UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
Big Time Acquisition, Inc.
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(Exact Name of Small Business Issuer in its Charter)
Commission file number 000-_____
Delaware 27-3291226
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
780 Reservoir Avenue, #123
Cranston,RI 02910
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(Address of Principal Executive Offices) (Zip Code)
Scot Scheer
780 Reservoir Avenue, #123
Cranston, RI 02910
Telephone: (401)641-0405
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(Registrant's telephone number, including area code)
Securities to be Registered Under Section 12(b) of the Act:
None
Securities to be Registered Under Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $0.0001
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(Title of Class)
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
a. Business Development
Big Time Acquisition, Inc. ("we", "us", "our", the "Company" or the
"Registrant")was incorporated in the State of Delaware on August 17,
2010. Since inception, which was August 17, 2010, the Company has been
primarily engaged in organizational efforts. The Company was formed as
a vehicle to pursue a business combination and has made no efforts to
identify a possible business combination. As a result, the Company has
not conducted negotiations or entered into a letter of intent
concerning any target business. The business purpose of the Company is
to seek the acquisition of or merger with, an existing company. The
Company selected August 31 as its fiscal year end.
b. Business of Issuer
The Company, based on proposed business activities, is a "blank check"
company.The U.S. Securities and Exchange Commission (the "SEC")
defines those companies as "any development stage company that is
issuing a penny stock, within the meaning of Section 3 (a)(51) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
that has no specific business plan or purpose, or has indicated that its
business plan is to merge with an unidentified company or companies."
Under SEC Rule 12b-2 under the Exchange Act, the Company also qualifies
as a "shell company," because it has no or nominal assets (other than cash)
and no or nominal operations. Many states have enacted statutes, rules
and regulations limiting the sale of securities of "blank check"
companies in their respective jurisdictions. Management does not intend
to undertake any efforts to cause a market to develop in our securities,
either debt or equity, until we have successfully concluded a business
combination. The Company intends to comply with the periodic
reporting requirements of the Exchange Act for so long as it is subject
to those requirements.
The Company was organized as a vehicle to investigate and, if such
investigation warrants, acquire a target company or business seeking the
perceived advantages of being a publicly held corporation. The Company's
principal business objective for the next 12 months and beyond such time will
be to achieve long-term growth potential through a combination with a
business rather than immediate, short-term earnings. The Company will not
restrict its potential candidate target companies to any specific business,
industry or geographical location and, thus, may acquire any type of
business.
The analysis of new business opportunities will be undertaken by or under the
supervision of Scot A. Scheer, the sole officer, president,secretary and
director of the Registrant. As of this date the Company has not entered into
any definitive agreement with any party, nor have there been any specific
discussions with any potential business combination candidate regarding
business opportunities for the Company. The Registrant has unrestricted
flexibility in seeking, analyzing and participating in potential business
opportunities. In its efforts to analyze potential acquisition targets, the
Registrant will consider the following kinds of factors:
a.Potential for growth, indicated by new technology, anticipated market
expansion or new products;
b. Competitive position as compared to other firms of similar size and
experience within the industry segment as well as within the industry as a
whole;
c. Strength and diversity of management either in place or scheduled
for recruitment;
d. Capital requirements and anticipated availability of required funds, to
be provided by the Registrant or from operations, through the sale of
additional securities, through joint ventures or similar arrangements or from
other sources;
e. The cost of participation by the Registrant as compared to the
perceived tangible and intangible values and potentials;
f.The extent to which the business opportunity can be advanced;
g. The accessibility of required management expertise, personnel, raw
materials, services, professional assistance and other required items; and
h.Other relevant factors.
In applying the foregoing criteria, no one of which will be controlling,
management will attempt to analyze all factors and circumstances and make a
determination based upon reasonable investigative measures and available
data. Potentially available business opportunities may occur in many
different industries, and at various stages of development, all of which will
make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex. Due to the Registrant's
limited capital available for investigation, the Registrant may not discover
or adequately evaluate adverse facts about the opportunity to be acquired.
FORM OF ACQUISITION
The manner in which the Registrant participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of the
Registrant and the promoters of the opportunity, and the relative negotiating
strength of the Registrant and such promoters.
It is likely that the Registrant will acquire its participation in a business
opportunity through the issuance of common stock or other securities of the
Registrant. Although the terms of any such transaction cannot be predicted,
it should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the
"Code") depends upon whether the owners of the acquired business own 80% or
more of the voting stock of the surviving entity. If a transaction were
structured to take advantage of these provisions rather than other "tax free"
provisions provided under the Code, all prior stockholders would in such
circumstances retain 20% or less of the total issued and outstanding shares
of the surviving entity.
In Addition, depending upon the transaction, the Registrant's current
stockholders may be substantially diluted to less than 20% of the total
issued and outstanding shares of the surviving entity and possibly even
eliminated as stockholders by an acquisition.
The present stockholders of the Registrant will likely not have control of a
majority of the voting securities of the Registrant following a
reorganization transaction. As part of such a transaction, all, or a
majority, of the Registrant's directors may resign and one or more new
directors may be appointed without any vote by stockholders.
In the case of an acquisition or a statutory merger or consolidation
directly involving the Company, it will likely be necessary to call a
stockholders' meeting and obtain the approval of the holders of a majority of
the outstanding securities. The necessity to obtain such stockholder approval
may result in delay and additional expense in the consummation of any proposed
transaction and will also give rise to certain appraisal rights to dissenting
stockholders. Most likely, management will seek to structure any such
transaction so as not to require stockholder approval.
It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial
management time and attention and substantial cost for accountants, attorneys
and others. If a decision is made not to participate in a specific business
opportunity, the costs theretofore incurred in the related investigation
might not be recoverable. Furthermore, even if an agreement is reached for
the participation in a specific business opportunity, the failure to
consummate that transaction may result in the loss to the Registrant of the
related costs incurred.
We presently have no employees apart from our management. Our officers and
directors are engaged in outside business activities and anticipate that they
will devote to our business very limited time until the acquisition of a
successful business opportunity has been identified. We expect no significant
changes in the number of our employees other than such changes, if any,
incident to a business combination.
a. Reports to security holders.
(1) The Company is not required to deliver an annual report to security
holders and at this time does not anticipate the distribution of such a
report.
(2) The Company will file reports with the SEC. The Company will be a
reporting company and will comply with the requirements of the Exchange Act.
(3) The public may read and copy any materials the Company files with the SEC
in the SEC's Public Reference Section, Room 1580, 100 F Street N.E.,
Washington, D.C. 20549. The public may obtain information on the operation of
the Public Reference Section by calling the SEC at 1-800-SEC-0330.
Additionally, the SEC maintains an Internet site that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC, which can be found at http://www.sec.gov.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
We were organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived
advantages of being a publicly held corporation. Our principal business
objective for the next 12 months and beyond such time will be to achieve
long-term growth potential through a combination with a business rather than
immediate, short-term earnings. We will not restrict our potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.
We do not currently engage in any business activities that provide cash flow.
The costs of investigating and analyzing business combinations for the next
12 months and beyond such time will be paid with money in our treasury or
with additional amounts, as necessary, to be loaned to or invested in us by
our stockholders, management or other investors.
During the next 12 months we anticipate incurring costs related to:
(i)
filing of Exchange Act reports, and
(ii)
consummating an acquisition.
We believe we will be able to meet these costs through use of funds in our
treasury and additional amounts, as necessary, to be loaned by or invested in
us by our stockholders, management or other investors.
We are in the development stage and have negative working capital, negative
stockholders' equity and have not earned any revenues from operations to
date. These conditions raise substantial doubt about our ability to continue
as a going concern. We are currently devoting its efforts to locating merger
candidates. Our ability to continue as a going concern is dependent upon our
ability to develop additional sources of capital, locate and complete a
merger with another company, and ultimately, achieve profitable operations.
