<pre>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended March 31, 2002
[ ] Transition report under section 13 or 15(d) of the Securities Exchange Act
of 1934 [no fee required]
Commission File Number 000-3149
MEDIABUS NETWORKS,INC.
(Exact name of registrant as specified in its charter)
Florida 65-0832987
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
2900 Delk Road
Suite 700
PMB 113
Marietta, GA 30067
(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 977-0944
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(b) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2)has been subject to such filing requirements for the past 90 days.[X]Yes[ ]No
Common Stock, issued and outstanding as of May 15, 2002: 8,886,637
PART I
Item 1. Financial Statement
MediaBus Networks, Inc.
formerly B Y & C Management, Inc.
(A Development Stage Enterprise)
<table>
Balance Sheet
March 31, March 31,
2002 2001
---------------- --------------
(Unadudited) (Audited)
<c> <c> <c>
ASSETS
Current assets:
Cash and cash equivalents $ 18,734 $ 4,234
Trade Receivable -
Inventories 68,000 -
Income tax receivables -
Other -
Total current assets 86,734 4,234
Investments
Goodwill 2,284,986 -
Long-term receivables - -
Furniture, fixtures & Equip. - -
Propoerty and equipment, net 37,776 -
Other assets - -
---------------- ------------------
Total assets $ 2,409,496 $ 4,234
================ ==================
LIABILITIES
Current liabilities:
Accounts Payable $ 96,677 $ -
Accrued Liabilities 240,952 2,690
Advances from officers - -
Other current liabilities 775,250 -
---------------- ------------------
Total current liabilities 1,112,879 2,690
STOCKHOLDERS' EQUITY
Shareholders Equity
Preferred Stock - -
Common Stock 8,885 7,020
APIC 2,425,725 69,930
Accumulated deficit (1,137,993) (75,406)
---------------- -------------------
Total Shareholders Equity 1,296,617 1,544
----------------- -------------------
Total Liab. & Shareholders Equity 2,409,496 4,234
================== ===================
<page> F-1 </table>
(A Development Stage Enterprise)
Statement of Operations
(Unaudited)
<table>
For the Nine Months Ended From 4/28/98
March 31, 2002 Initial)
to December 31,
------------------------------ --------------
2002 2001 2001
<c> <c> <c>
Revenues:
Revenues - - -
Total Revenues - - -
Expenses:
Consulting Services 20,758 - 85,926
Depreciation 5,362
Professional Fees 57,442 7,512 140,869
Operating Expenses 618,402 79 27,761
------------ ------------- ------------
Total Expenses 755,192 7,591 259,918
Net Loss from Operations (755,192) (7,591) (259,918)
Other Income and Expenses:
Other Commission Income 126,000
Loss on Sale of Auto (10,986)
Gain on Sale of Investments 2,077
Non-Recurring Expenses (382,801)
------------ ------------- ------------
Net Loss before Taxes (1,137,993) (7,591) (142,827)
Provision for Income Taxes:
Income Tax Benefit
Net Loss (1,137,993) (7,591) (142,827)
============ ============== =============
Basic and Diluted Earnings Per Common Share (0.128) (0.001) (0.020)
Weighted Average number of Common Shares
used in per share calculations 8,886,637 7,035,000 7,000,560
============ ============== =============
<page> F-2 </table>
MediaBus Networks, Inc.
