beneficial ownership of the shares of Baynon
owned by his adult daughter.
(2) Includes: (a) an aggregate of 500,000 shares held in a custodial
account for the benefit of Carrie Catizone, Mr. Carmine Catizone's
adult daughter who does not reside with him; and (b) 500,000 shares
held in a custodial account for the benefit of Sherri Catizone, Mr.
Carmine Catizone's adult daughter who does not reside with him. Mr.
Carmine Catizone served as an executive officer and director of Baynon
from May 1998 through October 1, 2001.
(3) Pasquale and Carmine Catizone are brothers.
(4) Robert L. Miller was named to Baynon's board of directors on March
12, 2002. He is the president of Shawshank Holdings, Limited, a New
York corporation.
(5) A New York corporation controlled by or under common control of
Robert L. Miller, a director of Baynon.
(6) Includes 2,120,000 shares which may be issued as satisfaction of a
note payable plus accrued interest upon request of the stockholder any
time before September 1, 2010.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Certain Relationships and Related Transactions
None.
Director Independence
There has been no trading market for Baynon's common stock for at least
the last three years. As such, there are no applicable standards to
determine whether Baynon's directors are independent. Nevertheless,
Baynon has one director who Baynon believes is independent under the
NASDAQ Marketplace Rules and those standards applicable to companies
trading on NASDAQ.
15
Specifically, Mr. Miller has not:
been at any time during the past three years, employed by Baynon or by
any parent or subsidiary of Baynon;
- accepted or had a family member who accepted any compensation from
Baynon in excess of $60,000 during any period of twelve consecutive
months within the three years preceding the determination of
independence;
- been a family member of an individual who is, or at any time
during the past three years was, employed by Baynon as an executive
officer;
- been, or had a Family Member who is, a partner in, or a
controlling shareholder or an executive officer of, any organization to
which Baynon made, or from which the company received, payments for
property or services in the current or any of the past three fiscal
years that exceed 5% of the recipient's consolidated gross revenues for
that year, or $200,000, whichever is more;
- been, or had a family member who is, employed as an executive
officer of another entity where at any time during the past three years
any of the executive officers of Baynon serve on the compensation
committee of such other entity; or
- been, or had a family member who is, a current partner of Baynon's
outside auditor, or was a partner or employee of Baynon's outside
auditor who worked on Baynon's audit at any time during any of the past
three years.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
AUDIT FEES
The aggregate fees billed and estimated to be billed for the fiscal
years ended and , for professional services rendered by Rotenberg,
Meril, Solomon, Bertiger & Guttilla, P.C., for the audit of Baynon's
annual financial statements and review of the financial statements
included in Baynon's Form 10-Q or services that are normally provided
by the accountant in connection with statutory and regulatory filings
or engagements for the fiscal years were $15,600 and $15,400,
respectively.
AUDIT-RELATED FEES
The aggregate fees billed for the fiscal years ended and for
assurance and related services by RMSB&G that are reasonably related to
the performance of the audit or review of Baynon's financial statements
for that fiscal year were $6000 and $5400, respectively.
TAX FEES
The aggregate fees billed for the fiscal years ended and for
professional services rendered by RMSB&G for tax compliance, tax
advice, and tax planning for that fiscal year were $0 and $0,
respectively.
ALL OTHER FEES
The aggregate fees billed in each of the fiscal years ended and, for
products and services provided by RMSB&G other than those services
reported above, for that fiscal year were $0 and $0, respectively.
16
AUDIT COMMITTEE POLICIES AND PROCEDURES
The board of directors, acting as the Audit Committee considered
whether, and determined that, the auditor's provision of non-audit
services was compatible with maintaining the auditor's independence.
All of the services described above for fiscal year were approved by
the Board of Directors pursuant to its policies and procedures. They
intend to continue using RMSB&G solely for audit and audit-related
services, tax consultation and tax compliance services, and, as needed,
for due diligence in acquisitions.