We may consider a business which has recently commenced operations, is a
developing company in need of additional funds for expansion into new
products or markets, is seeking to develop a new product or service, or is an
established business which may be experiencing financial or operating
difficulties, may be in bankruptcy and is in need of additional capital. In the
alternative,a business combination may involve the acquisition of, or merger
with, a company which does not need substantial additional capital, but which
desires to establish a public trading market for its shares, while avoiding,
among other things, the time delays, significant expense, and loss of voting
control which may occur in a public offering.
Our officers and directors have not had any preliminary contact or
discussions with any representative of any other entity regarding a business
combination with us. Any target business that is selected may be a
financially unstable company, presently in or out of bankruptcy, or an entity
in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be subject
to numerous risks inherent in the business and operations of financially
unstable and early stage or potential emerging growth companies. In addition,
we may effect a business combination with an entity in an industry
characterized by a high level of risk, and, although our management will
endeavor to evaluate the risks inherent in a particular target business,
there can be no assurance that we will properly ascertain or assess all
significant risks.
Our management anticipates that it will likely be able to effect only one
business combination, due primarily to our limited financing and the dilution
of interest for present and prospective stockholders, which is likely to
occur as a result of our management's plan to offer a controlling interest to
a target business in order to achieve a tax-free reorganization. This lack of
diversification should be considered a substantial risk in investing in us,
because it will not permit us to offset potential losses from one venture
against gains from another.
We anticipate that the selection of a business combination will be complex
and extremely risky. Because of general economic conditions, rapid
technological advances being made in some industries and shortages of
available capital, our management believes that there are numerous firms
seeking even the limited additional capital which we will have and/or the
perceived benefits of becoming a publicly traded corporation. Such perceived
benefits of becoming a publicly traded corporation include, among other
things, facilitating or improving the terms on which additional equity
financing may be obtained, providing liquidity for the principals of and
investors in a business, creating a means for providing incentive stock
options or similar benefits to key employees, and offering greater
flexibility in structuring acquisitions, joint ventures and the like through
the issuance of stock. Potentially available business combinations may occur
in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
RISK FACTORS
There may be conflicts of interest between our management and our non-
management stockholders and management may have incentives to act adversely
to the non-management stockholders.
Conflicts of interest create the risk that management may have an incentive
to act adversely to the interests of our stockholders. A conflict of interest
may arise between our management's personal pecuniary interest and its
fiduciary duty to our stockholders. In addition, management is currently
involved with other blank check companies and conflicts in the pursuit of
business combinations with such other blank check companies with which they
and other members of our management are, and may in the future be, affiliated
with may arise. If we and the other blank check companies that our management
is affiliated with desire to take advantage of the same opportunity, then
those members of management that are affiliated with both companies would
abstain from voting upon the opportunity. In the event of identical officers
and directors, members of management, such individuals will arbitrarily
determine the company that will be entitled to proceed with the proposed
transaction.
Our business is difficult to evaluate because we have no operating business
and our shareholders will not know what business we will enter into until we
effectuate a transaction.
As we have no operating history or revenue and only minimal assets, there is
a risk that we will be unable to continue as a going concern and consumate a
business combination. We have had no recent operating history nor any
revenues or earnings from operations since inception. We have no significant
assets or financial resources. We will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the consummation of a
business combination. This may result in our incurring a net operating loss
that will increase continuously until we can consummate a business
combination with a profitable business opportunity. We cannot assure you that
we can identify a suitable business opportunity and consummate a business
combination.
There is competition for those private companies suitable for a merger
transaction of the type contemplated by management and as a non-trading
company we are a competitive disadvantage to some of our competitors and may
reduce the likelihood of us consummating a deal.
We are in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of
established and well-financed entities, including small public companies and
venture capital firms, are active in mergers and acquisitions of companies
that may be desirable target candidates for us. Nearly all these entities
have significantly greater financial resources, technical expertise and
managerial capabilities than we do; consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination. These competitive factors may reduce the
likelihood of our identifying and consummating a successful business
combination.
We are a development stage company, and our future success is highly
dependent on the ability of management to locate and attract a suitable
acquisition.
We were incorporated on August 17, 2010 and are considered to be in the
development stage. The nature of our operations is highly speculative, and
there is a consequent risk of loss of your investment. The success of our
plan of operation will depend to a great extent on the operations, financial
condition and management of the identified business opportunity. While
management intends to seek business combination(s) with entities having
established operating histories, we cannot assure you that we will be
successful in locating candidates meeting that criterion. In the event we
complete a business combination, the success of our operations may be
dependent upon management of the successor firm or venture partner firm and
numerous other factors beyond our control.
We have no existing agreement for a business combination or other transaction
and there is no guarantee that we will be able to negotiate a transaction
that will benefit our shareholders.
We have no arrangement, agreement or understanding with respect to engaging
in a merger with, joint venture with or acquisition of, a private or public
entity. No assurances can be given that we will successfully identify and
evaluate suitable business opportunities or that we will conclude a business
combination. Management has not identified any particular industry or
specific business within an industry for evaluation. We cannot guarantee that
we will be able to negotiate a business combination on favorable terms, and
there is consequently a risk that funds allocated to the purchase of our
shares will not be invested in a company with active business operations.
Management intends to devote only a limited amount of time to seeking a
target company which may adversely impact our ability to identify a suitable
acquisition candidate.
While seeking a business combination, management anticipates devoting very
limited time to our affairs. Our officers have not entered into written
employment agreements with us and are not expected to do so in the
foreseeable future. This limited commitment may adversely impact our ability
to identify and consummate a successful business combination.
The time and cost of preparing a private company to become a public reporting
company may preclude us from entering into a merger or acquisition with the
most attractive private companies.
Target companies that fail to comply with SEC reporting requirements may
delay or preclude acquisition. Sections 13 and 15(d) of the Exchange Act
require reporting companies to provide certain information about significant
acquisitions, including certified financial statements for the company
acquired, covering one, two, or three years, depending on the relative size
of the acquisition. The time and additional costs that may be incurred by
some target entities to prepare these statements may significantly delay or
essentially preclude consummation of an acquisition. Otherwise suitable
acquisition prospects that do not have or are unable to obtain the required
audited statements may be inappropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable.
We may be subject to further government regulation which would adversely
affect our operations.
Although we will be subject to the reporting requirements under the Exchange
Act, management believes we will not be subject to regulation under the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
since we will not be engaged in the business of investing or trading in
securities. If we engage in business combinations which result in our holding
passive investment interests in a number of entities, we could be subject to
regulation under the Investment Company Act. If so, we would be required to
register as an investment company and could be expected to incur significant
registration and compliance costs. We have obtained no formal determination
from the SEC as to our status under the Investment Company Act and,
consequently, violation of the Investment Company Act could subject us to
material adverse consequences.
Any potential acquisition or merger with a foreign company may subject us to
additional risks.
If we enter into a business combination with a foreign company, we will be
subject to risks inherent in business operations outside of the United
States. These risks include, for example, currency fluctuations, regulatory
problems, punitive tariffs, unstable local tax policies, trade embargoes,
risks related to shipment of raw materials and finished goods across national
borders and cultural and language differences. Foreign economies may differ
favorably or unfavorably from the United States economy in growth of gross
national product, rate of inflation, market development, rate of savings, and
capital investment, resource self-sufficiency and balance of payments
positions, and in other respects.
There is currently no trading market for our common stock, and liquidity of
shares of our common stock is limited.
