UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
(x ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 2002
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( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
Commission File number 333-51180
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OFFICE MANAGERS, INC.
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(Exact name of registrant as specified in charter)
NEVADA 87-0661638
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(State or other jurisdiction of (I.R.S. Employer I.D. No.)
Incorporation or organization)
136 East South Temple, Suite 1600, Salt Lake City, Utah 84111
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (801) 363-2656
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Securities registered pursuant to section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
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None None
Securities registered pursuant to section 12 (g ) of the Act:
None
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(Title of Class)
Check whether the Issuer (1 ) filed all reports required to be filed by
section 13 or 15 (d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
(1) Yes [x ] No [ ] (2) Yes [x ] No [ ]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: $ 0
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The aggregate market value of the issuer's voting stock held as of March 3,
2003, by non-affiliates of the issuer based on the average of the bid and
asked prices of the stock on March 3, 2003 was $6,470,770.
As of March 3, 2003, the registrant had 37,627,911 shares of common stock
issued and outstanding.
Transitional Small Business Disclosure Format. Yes [ ]No [X]
Documents incorporated by reference: None.
TABLE OF CONTENTS
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PART I Page
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ITEM 1. DESCRIPTION OF BUSINESS. . . . . . . . . . . . . . . . . . . . .4
ITEM 2. DESCRIPTION OF PROPERTIES. . . . . . . . . . . . . . . . . . . 13
ITEM 3. LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . 13
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS. . . . . . . 13
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS. . . . . . . . . . . . . . . . . . . . . . 14
ITEM 6. PLAN OF OPERATION. . . . . . . . . . . . . . . . . . . . . . . 16
ITEM 7. FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 17
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . 27
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16 (a)
OF THE EXCHANGE ACT. . . . . . . . . . . . . . . . . . . . . . 27
ITEM 10. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . 28
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . 29
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . 31
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . 31
ITEM 14. CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . 31
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PART I
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FORWARD
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This Form 10-KSB contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. For
this purpose any statements contained in this Form 10-KSB that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate" or "continue" or comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainty, and
actual results may differ materially depending on a variety of factors,
many of which are not within the Company's control. These factors include
but are not limited to economic conditions generally and in the industries
in which the Company and its customers participate; competition within the
Company's industry, including competition from much larger competitors;
technological advances which could render the Company's products less
competitive or obsolete; failure by the Company to successfully develop new
products or to anticipate current or prospective customers' product needs;
price increase or supply limitations for components purchased by the
Company for use in its products; and delays, reductions, or cancellations
of orders previously placed with the Company.
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ITEM 1. DESCRIPTION OF BUSINESS
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Company History
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Office Managers, Inc., was formed as a Nevada corporation on September
19, 2000, and is a development stage company with limited operating
history. The Company's executive offices are located at 136 East South
Temple, Suite 1600, Salt Lake City, Utah 84111. Its telephone number is
(801) 363-2656. The Company's website is located at
www.officemanagers.net. In July 2002, the Company completed its initial
public offering in which it raised total funds of $509,850.
Business of the Company
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The Company's business focus is to act as a consultant; matching the
needs of its clients to the goods and services of reputable providers. To
date, the Company's primary business focus has been on developing its
website to provide small business and home office owners access to high
quality credit and collections professionals nationwide. The Company was
recently approached by a client interested in exploring entrance into the
animal waste management industry. After investigation of the client's
proposal, the Company believes opportunity exists in the animal waste
management industry and has formed a wholly-owned subsidiary Vogue
Environmental Solutions, Inc., a Nevada corporation, to further explore the
industry and to consult on and participate in the design, construction,
production and marketing of digester systems.
4
Credit, Collections and Financing
The Company is working to develop a comprehensive website devoted to
addressing the credit and collections needs of small business and home
office owners. The Company's website, which is in the early stages of
development, may be viewed at www.officemanagers.net. Via its website and
through its customer service department, the Company offers consulting
services to small business and home office owners in the areas of credit
and collections. The Company will assist small business and home office
owners by providing:
. A network of reliable, qualified professional service providers
in the areas of credit, collections and financing from which the
Company will provide referrals to office managers seeking such
services.
. A personalized professional customer service department, which
provides referrals to, and addresses the credit and collections
needs of small business and home office owners.
. Automated online sales of business products in over ten different
categories including office supplies, computer hardware and
software and furniture.
. Online advertising.
Referrals of Professional Services
To date, the Company has primarily focused its referral services in
the areas of credit, collections and financing. The primary target market
for the Company's referral services is small businesses and home offices
owners. The Company believes that most small business owners and home
office owners typically rely upon on one or a few credit and collections
agencies in the same city or state where their business is located to
collect accounts they are unable to collect by themselves. This
arrangement works well for collections from in-state customers. As most
credit and collections agencies are local or at best regional, however, a
problem arises with customers outside the state or region of the business.
Most delinquent customers simply ignore threats from out-of-state credit
and collection agencies and respond only if and when a collection agency
located in the customer's state is retained. The problem for most small
business and home office owners is that they do not have the resources of
larger companies. Small business and home office owners typically do not
know, have access to or have a comfort level with credit and collections
professionals outside their immediate locale. The Company's website seeks
to eliminate this problem.
The Company currently knows of no other referral service for credit
and collections professionals, outside of local bar association attorney
referral systems, which typically receive no fee for referrals. The
Company believes there are several reasons why potential clients may prefer
our services over those of attorney referral services sponsored by local
bar associations. Most small business and home office owners do not have
ready access to the phone numbers of each state's bar agency. The
Company's website, however, is being developed to provide easy access to a
network of reputable credit and collections professionals. The Company
believes if these business owners can log onto a website and receive a
referral to a reputable credit and collections professional at no cost to
them, there will be little incentive for them to go through the hassle of
searching for a local attorney referral service. The service provider
receiving the referral will pay us a $100 fee. There is absolutely no cost
to the business owner for the referral. Moreover, even if the business
owner locates a local attorney referral service, typically, there are only
minimal standards imposed on local bar association referral services.
5
There is no requirement that they refer to the best or most competent
collections agencies. Also, many credit and collections agencies are not
strictly law firms and therefore may not even be included in the local bar
association referral service at all. Furthermore, the Company believes
that many of its potential clients may not even think to contact a bar
agency when they are seeking to retain an out of state collections agency.
The Company is working to develop a network of high quality credit and
collections professionals. The Company will typically only accept
reputable, bonded professionals as members of our referral network. To
assure that customers receive high quality service, the Company has
implemented a follow-up program to seek feedback from all individuals
receiving referrals. This follow-up program is designed to evaluate the
customers' experiences with the professional to whom they were referred.
Based on this feedback, professionals will be evaluated for ongoing
suitability as a referral source.
Development of our Network
Initially, the Company had hoped to include at least three
professionals in each major city in the United States in its network.
While the Company's intensive direct marketing campaign has not begun, the
Company has had contact with some credit and collections professionals.