formerly B Y & C Management, Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
(Unaudited)
<table>
For the Six Months Ended From 4/28/98
March 31, 2001 Initial)
to March 31
------------------------------ --------------
2002 2001 2001
----------- ------------- --------------
<c> <c> <c>
Cash Flows from Operating Activities:
Net Incom (Loss) (1,137,993) ( 7,591) (142,827)
Changes in operating assets and liabilities: -
Accounts Receivable (1,500) -
Inventories (68,000) - -
Accounts Payable 96,677 (414) 21
Depreciation 5,362
Loss on Sale of Auto 10,986
Gain on Sale of Investments (2,077)
Advances from Officers 55,134
Stock issued for Services 26,950
---------- ------------- --------------
Total Adjustments 1,044,879 1,088 96,376
---------- ------------- --------------
Net Cash Used in Operating Activities (93,114) ( 6,505) (46,451)
---------- ------------- --------------
Cash Flows from Investing Activities:
Sale of Auto - 5,100
Purchase of Auto - (21,448)
Purchase Investment - (3,633)
Investment Sold - 5,710
Purchase Fixed Assets (37,776)
---------- ------------- --------------
Net Cash Used in Investing Activities (37,776) - (14,271)
========== ============= ==============
Cash Flows from Financing Activities:
Common Stock 8,885 - 65,000
APIC 2,425,725
(Increase) Decrease in Goodwill (2,284,989)
Note Payable -
Net Cash Provided for
Financing Activities 149,624 - 65,000
========== ============= ==============
Net Increase (Decrease) in Cash 18,734 (6,505) 4,278
Cash Balance, Begin Period - 10,739 -
---------- ------------- --------------
Cash Balance, Ending Period 18,734 4,234 4,278
========== ============= ==============
Supplemental Disclosures:
Cash Paid for Interest -
Cash Paid for income taxes -
Stock Issued for Services - - 6,950
<page> F-3 </table>
Statement of Stockholders' Equity
As of March 31, 2001
(Unaudited)
<table>
$0.001 Paid-In Accumulated Stockholders'
Shares Par Vaule Capital Deficit Equity
<c> <c> <c> <c> <c>
Balance, April 28, 1998 -
Stock Issuance 6,950,000 6,950 6,950
Net Income (Loss) - - - 57,379 57,379
---------------------------------------------------------------------
Balance, June 30, 1998 6,950,000 6,950 57,379 64,329
Net Income (Loss) - - (43,697) (43,697) -
---------------------------------------------------------------------
Balance, June 30, 1999 6,950,000 6,950 13,682 20,632
Net Income (Loss) - - - (20,381) (20,381)
---------------------------------------------------------------------
Balance, June 30, 2000 6,950,000 6,950 (6,699) 251
Shares Issued for Cash 65,000 65 64,935 65,000
Shares Issued for Services 20,000 20 19,980 20,000
-
Net Income (Loss) - - - (97,427) (97,427)
---------------------------------------------------------------------
Balance, June 30, 2001 7,035,000 7,035 84,915 (104,126) (12,176)
Stock Cancelled, 8/14/01 (5,200,000) (5,200) 5,200
Forward Split, 4 to 1 5,505,000 5,505 (5,505)
Net Income (Loss) - - - (11,883) (11,883)
---------------------------------------------------------------------
Balance, September 30, 2001 7,340,000 7,340 84,610 (116,009) (24,059)
Net Income (Loss) - - - (26,818) (26,818)
---------------------------------------------------------------------
Balance, December 31, 2001 7,340,000 7,340 84,610 (142,827) (50,877)
Forward Split, 8.25 to 1 60,555,000 60,555
Stock Cancelled, 1/25/02 (54,844,936) (54,845)
---------------------------------------------------------------------
Post-Split Total 5,710,064 5,710 -
Shares Issued for Purchase
of IDVDbox 478,260 478 750,000
Shares to Stephen Cavayero Debt 478,260 478 750,000
Shares Issued for Cash 242,857 243 850,000 850,000
Shares to Stephen Cavayero
Employment 188,305 188
Shares to MediaBus Management 1,788,891 1,788 -
Net Income (Loss) - - - (1,137,993) (1,137,993)
-----------------------------------------------------------------------
Balance, March 31, 2002 8,886,637 8,885 2,434,610 (1,280,820) (338,870)
<page> F-4 </table>
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
March 31, 2002
------------------
(Unaudited)
-----------
NOTE 1 - DESCRIPTION OF DEVELOPMENT STAGE ACTIVITIES
Mediabus Networks, Inc., formerly B Y & C Management, Inc.,
(the "Company") was incorporated on April 28, 1998 in the state of Florida.