Our shares of common stock are not registered under the securities laws of
any state or other jurisdiction, and accordingly there is no public trading
market for our common stock. Further, no public trading market is expected to
develop in the foreseeable future unless and until the Company completes a
business combination with an operating business and the Company thereafter
files a registration statement under the Securities Act of 1933, as amended
(the "Securities Act"). Therefore, outstanding shares of our common stock
cannot be offered, sold, pledged or otherwise transferred unless subsequently
registered pursuant to, or exempt from registration under, the Securities Act
and any other applicable federal or state securities laws or regulations.
Compliance with the criteria for securing exemptions under federal securities
laws and the securities laws of the various states is extremely complex,
especially in respect of those exemptions affording flexibility and the
elimination of trading restrictions in respect of securities received in
exempt transactions and subsequently disposed of without registration under
the Securities Act or state securities laws.
There are issues impacting liquidity of our securities with respect to the
fact that we will need to file a resale registration statement to create
liquidity in our common stock.
Since our shares of common stock issued prior to a business combination or
reverse merger cannot currently, nor will they for a considerable period of
time after we complete a business combination, be available to be offered,
sold, pledged or otherwise transferred without being registered pursuant to
the Securities Act, we will likely file a resale registration statement on
Form S-1, or some other available form, to register for resale such shares of
common stock. We cannot control this future registration process in all
respects as some matters are outside our control. Even if we are successful
in causing the effectiveness of the resale registration statement, there can
be no assurances that the occurrence of subsequent events may not preclude
our ability to maintain the effectiveness of the registration statement. Any
of the foregoing items could have adverse effects on the liquidity of our
shares of common stock.
In addition, the SEC has recently disclosed that it has developed internal
informal guidelines concerning the use of a resale registration statement to
register the securities issued to certain investors in private investment in
public equity (PIPE) transactions, where the issuer has a market capitalizaiton
of less than $75 million and, in general, does not qualify to file a
Registration Statement on Form S-3 to register its securities. The SEC has
taken the position that these smaller issuers may not be able to rely on
Rule 415 underthe Securities Act ("Rule 415"), which generally permits the
offer and sale of securities on a continued or delayed basis over a period of
time, but instead would require that the Issuer offer and sell such securities
in a direct or "primary" public offering, at a fixed price, if the facts and
circumstances are such that the SEC believes the investors seeking to have
their shares registered are underwriters and/or affiliates of the Issuer.
It appears that the SEC in most cases will permit a registration for resale of
up to one third of the total number of shares of common stock then currently
owned by persons who are not affiliates of the such issuer and, in some cases,
a larger percentage depending on the facts and circumstances. Staff members
also have indicated that an issuer in most cases will have to wait until the
later of six months after effectiveness of the first registration or such time
as substantially all securities registered in the first registration are sold
before filing a subsequent registration on behalf of the same investors.
Since, following a reverse merger or business combination, we may have little
or no tradable shares of common stock, it is unclear as to how many, if any,
shares of common stock the SEC will permit us to register for resale, but the
SEC staff members have indicated a willingness to consider a higher
percentage in connection with registrations following reverse mergers with
shell companies such as the Company. The SEC may require as a condition
to the declaration of effectiveness of a resale registration that we reduce or
"cut back" the number of shares of common stock to be registered in such
registration statement. The result of the foregoing is that a stockholder's
liquidity in our common stock maybe adversely affected in the event the SEC
requires a cut back of the securities as a conditon to allow the Company to rely
on Rule 415 with respect to a resale registration statement,or,if the SEC
requires us to file a primary registration statement.
We have never paid dividends on our common stock and if we do not pay
dividends in the future then our shareholders can only benefit from their
shares by selling such stock either in the public market place or in a
private transaction.
We have never paid dividends on our common stock and do not presently intend
to pay any dividends but we may decide to in the foreseeable future. We
anticipate that any funds available for payment of dividends will be re-
invested into us to further our business strategy.
We may be subject to certain tax consequences in our business, which may
increase our cost of doing business.
We may not be able to structure our acquisition to result in tax-free
treatment for the companies or their stockholders, which could deter third
parties from entering into certain business combinations with us or result in
being taxed on consideration received in a transaction. Currently, a
transaction may be structured so as to result in tax-free treatment to both
companies, as prescribed by various federal and state tax provisions. We
intend to structure any business combination so as to minimize the federal
and state tax consequences to both us and the target entity; however, we
cannot guarantee that the business combination will meet the statutory
requirements of a tax-free reorganization or that the parties will obtain the
intended tax-free treatment upon a transfer of stock or assets. A non-
qualifying reorganization could result in the imposition of both federal and
state taxes that may have an adverse effect on both parties to the
transaction.
Our business will have no revenue unless and until we merge with or acquire
an operating business.
We are a development stage company and have had no revenue from operations.
We may not realize any revenue unless and until we successfully merge with or
acquire an operating business.
We intend to issue more shares in a merger or acquisition, which will result
in substantial dilution.
Our Certificate of Incorporation authorizes the issuance of a maximum of
100,000,000 shares of common stock and a maximum of 10,000,000 shares of
blank check preferred stock. Any merger or acquisition effected by us may
result in the issuance of additional securities without minority stockholder
approval and may result in substantial dilution in the percentage of our common
stock held by our then existing stockholders. Moreover, the common stock issued
in any such merger or acquisition transaction may be valued on an arbitrary or
non-arm's-length basis by our management, resulting in an additional
reduction in the percentage of common stock held by our then existing
stockholders. Our Board of Directors has the power to issue any or all of
such authorized but unissued shares without stockholder approval. To the
extent that additional shares of common stock or preferred stock are issued
in connection with a business combination or otherwise, dilution to the
interests of our stockholders will occur and the rights of the holders of
common stock might be materially adversely affected.
Our principal stockholders may engage in a transaction to cause us to
repurchase their shares of common stock.
In order to provide an interest in us to a third party, our control
stockholders may choose to cause us to sell our securities to one or more
third parties, with the proceeds of such sale(s) being utilized by us to
repurchase shares of common stock held by them. As a result of such
transaction(s), our management, principal stockholder(s) and Board of
Directors may change.
We have conducted no market research or identification of business
opportunities, which may affect our ability to identify a business to merge
with or acquire.
We have not conducted market research concerning prospective business
opportunities, nor have others made the results of such market research
available to us. Therefore, we have no assurances that market demand exists
for a merger or acquisition as contemplated by us. Our management has not
identified any specific business combination or other transactions for formal
evaluation by us, such that it may be expected that any such target business
or transaction will present such a level of risk that conventional private or
public offerings of securities or conventional bank financing will not be
available. There is no assurance that we will be able to acquire a business
opportunity on terms favorable to us. Decisions as to which business
opportunity to participate in will be unilaterally made by our management,
which may act without the consent, vote or approval of our stockholders.
Our shares may be subject to the "penny stock" rules, following such a
reverse merger transaction which might subject you to restrictions on
marketability and may not be able to sell your shares.
If our common stock becomes tradable in the secondary market, we will be
subject to the penny stock rules adopted by the Securities and Exchange
Commission that require brokers to provide extensive disclosure to their
customers prior to executing trades in penny stocks. These disclosure
requirements may cause a reduction in the trading activity of our common
stock, which in all likelihood would make it difficult for our shareholders
to sell their securities.
Additional risks may exist since we will assist a privately held business to
become public through a "reverse merger." Securities analysts of major
brokerage firms may not provide coverage of us since there is no incentive to
brokerage firms to recommend the purchase of our common stock. No assurance
can be given that brokerage firms will want to conduct any secondary
offerings on behalf of our post-merger company in the future. Failure to
develop or maintain an active trading market for our common stock will have a
generally negative effect on the price of our common stock and you may be
unable to sell your common stock or any attempted sale of such common stock
may have the effect of lowering the market price. Your investment could be a
partial or complete loss.