The Company continues to work with MediaComm Marketing International, Inc.,
to develop its direct marketing program focused on building its referral
network. The Company is in the process of providing MediaComm with
specific criteria for the service providers it wants to include in its
referral network. Based on that criteria, MediaComm will identify, contact
and screen potential service providers. Following screening by MediaComm,
the Company's management will interview potential candidates and decide
whether those candidates who express interest in participating in the
database should be included in the network. MediaComm will also seek to
establish relationships with professional organizations that can provide
the Company referrals to competent professionals.
To date, the Company has been successful in retaining the services of
very few credit and collections professionals for inclusion in its network.
The Company believes this is due to several factors: doubt on the part of
credit and collections professionals that the $100 per referral fee they
pay will be worth the referral they are given; questions about the quantity
and quality of referrals the Company will be able to provide; and a lack of
knowledge about the Company's services because the Company's direct
marketing campaign has not yet commenced. The Company hopes its direct
marketing campaign will increase the number of credit and collections
professionals willing to participate in its referral database. If the
Company cannot convince a sufficient number of credit and collections
professionals of the value of becoming a member of its referral database,
the Company will have no service to provide to its targeted markets.
Marketing and Delivery of our Referral Service
The Company is marketing its professional service referral system as a
credit and collections resource for small business and home office owners.
Individuals visiting our site in search of a referral are directed to call
a 1-800 number that puts them in touch with one of the Company's customer
service representatives. The customer service representative asks for
information relevant to the caller's location, situation and need. This
information is logged into our database. Based on the information
provided, the customer service representative provides the caller with the
name of a professional. The caller is informed that the professional will
contact him within 24 hours. The customer service representative then
contacts the professional and discloses the relevant information. If the
professional is interested in providing the services needed, the
6
professional is instructed to contact the caller within 24 hours. The
professional is then billed a $100 referral fee, which is paid directly to
the Company. Following the expiration of the 24-hour period, the customer
service representative contacts the caller to assure that he or she was
called by the professional, and is satisfied with the referral. If the
professional has not contacted the caller, or the caller would like a
second referral, another referral is given.
In addition to being provided with a referral, the caller receives a
free or significantly discounted initial visit with the professional.
To date, the Company has received no requests for referrals. The
Company believes there may be several explanations why no one has used its
service yet. First, up to this point the Company has not launched a
significant campaign to market its services to its target market because it
wants to wait until it has sufficient credit and collections professionals
committed to its network to be able to meet customer needs. Second, it
could be that home office and small business owners do not believe the
service the Company offers represents a value to them. If the Company is
unable to convince home office and small business owners that the referral
service it provides is a benefit to them, the Company will have very
limited revenue, if any, and will be unable to operate profitably.
Online Sales of Office Products
As a service to its target market, the Company intends to sell certain
office products on its website. The business model for its online office
products store will not vary significantly from many of the current office
product e-commerce sites. While the Company has not determined the full
range of products it may offer, it intends to offer at least 10 different
categories of office-related "commodity" type products, including computer
hardware and software; office supplies, such as pens, pencils, paper,
binders, etc.; furniture; and office machines. The Company has posted
links on its website to a number of online office products retailers for
the benefit of those visiting its website in search of office products.
Distribution Network
Rather than undertake the significant capital expenditures associated
with a traditional retail sales operation, the Company is working to
outsource all of its necessary operating infrastructure. The Company
believes that outsourcing is key to an efficient and profitable e-commerce
model. As part of this strategy, the Company is seeking to enter into
relationships with distributors in a number of product segments. These
distributors will carry the inventory of goods from which products will be
picked, packed and shipped directly to the Company's customers. Through
this system, the Company can effectively leverage the inventory management
and fulfillment capabilities of its providers to deliver products cost
effectively to its customers. To date, the Company has no agreements with
any distributors.
The Company is seeking to establish secure electronic connections with
product providers so that orders placed by its customers will be
transmitted directly to the distributor. The orders will be automatically
fed into the distributor's system where they will be processed, picked,
packed and shipped. The Company anticipates that orders will be processed
and ready for shipment within three to five days from the time a customer
places an order at our website.
7
The Company is also seeking to establish integrated electronic
connections with each of its distribution providers that can provide it
with data on inventory quantities, shipping status, shipper tracking
numbers and the estimated time of arrival for back-ordered products. Once
these connections are established, the Company's website will provide
direct links from a customer's order information to United Parcel Service
and FederalExpress to provide up-to-the-minute information on delivery
status.
Advertising
Advertising will be sold on the Company's website. The Company hopes,
given the narrow focus of its website, that its site may provide attractive
demographics which will appeal to participants in the professional services
and office products markets. Attractive rates will be given to affiliates
and strategic partners, such as service providers and e-commerce partners.
While the Company believes its website will provide a positive
advertising platform, the primary focus of its website will be providing
services, not advertising and its does not intend to aggressively pursue ad
sales.
Marketing Strategy
Successful internet sites build their business on an understanding of
the importance of creating positive and productive relationships among the
community. Accordingly, the Company believes its success will be based on
a combination of quality and in-depth, lasting relationships within the
community it hopes to develop. The Company will pursue an aggressive brand
building strategy, utilizing a combination of innovative online and offline
industry methods targeted specifically to key market segments. This will
include:
. Providing superior customer value through a combination of
services and delivery mechanisms, broad product selection, fair
prices and outstanding customer service.
. Creating a comfortable, easy to use environment with skilled
customer service representatives available to assist customers.
Direct Sales
In addition to assisting the Company in establishing its referral
network, MediaComm is helping the Company develop and implement an
extensive marketing campaign focused on contacting small business and home
office owners, service providers and product suppliers. This campaign will
be aimed at creating brand awareness, building the Company's referral
network and developing product and distribution relationships.
Advertising
The Company's online advertising will include:
. Content tailored e-mail drops.
. Reciprocal web links with other websites.
. Presence in web directories.
. Selected banner advertising.
8
Its offline advertising will include:
. Articles and ads in internet industry publications, general
business magazines and newsprint.
. Trade Shows and Conferences.
. Direct mail campaigns.
. TV and radio spots in selected markets.
. Full color brochures.
The Company's offline advertising campaign will initially be focused
in the western United States. Thereafter, as the Company begins to build
brand recognition, it will expand its offline advertising to other regions,
with the expectation of having a nationwide offline advertising presence
within three to five years.
Direct Marketing
Pursuant to the Company's agreement with MediaComm, MediaComm has
begun to develop and implement a direct marketing campaign for the Company.
This includes market research, developing a customized database, conducting
direct mailings, direct e-mailings, other direct advertising and
undertaking all other necessary activities to create a direct marketing
campaign designed to drive traffic to its website.
Trade Shows and Conferences
Once the Company has more professionals committed to its network, the
Company will seek to have a presence at conferences for credit, collections
and financing professionals, internet-related business-to-business trade
shows and offline office supply trade shows to build brand awareness and
relationships with small business and home office owners and industry
partners.