17
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) List of financial statements included in Part II hereof:
Report of Independent Registered Public Accounting Firm
Balance Sheet at December 31, 2009 and 2008
Statements of Operations for the years ended December 31, 2009 and 2008
Statement of Changes in Stockholders' Equity for the years ended
December 31, 2009 and 2008
Statements of Cash Flows for the years ended December 31, 2009 and 2008
Notes to Financial Statements
(a)(2) List of financial statement schedules included in Part IV
hereof:
None.
(a)(3) Exhibits
All of the following exhibits are incorporated by reference
3.1 Certificate of Incorporation of Baynon, as
amended (filed with Baynon's Form 10-SB on
July 8, 1999, File No. 000-26653, and incorporated
herein by reference).
3.2 Bylaws of Baynon, as amended (filed with the
Baynon's Form 10-SB on July 8, 1999, File No.
000-26653, and incorporated herein by reference).
The following exhibits are filed with this report
31 302 certifications
32 906 certifications
In accordance with the Securities Exchange Act of 1934, this Report has
been signed below by the following persons on behalf of Baynon and in
the capacities and on the dates indicated.
By: /s/ PASQUALE CATIZONE
-------------------------------
Pasquale Catizone,
President
(Principal Executive Officer)
Dated: March 26, 2010
By: /s/ DANIEL GENERELLI
-------------------------------
Daniel Generelli
Secretary, Treasurer
(Principal Financial Officer, Principal Accounting Officer)
Dated: March 26, 2010
By: /s/ ROBERT L. MILLER
-------------------------------
Robert L. Miller
Director
Dated: March 26, 2010
18
BAYNON INTERNATIONAL CORP.
INDEX TO FINANCIAL STATEMENTS
Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 19
FINANCIAL STATEMENTS:
Balance Sheets as of December 31, 2009 and 2008 20
Statements of Operations for the years ended 21
December 31, 2009 and 2008
Statements of Changes in Stockholders' 22
Deficiency for the years ended December 31, 2009 and 2008
Statements of Cash Flows for the years ended December 23
31, 2009 and 2008
Notes to Financial Statements 24
19
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Baynon International
Corporation:
We have audited the accompanying balance sheets of Baynon International
Corporation (the "Company") as of December 31, 2009 and December 31,
2008, and the related statements of operations, changes in
stockholders' deficiency and cash flows for the years then ended. The
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 audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also 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 audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of and the results of its operations and cash flows for the years
then ended, in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 2 to
the financial statements, the Company's recurring losses from
operations, stockholders deficiency and working capital deficiency, and
lack of revenue generating operations, raise substantial doubt about
the Company's ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 2. The
accompanying financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/Rotenberg Meril Solomon Bertiger & Guttilla, P.C.
ROTENBERG MERIL SOLOMON BERTIGER & GUTTILLA, P.C.
Saddle Brook, New Jersey
March 15, 2010
20
BAYNON INTERNATIONAL CORP.
BALANCE SHEETS
DECEMBER 31, 2009 AND 2008
2009 2008
ASSETS
Current Assets: $ 4,631 $ 22,949
-------- --------
Total Current Assets $ 4,631 $ 22,949
-------- --------
Total Assets $ 4,631 $ 22,949
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts Payable and accrued expenses $ 14,747 $ 31,345
Convertible note payable - stockholder 20,000 25,000
Accrued interest - stockholder 398 32
-------- --------
Total current liabilities 35,145 56,377
-------- --------
Stockholders' Deficiency:
Common stock, $.001 par value, 50,000,000
Shares authorized, 25,660,192 shares issued
and outstanding at December 31, 2009 and
23,272,692 shares issued and outstanding
at December 31, 2008. 25,860 23,273
Additional paid-in capital 178,947 155,660
Accumulated deficit (235,321) (212,361)
-------- --------
Total Stockholders' Deficiency (30,514) (33,428)
Total Liabilities and Stockholders'
Deficiency $ 4,631 $ 22,949
======== ========
The accompanying notes are an integral part
of these financial statements
21
BAYNON INTERNATIONAL CORP.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
2009 2008
Revenues $ - $ -
Other Costs:
General and administrative expenses 21,932 28,499
--------- ----------
Total Other Costs 21,932 28,449
--------- ----------
Operating loss (21,932) (28,499)
--------- ----------
Other Income(Expense):
Interest income 51 60
Interest expense-stockholder (1,079) (1,170)
---------- ----------
Total Other Income (Expense) (1,028) (1,110)
---------- ----------
Net Loss $ (22,960) $ (29,609)
========== ==========
Earnings Per Share:
Basic and diluted earnings per
common share $ - $ -
========== ==========
Basic and diluted common shares
outstanding 21,263,048 19,143,048
========== ==========
The accompanying notes are an integral part
of these financial statements
22
BAYNON INTERNATIONAL CORP.