Penny stocks generally are equity securities with a price of less than $5.00
(other than securities registered on certain national securities exchanges or
quoted on the NASDAQ system). Penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules,
to deliver a standardized risk disclosure document that provides information
about penny stocks and the risks in the penny stock market. The broker-dealer
also must provide the customer with current bid and offer quotations for the
penny stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. The broker-dealer must also make
a special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser's written agreement to the
transaction. These requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security that becomes
subject to the penny stock rules. The additional burdens imposed upon broker-
dealers by such requirements may discourage broker-dealers from effecting
transactions in our securities, which could severely limit the market price
and liquidity of our securities. These requirements may restrict the ability
of broker-dealers to sell our common stock and may affect your ability to
resell our common stock.
We cannot assure you that following a business combination with an operating
business, our common stock will be listed on NASDAQ or any other securities
exchange and therefore it is possible that our stockholders will not be able
to liquidate their investment in our stock and we may not have access to
capital available to companies trading on these exchanges.
Following a business combination, we may seek the listing of our common
stock on NASDAQ or the American Stock Exchange. However, we cannot assure you
that following such a transaction, we will be able to meet the initial
listing standards of either of those or any other stock exchange, or that we
will be able to maintain a listing of our common stock on either of those or
any other stock exchange. After completing a business combination, until our
common stock is listed on the NASDAQ or another stock exchange, we expect
that our common stock would be eligible to trade on the OTC Bulletin Board,
another over-the-counter quotation system, or on the "pink sheets," where our
stockholders may find it more difficult to dispose of shares or obtain
accurate quotations as to the market value of our common stock. In addition,
we would be subject to an SEC rule that, if it failed to meet the criteria
set forth in such rule, imposes various practice requirements on broker-
dealers who sell securities governed by the rule to persons other than
established customers and accredited investors. Consequently, such rule may
deter broker-dealers from recommending or selling our common stock, which may
further affect its liquidity. This would also make it more difficult for us
to raise additional capital following a business combination.
Our authorization of blank check preferred stock could be used to discourage
a take-over transaction involving an actual or potential change in control of
us or our management.
Our Certificate of Incorporation authorizes the issuance of up to 10,000,000
shares of blank check preferred stock with designations, rights and
preferences determined from time to time by our Board of Directors.
Accordingly, our Board of Directors is empowered, without stockholder
approval, to issue preferred stock with dividend, liquidation, conversion,
voting, or other rights which could adversely affect the voting power or
other rights of the holders of the common stock. In the event of issuance,
the preferred stock could be utilized, under certain circumstances, as a
method of discouraging, delaying or preventing a change in control of the
Company. Although we have no present intention to issue any shares of its
authorized preferred stock, there can be no assurance that the Company will
not do so in the future.
Due to the control by beneficial shareholders holding 90% of the majority of
issued and outstanding common stock, our minority shareholder(s) will have no
power to choose management or impact operations.Furthermore,In the event
of any third party offer to puchase our securities, the Company and
Control Shareholders retain the right but not the obligation to repurchase
any or all shares of common stock issued to our minority shareholder,LMIC,Inc.
at par value pursuant to founders common stock agreement attached hereto
as Exhibit 10.
Management, Scot Scheer currently controls and votes 45% of our issued and
outstanding common stock. Scot's sister-in-law, Lisa DeNunzio controls and
owns 45% of our issued and outstanding common stock. Consequently, management
and Ms. DeNunzio are control shareholders and have the ability to influence
control of our operations and, acting together, will have the ability to
influence or control substantially all matters submitted to stockholders for
approval, including:
A) Election of the Board of Directors;
B) Removal of directors;
C) Amendment to the our certificate of incorporation or bylaws;
and
D) Adoption of measures that could delay or prevent a change in
control or impede a merger, takeover or other business
combination.
These stockholders will thus have substantial influence over our management
and affairs and other stockholders possess no practical ability to remove
management or effect the operations of our business. Accordingly, this
concentration of ownership by itself may have the effect of impeding a
merger, consolidation, takeover or other business consolidation, or
discouraging a potential acquirer from making a tender offer for the common
stock.
This registration statement contains forward-looking statements and
information relating to us, our industry and to other businesses.
These forward-looking statements are based on the beliefs of our management,
as well as assumptions made by and information currently available to our
management. When used in this registration statement, the words "estimate,"
"project," "believe," "anticipate," "intend," "expect" and similar
expressions are intended to identify forward-looking statements. These
statements reflect our current views with respect to future events and are
subject to risks and uncertainties that may cause our actual results to
differ materially from those contemplated in our forward-looking statements.
We caution you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this registration statement.
We do not undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date
of this registration statement or to reflect the occurrence of unanticipated
events.
ITEM 3. DESCRIPTION OF PROPERTY.
We neither rent nor own any properties. We utilize the office space and
equipment of our management at no cost. Management estimates such amounts to
be immaterial. We currently have no policy with respect to investments or
interests in real estate, real estate mortgages or securities of, or
interests in, persons primarily engaged in real estate activities.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
a. Security ownership of certain beneficial owners.
The following table sets forth, as of August 17, 2010, the number of shares
of common stock owned of record and beneficially by executive officers,
directors and persons or entities who beneficially own more than 5% of the
outstanding shares of our common stock.
Amount and Nature of Percentage
Name and Address Beneficial Ownership Of Class
- -------------------------- -------------------- ----------
Scot A. Scheer (1) 45,000 45%
780 Reservoir Avenue,#123
Cranston, RI 02910
Lisa DeNunzio 45,000 45%
780 Reservoir Avenue #123
Cranston,RI 02910
LMIC, Inc. 10,000 10%
780 Reservoir Avenue,#123
Cranston,RI 02910
(1) Scot Scheer serves as President, Secretary and Director of the
Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
A. Identification of Directors and Executive Officers.
Our officers and directors and additional information concerning them
are as follows:
Name Age Position
-----------------------------------------------------------------------
Scot Scheer 52 President and Director
Scot A. Scheer, President,Secretary and Director,
Scot Scheer is a twice (2 times) "Daytime Emmy Award" winner for outstanding
music direction and composition for a daytime drama television series, "Santa
Barbara"- N.B.C...as N.B.C. staff composer (1985-1994) he composed and
produced music for over 700 N.B.C. episodes of the "Santa Barbara" series
incorporating 60-70- hours of music compositions.
Some of Scot's other music compositions include... Lifestyles of the Rich and
Famous, Los Angeles Lakers Show, Another World (NBC), Loving (ABC) , The Drug
Knot (ABC movie of the week), CBS Sports programming, Miss World Pageant
(1988,90,92,93), General Hospital (ABC), Good Morning America (ABC), and Eye
On L.A.
Collaborations, additional production and album credits include...Kenny
Loggins, Thomas Dolby, Larry Graham, Iki Levy, Beau Williams, Tavares,
Temptations, Spinners, Tom Scott, Tony Haynes, Bill Mays, Lowell Fulsom and
Cher.
Scot graduated from Berklee College of Music (Cum Laude) with a Bachelors
Degree in Music Education.
Scot has played both the highly acclaimed "Monterey Jazz Festival" and the
"Newport Jazz Festival."
In addition, Scot has owned and operated several small busineses during the
last 20 years. Presently, Scot Scheer is the President, control person, and
sole Director of LMIC, Inc., a public, non-reporting blank check company
trading on the Over the Counter Bulletin Board. Scot Scheer was appointed
President and Director of LMIC, Inc. on June 9, 2009. Scot has successfully
procured the restoration, renewal and revival of LMIC Inc.'s Delaware corporate
charter.