Public Relations
As discussed above, MediaComm will provide the Company valuable market
research and information, manage both its online and offline advertising
campaigns and otherwise handle most of the Company's public relations
matters.
Technology and Systems
The Company has contracted with Vincent Gonzales and Associates to
assist it in designing and constructing its website. Vincent Gonzales and
Associates will also provide ongoing maintenance. The Company has asked
Vincent Gonzales and Associates to primarily rely upon commercially
available licensed technologies in building its website. The Company
prefers to license available technology whenever possible rather than seek
internally-developed solutions.
The Company anticipates its website's front-end will be built on
industry standard technologies. The business logic of the site will be
contained in a variety of currently available programs. These programs
will handle user interface, ordering and customer communications and will
operate on redundant servers. If needed, the Company will add additional
servers and capacity. The Company's system will include redundant hardware
on mission critical components, which it believes can survive the failure
of several entire servers with relatively little downtime. The Company
will seek to create a system that can quickly and easily expand capacity
without significant additional development. The Company will run its key
systems below capacity to support anticipated growth.
9
Order Processing Applications.
The Company will use a set of computer software applications for
processing each customer order. These applications will charge customer
credit cards, print order information, transmit order information
electronically to distributors and deposit transaction information into the
Company's accounting system. All credit card numbers and financial and
credit information will be secured using encryption standards, and the
Company will maintain credit card numbers behind appropriate fire walls.
Competition
While the Company is not familiar with any other competitor who is
offering exactly the same mix of services and products, it believes that it
will be competing in several highly competitive industries and that its
principal competitors in these industries have substantially more
financial, operating and other resources available to them than the
Company. For instance, the Company is aware that there are a number of
established referral services with whom it will compete for customers. The
Company believes its primary competitors in this area include a number of
established privately and publicly operated attorney referral services.
Similarly, there are many regionally based credit and collections agencies
which can provide referrals within their geographic region. The Company
also is aware that there are a growing number of credit and collections
agencies who specialize in providing services to a single market segment,
such as to medical professionals with whom it will compete for customers.
Many of these agencies have been in operation for many years, have strong
reputations, substantial client bases and significantly greater assets than
the Company.
The Company will also offer office products to its target market
primarily as a convenience and to help build a strong community among its
users. While the Company does not envision its online product sales as a
primary value driver of its business model, to the extent the Company
engages in selling office products, it will be competing in a highly
competitive industry dominated by such industry giants as Staples, Office
Depot, and Office Max. Clearly, the Company cannot compete directly with
these competitors given their significantly greater financial, marketing,
technical and other resources and their established reputations in the
industry.
Animal Waste Management Systems
Vogue Environmental Solutions, Inc.
On February 13, 2003, the Company formed Vogue Environmental
Solutions, Inc., a Nevada corporation, ("Vogue") as a wholly owned
subsidiary to explore the animal waste management industry and to consult
on and participate in the design, construction, production and marketing of
animal waste digester systems. Vogue has retained the services of Charles
Yourshaw, a professional engineer, to assist in the further exploration of
the animal waste management industry and the possible development of
digester systems.
Animal Waste Management
Management of animal waste from dairy, chicken, pig, hog and beef
farms is a significant problem for farmers. For example, an average milk
cow produces about 24 pounds of waste per day. A dairy farm of 200 cows
will produce almost two and a half tons of waste per day. In the past,
farmers have simply dumped the waste on an unused portion of their farm
and left it to biodegrade. With heightening federal and state regulation
of environmental, air and water quality standards and populations
encroaching on farm lands, dumping the waste on the back 40 acres is
becoming less desirable.
10
Based on preliminary investigations, the Company believes that
anaerobic digester systems represent a potential solution to the animal
waste management problem. Anaerobic digester systems rely on anaerobic
decomposition to decompose animal waste, not unlike the process that occurs
naturally in swamps, water-logged soils, rice fields and deep bodies of
water.
Anaerobic decomposition is a complex process. It occurs in three
basic stages as the result of the activity of a variety of microorganisms.
Initially, a group of microorganisms converts the organic material to a
form that a second group of organisms utilizes to form organic acids.
Methane-producing anaerobic bacteria utilize these acids and complete the
decomposition process. One of the bi-products of anaerobic decomposition
is the production of biogas (methane). Another is the effluent of the
system (the remaining digested material), which is usually high in
nutrients and can be used as a soil fertilizer.
A variety of factors affect the rate of digestion. The most important
is temperature. To optimize the digestion process, the digester must be
kept at a constant temperature, as rapid changes upset bacterial activity.
Anaerobic bacteria digest most efficiently at temperatures ranging from 98
and 103 degrees Fahrenheit. Depending on climate, most anaerobic systems
require a heating source to maintain optimal digestion. Therefore, most
systems incorporate a method for capturing the biogas produced and using it
to heat the digester vessel(s). Biogas can also be used as a fuel to run
an engine or it can be converted to electricity. When burned, a cubic foot
of biogas yields about 10 BTU of heat energy per percentage of methane gas
composition. The relative percentage of methane gas in biogas depends on
the feed material and management of the process. Biogas produced in
anaerobic digesters typically consists of 50% to 80% methane gas.
Digester systems are not new. As discussed above, the process can be
complex. Historically, the equipment has been temperamental and expensive
both to purchase and to operate. Moreover, the process requires monitoring
from the farmer. For these reasons, digester systems have not historically
met with great market acceptance in the past, particularly with smaller
farmers. The Company believes, however, that changing legislation, market
conditions and advances in technology may increase the attractiveness of
digester systems.
For instance, for many years the United States Environmental
Protection Agency ("EPA") has been investigating animal waste pollution and
its effects. The EPA has announced that it plans to create federal rules
to govern feedlot waste management.
The $73.5 billion 2002 Farm Bill passed in May 2002, does not directly
address provisions for manure cleanup and storage at dairy operations. It
does, however, "offer incentives for good conservation practiced on working
lands" according to a statement made by President George W. Bush at the
signing of the Bill. A major program emphasized in the 2002 Farm Bill is
the Environmental Quality Incentives Program ("EQIP"), which focuses on
conservation. EQIP provides technical assistance, cost sharing (up to
75%), and incentive payments to assist livestock and crop producers with
conservation and environmental improvements, which includes livestock waste
handling. These programs help farmers meet new higher environmental
standards, while continuing to work the land. The 2003 Budget proposes to
provide a significant increase in funds for all research funding and
research grant programs. EQIP was authorized at $200 million in 2002 and
will ultimately go up to $1.3 billion by 2007, of which 60% of those funds
must go to livestock operations.
11
At this point, the Company is in the preliminary stages of
investigation. The Company understands that the primary reason digester
systems have been unsuccessful in the past is because of the cost and
complexity of the systems. Therefore, to be successful, the Company must
find a design that is cost effective and reliable, both to install and to
operate. To this end, Company representatives recently met with a
manufacturer in Zhongshan, Guangdong, China, with the capability and
experience to manufacture major components of the system in mainland China.
