UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 0-27989
================================================================================
BBMF CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 88-0286466
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Room 4302, 43rd Floor, China Resources Building
26 Harbour Road, Wan Chai, Hong Kong SAR
(Address of principal executive offices)
+852 2116 8509
(Registrant's telephone number, including area code)
ECHEX WORLDWIDE CORP.
(Former name, former address and former fiscal year,
if changed since last report)
================================================================================
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of June 30, 2004, there were
20,268,688 shares of the registrant's common stock outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
SEC 2334 (1-04)) PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE
FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER.
INDEX
Page no.
PART I. UNAUDITED FINANCIAL INFORMATION
Item 1 Consolidated Balance Sheets as of June 30, 2004 and
December 31, 2003
Consolidated Statements of Operations for the three and
six months ended June 30, 2004 and 2003
Consolidated Statements of Cash Flows for the six months
ended June 30, 2004 and 2003
Consolidated Balance Sheets as of March 31, 2004 and
December 31, 2003
Consolidated Statements of Operations for the three months
ended March 31, 2004 and 2003
Consolidated Statements of Cash Flows for the three months
ended March 31, 2004 and 2003
Notes to Unaudited Consolidated Financial Statements
Item 2 Management's Discussion and Analysis of the Company's
Financial Condition and Results of Operations
Item 3 Controls and Procedures
PART II OTHER INFORMATION
Item 1 Legal Proceedings
Item 2 Changes in Securities
Item 3 Defaults upon Senior Securities
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
Signatures
Exhibit Index
2
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2004 AND DECEMBER 31, 2003
(Expressed in US Dollars)
JUNE 30, DECEMBER 31,
2004 2003
----------- ------------
(UNAUDITED) (AUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,804,931 $ 1,333,385
Accounts receivable 2,548 --
Deposits and prepayments (Note 3) 55,090 8,720
Amounts due from related companies (Note 4) 2,699 --
Amount due from a director (Note 4) 19,147 24,045
----------- -----------
Total current assets $ 2,884,415 $ 1,366,150
Equipment (Note 5) 125,893 30,297
----------- -----------
TOTAL ASSETS $ 3,010,308 $ 1,396,447
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Other payables and accrued expenses (Note 6) $ 1,218,275 $ 38,449
Amount due to affiliated company (Note 4) 3,070,653 1,878,927
Amount due to a director (Note 4) 35,222 78,252
----------- -----------
Total current liabilities $ 4,324,150 $ 1,995,628
----------- -----------
SHAREHOLDERS' DEFICIT
Common stock, par value $0.001 per share;
75,000,000 shares authorized; 20,268,668 shares
issued and outstanding (Note 7) 20,269 20,269
Additional paid-in capital (20,269) (20,269)
Accumulated losses (1,313,842) (599,181)
----------- -----------
Total stockholders' deficit $(1,313,842) $ (599,181)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 3,010,308 $ 1,396,447
=========== ===========
See accompanying notes to unaudited consolidated financial statements.
3
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Expressed in US Dollars)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
NET SALES $ 2,673 $ -- $ 2,673 $ --
---------- ---------- ---------- ----------
GENERAL AND ADMINISTRATIVE EXPENSES (579,587) -- (688,724) --
SELLING EXPENSES (9,435) -- (28,708) --
---------- ---------- ---------- ----------
TOTAL OPERATING EXPENSES $ (589,022) -- $ (717,432) --
---------- ---------- ---------- ----------
OPERATING LOSS (586,349) -- (714,759) --
INTEREST INCOME 93 -- 98 --
---------- ---------- ---------- ----------
LOSS BEFORE INCOME TAXES $ (589,256) -- $ (714,661) --
PROVISION FOR INCOME TAXES (NOTE 8) -- -- -- --
---------- ---------- ---------- ----------
NET LOSS $ (589,256) $ -- $ (714,661) $ --
========== ========== ========== ==========
LOSS PER SHARE
-- BASIC AND DILUTED $ (0.03) $ -- $ (0.04) $ --
========== ========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING -- BASIC AND DILUTED 20,268,668 20,268,668 20,268,668 20,268,668
========== ========== ========== ==========
See accompanying notes to unaudited consolidated financial statements.
4
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(Expressed in US Dollars)
SIX MONTHS ENDED JUNE 30,
-------------------------
2004 2003
----------- -----------
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (714,661) $ --
Adjustments to reconcile net loss
to net cash used in operating activities
Depreciation of equipment 19,429 --
Changes in:
Amounts due from related companies (2,699) --
Deposits and prepayments (46,370) --
Accounts receivable (2,548) --
Amount due from a director 4,898 --
Other payables and accrued expenses 1,179,826 --
Amount due to a director (43,030) --
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 394,845 $ --
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of equipment (115,025) --
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES $ (115,025) $ --
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Amount due to affiliated company 1,191,726 --
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 1,191,726 $ --
=========== ===========
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 1,471,546 $ --
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,333,385 --
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,804,931 $ --
=========== ===========
See accompanying notes to unaudited consolidated financial statements.