B. Significant Employees. None.
C. Family Relationships. Scot Scheer is the brother-in-law of Lisa DeNunzio.
D.Involvement in Certain Legal Proceedings. There have been no events under
any bankruptcy act, no criminal proceedings and no judgments, injunctions,
orders or decrees material to the evaluation of the ability and integrity of
any director, executive officer, promoter or control person of Registrant
during the past five years.
E. The Board of Directors acts as the Audit Committee, and the Board has no
separate committees. The Company has no qualified financial expert at this
time because it has not been able to hire a qualified candidate. Further, the
Company believes that it has inadequate financial resources at this time to
hire such an expert. The Company intends to continue to search for a
qualified individual for hire.
CURRENT BLANK CHECK COMPANY EXPERIENCE
As indicated below, members of the management also serve as officers and
directors of:
Filing Date Pending
Registration Operating SEC File Business
Name Statement Status Number Combinations Additional Information
- ------------- ------------ -------------- --------- ------------ -----------------------------
LMIC, Inc. Deregistered None 000-261860 None Scot Scheer has
Dec.23, 2009 been the sole officer
and director since June 9, 2009.
</table>
ITEM 6. EXECUTIVE COMPENSATION.
The Company's sole officer and director has not received any cash
remuneration since inception. He will not receive any remuneration until the
consummation of an acquisition. No remuneration of any nature has been paid
for on account of services rendered by a director in such capacity. Our
officers and directors intend to devote very limited time to our affairs.
It is possible that, after the Company successfully consummates a business
combination with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of our management for the purposes of
providing services to the surviving entity. However, the Company has adopted
a policy whereby the offer of any post-transaction employment to members of
management will not be a consideration in our decision whether to undertake
any proposed transaction.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Company for the benefit of
its employees.
There are no understandings or agreements regarding compensation our
management will receive after a business combination that is required to be
included in this table, or otherwise.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
We utilize the office space and equipment of our management at no
cost. There have been no transactions since our formation, or any currently
proposed transaction, in which we are to be a participant and the amount
involved exceeds $120,000 and in which any related person had or will have a
direct or indirect material interest.
On August 17, 2010, we issued 45,000 shares to Scot A. Scheer, our sole
officer, and Director and 45,000 shares to Lisa DeNunzio, and 10,000 shares
to LMIC, Inc. are our only shareholders.
Except as otherwise indicated herein,there have been no related party
transactions,or any other transactions or relationships required to be
disclosed pursuant to Item 404 of Regulation S-B.
We have not:
Established our own definition for determining whether our director
and nominees for directors are "independent" nor has it adopted any
other standard of independence employed by any national securities
exchange or inter-dealer quotation system, though our current
directors would not be deemed to be "independent" under any applicable
definition given that they are officers of the Company; nor,
Established any committees of the Board of Directors.
Given the nature of our company, its limited shareholder base and the current
composition of management, the Board of Directors does not believe that we
require any corporate governance committees at this time. The Board of
Directors takes the position that management of a target business will
establish:
Its own Board of Directors,
Establish its own definition of "independent" as related to directors
and nominees for directors,
Establish committees that will be suitable for its operations after
the Company consummates a business combination.
ITEM 8. DESCRIPTION OF SECURITIES.
a.Common and Preferred Stock.
We are authorized by its Certificate of Incorporation to issue an
aggregate of 110,000,000 shares of capital stock, of which 100,000,000
are shares of common stock, par value $0.0001 per share (the "Common
Stock") and 10,000,000 are shares of blank check preferred stock, par
value $0.0001 per share (the "Preferred Stock"). As of August 17 ,
2010, 100,000 shares of Common Stock and zero shares of Preferred Stock
were issued and outstanding.
Common Stock
All outstanding shares of Common Stock are of the same class and have
equal rights and attributes. The holders of Common Stock are entitled
to one vote per share on all matters submitted to a vote of
stockholders of the Company. All stockholders are entitled to share
equally in dividends, if any, as may be declared from time to time by
the Board of Directors out of funds legally available. In the event of
liquidation, the holders of Common Stock are entitled to share ratably
in all assets remaining after payment of all liabilities. The
stockholders do not have cumulative or preemptive rights.
Preferred Stock
Our Certificate of Incorporation authorizes the issuance of up to
10,000,000 shares of blank check Preferred Stock with designations,
rights and preferences determined from time to time by its Board of
Directors. Accordingly, our Board of Directors is empowered, without
stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting, or other rights which could adversely
affect the voting power or other rights of the holders of the Common
Stock. In the event of issuance, the Preferred Stock could be utilized,
under certain circumstances, as a method of discouraging, delaying or
preventing a change in control of the Company. Although we have no
present intention to issue any shares of its authorized Preferred
Stock, there can be no assurance that the Company will not do so in the
future.
The description of certain matters relating to the securities of the
Company is a summary and is qualified in its entirety by the provisions
of the Company's Certificate of Incorporation and By-Laws, copies of
which have been filed as exhibits to this Form 10.
b.Debt Securities.
None.
c.Other Securities To Be Registered.
None.
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
a. Market Information.
The Common Stock is not trading on any stock exchange. The Company is
not aware of any market activity in its Common Stock since its
inception through the date of this filing.
b. Holders.
As of August 17 , 2010, there are three record holders of an aggregate of
100,000 shares of the Common Stock issued and outstanding.
(c) Dividends.
The Registrant has not paid any cash dividends to date and does not
anticipate but may contemplate paying dividends in the foreseeable future. It
is the present intention of management to utilize all available funds for the
development of the Registrant's business.
ITEM 2. LEGAL PROCEEDINGS.
Presently, there are not any material pending legal proceedings to which the
Registrant is a party or as to which any of its property is subject, and no
such proceedings are known to the Registrant to be threatened or contemplated
against it.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There are not and have not been any disagreements between the Registrant and
its accountants on any matter of accounting principles, practices or
financial statement disclosure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
On August 17, 2010, we issued 45,000 shares to Scot Scheer and 45,000 shares
to Lisa DeNunzio and 10,000 shares to LMIC, Inc. for founder services
rendered to us. Such shares were issued pursuant to an exemption from
registration at Section 4(2) of the Securities Act of 1933. These shares of
our common stock qualified for exemption under Section 4(2) of the Securities
Act of 1933 since the issuance shares by us did not involve a public
offering. The offering was not a "public offering" as defined in Section 4(2)
due to the insubstantial number of persons involved in the deal, size of the
offering, manner of the offering and number of shares offered. We did not
undertake an offering in which we sold a high number of shares to a high
number of investors. In addition, these shareholders had the necessary
investment intent as required by Section 4(2) since they agreed to and
received share certificates bearing a legend stating that such shares are
restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction
ensures that these shares would not be immediately redistributed into the
market and therefore not be part of a "public offering." Based on an analysis
of the above factors, we have met the requirements to qualify for exemption
under Section 4(2) of the Securities Act of 1933 for this transaction.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our directors and officers are indemnified as provided by the Delaware
corporate law and our Bylaws. We have agreed to indemnify each of our
directors and certain officers against certain liabilities, including
liabilities under the Securities Act of 1933. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to our
directors, officers and controlling persons pursuant to the provisions
described above, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than our payment of expenses incurred or paid by our
director, officer or controlling person in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
We have been advised that in the opinion of the Securities and Exchange
Commission indemnification for liabilities arising under the Securities Act
is against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we
will, unless in the opinion of our legal counsel the matter has been settled
by controlling precedent, submit the question of whether such indemnification
is against public policy to a court of appropriate jurisdiction. We will then
be governed by the court's decision.