The Company was an Internet based association of property management
professionals and licensed real estate brokers and agents that intended to
provide continuing education classes, to promote the adoption of national
standardized policies and procedures, and to develop certification programs
for its membership community. The Company has been in the development stage
since its inception. The Company plans to move into technologies and
services that allow for the distribution and virtual access of audio, video
and interactive content to consumer and business environments.
The Company has incurred an operating loss from inception through
March 31, 2001 and has an accumulated deficit of $1,137,993. Management
expects that the Company will be out of the development stage in late 2002
or early 2003.
NOTE 2 - BASIS OF PRESENTATION
The unaudited financial statements included herein have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 301(b)
of Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six months ended March 31, 2001
and 2000 and cumulative since inception (April 28, 1998 through March 31,
2001) are not necessarily indicative of the results that may be expected for the
fiscal year ended June 30, 2002. For further information, the statements should
be read in conjunction with the financial statements and notes thereto included
in the Company's 10-KSB 2001.
Shares of common stock issued by the Company for other than cash have
been assigned amount equivalent to the fair value of the service or assets
received in exchange.
Start-up and organization costs are recorded in accordance with the
provisions of Statement of Position 98-5, "Reporting Costs of Start-up
Activities" ("SOP 98-5"). SOP 98-5 requires that the costs of start-up
activities, including organization costs, be expensed as incurred.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
The Company, from time to time, may be subject to legal proceedings and
claims that arise in the ordinary course of its business. Currently, the Company
is not subject to any legal proceedings or other claims.
<page> F-5
Item 2. Management's Discussion and Analysis or Plan of Operation
General
Our mission is to provide technologies and services that allow for the
distribution and virtual access of audio, video and interactive content to
consumer and business environments. Our strategy has been to identify the
cream of the crop in the media distribution space and merge them into an
entity that will allow for our visions to be realized and for revenues to
be earned. We have most recently acquired the assets of iDVDBox, a Florida
based consumer technology and marketing company. Additionally,
simultaneous with this acquisition we also hired in former key employees of
Broad Stream Technologies, a hotel/hospitality in-room on-demand video
services group, which afforded us an entry into the "heads on beds" space.
We are currently listed as an over-the-counter electronic bulletin
board market with symbol MDBU.
The Company was originally incorporated on April 29, 1998 under the
name BY & C Management, Inc. The name was recently changed to MediaBus
Networks, Inc. on January 18, 2002. The Articles of Incorporation were
amended on June 27, 2000 when the authorized shares were amended to allow
100,000,000 shares @ $0.001 par value common stock and authorized
50,000,000 shares of Preferred Stock at $0.001 par value.
On January 7, 2002 Kenneth O. Lipscomb acquired the controlling interest in
B Y & C Management, Inc. Mr. Lipscomb paid $300,000 in cash for 6,800,000
shares of the common stock and he owns approximately 92% of the outstanding
shares of common stock. Mr. Lipscomb purchased his stock from three former
members of the Board of Directors of the Company as follows:
4,000,000 shares from Robert A. Younker;
2,000,000 shares from Carol Jean Gehlke; and
800,000 shares from Calvin K. Mees.
All three of these board members resigned on January 8, 2002.
On January 8, 2002, we acquired the assets of iDVDBox through an Asset
Purchase Agreement. The Company acquired all rights of ownership to the
iDVDBox Intellectual Property on a worldwide basis.
The Company agreed to issue the shareholders of iDVDBox an aggregate amount
of 478,260 shares as in exchange and consideration for the assets.
Further, the Company has hired three key personnel of iDVDBox to continue
the business of iDVDBox; Stephen Cavayero, the former President and
founder, Richard Cavayero former Head of Operations and Jerry Siah the
former Head of Engineering.
Stephen Cavayero will serve as the Executive Vice President; Richard Cavayero
as Vice President of Operations; and Jerry Siah as Vice President of
Engineering, all in the new Consumer Appliance Division.
As part of the Asset Purchase Agreement, the Company agreed to issue an
additional 478,262 shares to Stephen Cavayero in exchange for and in full
satisfaction of a $750,000 note payable to Mr. Cavayero from iDVDBox.