5
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2004 AND DECEMBER 31, 2003
(Expressed in US Dollars)
MARCH 31, DECEMBER 31,
2004 2003
----------- ------------
(UNAUDITED) (AUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,206,702 $ 1,333,385
Deposits and prepayments (Note 3) 13,434 8,720
Amounts due from related companies (Note 4) 2,699 --
Amount due from a director (Note 4) 24,149 24,045
----------- -----------
Total current assets $ 2,246,984 $ 1,366,150
Equipment (Note 5) 83,375 30,297
----------- -----------
TOTAL ASSETS $ 2,330,359 $ 1,396,447
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Other payables and accrued expenses (Note 6) $ 98,639 $ 38,449
Amount due to affiliated company (Note 4) 2,923,739 1,878,927
Amount due to a director (Note 4) 35,565 78,252
----------- -----------
Total current liabilities $ 3,057,943 $ 1,995,628
----------- -----------
SHAREHOLDERS' DEFICIT
Common stock, par value $0.001 per share;
75,000,000 shares authorized; 20,268,668 shares
issued and outstanding (Note 7) 20,269 20,269
Additional paid-in capital (20,269) (20,269)
Accumulated losses (727,584) (599,181)
----------- -----------
Total stockholders' deficit $ (727,584) $ (599,181)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 2,330,359 $ 1,396,447
=========== ===========
See accompanying notes to unaudited consolidated financial statements.
6
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(Expressed in US Dollars)
THREE MONTHS ENDED
MARCH 31,
----------------------------
2004 2003
------------ ------------
(UNAUDITED) (UNAUDITED)
NET SALES $ -- $ --
------------ ------------
GENERAL AND ADMINISTRATIVE EXPENSES (109,135) --
SELLING EXPENSES (19,273) --
------------ ------------
TOTAL OPERATING EXPENSES $ (128,408) $ --
------------ ------------
OPERATING LOSS (128,408) --
INTEREST INCOME 5 --
------------ ------------
LOSS BEFORE INCOME TAXES $ (128,403) $ --
PROVISION FOR INCOME TAXES (NOTE 8) -- --
------------ ------------
NET LOSS $ (128,403) $ --
============ ============
LOSS PER SHARE -- BASIC AND DILUTED $ (0.01) $ --
============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING -- BASIC AND DILUTED 20,268,668 20,268,668
============ ============
See accompanying notes to unaudited consolidated financial statements.
7
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(Expressed in US Dollars)
THREE MONTHS ENDED
MARCH 31,
----------------------------
2004 2003
------------ ------------
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (128,403) $ --
Adjustments to reconcile net loss
to net cash used in operating activities
Depreciation of equipment 6,232 --
Changes in:
Amounts due from related companies (2,699) --
Deposits and prepayments (4,714) --
Amount due from a director (104) --
Other payables and accrued expenses 60,190 --
Amount due to a director (42,687) --
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES $ (112,185) $ --
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of equipment (59,310) --
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES $ (59,310) $ --
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Amount due to affiliated company 1,044,812 --
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 1,044,812 $ --
=========== ===========
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 873,317 $ --
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,333,385 --
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,206,702 $ --
=========== ===========
See accompanying notes to unaudited consolidated financial statements.
8
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in US Dollars)
NOTE 1 -- ORGANIZATION AND DESCRIPTION OF BUSINESS
BBMF Corporation (the "Company"), formerly known as eChex Worldwide Corp., was
incorporated in the State of Nevada on June 10, 1992 under the corporate name of
Second Investors Group, Inc. On June 19, 1998, Second Investors Group, Inc.
changed its corporate name to Progressive Environmental Recovery Corporation. On
March 5, 1999, Progressive Environmental Recovery Corporation changed its
corporate name to Worldwide Wireless Networks Inc., which subsequently changed
its corporate name to eChex Worldwide Corp. ("ECWC"). ECWC was inactive prior to
April 1, 2004.
BBMF Group Inc. ("BBMF Group") was incorporated in the British Virgin Islands on
January 27, 2004 as a limited liability company. BBMF Group is the 100% holding
company of Kesrich (Hong Kong) Limited ("Kesrich") and itself does not conduct
any operations nor have any material assets and liabilities.
BBMF Group was previously owned 100% by Mr. Antony Ip Ren Haw and Mr. Lian Yih
Hann. Pursuant to a board resolution dated February 25, 2004, BBMF Inc., a
British Virgin Islands company ("BBMF Inc.") subscribed for 98 newly issued
shares of BBMF Group in consideration of US$3,300,000 in cash. BBMF Group also
purchased the two then outstanding shares of BBMF Group held by Messrs. Ip and
Lian in exchange for the aggregate consideration of US$2.00.
Kesrich's main business is developing and distributing games for mobile
telephones and other applications for mobile phones such as ring tones. Kesrich
also provides mobile games on various technical platforms including the Java 2
platform, micro edition (J2ME); binary runtime environment for wireless
application protocol (BREW); wireless application protocol (WAP) and short
message service (SMS). Currently, all of our game development and production
activities are conducted in an operation center based in Jiangsu province of the
People's Republic of China (the "PRC").
On April 1, 2004, BBMF Group, BBMF Inc. and other parties named therein entered
into an Agreement and Plan of Reorganization with ECWC (the "Agreement").
Pursuant to the Agreement, ECWC issued to BBMF Inc. 20,000,000 newly issued
shares of the common stock of the Company in exchange for 100% of the 100 issued
and outstanding ordinary shares of BBMF Group. In addition, BBMF Group is liable
to pay a sum of US$400,000 to (i) Mr. Michael F. Manion, the then sole director
and President, CEO and CFO of ECWC and (ii) to certain other subscribers of ECWC
stock named in the Agreement, to pay for the cancellation of rights to subscribe
for an aggregate of 1,000,000 shares of the Company's common stock, which shares
were cancelled on March 16, 2004.