The Company's Certificate of Incorporation provides that, to the fullest extent
permitted by applicable law,none of our directors will be personally liable to
us or our stockholders for monetary damages for breach of fiduciary duty as
a director. Any repeal or modification of this provision will be prospective
only and will not adversely affect any limitation,right or protection of a
director of our company existing at the time of such repeal or modification.
ITEM 6. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
We set forth below a list of our audited financial statements included in
this Registration Statement on Form 10.
Statement
Report of Independent Registered Public Accounting Firm F-1
Balance Sheet as of August 31, 2010 F-2
Statements of Operations for the Period from August 17, 2010
(Date of Inception) to August 31, 2010 F-3
Statement of Changes in Stockholders' Equity (Deficit) for the Period from
August 17, 2010 (Date of Inception) to August 31, 2010 F-4
Statements of Cash Flows for the Period from August 17, 2010
(Date of Inception) to August 31, 2010 F-5
Notes to Financial Statements F-6
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of:
Big Time Acquistion, Inc.
(A Development Stage Company)
780 Reservoir Avenue, #123
Cranston, RI 02910
We have audited the accompanying balance sheet of Big Time Acquisition Inc.
(the "Company") as of August 31, 2010, and the related statements of
operations, stockholders' equity and cash flows for the period from August 17,
2010 (inception) to August 31, 2010. The management of Big Time Acquisition,
Inc.is responsible for these financial statements. Our responsibility is to
expressan opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Big Time Acquisition, Inc. as
of August 31, 2010, and the results of its operations and its cash flows for
the period from August 17, 2010 (inception) to August 31, 2010, in conformity
with accounting principles generally accepted in the United States of America.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 3 to the financial
statements, the Company's losses from operations raise substantial doubt about
its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ PS Stephenson & Co., P.C.
- -----------------------------------
PS Stephenson & Co., P.C.
September 27, 2010
Wharton, TX
F-1
Big Time Acquisition, Inc.
(A Development Stage Company)
Balance Sheet
As of
August 31,
2010
------------
ASSETS
Current Assets
Cash $ --
------------
Total Current Assets --
------------
TOTAL ASSETS $ --
============
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities $ --
------------
Total Current Liabilities --
------------
TOTAL LIABILITIES --
Stockholders' Equity (Deficit)
Preferred stock, ($.0001 par value, 10,000,000
shares authorized; none issued and outstanding.) --
Common stock ($.0001 par value, 100,000,000
shares authorized; 100,000 shares issued and
outstanding as of August 31, 2010) 10
Additional paid-in capital 3,098
------------
Retained Earnings during development stage (3,108)
------------
Total Stockholders' Equity (Deficit) --
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY (DEFICIT)
------------
$ --
============
See Notes to Financial Statements
F-2
Big Time Acquisition, Inc.
(A Development Stage Company)
Statement of Operations
August 17, 2010 Cumulative
(Inception) Since Inception
Through at
August 31, 2010 August 31, 2010
--------------- ---------------
Revenues
Revenues $ -- $ --
--------------- ---------------
Total Revenues -- --
Operating and administrative expenses 3,108 3,108
--------------- ---------------
Total Operating & Administrative Expenses 3,108 3,108
--------------- ---------------
Income (loss) from operations (3,108) (3,108)
--------------- ---------------
Net Loss $ (3,108) $ (3,108)
=============== ===============
Basic and diluted earnings per share $ (0.03)
===============
Weighted average number of
common shares outstanding 100,000
===============
See Notes to Financial Statements
F-3
Big Time Acquisition, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity (Deficit)
From August 17, 2010 (inception) through August 31, 2010
Deficit
Accumulated
Common Common Additional During
Stock Stock Paid-in Development
Shares Amount Capital Stage Total
---------- ---------- ---------- ----------- ----------
Balance, August 17, 2010 -- -- -- -- --
(Inception)
Shares issued for services at $.0001
per share 100,000 10 3,098 -- 3,108
Net income (loss) August 31, 2010 -- -- (3,108) (3,108) (3,108)
- ------------------------------------ ---------- ---------- ---------- ----------- ----------
Balance, August 31, 2010 100,000 $ 10 $ (3,098) $ (3,108)
========== ========== ========= =========== ==========
See Notes to Financial Statements
F-4
Big Time Acquisition, Inc.
(A Development Stage Company)
Statement of Cash flows
August 17, 2010
(Inception) Cumulative
through Since Inception
August 31, at August 31,
2010 2010
--------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (3,108) $ (3,108)
Adjustments to reconcile net income to net -- --
cash provided (used) by operating activities:
Common stock issued to founder(s) for services rendered (3,108) (3,108)
--------------- ---------------
Net cash provided by (used in) operating activities -- --
CASH FLOWS PROVIDED FROM INVESTING ACTIVITIES
Net cash provided by (used in) investing activities -- --
--------------- ---------------
CASH FLOWS USED BY FINANCING ACTIVITIES
Proceeds from shareholder loans -- --
Common stock issued for cash -- --
--------------- ---------------
Net cash provided by financing activities -- --
Net increase (decrease) in cash and cash equivalents -- --
Cash and cash equivalents, inception -- --
--------------- -----------------
Cash and cash equivalents, end of year $ -- $ --
=============== ===============
NONCASH INVESTING AND FINANCING ACTIVITIES:
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ -- $ --
=============== ===============
Income taxes paid $ -- $ --
=============== ===============
See Notes to Financial Statements
F-5
Big Time Acquisition, Inc.
(A DEVELOPMENT STAGE COMPANY)
August 31, 2010
NOTES TO THE FINANCIAL STATEMENTS
Note 1 - Nature of Operations
Big Time Acquisition Inc. (a development stage company) ("Big Time" or the
"Company") was incorporated in Delaware on August 17, 2010, with an
objective to acquire, or merge with, an operating business. As of August 31,
2010, the Company had not yet commenced any operations.
The Company, based on proposed business activities, is a "blank check"
company. The Securities and Exchange Commission ("SEC") defines such a
company as "a development stage company" that has no specific business
plan or purpose, or has indicated that its business plan is to engage in a
merger or acquisition with an unidentified company or companies, or other
entity or person; and is issued 'penny stock,' as defined in Rule 3a51-1 unde
the Securities Exchange Act of 1934. Many states have enacted statutes,
rules and regulations limiting the sale of securities of "blank check" companies
in their respective jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in its securities, either debt or equity,
until the Company concludes a business combination.
The Company was organized as a vehicle to investigate and, if such
investigation warrants, acquire a target company or business seeking the
perceived advantages of being a publicly held corporation and, to a lesser
extent that desires to employ the Company's funds in its business. The
Company's principal business objective for the next 12 months and beyond
such time will be to achieve long-term growth potential through a combination
with a business ("Business Combination") rather than immediate, short-term
earnings. The Company will not restrict its potential candidate target
companies to any specific business, industry or geographical location and,
thus, may acquire any type of business. The analysis of new business
opportunities will be undertaken by or under the supervision of the officers
and directors of the Company.
Note 2 - Significant Accounting Policies
Basis of presentation
The Company's financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of
America ("U.S. GAAP").
Development stage company
The Company is a development stage company as defined by section
810-10-20 of the FASB Accounting Standards Codification. The
Company is still devoting substantially all of its efforts on establishing
the business and its planned principal operations have not commenced.
All losses accumulated since inception have been considered as part of
the Company's exploration stage activities.
Use of estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements as well as the reported amount of
revenues and expenses during the reporting period. Actual results could
differ from these estimates.
Due to the limited level of operations, the Company has not had to make
material assumptions or estimates other than the assumption that the
Company is a going concern.
Fiscal year end
The Company elected August 31 as its fiscal year ending date.