On May 15, 2002 we determined it would be in the best interest of the
shareholders to unwind the asset purchase with iDVDBox and return all the
assets and assumed liabilities in exchange for the return to the Company of
all the shares used in the acquisition. We will continue to persue the
hotel market for interactive media distribution.
Additionally, Mr Stephen Cavayero resigned as a member of the Board of
Directors and Vice-President effective on May 1, 2002. Jerry Siah and
Richard Cavayero also resigned their employment with the Company.
The Financial Accounting Standards Board (FASB) Impact
Statement of Financial Accounting Standard No. 130, Reporting Comprehensive
Income, (SFAS No. 130) issued by the FASB is effective for financial
statements with fiscal years beginning after December 15, 1997. Earlier
adoption is permitted. SFAS 130 establishes standards for reporting and display
of comprehensive income and its components in a full set of general-purpose
financial statements. The Company does not expect adoption of SFAS No. 130 to
have an effect, if any, on its financial position or its results of operations.
Statement of Financial Accounting Standard No. 131, Disclosure About Segments
Of An Enterprise And Related Information, (SFAS 131) issued by the FASB is
effective for financial statements with fiscal years beginning after December
15, 1997. Earlier application is permitted. SFAS No. 131 requires that public
companies report certain information about operating segments, products,
services and geographical areas in which they operate and their major
customers. The Company does not expect adoption of SFAS No. 131 to have an
effect on its financial position or results of operations; however, additional
disclosures may be made relating to the above items.
PART II
Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
The Company's Board of Directors approved an 8.25 to 1 share split given as
a dividend to all shareholders of record on January 8, 2002. The share
dividend took effect on January 18, 2002.
Stock Subscriptions
In January 2002 the Company issued:
(1) 478,510 shares of common stock for the purchase of the iDVDBox asset
purchase.
(2) 1,788,891 shares of common stock to MediaBus Networks, Inc. owners in
conjunction with thier management roles with the Company.
(3) 478,260 shares of common stock for the full satisfaction and payment of
a Promissory Note in the amount of $750,000 plus interest to Stephen B.
Cavayero, a Vice-President and Director of the Company.
(4) 188,305 shares of common stock to Stephen Cavayero pursuant to an
employment agreement;
(5) 242,857 shares of common stock for the cash in amount of $850,000.
(6) An option to purchase 562,165 shares of common stock for $3.50 per
share.
In May of 2002 1,145,075 shares of our common stock was returned to the
treasuery pursuant to an unwind agreement of the asset purchase with
iDVDBox and three employment agreements.
The Company believes the shares issued in these transactions did not involve a
public offering and were made in reliance upon an exemption from registration
provided by Regulation D and Section 4(2) of the Securities Act of 1933, as
amended.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to Vote of Security Holders.
None.
Item 5. Other Information
On January 25, 2002 the Board of Directors appointed Stephen B. Cavayero,
the Company's Vice-President to the serve on the Company's Board of
Directors until the next annual meeting of the shareholders. Effective May
1, 2002 Mr Cavayero resigned his position on the Company's Board of
Directors.
The Company expects to nominate other qualified individuals to serve on the
Board of Directors in the next quarter.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
Exhibit No. Description
- ----------- -----------
10.1 Unwind Agreement of Asset Purchase with iDVDBox
- ----------
(1) Filed as an exhibit to the Registrant's Form 8-K filed with the
Securities and Exchange Commission on January 16, 2002
(Registration No. 000-31489) and incorporated herein by reference.
(b) Reports on Form 8-K
-------------------
January 15, 2002 8-K
January 16, 2002 8-K/A
February 28, 2002 8-K/A
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned hereunto duly authorized.
MediaBus Networks, Inc.
Dated: May 15, 2002 /s/ Kenneth O. Lipscomb
KENNETH O. LIPSCOMB, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/KENNETH O. LIPSCOMB
Kenneth O. Lipscomb Chairman & President May 15, 2002
EXHIBITS
Exhibit No. Description
- ----------- -----------
10.1 Unwind Agreement of Asset Purchase with iDVDBox