US$400,000 was paid by BBMF Inc. on BBMF Group's behalf and was reflected in the
Company's accumulated loss prior to April 1, 2004. Further, professional fees of
US$225,000 were incurred in connection with the above reorganization and were
accounted for as general and administrative expenses for the three months ended
June 30, 2004. The closing date of this exchange transaction was April 1, 2004.
9
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in US Dollars)
NOTE 1 -- ORGANIZATION AND DESCRIPTION OF BUSINESS -- CONTINUED
As a result of the acquisition, BBMF Inc. holds a majority interest in the
Company. Generally accepted accounting principles require in certain
circumstances that a company whose stockholders retain the majority voting
interest in the combined business to be treated as the acquirer for financial
reporting purposes. Since ECWC was not an operating company prior to the
acquisition, this transaction is treated as reorganization rather than a
business combination. Accordingly, the acquisition has been accounted for as a
"reverse acquisition" whereby BBMF Group is deemed to have purchased the
Company. However, the Company remains the legal entity and the Registrant for
Securities and Exchange Commission ("SEC") reporting purposes.
The historical financial statements prior to April 1, 2004 are those of Kesrich.
All shares and per share data prior to the acquisition have been restated to
reflect the stock issuance as a recapitalization of BBMF Group.
NOTE 2 -- BASIS OF PRESENTATION
The consolidated financial statements as of June 30, 2004, March 31, 2004 and
December 31, 2003, for the three and six months ended June 30, 2004 and 2003,
and for the three months ended March 31, 2004 and 2003 are prepared in
accordance with generally accepted accounting principles in the United States of
America. All material inter-company transactions have been eliminated.
The accompanying financial data have been prepared by the Company, without
audit, pursuant to the rules and regulations of the SEC. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles of the United States of
America have been condensed or omitted pursuant to such rules and regulations.
However, the Company believes that the disclosures are adequate to make the
information presented not misleading. These financial statements should be read
in conjunction with the Kesrich's audited financial statements and the notes
thereto for the year ended December 31, 2003 included in the Company's Form
8-K/A filed on June 15, 2004.
The preparation of consolidated financial statements in conformity with general
accepted accounting principles of the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
In the opinion of the Company's management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows as of June 30, 2004, March 31,
2004 and December 31, 2003, for the three and six months ended June 30, 2004 and
2003, and for the three months ended March 31, 2004 have been made. The results
of operations for the three and six months ended June 30, 2004 and 2003, and for
the three months ended March 31, 2004 and 2003 are not necessarily indicative of
the operating results for the full year.
10
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in US Dollars)
NOTE 3 -- DEPOSITS AND PREPAYMENTS
JUNE 30, MARCH 31, DECEMBER 31,
2004 2004 2003
----------- ----------- ------------
(UNAUDITED) (UNAUDITED) (AUDITED)
Rental deposits $10,556 $ -- $ --
Prepayments 44,534 13,434 8,720
------- ------- -------
$55,090 $13,434 $ 8,720
======= ======= =======
NOTE 4 -- RELATED PARTY
A related party is an entity that can control or significantly influence the
management or operating policies of another entity to the extent one of the
entities may be prevented from pursuing its own interests. A related party may
also be any party the entity deals with that can exercise that control.
AMOUNTS DUE FROM RELATED COMPANIES
The amounts due from related companies do not bear any interest and do not have
clearly defined terms of repayment.
AMOUNT DUE TO AFFILIATED COMPANY
The amount due to affiliated company does not bear any interest and does not
have clearly defined terms of repayment. It represents cash balance held by the
Company and its subsidiary on behalf of its related company.
AMOUNT DUE FROM/TO A DIRECTOR
The amount due from/to a director does not bear any interest and does not have
clearly defined terms of repayment.
NOTE 5 -- EQUIPMENT, NET
JUNE 30, MARCH 31, DECEMBER 31,
2004 2004 2003
----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (AUDITED)
Furniture and fixtures $ 15,922 $ 10,053 $ 5,896
Computer 108,787 70,660 25,685
Equipment 30,711 18,992 8,814
--------- --------- ---------
$ 155,420 $ 99,705 $ 40,395
Less: Accumulated depreciation (29,527) (16,330) (10,098)
--------- --------- ---------
$ 125,893 $ 83,375 $ 30,297
========= ========= =========
11
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in US Dollars)
NOTE 6 -- OTHER PAYABLES AND ACCRUED EXPENSES
JUNE 30, MARCH 31, DECEMBER 31,
2004 2004 2003
----------- ----------- ------------
(UNAUDITED) (UNAUDITED) (AUDITED)
Other payables $1,139,436 $ 26,570 $ --
Accrued salaries and wages 36,456 -- --
Other accrued expenses 42,383 72,069 38,449
---------- ---------- ----------
$1,218,274 $ 98,639 $ 38,449
========== ========== ==========
NOTE 7 -- COMMON STOCK
On March 16, 2004, 1,000,000 shares of the Company's common stock previously
owned by the original stockholders of ECWC were cancelled.
Pursuant to the Agreement dated April 1, 2004, the Company had issued to BBMF
Inc. 20,000,000 newly issued shares of the common stock of the Company in
exchange for 100 issued and outstanding ordinary shares of BBMF Group,
representing the entire share capital of BBMF Group.
Immediately prior to the share exchange made pursuant to the Agreement, 268,668
shares of the Company's common stock were issued and outstanding. All shares and
per share data prior to April 1, 2004 have been restated to reflect the stock
issuance as a recapitalization of BBMF Group.
NOTE 8 -- INCOME TAX
The income taxes of the Company are substantially attributable to the operations
in Hong Kong whose statutory tax rate is 17.5%.