Cash equivalents
The Company considers all highly liquid investments with maturities of
three months or less at the time of purchase to be cash equivalents.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting
Standards Codification for disclosures about fair value of its financial
instruments and paragraph 820-10-35-37 of the FASB Accounting
Standards Codification ("Paragraph 820-10-35-37") to measure the fair
value of its financial instruments. Paragraph 820-10-35-37 establishes
a framework for measuring fair value in accounting principles generally
accepted in the United States of America (U.S. GAAP), and expands
disclosures about fair value measurements. To increase consistency
and comparability in fair value measurements and related disclosures,
Paragraph 820-10-35-37 establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value
into three (3) broad levels. The fair value hierarchy gives the highest
priority to quoted prices (unadjusted) in active markets for identical
assets or liabilities and the lowest priority to unobservable inputs.
The three (3) levels of fair value hierarchy defined by Paragraph
820-10-35-37 are described below:
Level 1
Quoted market prices available in active markets for identical assets
or liabilities as of the reporting date.
Level 2
Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
Level 3
Pricing inputs that are generally observable inputs and not corroborated
by market data.
The carrying amounts of the Company's financial assets and liabilities,
such as accrued expenses approximate its fair values because of the
short maturity of this instrument.
The Company does not have any assets or liabilities measured at fair
value on a recurring or a non-recurring basis, consequently, the
Company did not have any fair value adjustments for assets and
liabilities measured at fair value at August 31, 2010, nor gains or losses
are reported in the statement of operations that are attributable to the
change in unrealized gains or losses relating to those assets and
liabilities still held at the reporting date for the period from August 17,
2010 (inception) through August 31, 2010.
Revenue recognition
The Company applies paragraph 605-10-S99-1 of the FASB Accounting
Standards Codification for revenue recognition. The Company will
recognize revenue when it is realized or realizable and earned. The
Company considers revenue realized or realizable and earned when all
of the following criteria are met: (i) persuasive evidence of an
arrangement exists, (ii) the product has been shipped or the services
have been rendered to the customer, (iii) the sales price is fixed or
determinable, and (iv) collectability is reasonably assured.
Income taxes
The Company follows Section 740-10-30 of the FASB Accounting
Standards Codification, which requires recognition of deferred tax
assets and liabilities for the expected future tax consequences of
events that have been included in the financial statements or tax
returns. Under this method, deferred tax assets and liabilities are
based on the differences between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the
extent management concludes it is more likely than not that the
assets will not be realized. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the
Statements of Operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting
Standards Codification ("Section 740-10-25"). Section 740-10-25
addresses the determination of whether tax benefits claimed or
expected to be claimed on a tax return should be recorded in the
financial statements. Under Section 740-10-25, the Company may
recognize the tax benefit from an uncertain tax position only if it is
more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits
of the position. The tax benefits recognized in the financial statements
from such a position should be measured based on the largest benefit
that has a greater than fifty percent (50%) likelihood of being realized
upon ultimate settlement. Section 740-10-25 also provides guidance
on de-recognition, classification, interest and penalties on income taxes,
accounting in interim periods and requires increased disclosures. The
Company had no material adjustments to its liabilities for unrecognized
income tax benefits according to the provisions of Section 740-10-25.
Net loss per common share
Net loss per common share is computed pursuant to section 260-10-45
of the FASB Accounting Standards Codification. Basic net loss per share
is computed by dividing net loss by the weighted average number of shares
of common stock outstanding during the period. Diluted net loss per share
is computed by dividing net loss by the weighted average number of shares
of common stock and potentially outstanding shares of common stock during
each period. There were no potentially dilutive shares outstanding as of
August 31, 2010.
Recently issued accounting standards
In June 2003, the SEC adopted final rules under Section 404 of the Sarbanes-
Oxley Act of 2002 ("Section 404"), as amended by SEC Release No. 33-9072
on October 13, 2009. Commencing with the Company's Annual Report for the
fiscal year ended August 31, 2011, the Company is required to include a report
of management on the Company's internal control over financial reporting. The
internal control report must include a statement of management's responsibility
for establishing and maintaining adequate internal control over financial
reporting for the Company; of management's assessment of the effectiveness
of the Company's internal control over financial reporting as of year end;
of the framework used by management to evaluate the effectiveness of the
Company's internal control over financial reporting; and that the Company's
independent accounting firm has issued an attestation report on
management's assessment of the Company's internal control over
financial reporting, which report is also required to be filed as part of the
Annual Report on Form 10-K.
In June 2009, the FASB approved the "FASB Accounting Standards Codification"
(the "Codification") as the single source of authoritative nongovernmental
U.S. GAAP which was launched on July 1, 2009. The Codification does
not change current U.S. GAAP, but is intended to simplify user access to
all authoritative U.S. GAAP by providing all the authoritative literature
related to a particular topic in one place. All existing accounting standard
documents will be superseded and all other accounting literature not
included in the Codification will be considered non-authoritative. The
Codification is effective for interim and annual periods ending after
September 15, 2009.
In August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-04 "Accounting for Redeemable Equity Instruments - Amendment to Section
480-10-S99" which represents an update to section 480-10-S99, distinguishing
liabilities from equity, per EITF Topic D-98, Classification and Measurement of
Redeemable Securities. The Company does not expect the adoption of this
update to have a material impact on its financial position, results of
operations or cash flows.
In August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-05 "Fair Value Measurement and Disclosures Topic 820 - Measuring
Liabilities at Fair Value", which provides amendments to subtopic 820-10, Fair
Value Measurements and Disclosures - Overall, for the fair value
measurement of liabilities. This update provides clarification that in
circumstances in which a quoted price in an active market for the
identical liability is not available, a reporting entity is required to measure
fair value using one or more of the following techniques:
1. A valuation technique that uses:
a. The quoted price of the identical liability when traded as an asset,
and b. Quoted prices for similar liabilities or similar liabilities when
traded as assets.
2. Another valuation technique that is consistent with the principles
of topic 820; two examples would be an income approach, such as
a present value technique, or a market approach, such as a technique
that is based on the amount at the measurement date that the reporting
entity would pay to transfer the identical liability or would receive to enter
into the identical liability.
The amendments in this update also clarify that when estimating the
fair value of a liability, a reporting entity is not required to include a
separate input or adjustment to other inputs relating to the existence
of a restriction that prevents the transfer of the liability. The amendments
in this update also clarify that both a quoted price in an active market for
the identical liability when traded as an asset in an active market when
no adjustments to the quoted price of the asset are required are Level 1
fair value measurements. The Company does not expect the adoption
of this update to have a material impact on its financial
position, results of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting Standards
Update No. 2009-08 "Earnings Per Share - Amendments to Section
260-10-S99",which represents technical corrections to topic 260-10-S99,
Earnings per share, based on EITF Topic D-53, Computation of Earnings
Per Share for a Period that includes a Redemption or an Induced
Conversion of a Portion of a Class of Preferred Stock and EITF Topic
D-42, The Effect of the Calculation of Earnings per Share for the
Redemption or Induced Conversion of Preferred Stock. The Company
does not expect the adoption of this update to have a material impact on
its financial position,
results of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting Standards
Update No. 2009-09 "Accounting for Investments-Equity Method and
Joint Ventures and Accounting for Equity-Based Payments to Non-
Employees". This update represents a correction to Section 323-
10-S99-4, Accounting by an Investor for Stock-Based Compensation
Granted to Employees of an Equity Method Investee. Additionally,
it adds observer comment Accounting Recognition for Certain
Transactions Involving Equity Instruments Granted to Other Than
Employees to the Codification. The Company does not expect the
adoption to have a material impact on its financial position, results
of operations or cash flows.