The Company believes the cost-savings of having various components of the
system manufactured in China could significantly decrease the overall cost
of the system, thereby making it a more attractive alternative to farmers.
Competition
Vogue will operate in a highly competitive environment. Many of its
competitors have greater resources, greater engineering expertise,
established clientele, existing industry relationships, more know-how and
more business experience than Vogue does. Because of their resources,
Vogue's competition may be able to implement improvements in technology
much more rapidly than Vogue, potentially giving the competition a
significant advantage in the marketplace.
Intellectual Property
The Company believes the protection of intellectual property, service
marks, trademarks, trade secrets and other intellectual property rights may
be critical to its future success. As the Company develops intellectual
property, it will seek to rely on various intellectual property laws and
contractual restrictions to protect its proprietary rights in products and
services. The Company has acquired and registered its domain name with the
appropriate regulatory bodies in an effort to protect such. When the
Company retains contractors and suppliers to assist it in the development
of its products, it intends to have them enter into confidentiality
agreements, invention assignment agreements and non-disclosure agreements
to limit access to and disclosure of any proprietary information the
Company may have or develop. The Company cannot assure that these
contractual arrangements or the other steps taken by it to protect the
intellectual property it may develop will prove sufficient to prevent
misappropriation of technology or to deter independent third party
development of similar technologies. As they are created, the Company will
pursue the registration of its intellectual property, key trademarks and
service marks in the U.S. Effective intellectual property protection,
however, may not be available in every country in which the Company's
services or products may be made available in the future. There is also no
guarantee that the intellectual property, trademarks or servicemarks for
which the Company may apply for registration will offer adequate protection
under applicable law.
As is customary with technology companies, from time to time the
Company may receive or become aware of, correspondence claiming potential
infringement of other parties' proprietary rights. The Company could incur
significant costs and diversion of management time and resources to defend
claims regardless of the validity of these claims. The Company may not
have adequate resources to defend those claims, and any associated costs
and distractions could have a material adverse effect on its business,
financial condition and results of operations. As an alternative to
litigation, the Company may seek licenses for other parties' intellectual
property rights. The Company may not be successful in obtaining any
necessary licenses on commercially reasonable terms, if at all.
12
Key Consultants
The Company has no employees. The Company has retained the services
of six consultants, who provide services to the Company ranging from
management and marketing to office support, website support and
development, investor relations and engineering services.
Among the consultants retained by the Company is Lincoln
Communications, a management consulting firm owned by John Hickey, the
Company's President. Through Lincoln Communications, Mr. Hickey provides
management functions and oversees the day to day operations of the Company.
The Company has also retained the services of MediaComm Marketing
International, Inc., to provide a number of services including developing a
direct contact program focused on retaining credit and collections
professionals to participate in its referral network, creating an
advertising campaign to drive traffic to its website and handling public
relations matters. To date, MediaComm has been paid $25,000 for services
and was issued 150,000 restricted shares of Company common stock.
The Company, through its subsidiary Vogue Environmental, Inc., is
negotiating the final terms of an agreement with Charles Yourshaw, an
engineer, to work with the Company on the investigation and potential
development of digester systems. If and/or when the Company determines to
pursue the animal waste business, Mr. Yourshaw would be responsible to
oversee the design and eventual production of digester systems. To date,
Mr. Yourshaw has received 1,029,411 restricted common shares of the Company
for services rendered. It is anticipated that the Company will pay Mr.
Yourshaw the equivalent of $10,000 per month in restricted Company common
shares as compensation for his services. The number of shares Mr. Yourshaw
will receive monthly will vary depending on the market price of the
Company's common shares.
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ITEM 2. DESCRIPTION OF PROPERTY
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The Company's principal executive offices are located in approximately
1,500 square feet of office space in Salt Lake City, Utah under a lease
that expires May 31, 2005. The Company pays approximately $3,800 a month
in rent for this space.
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ITEM 3. LEGAL PROCEEDINGS
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No legal proceedings are threatened or pending against the Company or
any of its officers or directors. Further, none of the Company's officers
or directors or affiliates of the Company are parties against the Company
or have any material interests in actions that are adverse to the Company's
interests.
==========================================================================
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES
HOLDERS
==========================================================================
No matters were submitted to a vote of the Company's shareholders
during the fiscal year ended December 31, 2002.
13
==========================================================================
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
==========================================================================
The Company's common stock is listed on the NASD OTC Bulletin Board
under the symbol "OFFM." As of March 3, 2003, the Company had 255 holders
of record holding 37,627,911 common shares. Of the issued and outstanding
common stock, 11,325,385 are free trading and 26,302,526 are "restricted
securities"as that term is defined in Rule 144 promulgated by the
Securities and Exchange Commission . The Company has never declared a
dividend on its common shares.
The published bid and ask quotations are included in the chart below.
These quotations represent prices between dealers and do not include retail
markup, markdown or commissions. In addition, these quotations may not
reflect actual transactions.
BID PRICES ASK PRICES
HIGH LOW HIGH LOW
2002
- ----
Sept. 9 (First available) None None None None
thru Sept. 30
Oct. 1 thru Dec. 31 .40 .18 .45 .20
The foregoing figures were furnished to the Company by Pink Sheets,
LLC., 304 Hudson Street, 2nd Floor, New York, New York 10013.
Recent Sales of Unregistered Securities
No instruments defining the rights of the holders of any class of
registered securities have been materially modified, limited or qualified.
During the quarter ended December 31, 2002, the Company issued no
securities. Subsequent to December 31, 2002, the Company has issued the
following securities which have not been registered pursuant to the
Securities and Exchange Act of 1933.
On January 3, 2003, the Company issued 150,000 restricted common
shares to MediaComm Marketing for services to be rendered to the Company in
connection with the development of its referral database and marketing of
Office Managers' services. The shares were issued without registration
under the Securities Act of 1933 in reliance on an exemption from
registration provided by Section 4(2) of the Securities Act, and from
similar applicable state securities laws, rules and regulations exempting
the offer and sale of these securities by available state exemptions. No
general solicitation was made in connection with the offer or sale of these
securities. No funds were received by the Company for these shares.
On January 3, 2003, 100,000 restricted common shares were issued to
Vincent Gonzales and Associates for website development and maintenance
services provided and to be to the Company. The shares were issued without
registration under the Securities Act of 1933 in reliance on an exemption
from registration provided by Section 4(2) of the Securities Act, and from
similar applicable state securities laws, rules and regulations exempting
the offer and sale of these securities by available state exemptions. No
general solicitation was made in connection with the offer or sale of these
securities. No funds were received by the Company for these shares.
14
On January 3, 2003, the Company issued 250,000 restricted common
shares to Roger Reynolds for investor and shareholder relations services to
be provided to the Company. The shares were issued without registration
under the Securities Act of 1933 in reliance on an exemption from
registration provided by Section 4(2) of the Securities Act, and from
similar applicable state securities laws, rules and regulations exempting
the offer and sale of these securities by available state exemptions. No
general solicitation was made in connection with the offer or sale of these
securities. No funds were received by the Company for these shares.