The difference between the statutory rate and the effective rate relates
principally to nondeductible expenses and nontaxable income.
There is no provision for income tax of the Company as there was no estimate
assessable income for the period. Further, no provision for deferred taxation
has been made as there was no material temporary difference at the balance sheet
date.
NOTE 9 -- COMMITMENTS AND CONTINGENCIES
As of June 30, 2004, the Company has entered into a construction contract in
connection with the renovation for a new production capacity where the Company
is planning to relocate to in October 2004. The total contract value for the
renovation work is US$70,480.
NOTE 10 -- SUBSEQUENT EVENTS
12
BBMF CORPORATION
(FORMERLY KNOWN AS ECHEX WORLDWIDE CORP.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in US Dollars)
Subsequent to the three months ended June 30, 2004, Atlus Co., Ltd., a Japanese
game developer and a few other private investors, subscribed to 518,181 new
shares of the Company's common stock at US$2.20 per share, by way of a private
placement. Total proceeds from the transaction were approximately US$1.14
million. Immediately after the closing of such private placement, our entire
share capital was increased to 20,786,849 shares.
On April 13, 2004, BBMF Information Technology Co., Ltd. ("BBMF China") was
established in the PRC by the shareholders of BBMF Inc. as a wholly foreign
owned enterprise. BBMF China serves as the game production studio and research
and development center of the Company in the PRC. On August 13, 2004, the
shareholders of BBMF China injected 100% of BBMF China's shares into BBMF Group
for nominal consideration.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
balance sheet as of December 31, 2003, the financial statements as of and for
the three and six months ended June 30, 2004 and 2003, and the financial
statements as of and for the three months ended March 31, 2004 and 2003 included
with this Form 10-QSB.
CAUTIONARY STATEMENTS
Statements contained herein that are not historical facts are
forward-looking statements as that term is defined by the Private Securities
Litigation Reform Act of 1995. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, the forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ from those projected. We caution investors that any
forward-looking statements made by us are not guarantees for future performance
and actual results may differ materially from those in the forward-looking
statements. Such risks and uncertainties include, without limitation:
well-established competitors who have substantially greater financial resources
and longer operating histories, regulatory delays or denials, ability to compete
as a start-up company in a highly competitive market, and access to sources of
capital.
The financial statements include all adjustments, which in the opinion of
and to the best of management's knowledge are necessary to make the financial
statements not misleading.
The following discussion and analysis should be read in conjunction with
our financial statements and notes thereto included elsewhere in this Form
10-QSB. Except for the historical information contained herein, the discussion
in this Form 10-QSB contains certain forward-looking statements that involve
risks and uncertainties, such as statements of our plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-QSB
should be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-QSB. The Company's actual results could
differ materially from those discussed here.
BUSINESS OVERVIEW
"BBMF" or the "Company" is a developer and distributor of games and other
software applications for use on mobile phones and other handheld sets. We focus
on Java-based games for mobile phones and handsets, and provide games on various
platforms. We also develop and distribute mobile karaoke, ringtones and
truetones for use on mobile phones.
During the last quarter of 2003 and first two months in 2004, we, through
our subsidiaries BBMF Group Inc. ("BBMF Group") and Kesrich (Hong Kong) Limited
("Kesrich"), had focused on developing relationships with Japanese and Korean
partners and converting and distributing those Japanese and Korean games into
the Greater China region.
The Company's business model changed when BBMF completed developing its
first batch of proprietary game titles toward the end of the first quarter of
2004. Since then, BBMF has concluded over 60 distributing agreements to sell its
games worldwide. Currently, BBMF is concentrated on the development and
distribution of its own proprietary titles for distributions around the world.
Under these distribution agreements, BBMF shares a percentage of the games
sales revenue with its distribution partners. Since April 2004, BBMF games have
become distributed
to and available for download (sales) in 17 countries. The second quarter of
2004 was the first quarter when the company generated revenue from its core
game-production businesses.
Our development strategy is to 1) continue to increase the game output
capacity; 2) make the games playable (portable) on as many handsets models as
possible; and 3) develop brand name game titles. We expects higher revenue going
forward as BBMF produces more games that can support a larger number of handsets
for distributions in more countries. However, our limited operating history
makes prediction of future operating results difficult.
To support the above development strategy, we intend to increase the number
of staff from our current level of over 180 people to 300 before year-end 2004.
We are also in the process of establishing a subsidiary in Japan to distribute
mobile games in the Japanese market and seek to secure global distribution
rights to convert traditional console games into mobile versions and secure
rights to use well-known animation characters for use in developing mobile
games.
Going forward, it is our intent to seek opportunities to acquire companies
with established distribution channels to expand the sales channels for our
games in markets including Japan, Korea, Europe and the rest of the world. We
intend to fund such acquisitions with a combination of shares and cash. We have
entered such discussions with companies from different markets. However, these
discussions are of preliminary nature and there is no guarantee that any of
these discussions will continue.
RESULTS OF OPERATIONS
The Company was in the early development stage for the three months ended
March 31, 2003 and for the six months ended June 20, 2003, respectively. There
were zero operating activities to make meaningful comparisons to the three
months ended March 31, 2004 and to the six months ended June 30, 2004. The
discussions below therefore focus on the actual operating results for each of
the key items during the current operating period.