In September 2009, the FASB issued the FASB Accounting
Standards Update No. 2009-12 "Fair Value Measurements and
Disclosures Topic 820 - Investment in Certain Entities That
Calculate Net Assets Value Per Share (or Its Equivalent)",
which provides amendments to Subtopic 820-10, Fair Value
Measurements and Disclosures-Overall, for the fair value
measurement of investments in certain entities that calculate net
asset value per share (or its equivalent). The amendments in this
update permit, as a practical expedient, a reporting entity to
measure the fair value of an investment that is within the scope of
the amendments in this update on the basis of the net asset value
per share of the investment (or its equivalent) if the net asset value
of the investment (or its equivalent) is calculated in a manner
consistent with the measurement principles of Topic 946 as of the
reporting entity's measurement date, including measurement of all
or substantially all of the underlying investments of the investee in
accordance with Topic 820. The amendments in this update
also require disclosures by major category of investment about the
attributes of investments within the scope of the amendments in this
update, such as the nature of any restrictions on the investor's ability
to redeem its investments a the measurement date, any unfunded
commitments (for example, a contractual commitment by the investor
to invest a specified amount of additional capital at a future date to
fund investments that will be make by the investee), and the
investment strategies of the investees. The major category of
investment is required to be determined on the basis of the nature and
risks of the investment in a manner consistent with the guidance for
major security types in U.S. GAAP on investments in debt and equity
securities in paragraph 320-10-50-1B. The disclosures are required
for all investments within the scope of the amendments in this update
regardless of whether the fair value of the investment is measured
using the practical expedient. The Company does not expect the
adoption to have a material impact on its financial position, results of
operations or cash flows.
In January 2010, the FASB issued the FASB Accounting Standards
Update No. 2010-01 "Equity Topic 505 - Accounting for Distributions
to Shareholders with Components of Stock and Cash", which clarify
that the stock portion of a distribution to shareholders that allows them
to elect to receive cash or stock with a potential limitation on the total
amount of cash that all shareholders can elect to receive in the
aggregate is considered a share issuance that is reflected in EPS
prospectively and is not a stock dividend for purposes of
applying Topics 505 and 260 (Equity and Earnings Per Share ("EPS")).
Those distributions should be accounted for and included in EPS
calculations in accordance with paragraphs 480-10-25- 14 and
260-10-45-45 through 45-47 of the FASB Accounting Standards
codification. The amendments in this Update also provide a technical
correction to the Accounting Standards Codification. The correction
moves guidance that was previously included in the Overview and
Background Section to the definition of a stock dividend in the
Master Glossary. That guidance indicates that a stock dividend takes
nothing from the property of the corporation and adds nothing to the
interests of the stockholders. It also indicates that the proportional
interest of each shareholder remains the same, and is a key factor to
consider in determining whether a distribution is a stock dividend.
In January 2010, the FASB issued the FASB Accounting Standards
Update No. 2010-02 "Consolidation Topic 810 - Accounting and
Reporting for Decreases in Ownership of a Subsidiary - a Scope
Clarification", which provides amendments to Subtopic 810-10
and related guidance within U.S. GAAP to clarify that the scope of
the decrease in ownership provisions of the Subtopic and related
guidance applies to the following:
1. A subsidiary or group of assets that is a business or nonprofit
activity.
2. A subsidiary that is a business or nonprofit activity that is
transferred to an equity method investee or joint venture.
3. An exchange of a group of assets that constitutes a business
or nonprofit activity for a non-controlling interest in an entity
(including an equity method investee or joint venture).
The amendments in this Update also clarify that the decrease
in ownership guidance in Subtopic 810-10 does not apply to
the following transactions even if they involve businesses:
1. Sales of in substance real estate. Entities should apply the
sale of real estate guidance in Subtopics 360-20 (Property,
Plant, and Equipment) and 976-605 (Retail/Land) to such
transactions.
2. Conveyances of oil and gas mineral rights. Entities should
apply the mineral property conveyance and related transactions
guidance in Subtopic 932-360 (Oil and Gas-Property, Plant,
and Equipment) to such transactions.
If a decrease in ownership occurs in a subsidiary that is not a
business or nonprofit activity, an entity first needs to consider
whether the substance of the transaction causing the decrease
in ownership is addressed in other U.S. GAAP, such as
transfers of financial assets, revenue recognition, exchanges
of non-monetary assets, sales of in substance real estate, or
conveyances of oil and gas mineral rights, and apply that
guidance as applicable. If no other guidance exists, an entity
should apply the guidance in Subtopic 810-10.
Management does not believe that any other recently issued,
but not yet effective accounting pronouncements, if adopted,
would have a material effect on the accompanying financial
statements.
Note 3 - Going Concern
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
As reflected in the accompanying financial statements, the
Company had cash and cash equivalents of zero dollars and
a net loss from operations of $3,108 for the period ended
August 31, 2010.
While the Company is attempting to commence operations
and generate revenues, the Company's cash position may
not be sufficient enough to support the Company's daily
operations without the financial support of our shareholders.
Management intends to raise additional funds by way of a
public or private offering. Management believes that the
actions presently being taken to further implement its
business plan and generate revenues provide the opportunity
for the Company to continue as a going concern. While the
Company believes in the viability of its strategy to generate
revenues and in its ability to raise additional funds, there can
be no assurances to that effect. The ability of the Company
to continue as a going concern is dependent upon the
Company's ability to further implement its business plan and
generate revenues.
The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as
a going concern.
Note 4 - Stockholder' Equity (Deficit)
The Company was incorporated on August 17, 2010 at which
time 100,000 shares of common stock were issued to the
Company's founders at $0.0001 per share or $10.00 and for
paid-in-capital in the amount of $3098 and for services
performed.
Note 5 - Income Taxes
At August 31, 2010, the Company had net operating loss
("NOL") carry-forwards for Federal income tax purposes of
$3,108 that may be offset against future taxable income
through 2030. No tax benefit has been reported with respect
to these net operating loss carry-forwards in the accompanying
financial statements because the Company believes that the
realization of the Company's net deferred tax assets of
approximately $1,057, calculated at an effective tax rate of 34%,
was not considered more likely than not and accordingly, the
potential tax benefits of the net loss carry-forwards are fully
offset by a valuation allowance of $1,057.
Deferred tax assets consist primarily of the tax effect of NOL
carry-forwards. The Company has provided a full valuation
allowance on the deferred tax assets because of the uncertainty
regarding its realizability. The valuation allowance increased
approximately $1,057 for the period ended August 31, 2010.
Note 6 - Related Party Transaction
The Company has been provided office space by its Chief
Executive Officer at no cost. The management determined
that such cost is nominal and did not recognize the rent
expense in its financial statements.
Note 7 - Subsequent Events
The Company has evaluated all events that occur after the
balance sheet date of August 31, 2010 through September 27,
2010, the date when the financial statements were issued to
determine if they must be reported. The Management of the
Company determined that there are no reportable subsequent
events to be disclosed.
F-6
ITEM 7. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
There are not and have not been any disagreements between
us and our accountants on any matter of accounting principles,
practices or financial statement disclosure.
ITEM 8. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
The financial statements included in this Registration Statement on
Form 10 are listed in Item 6.
(b) Exhibits.
PART III
ITEM 1. INDEX TO EXHIBITS.
EXHIBIT DESCRIPTION
NUMBER
- ------- --------------------------------------------------------
3.1 Certificate of Incorporation*
3.2 By-Laws*
10 Common Stock Agreement*
23 Consent of Independent Registered Public Accounting Firm*
* filed as an exhibit to the Form 10 filed with the SEC on October
15, 2010.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: October 15, 2010 Big Time Acquisition, Inc.
By: /s/ Scot Scheer
-----------------------------------
Name: Scot Scheer
Title: President and Director