On February 20, 2003, the Company issued 1,000,000 restricted common
shares to Charles Yourshaw for services rendered and to be rendered to the
Company in connection with the operations of its wholly owned subsidiary
Vogue Environmental Solutions, Inc. The shares were issued without
registration under the Securities Act of 1933 in reliance on an exemption
from registration provided by Section 4(2) of the Securities Act, and from
similar applicable state securities laws, rules and regulations exempting
the offer and sale of these securities by available state exemptions. No
general solicitation was made in connection with the offer or sale of these
securities. No funds were received by the Company for these shares.
On February 20, 2003, the Company issued 250,000 restricted common
shares to David Wagner, for services rendered and to be rendered to the
Company in connection with the operations of Vogue Environmental. The
shares were issued without registration under the Securities Act of 1933 in
reliance on an exemption from registration provided by Section 4(2) of the
Securities Act, and from similar applicable state securities laws, rules
and regulations exempting the offer and sale of these securities by
available state exemptions. No general solicitation was made in connection
with the offer or sale of these securities. No funds were received by the
Company for these shares.
On February 20, 2003, the Company issued 1,250,000 restricted common
shares to consultants in China and Canada who have been and will continue
to assist Vogue Environmental in securing appropriate manufacturing
capabilities in China. The shares were issued without registration under
the Securities Act of 1933 in reliance on an exemption from registration
provided by Section 4(2) of the Securities Act, and from similar
applicable state securities laws, rules and regulations exempting the offer
and sale of these securities by available state exemptions. No general
solicitation was made in connection with the offer or sale of these
securities. No funds were received by the Company for these shares.
On January 11, 2002, the Company's public offering pursuant to
registration of units on Securities and Exchange Commission ("SEC") Form
was declared effective by the SEC. The offering was conducted by the
officers of the Company. The Company received subscriptions for 5,098,500
units and total proceeds of $509,850. The offering closed upon the
expiration of the offering period on July 10, 2002. As the offering was
not underwritten, the Company paid no underwriting expenses. No
distribution expenses were paid during the quarter ended December 31,
2002, and no distribution expenses were or will be paid to any officer,
director or affiliate of the Company.
15
During the year ended December 31, 2002, the Company used
approximately $226,415 of the proceeds of the offering to cover working
capital costs. During the year ended December 31, 2002, the Company also
used approximately $161,096 of the proceeds of the offering to cover market
development expenses. During the quarter ended December 31, 2002, the
Company paid approximately $30,000 to Ambra Resources Group, Inc., a
related party, as partial payment of no interest, demand loans made to the
Company. The Company owes Ambra $50,923. Approximately $32,000 of the
proceeds of the offering were paid to officers and directors of the Company
as compensation for services rendered to the Company during the year ended
December 31, 2002. The Company has approximately $90,000 of the proceeds
of the offering remaining.
==========================================================================
ITEM 6. PLAN OF OPERATIONS
==========================================================================
For a complete understanding, this Plan of Operations should be read
in conjunction with Part I- Item 7. Financial Statements to this Form
10- KSB.
Office Managers, Inc., is a Nevada corporation acting primarily as a
consultant to businesses helping them match their needs to the goods and
services of reputable providers. The Company is considered a development
stage company because it has not yet generated revenue from sale of its
products. Since its inception, the Company has devoted substantially all
of its efforts to developing its service and product offerings and to the
search for sources of capital to fund its efforts.
Source of Funds
As discussed above, on July 10, 2002, the Company closed its initial
public offering pursuant to an effective registration statement with the
SEC. The Company received total proceeds of $509,850 from the offering.
Since that time, the Company has relied on the proceeds of that offering to
fund its operations. As of December 31, 2002, the Company has spent
approximately $419,850 of the funds raised in the offering. At the present
time, the Company anticipates the funds remaining from the offering should
be sufficient to meet operating expenses of the Company through the first
and possibly second quarters of 2003.
Once the proceeds from the public offering are fully used, the Company
will need to seek additional funding. This funding may be sought by means
of private equity or debt financing by the Company. The Company currently
has no commitments from any party to provide funding and there is no way to
predict when, or if, any such funding could materialize. There is no
assurance that the Company will be successful in obtaining additional
funding on attractive terms or at all. If the Company is unsuccessful in
obtaining additional funding by the end of the second quarter of 2003, the
Company may be unable to continue operations.
Results of Operations
During the period from inception, September 19, 2000, to December 31,
2002, the Company has not generated any revenue. The Company does not
expect to generate any material revenues from its credit and collections
referral service or online office product sales until at least the third
quarter of 2003. At this time, the Company does not know if or when it may
generate revenues from anaerobic digester systems. The Company will use
substantially all of its resources for further development of its website,
referral database and an anaerobic digester system.
16
As of December 31, 2002, the Company had an accumulated deficit of
($447,746) funded by paid-in capital. During the year ended December 31,
2002, the Company spent $161,096 in market development expenses compared to
$-0- in the same period 2001. During the year ended December 31, 2002, the
Company spent $226,415 in administrative expenses compared to $11,639 for
the same period of 2001. During the year ended December 31, 2002, the
Company had losses from operations of ($389,097) compared to losses in the
period 2001 of ($11,639). These increases are due to the Company
undertaking operations and efforts to develop its website and referral
database and to the investigation of digester systems.
The Company has financed its operations mainly through the sale of its
common stock and has been entirely dependent on outside sources of
financing for continuation of operations. The Company expects to continue
its development efforts at the same pace until funds raised in the public
offering are exhausted. The Company anticipates the funds from the
offering may be sufficient to fund operations for the next three to six
months. The Company will then evaluate its situation to determine the
potential availability of funds and to seek additional funding. At that
time, the Company will also determine whether it needs to scale back its
efforts to minimize expenses. As stated previously, there is no assurance
that the Company will be successful in obtaining additional funding on
acceptable terms or at all.
The Company currently is currently paying monthly fees to its
President, John Hickey and five other consultants for services being
rendered to the Company. The total fees paid to these individuals on a
monthly basis is approximately $17,000. The Company does not anticipate
hiring employees in 2003 unless the Company is successful in securing
additional funding. Once the Company has exhausted the funds raised in the
offering, unless it is unable to raise additional funds, it is unlikely the
Company will be able to continue to retain the services of some or any of
these consultants.
==========================================================================
ITEM 7. FINANCIAL STATEMENTS
==========================================================================
[This space intentionally left blank.]
SELLERS AND ANDERSEN, L.L.C. 941 East 3300 South, Suite 202
Certified Public Accountants
and Business Consultants Salt Lake City, Utah 84106
Member SEC Practice Section of the AICPA Telephone 801 486-0096
Fax 801 486-0098
Board of Directors
Office Managers, Inc.
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of Office Managers, Inc.