Net Sales
- ---------
SIX MONTHS ENDED JUNE 30, 2004
The entire sales of US$2,673 were generated during the second quarter of
2004, from the sales of BBMF's own original game titles. The Company distributes
its games to partners' websites or other networks where the end users can
download the games into their mobile handsets. End users pay for a one-time fee
each time a game is downloaded or a fixed amount for a specific period of time
(e.g. one month) when the games can be downloaded as many times as they wish.
BBMF shares a percentage of the fee from the sale of its games.
We anticipate higher revenue going forward as BBMF produces more games that
can support bigger number of handsets for distributions to more countries.
THREE MONTHS ENDED MARCH 31, 2004
There were no sales reported during the three months ended March 31, 2004
since the Company was still developing its own games titles.
-15-
Operating Expenses
- ------------------
SIX MONTHS ENDED JUNE 30, 2004
Total operating expenses for the six months ended June 30, 2004 were
US$717,432, consisting of general and administrative expenses and selling
expenses.
General and administrative expenses included salaries, benefits and travel
expenses for operational activities in the development of mobile games. It also
included depreciation of equipment and legal & professional fees, amongst which
US$225,000 was paid to various parties in connection with the Agreement and Plan
of Reorganization with eChex Worldwide Corp. ("ECWC") dated April 1, 2004 as
mentioned in Note 1 to the consolidated financial statements.
Selling expenses included salaries, benefits, travel and other related
expenses for direct sales personnel and business development personnel.
We anticipate the general and administrative and selling expenses to
increase during the next quarters due to expected increase in the number of
employees, and significant sales and business development activities are
anticipated to support the Company's growth strategy.
THREE MONTHS ENDED MARCH 31, 2004
Total operating expenses for the three months ended March 31, 2004 is
US$128,408, consisting of general and administrative expenses and selling
expenses.
General and administrative expenses included salaries, benefits and travel
expenses for operational activities in the development of mobile games. It also
included depreciation of equipment.
Selling expenses included salaries, benefits, travel and other related
expenses for business development activities.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2004, we had US$2,804,931 in net cash. For the three months
ended June 30, 2004, we had recorded operating expenses of US$583,022 and net
sales of US$2,673, for a total operating loss of US$589,587 over the same
period.
We anticipate our operating expenses to either remain the same or increase
over time. We intend to use net cash for working capital, to pay operating
expenses and to fund additional acquisitions. If our monthly sales revenues and
expenses continue at these levels and we are not able to raise additional
sources of financing, our net cash position will be depleted in less than two
years.
The Company started generating its operating revenue during the quarter
ended June 30, 2004. To date, a significant source of our financing and
liquidity has come in the form of related party loans, which loans cannot be
relied on as a source of continued financing. In addition, we believe that loans
from commercial institutions will be either unavailable or economically not
feasible to be available to companies of our name and in our current development
stage. Therefore, until monthly sales revenue grow to a level exceeding our
operating expenses, we must rely on equity funding to meet the working capital
requirements from the Company's continued operations.
-16-
Our current business plan provides for funding solely through the sale of
equity securities, either through private placement or a potential public
offering. Our ability to continue as a going concern over the foreseeable future
will therefore depend primarily on our ability to sell additional equity
securities, which in turn depends on the attractiveness of our stock. Our latest
funding was raised from Atlus Co., Ltd., a Japanese game developer, along with a
few other investors for US$1.14 million. Liquidity according to our current
business plan therefore relies on our ability to raise new funding, although
there can be no assurance such financings will occur.
An important component of the Company's business plan is to acquire
companies with distribution channels that can help expand the sales of mobile
games. We intend to fund our acquisitions of these distribution channels with
combination of cash and shares so as to reduce the requirement for cash outlay.
Another advantage of using shares as funding currency is to align the interests
of existing shareholders of distribution channels with that of the Company.
The implementation of such acquisition plans, however, creates additional
funding needs and may have a dilutive effect on existing shareholders. We intend
to manage the timing and the transaction size of such acquisition plans while
considering available funding sources and working capital needs for operations.
By doing so, we intend to avoid negative impact on the Company's liquidity/net
deficit concerns at any given time.
The only significant commitments for capital expenditures for the remaining
of the fiscal year ending December 31, 2004 is the renovation costs for a new
production capacity where the Company is planning to relocate in October 2004.
The total contract value for the renovation work is US$70,480. The Company has
no other significant capital commitments.
CONTRACTUAL OBLIGATIONS
Subsequent to June 30, 2004, the Company has entered into a construction
contract in connection with the renovation for a new production capacity where
the Company is planning to relocate to in October 2004. The total contract value
for the renovation work is US$70,480.
OFF BALANCE SHEET ARRANGEMENTS
As of June 30, 2004, we have not entered into any off-balance sheet
arrangements with any individuals or entities.
RISK FACTORS.
The following risks relate specifically to BBMF's business and should be
considered carefully. BBMF's business, financial condition and results of
operations could be materially and adversely affected by any of the following
risks:
BECAUSE OUR OPERATING HISTORY IS LIMITED AND THE REVENUE AND INCOME
POTENTIAL OF OUR BUSINESS AND MARKETS ARE UNPROVEN, WE CANNOT PREDICT WHETHER WE
WILL MEET INTERNAL OR EXTERNAL EXPECTATIONS OF FUTURE PERFORMANCE.
Our future success depends on our ability to significantly increase revenue
from operation, which revenue has been insignificant to date. Accordingly, our
prospects must
-17-
be considered in light of the risks, expenses, and difficulties frequently
encountered by companies in an early stage of development. These risks include
our ability to:
o offer new and innovative products;
o attract buyers for our mobile phone platform games;
o respond effectively to competitive pressures and address the effects of
strategic relationships or corporate combinations among our competitors;
o maintain our current, and develop new, strategic relationships; and
o attract and retain qualified management and employees.