STATEMENT OF STOCKHOLDERS' DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
Common Stock
$.001 Par Value
---------------
Common Additional
Number Stock Paid-in Accumulated
Of Shares Amount Capital Deficit Total
--------- ------ ---------- ----------- -----
<s> <c> <c> <c> <c> <c>
Balance-Janary 1, 2008 21,152,692 $ 21,153 $136,580 $(182,752) $(25,019)
Issuance of common stock -
Repayment of debt 2,120,000 2,120 19,080 - 21,200
Net loss for the year ended
December 31, 2008 - - - (29,609) (29,609)
---------- -------- -------- --------- --------
Ending Balance, December 31,
2008 23,272,692 23,273 155,660 (212,361) (33,248)
Issuance of common stock -
repayment of debt 2,587,500 2,588 23,287 - 25,875
Net loss for the year ended
December 31, 2009 25,860,192 $25,861 $178,947 $(235,321) $(30,514)
---------- ------- -------- --------- --------
Ending Balance, December 31,
2009 25,860,192 $25,861 $178,947 $(235,321) $(30,514)
========== ======= ======== ========= ========
The accompanying notes are an integral part
of these financial statements
23
BAYNON INTERNATIONAL CORP.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
2009 2008
---- ----
Cash Flows from Operating Activities:
Net loss $(22,960) $(29,609)
Adjustments to reconcile net loss
To net cash used in operating
Activities:
Common stock issued for accrued interest 843 1,200
(Decrease) Increase in accounts payable
and accrued expenses (16,599) 11,875
Increase(Decrease) in accrued interest -
Stockholder 398 (30)
------ --------
Net cash used in operating activities (38,318) (16,564)
------- --------
Cash Flows from Financing Activities:
Proceeds from note payable, stockholder 20,000 25,000
------- --------
(Decrease) Increase in Cash and Cash
Equivalents (18,318) 8,436
Cash and Cash Equivalents, beginning of year 22,949 14,513
------- --------
Cash and Cash Equivalents, end of year $ 4,631 $ 22,949
Schedule of Non-cash Activities:
Common stock issued for note payable
- stockholder $ 25,000 $ 20,000
======== ========
Common stock issued for accrued interest
- stockholder $ 32 $ 1,200
======== ========
The accompanying notes are an integral part
of these financial statements.
24
BAYNON INTERNATIONAL CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 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
Basis of Presentation
The Company's consolidated financial statements are prepared in
conformity with US generally accepted accounting principles ("GAAP").
Use of Estimates
These consolidated financial statements and accompanying notes have
been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these
consolidated 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.
Cash and Cash Equivalents
For financial statement purposes, short-term investments with an
original maturity of ninety days or less and highly liquid investments
are considered cash and cash equivalents. Cash and cash equivalents
consist of a money market account.
25
Income Taxes
The Company utilizes the Financial Accounting Standards Board's
("FASB") Accounting Standard Codification ("ASC") 740 "Income Tax".