(development stage company) at December 31, 2002, and the related
statements of operations, stockholders' equity, and cash flows and for the
years ended December 31, 2002 and 2001 and the period September 19, 2000
(date of inception) to December 31, 2002. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall balance sheet 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 Office Managers Inc. at
December 31, 2002 and the results of operations and cash flows for the
years ended December 31, 2002 and 2001 and the period September 19, 2000
to December 31, 2002 in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company will need additional
working capital to service its debt and for its planned activity, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 7 .
These financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Salt Lake City, Utah
March 4, 2003 /s/Sellers and Andersen, L.L.C.
OFFICE MANAGERS, INC.
( Development Stage Company)
BALANCE SHEET
December 31, 2002
<Table>
==========================================================================
ASSETS
CURRENT ASSETS
Cash $ 90,601
----------
Total Current Assets 90,601
OTHER ASSETS
Office equipment - net of accumulated depreciation 13,498
----------
Web site - net of accumulated amortization 5,027
----------
$ 109,126
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,305
Accounts payable - affiliate 50,923
---------
Total Current Liabilities 52,228
---------
STOCKHOLDERS' EQUITY
Common stock
50,000,000 shares authorized, at $0.001 par value;
34,598,500 shares issued and outstanding 34,599
Capital in excess of par value 470,045
Deficit accumulated during the development stage (447,746)
---------
Total Stockholders' Equity 56,898
---------
$109,126
=========
</Table>
The accompanying notes are an integral part of these financial statements.
19
OFFICE MANAGERS, INC.
( Development Stage Company)
STATEMENT OF OPERATIONS
For the Years Ended December 31, 2002 and 2001 and the period
September 19, 2000 (Date of Inception) to December 31, 2002
<Table>
<Caption>
Dec 31, Dec 31, Sept 19, 2000
2002 2001 to Dec 31, 2002
----------- ----------- ---------------
REVENUES $ - $ - $ -
----------- ----------- ---------------
EXPENSES
Market development 161,096 - 161,096
Development of web site -
preliminary project stage - - 25,000
Depreciation 1,586 - 1,586
Administrative 226,415 11,639 260,064
----------- ----------- ---------------
NET LOSS $ (389,097) $ (11,639) $ (447,746)
=========== =========== ===============
NET LOSS PER COMMON SHARE
Basic and dilutive $ (.01) $ -
AVERAGE OUTSTANDING SHARES -
(stated in 1,000's)
Basic and dilutive 34,598 29,500
----------- -----------
</Table>
The accompanying notes are an integral part of these financial statements.
20
OFFICE MANAGERS, INC.
( Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period September 19, 2000 (Date of Inception)
to December 31, 2002
<Table>
<Caption>
===========================================================================
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
-----------------------------------------------------
Balance September 19, 2000 - $ - $ - $ -
Issuance of common stock
for cash at $.001 -
September 19, 2000 16,000,000 16,000 - -
Issuance of common stock
for web site - September
25, 2000 - Note 3 6,000,000 6,000 19,000 -
Issuance of common stock
for cash at $.01 -
October 10, 2000 5,000,000 5,000 44,810 -
Net operating loss for the
period September 19, 2000
to December 31, 2000 - - - (47,010)
------------ ------------ ------------ ------------
Balance December 31, 2000 27,000,000 27,000 63,810 (47,010)
Issuance of common stock
for cash at $.0012 -
January 2001 2,500,000 2,500 500 -
Net operating loss for the
year ended December 31,
2001 - - - (11,639)
------------ ------------ ------------ ------------
Balance December 31, 2001 29,500,000 29,500 64,310 (58,649)
Issuance of common stock for
cash at $.10 - net of
offering costs - July
22, 2002 5,098,500 5,099 405,735 -
Net operating loss for year
ended December 31, 2002 - - - (389,097)
------------ ------------ ------------ ------------
Balance December 31, 2002 34,598,500 $ 34,599 $ 470,045 $ (447,746)
============ ============ ============ ============
</Table>
The accompanying notes are an integral part of these financial statements.
21
OFFICE MANAGERS, INC.
( Development Stage Company)
STATEMENT OF CASH FLOWS
For the Years Ended December 31, 2002 and 2001 and the Period
September 19, 2000 (Date of Inception) to December 31, 2002
<Table>
<Caption>
=====================================================================================
Sept 19, 2000
Dec 31, Dec 31, to Dec 31,
2002 2001 2002
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (389,097) $ (11,639) $ (447,746)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Depreciation 1,586 - 1,586
Change in accounts payable 52,228 - 52,228
Issuance of capital stock for web site - - 25,000
Net Decrease in Cash From Operations (335,283) (11,639) (368,932)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of web site (5,027) - (5,027)
Purchase of equipment (15,084) - (15,084)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock 410,834 3,000 479,644
------------ ------------ ------------
Net Increase (Decrease) in Cash 55,440 (8,639) 90,601
Cash at Beginning of Period 35,161 43,800 -
------------ ------------ ------------
Cash at End of Period $ 90,601 $ 35,161 $ 90,601
============ ============ ============
NON CASH FLOWS FROM OPERATING ACTIVITIES
Issuance of 6,000,000 common shares for
web site - 2000 $ 25,000
</Table>
The accompanying notes are an integral part of these financial statements.
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
===========================================================================
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on
September 19, 2000 with authorized common stock of 50,000,000 shares at
$0.001 par value.
The Company was organized for the purpose of acquiring and developing a
web site on the World Wide Web devoted exclusively to office managers for
the purpose of delivering office products and related professional services
over the internet.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
- ------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
- ---------------
The Company has not adopted a policy regarding payment of dividends.
Income Taxes
- ------------
On December 31, 2002, the Company had a net operating loss carry forward
of $447,749. The tax benefit of approximately $134,324 from the loss
carry forward has been fully offset by a valuation reserve because the use
of the future tax benefit is doubtful since the Company has no operations.
The net operating loss will expire in 2023.
Basic and Dilutive Net Income (Loss) Per Share
- ----------------------------------------------
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding. Diluted EPS are
similarly calculated, except that the weighted average number of common
shares outstanding includes common shares that may be issued, subject to
existing rights, with dilutive potential. Dilutive (loss) per share has not
been computed nor presented if it would be anti-dilutive and for purposes
of this report the dilutive shares includes 10,197,000 shares that may be
issued as outlined in note 5.
23
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2002
===========================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Amortization of Web Site
- ------------------------
Costs of the preliminary development of the web site are expensed as
incurred and costs of the application and post- implementation are
capitalized and amortized over the useful life of the fully developed web
site. The web site is fully developed, however, amortization over five
years will begin in 2003.
Financial Instruments
- ---------------------
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair values.
Recent Accounting Pronouncements
- --------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will
have a material impact on its financial statements.
Financial and Concentrations Risk
- ---------------------------------
The Company does not have any concentration or related financial credit
risk.
Revenue Recognition
- -------------------
Revenue is recognized on the sale and delivery of a product or the
completion of a service provided.
Statement of Cash Flows
- -----------------------
For the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be
cash equivalents.