OUR INCOME HISTORY IS LIMITED AND IT IS UNCERTAIN WHETHER WE WILL BE ABLE
TO MEET OUR FUTURE CAPITAL REQUIREMENTS.
For the three months ended June 30, 2004, we recorded net sales from income
of US$2,673 and have recorded US$589,349 in operating expenses over the same
period. We cannot be certain that the Company will generate sufficient revenues
to support the overhead of the Company as well as to fund the Company's
long-term business plan. The Company has limited financial resources and we have
been financed primarily by loans from related parties. There can be no assurance
that additional funding will be available from this or any other sources.
IF WE CANNOT RAISE OUR REVENUE LEVELS SIGNIFICANTLY, OUR ABILITY TO
CONTINUE AS A GOING CONCERN DEPENDS MAY DEPEND ON OUR ABILITY TO RAISE
ADDITIONAL FUNDS BY SELLING OUR SECURITIES.
On August 9, 2004, we raised approximately US$1.14 million in a private
placement of our common stock with several investors including Atlus Co., Ltd.,
a Japanese game developer. There can be assurance that additional funding will
be available from this or any other sources. We do not have sufficient assets or
the kind of assets typically used to secure traditional debt financing and there
can be no assurance that the Company can obtain financing on commercial
reasonable terms in the near future. Future equity financings may result in
substantial dilution to existing stockholders.
OUR BUSINESS STRATEGY DEPENDS ON ACQUIRING COMPANIES WITH COMPLIMENTARY
TECHNOLOGIES OR OTHER RESOURCES.
Our future growth depends, in part, on our ability to successfully identify
and acquire promising companies with good distribution channels for our games.
We intend to increase our distribution capability in part through acquisitions.
The integration of any future acquisitions into our existing business could
result in certain unanticipated difficulties that could require a
disproportionate amount of management's attention and resources. Furthermore,
there can be no assurance that the anticipated benefits of acquiring any future
acquisition will be realized. We have limited experience in completing
acquisitions and integrating acquired businesses or products into our
-18-
operations. We may compete for future acquisition opportunities with other
companies that have significantly greater financial and management resources.
We are continually searching for acquisition opportunities; however, we are
not currently a party to any agreements, understandings or negotiations with
respect to any material acquisitions, and there can be no assurance that we will
be successful in identifying, acquiring and developing products and technology.
In addition, acquisitions could also have adverse short-term effects on our
operating results, and could result in dilutive issuances of equity securities
and the incurrence of debt and contingent liabilities. In addition, many
business acquisitions must be accounted for as purchases and, because most
software-related acquisitions involve the purchase of significant intangible
assets, these acquisitions typically result in substantial amortization charges
and may also involve charges for acquired research and development projects,
which could have a material adverse effect on our operating results.
OUR SALES RELY ON A LIMITED CUSTOMER BASE.
Sales are made primarily to our existing customer base of limited scope.
Our customers typically pay a one-time licensing fee for use of our mobile
handheld games and may pay a monthly subscription charge for unlimited access to
the use of our games during the month. There can be no assurance that customers
will continue to purchase BBMF's products and services, that BBMF's historic
subscription renewal rates will continue, or that BBMF will be able to maintain
its current pricing levels for products and subscription services. Customers'
decisions not to renew their maintenance agreements or to renew them on
different terms could have a material adverse effect on BBMF's business,
financial condition and results of operations.
OUR BUSINESS AND GROWTH COULD SUFFER IF WE ARE UNABLE TO HIRE AND RETAIN
KEY PERSONNEL THAT ARE IN HIGH DEMAND.
We have recently changed the focus of our business and have been increasing
the scope of our business. We anticipate significant growth in our operations in
the foreseeable future. The expansion of our staff and operations will place a
significant strain on our managerial, operational and financial resources. To
manage the expected growth of our operations and personnel, we will need to
improve existing, and implement, new transaction processing, operational and
financial systems, procedures and controls. There is no assurance that BBMF can
achieve these goals in a timely manner.
Our future performance depends to a significant degree upon the continued
service of the key members of its management, as well as marketing, sales,
consulting and product development personnel, and its ability to attract,
integrate and retain new management and other personnel. There can be no
assurance that the key members of our management will stay with us in the
future. The loss of any one or more of our key personnel or senior management
could have a material adverse effect on our business, financial condition and
results of operations.
-19-
While we have, in the past, relied on its Korean and Japanese strategic
partners for content development, our future success also depends upon our
ability to develop our own technologies and products and, consequently, upon our
ability to attract and retain highly skilled technical and product development
personnel. Competition for personnel is intense, and there can be no assurance
that we will be able to retain our key employees or that we will be successful
in attracting, integrating and retaining new personnel in the future. Failure to
attract, integrate and retain such personnel could have a material adverse
effect on our business, financial condition and results of operations.
THE MARKET FOR MOBILE PHONE GAMES IS SUBJECT TO RAPIDLY CHANGING CUSTOMER
APPEAL, AND WE MAY NOT BE SUCCESSFUL IN DEVELOPING OR LICENSING GAMES THAT
APPEAL TO OUR CUSTOMERS.