ASC 740 requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on the
differences between the financial statement carrying amounts and tax
bases of assets and liabilities using enacted tax rates in effect in
the years in which the differences are expected to reverse. Valuation
allowances are established when necessary to reduce deferred tax assets
to the amount expected to be realized.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earning (Loss) Per Share
The Company computes earnings or loss per share in accordance with the
Financial Accounting Standards Board's Accounting Standard Codification
260 ("ASC 260"), "Earning Per Share". Basic earnings per share is
computed by dividing 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. The following securities have
been excluded from the calculation of net income per share, as their
effect would be anti- dilutive:
2009 2008
------ ------
Convertible note payable and
accrued interest - stockholder
(weighted average) 708,603 53,528
Going Concern
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The Company's recurring
losses from operations, stockholders' deficiency and working capital
deficiency, and lack of revenue generating operations, raise
substantial doubt about the Company'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 the Company, but cannot assure that such financing will
be available on acceptable terms. The Company'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.
26
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 the Company's operating results.
Recently Issued Accounting Standards
Effective July 1, 2009, the FASB's ASC became the single official
source of authoritative, nongovernmental GAAP. The historical GAAP
hierarchy was eliminated and the ASC became the only level of
authoritative GAAP, other than guidance issued by the Securities and
Exchange Commission. Our accounting policies were not affected by the
conversion to ASC. However, references to specific accounting
standards in the footnotes to our financial statements have been
changed to refer to the appropriate section of ASC.
Management does not believe that any other recently issued, but not yet
effective, accounting standard if currently adopted would have a
material effect on the accompanying financial statements.
3. CONVERTIBLE NOTE PAYABLE - STOCKHOLDERS
On December 13, 2008, the Company issued an unsecured note payable to a
stockholder in exchange for $5,000 in cash, in order for the
Company to pay current invoices. The note bears interest at 6% per
annum and matures on December 13, 2009. The stockholder has the option
convert the note and accrued interest into the Company's common stock
at $.01 per share. The note was converted on June 15, 2009 and 517,500
shares of common stock were issued in satisfaction of the note and
accrued interest.
On December 26, 2008, 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 26, 2009. The stockholder has the option
to convert the note and accrued interest into the Company's common
stock at $.01 per share. The note was converted on June 15, 2009 and
2,070,000 shares of common stock were issued in satisfaction of the
note and accrued interest.
On September 1, 2009, the Company issued an unsecured note payable to a
stockholder in exchange for $20,000 in cash, for the Company's working
capital needs. The note bears interest at 6% per annum, and matures on
September 1, 2010. 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 September 1, 2010.
At December 31, 2009 and 2008, accrued interest on the notes was $398
and $32, respectively. Interest expense amounted to $1,079 and $1,170
for the years ended December 31, 2009 and 2008, respectively.
27
4. COMMON STOCK
On December 13, 2008, the Board of Directors authorized the issuance of
2,120,000 shares of common stock in satisfaction of a note payable to a
stockholder in the amount of $20,000 plus accrued interest of $1,200.
On June 15, 2009, the Board of Directors authorized the issuance of
2,587,500 shares of common stock in satisfaction of two notes payable
to stockholders in the amount of $25,000 plus accrued interest of $712.
See Note 3.
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 Director 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.
5. INCOME TAXES
The component of deferred tax assets at December 31, 2009 and 2008 is
as follows:
2009 2008
------ ------
Net operating loss carry forwards $ 73,800 $ 69,500
Less: Valuation allowance (73,800) (69,500)
--------- ---------
$ - $ -
========= =========
A 100% valuation allowance was provided at December 31, 2009 and 2008
as it is uncertain if the deferred tax assets would be utilized. The
increase in the valuation allowance was a result from the increase in
the Company's net operating loss carry forward.
At December 31, 2009, the Company has unused federal net operating loss
carry forwards of approximately $232,000 expiring between 2018 and 2029
and unused New Jersey net operating loss carry forwards of
approximately $176,000 expiring between 2011 and 2016.