Advertising and Market Development
- ----------------------------------
The Company expenses advertising and market development costs as incurred.
24
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2002
===========================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Estimates and Assumptions
- -------------------------
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
Office equipment
- ----------------
Office equipment is depreciated over 3 and 7 years using the straight line
method.
Cost $ 15,084
Less accumulated depreciation (1,586)
------------
Net $ 13,498
============
3. ACQUISITION OF WEB SITE
On September 25, 2000 the Company acquired the web site and the domain name
"officemanagers.net",(which was in the preliminary development stage) from
Ambra Resources, Inc.(an affiliate), by the issuance of 6,000,000 common
shares of the Company, for the purpose of pursuing its business interest
as outlined in note 1. The value of the web site was recorded at
$25,000, the acquisition cost to Ambra Resources, Inc., before the sale
to the Company.
Costs of the preliminary development of the web site are expensed as
incurred and costs of the application and post- implementation will be
capitalized and amortized over an estimated useful life of five years.
The web site is fully developed and amortization will begin in 2003.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors, employees and Ambra Resources, Inc. (an affiliate by
common officers) have acquired 46 % of the common stock issued.
Ambra Resources, Inc. has made a no interest demand loan to the Company of
$50,923
25
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 2002
===========================================================================
5. CAPITAL STOCK
From September 2000 to January 2001 the Company completed private
placement offerings of 23,500,000 common shares for $68,810.
During July 2002 the Company completed the sale of an offering of
5,098,500 units at $.10 per unit. Each unit consists of one share of common
stock, one redeemable A warrant to purchase an additional common share
at $.50 by July 10, 2003, and one redeemable B warrant to purchase an
additional common share at $1.20 by July 10, 2007 which could amount to
the issuance of 10,197,000 additional shares. On the report date no
warrants had been redeemed.
During January and February 2003 (subsequent to December 31, 2002) the
Company issued 2,529,411 restricted common shares for services.
6. CONTINUING LIABILITIES
On May 22, 2001 the Company entered into a marketing agreement with
MediaComm Marketing International , Inc. The terms of the agreement
included a payment of $25,000 (paid in September 2002) and the issuance of
250,000 common shares of the Company. The shares were issued in February
2003 as part of the 2,529,411 shares outlined in note 5.
The Company is obligated under a month to month office lease for $3,819 per
month.
7. GOING CONCERN
The Company intends to continue the development of its business interests,
however, there is insufficient working capital necessary to be successful
in this effort and to service its debt.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed
a strategy, which it believes will accomplish this objective, through short
term related party loans, long term financing, and additional equity
funding, which will enable the Company to operate for the coming year.
26
===========================================================================
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company's independent auditors recently changed the name of its
firm from Andersen, Andersen & Strong, L.C., to Sellers and Andersen, L.C.
The Company has had no disagreements with its certified public accountants
with respect to accounting practices or procedures of financial disclosure.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
The following table sets forth our directors, executive officers,
promoters and control persons, their ages, and all offices and positions
held. Directors are elected for a period of one year and thereafter serve
until their successor is duly elected by the stockholders. Officers and
other employees serve at the will of the Board of Directors.
<Table>
<Caption>
Term Served as Positions with
Name Age Director/Officer the Company
-------------- ------- ---------------- --------------------
John M. Hickey 60 January 2001 President
September 2000 Director
-------------- ------- ---------------- --------------------
John Ray Rask 50 January 2001 Secretary/Treasurer
September 2000 Director
-------------- ------- ---------------- --------------------
Charles Smith 62 February 2001 Director
-------------- ------- ---------------- --------------------
Wilf Blum 49 February 2001 Director
-------------- ------- ---------------- --------------------
</Table>
The above individuals will serve as officers and/or directors. None
of the officers or directors are related. A brief description of their
positions, proposed duties and their background and business experience
follows:
John M. Hickey. From 1995 to present Mr. Hickey has worked for Ambra
Resources Group, Inc., a company engaged in the acquisition of interests in
gas and oil properties. Mr. Hickey began with Ambra Resources as the
General Manager. In 1996, he became the President and a director of Ambra
Resources. Mr. Hickey is primarily responsible for the day to day
operations of Ambra Resources. Mr. Hickey currently devotes approximately
20 hours per week to Office Managers. He will devote additional time as
need requires.
John Ray Rask. Since the early 1980's Mr. Rask has been owner and
operator of Ray's Income Tax Service, a company which specialized in
bookkeeping and the preparation of income tax returns. Since 1996, Mr.
Rask has also served as the Secretary and a director of Ambra Resources
Group, Inc. Mr. Rask currently devotes approximately 20 hours per week to
Office Managers. He will devote additional time as need requires.
27
Charles Smith. Mr. Smith earned a degree in Transpersonal Psychology
and Holotropic Breathwork from Grof Transpersonal Training Institute, Mill
Valley, California, in 1996. Since that time, he has taught workshops in
this process in Austria, China, Argentina, Chile, Canada and the United
States. Currently, he is working in cooperation with Dr. Vera Casali of
the Department of Psychology, Pontificia Universidade Catolica de Sao
Paulo, Brazil, teaching this process to students of that University. Mr.
Smith devotes time to Office Managers on an as needed basis.
Wilf Blum. In August 1999, Mr. Blum founded and became president of
Bluestone, Inc., a financial public relations firm. Mr. Blum continues to
serve as president of Bluestone. From November 1997 to August 1999, Mr.
Blum served as president of Commercial Concepts, Inc., where he was
generally responsible for the operations of the company, including website
development and acquisitions. From January 1995 to November 1997, Mr. Blum
was a real estate agent specializing in land development and commercial
projects. Mr. Blum devotes time to Office Managers on an as needed basis.
Compliance with Section 16(a) of the Exchange Act
Directors and executive officers are required to comply with Section
16(a) of the Securities Exchange Act of 1934, which requires generally that
such persons file reports regarding ownership of and transactions in
securities of the Company on Forms 3, 4, and 5. A Form 3 is an initial
statement of ownership of securities, which is to be filed by the officers
and directors owning shares in the Company within 10 days after the
effective date of the Company's filing on Form 10-SB. Form 4 is to report
changes in beneficial ownership and is due on or before the tenth day of
the month following any month in which they engage in any transaction in
the Company's common stock. Form 5 covers annual statement of changes in
beneficial ownership which is due 90 days after the fiscal year end of the
Company.
Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5
and amendments thereto furnished to the Company with respect to the most
recent fiscal year, it appears that Mr. Blum inadvertently failed to timely
file a Form 4 during the fiscal year ended December 31, 2002.
===========================================================================
ITEM 10. EXECUTIVE COMPENSATION
===========================================================================
<Table>
<Caption> SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Payouts
Awards
Other Restr All
Name and Other Annual icted Other
Principal Annual Bonus Compen Stock Options LTIP Compen
Position Year Salary $ sation Awards /SARs Payout sation
John Hickey 2002 $ 32,000$ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
President 2001 -0- -0- -0- -0- -0- -0- -0-
2001 -0- -0- -0- -0- -0- -0- -0-
</Table>
No other compensation has been paid directly or accrued to any other
officer or director of the Company to date. The Company has no policy for
compensating its directors for attendance at Board of Directors meetings or
for other services as directors.