In order to attain profitability and financial and operational success, we
must continually license or develop new mobile handheld games that are
attractive to end-users and replace our existing games as they reach the end of
their useful economic lives, which we believe is three to six months for each
market, depending on popularity. Our ability to license successful and popular
games will depend on availability at an acceptable cost, our ability to compete
effectively to attract the licensors of these games, and our ability to obtain
government approvals required for licensing and operating such games. Moreover,
the success of our internally developed games will largely depend on our ability
to anticipate and effectively respond to changing consumer tastes and
preferences. In addition, internal game development requires substantial initial
investment prior to the commercial launch of the games as well as a significant
commitment of future resources. There can be no assurance that the mobile
handheld games that we develop or licenses will be attractive to end-users, will
be viewed by the regulatory authorities as complying with content restrictions,
will be launched in a timely manner or will be able to compete with games
operated by its competitors. If we are not able to consistently license or
develop online games with continuing appeal to end-users, we may never become
profitable and our growth prospects would decline.
THE MARKET FOR HANDHELD GAMES CHANGES RAPIDLY AND WE MAY NOT BE SUCCESSFUL
IN WORKING WITH NEW TECHNOLOGY STANDARDS.
The market for games on handheld phones is subject to rapid and significant
change in technology. New technological developments which may have an impact on
database architecture, internet enabling technologies and other aspects of our
operations are expected to continue at a rapid pace. It is difficult to predict
the effect of the emerging and future technological changes and inventions on
the viability or competitiveness of our products and services. We must respond
to these changes by enhancing our existing products and developing new products
in a timely manner to meet or place ourselves ahead of the technological
advances in the market. In addition, we may need to form alliances with new
technological partners to enable us to adopt and modify development methods,
processes and programs in response to new technologies and industry standards.
There can be no assurance that we can respond effectively and such failure to
rapidly respond to technological advances and new industry standards could have
a material and adverse impact to our operations.
-20-
THE MARKET FOR MOBILE PHONE GAME IS HIGHLY COMPETITIVE AND WE MAY BE UNABLE
TO COMPETE SUCCESSFULLY AGAINST NEW ENTRANTS AND INDUSTRY COMPETITORS, SOME OF
WHICH HAVE GREATER FINANCIAL RESOURCES THAN WE DO OR CURRENTLY ENJOY A SUPERIOR
MARKET POSITION THAN WE DO.
We face intense competition from both local and overseas competitors with
respect to our mobile handheld games. We intend to expand into international
markets including Japan, South Korea and the United States, which expansion
requires us to compete with other game developers and distributors in such
countries and regions.
In addition, if our competitors adapt more quickly to technological
advances, develop new products and services in a more cost effective manner
and/or take a more aggressive pricing strategy, our revenues may be adversely
affected. A number of our current and potential future competitors have greater
financial and other resources than we have, and may be able to more quickly meet
changing consumer demands. Increased competition could result in reduced demand
for our games, loss of market shares, and lower profit margins.
MANY OF OUR GAMES ARE ONLY RECENTLY DEVELOPED AND MAY HAVE CONTAIN ERRORS
OR OTHER DEFECTS.
Our games are complex software products that frequently contain errors or
defects, especially when first introduced or when new versions or enhancements
are released. Despite product testing, new products may contain defects or
software errors and, as a result, we may experience delayed or lost revenues
during the period required to correct any defects or errors. There can be no
assurance that we can avoid defects or errors. Such defects or errors could
result in adverse customer reactions, negative publicity regarding our company
and products, harm to our reputation or loss of or delay in market acceptance,
or could require expensive product changes, any of which could have a material
adverse effect upon our business, financial condition and results of operations.
WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY,
ESPECIALLY IN THE PRC WHERE INTELLECTUAL PROPERTY PROTECTION IS LIMITED.
Our success depends on our ability to protect our intellectual property
rights. We rely on a combination of copyright, trade secret laws as well as
non-disclosure and confidentiality agreement with its officers, employees and
third parties to protect and limit access to and distribution of our
intellectual property. These legal protections offer only limited protection and
litigation may be necessary to enforce or protect our intellectual property
rights, which could result in substantial costs and diversion of our resources.
Third parties, including our competitors, may infringe upon our intellectual
property rights and there is no assurance that under current Chinese laws and
regulations that we can successfully enforce our rights. Even if we have
undertaken all precautionary steps, infringement of its intellectual property
rights may still occur and could adversely affect our business and operational
results.
-21-
Our intellectual property rights are critical to success. Unauthorized
users may infringe upon our intellectual property rights and may compete with us
in similar markets. We have registered certain of our software products with the
National Copyright Bureau of the PRC. However, there can be no assurance that
the relevant law enforcement agencies will be able to prohibit, punish and deter
the occurrence of trademark, patent and copyright infringements of our software
products in the PRC.
Investors should also be aware that infringement of intellectual property
rights by way of sales of counterfeit goods occurs in the PRC as well as in
other countries, and there will always be a market for counterfeit products
given the price difference between counterfeit goods and the original. We
believe that total eradication of intellectual property infringement in the PRC
is unlikely within a short period of time. Our profitability may be adversely
affected if our intellectual property rights are infringed.
OUR PRODUCTS AND PROPRIETARY RIGHTS COULD BE CONSTRUED AS INFRINGING ON THE
RIGHTS OF THIRD PARTIES.
Our business model depends on both internally developed games and licensed
games. Such games are playable on a number of platforms that require use of
technologies developed by other third parties. Although we are not aware that
our products, trademarks or other proprietary rights infringe upon the
proprietary rights of third parties, there can be no assurance that third
parties will not assert infringement claims against us and that such claims will
not have a material adverse effect on our business, financial condition and
results of operations. Any litigation involving the use of our technology could
result in substantial cost to us and divert management's attention from
operations, either of which could have a material adverse effect on our
business, financial condition and results of operations. Adverse determinations
in such litigation could result in the loss of our proprietary rights, subject
us to significant liabilities, require us to seek licenses from third parties or
prevent us from selling its products, any one of which could have a material
adverse effect on our business, financial condition and results of operations.
CRITICAL ACCOUNTING POLICIES
REVENUE RECOGNITION
- -------------------
The Company distributes its games to partners' websites or other networks where
the end users can download the games into their mobile handsets. Revenue of net
sales is recognized when the mobile games are downloaded into the mobile
handsets of the end users.
-22-
RESEARCH AND DEVELOPMENT COSTS
- ------------------------------
The Company's research and development costs associated with the development of
mobile game software are expensed as incurred given the relatively short
development cycle compared to other software development.
ITEM 3. CONTROLS AND PROCEDURES.
Our management, with the participation of our President and Chief Financial
Officer, has evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rule 15d-15(e) under the Securities Exchange Act of
1934) as of the end of the period covered by this report. Based on such
evaluation, our President and Chief Financial Officer have concluded that our
disclosure controls and procedures as of the end of the period covered by this
report were designed and functioning effectively to provide reasonable assurance
that the information required to be disclosed by us in reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized, and reported
within the time periods specified in the SEC's rules and forms. We believe that
a controls system, no matter how well designed and operated, cannot provide
absolute assurance that the objectives of the controls system are met, and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within a company have been detected.
As required by Rule 15d-15(e) under the Securities Exchange Act of 1934,
our management, including our President and Chief Financial Officer, have
evaluated our internal control over financial reporting to determine whether any
changes occurred during the most recent fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting. Based on this evaluation, no such change in our
internal control over financial reporting occurred during the most recent fiscal
quarter.
-23-
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF
EQUITY SECURITIES.
On April 1, 2004, ECWC , BBMF Group, BBMF Inc. and certain other parties
named in the Agreement entered into a plan of reorganization and which Agreement
has been filed as an exhibit to the Company's current report on Form 8-K for the
events reportable beginning April 1, 2004, as filed with the Commission on April
15, 2004 and amended and filed with the Commission on June 15, 2004, and which
Form 8-K and amendment on Form 8-K/A are hereby incorporated by reference.
Pursuant to the Agreement, 100 ordinary shares issued and outstanding of
BBMF Group, representing 100% of the share capital of BBMF Group have been
exchanged with the Company (then known as ECWC) for 20,000,000 newly issued,
unregistered and restricted shares of the common stock of the Company.
The Company has issued the newly issued shares in reliance of certain
exemptions to the Securities Act of 1933, as amended (the "Act"), including,
without limitation Regulation D of the Act.
Subsequent to the quarter ended June 30, 2004, Atlus Co., Ltd., a Japanese
game developer, along with certain other private investors, subscribed to
518,181 new shares of the Company at US$2.20 per share in a private placement of
the Company's common shares. Total proceeds from the transaction were
approximately US$1.14 million. The Company's share capital was increased to
20,786,849 shares outstanding immediately after the transaction.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
On April 13, 2004, BBMF Information Technology Co., Ltd. ("BBMF China") was
established in the PRC by the shareholders of BBMF Inc as a wholly foreign owned
enterprise. BBMF China serves as the game production studio and research and
development center of the Company in the PRC. Subsequently on August 13, 2004,
the shareholders of BBMF China injected 100% of BBMF China's shares into BBMF
Group for nominal consideration.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
-24-
See the list in the exhibit index
-25-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BBMF CORPORATION
Date: August 16, 2004 By: /s/ Antony Ren Haw Ip
-------------------------------------
Antony Ren Haw Ip
President
Date: August 16, 2004 By: /s/ Anny Lian
-------------------------------------
Anny Lian
Chief Financial Officer
-26-
EXHIBIT INDEX
-------------
(a) Exhibits
NUMBER
2.1 Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession (1)
3.1 Articles of Incorporation of Second Investors Group, Inc. dated June 10,
1992 (2)
3.2 Certificate of Amendment to Articles of Incorporation of Second
Investors Group, Inc. filed June 19, 1998 (2)
3.3 Certificate of Amendment to Articles of Incorporation of Progressive
Environmental Recovery Corporation dated January 29, 1999 (2)
3.2* By-laws of the Company
31.1* Rule 13a-14(a) Certification (President)
31.2* Rule 13a-14(a) Certification (CFO)
32.1* Section 1350 Certification (President)
32.2* Section 1350 Certification (CFO)
(1) Incorporated by reference to an exhibit to the Company's Current Report
on Form 8-K as previously filed with the Commission on April 15, 2004.
(2) Incorporated by reference to the Company's Registration Statement on
Form SB-2/A as previously filed with the Commission on November 21, 2000.
*Filed herewith
(B) REPORTS ON FORM 8-K:
On April 15, 2004, the Company filed a Current Report on Form 8-K to report the
Agreement and plan of reorganization by and among the Company, BBMF Inc., BBMF
Group and others named in the Agreement.
On June 15, 2004, the Company filed on Form 8-K/A an amendment to its Current
Report on Form 8-K filed on April 15, 2004, to report financial statements in
connection with the Agreement and plan of reorganization.
On July 15, 2004, the Company filed a Current Report on Form 8-K to report a
private placement of the Company's common shares with private investors
including Atlus Co. Ltd.
On August 16, 2004, the Company filed a Current Report on Form 8-K to report a
change in the Company's certifying auditors.
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