28
Compensation of officers and directors is determined by the Company's
Board of Directors and is not subject to shareholder approval. The Company
has no agreement at this time, with any officer, director or key employee,
regarding employment with the Company or compensation for services.
The Company has no retirement, pension, or benefit plan at the present
time, however, the Board of Directors may adopt plans as it deems to be
reasonable under the circumstances.
Employment Contracts, Termination of Employment and Change in Control
Arrangement
The salary attributed to Mr. Hickey is actually paid as consulting
fees to Lincoln Communications, a consulting firm owned by Mr. Hickey.
Lincoln Communications is paid $4,000 per month for Mr. Hickey's services.
There is no written agreement between the Company and Lincoln
Communications. The Company could terminate the services of Lincoln
Communications at any time.
In the past three years no executive officer has received any amounts
in connection with an executive officer's resignation, retirement, or other
termination. No executive officer received any amounts in the last three
years in connection with a change in control of the Company of a change in
the executive officer's responsibilities after a change in control.
There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person which would in any
way result in payments to any such person because of his resignation,
retirement, or other termination of such person's employment with the
Company or its subsidiaries, or any change in control of the Company, or a
change in the person's responsibilities following a change in control of
the Company.
===========================================================================
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
===========================================================================
The following table sets forth as of March 3, 2003, the name and
number of shares of the Company's Common Stock, par value $0.001 per share,
held of record or beneficially by each person who held of record, or was
known by the Company to own beneficially, more than 5% of the 37,629,911
issued and outstanding shares of the Company's Common Stock, and the name
and share holdings of each director and of all officers and directors as a
group.
The term "beneficial owner" refers to both the power of investment
(the right to buy and sell) and rights of ownership (the right to receive
distributions from the company and proceeds from sales of the shares).
Inasmuch as these rights or shares may be held by more than one person,
each person who has a beneficial ownership interest in shares is deemed the
beneficial owners of the same shares because there is shared power of
investment or shared rights of ownership.
<Table>
<Caption>
Amount of
Name and Address Beneficial Ownership Percentage of Class
- ----------------------- --------------------- -------------------
John M. Hickey 6,000,000 15.9%
1601-1415 West Georgia Street
Vancouver, B.C. V6G 3C8
John M. Hickey 6,000,000 15.9%
Ambra Resources Group, Inc.
610-800 West Pender Street
Vancouver, B.C. V6C 2V6
Robert L. Card 5,000,000 13.3%
Siam Oceanic Fund Ltd.
Suite 316 - 744 West Hastings Street
Vancouver, B.C. V6C 1A5
Eric Smith 2,000,000 5.3%
Network Capital Group, Inc.
P.O. Box 61 Front Street
Churchill Building
Grand Turk, Turks & Caicos Islands
Mavis Smith 2,000,000 5.3%
Powerwave Systems Corp.
P.O. Box 170 Front Street
Churchill Building
Grand Turk, Turks & Caicos Islands
John Ray Rask 1,000,000 2.7%
1909 Monroe Ave.
Butte, Montana 59701
Charles Smith 500,000 1.3%
Rua Tavares Bastos, 103
05012-020
Sao Paulo S.P. Brasil
Wilf Blum 640,000 1.7%
Bluestone, Inc.
136 East South Temple, Suite 1600
Salt Lake City, Utah 84111
- -------------------------------------------------------------------------------------
All officers and directors
as a group (4 persons) 14,140,000 37.8%
- -------------------------------------------------------------------------------------
TOTAL 23,140,000 61.5%
- -------------------------------------------------------------------------------------
</Table>
Mr. Hickey and Mr. Rask are officers and directors. Mr. Smith and Mr.
Blum are directors.
30
===========================================================================
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
===========================================================================
During the quarter ended September 30, 2002, Ambra Resources Group,
Inc., loaned the Company $80,923 pursuant to no interest demand notes.
During the quarter ended December 31, 2002, the Company paid Ambra $30,000
toward retirement of the no interest demand notes. The Company now owes
Ambra $50,923.
The Company pays Lincoln Communications $4,000 per month in consulting
fees for the services provided to the Company by Mr. John Hickey. Lincoln
Communications is a consulting firm owned by Mr. Hickey. There is no
written agreement between the Company and Lincoln Communications. The
Company could terminate the services of Lincoln Communications at any time.
The Company believes the services being provided by Lincoln Communications
are being provided on terms at least as favorable as could be obtained in
the open market.
===========================================================================
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
===========================================================================
(a) Reports on Form 8-K.
None.
(b) Exhibits. The following exhibits are included as part of this report:
Exhibit 99.1 Certification Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
===========================================================================
ITEM 14. CONTROLS AND PROCEDURES
===========================================================================
(a) Evaluation of Disclosure Controls and Procedures. The Company's
Chief Executive Officer and Chief Financial Officer has conducted an
evaluation of the Company's disclosure controls and procedures as of a date
(the "Evaluation Date") within 90 days before the filing of this annual
report. Based on his evaluation, the Company's Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls
and procedures are effective to ensure that information required to be
disclosed by the Company in reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the applicable Securities and
Exchange Commission rules and forms.
(b) Changes in Internal Controls and Procedures. Subsequent to the
Evaluation Date, there were no significant changes in the Company's
internal controls or in other factors that could significantly affect these
controls, nor were any corrective actions required with regard to
significant deficiencies and material weaknesses.
31
===========================================================================
SIGNATURES
===========================================================================
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this report has been signed below by following persons on
behalf of the Registrant and in the capacities and on the dates indicated:
OFFICE MANAGERS, INC.
Date: March 26, 2003 By /S/ John M. Hickey
John M. Hickey, Chief Executive Officer
Date: March 26, 2003 By /S/ John R Rask
John R. Rask, Chief Financial Officer
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, John M. Hickey, certify that:
(1) I have reviewed this annual report on Form 10-KSB of Office
Managers, Inc., (the "Company");
(2) Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this annual
report;
(4) The Company's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Company and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the Company is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
(5) The Company's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Company's auditors and the
audit committee of the Company's board of directors (or persons fulfilling
the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data
and have identified for the Company's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's
internal controls; and
(6) The Company's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: March 26, 2003 By: /S/ John M. Hickey
John M. Hickey, Principal Executive Officer
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, John R. Rask, certify that:
(1) I have reviewed this annual report on Form 10-KSB of Office
Managers, Inc., (the "Company");
(2) Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this annual report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this annual
report;
(4) The Company's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Company and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the Company is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
(5) The Company's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Company's auditors and the
audit committee of the Company's board of directors (or persons fulfilling
the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data
and have identified for the Company's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's
internal controls; and
(6) The Company's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: March 26, 2003 By: /S/ John R. Rask
John R. Rask, Principal Financial Officer