Registration of Securities of a Small-Business Issuer — Form 10-SB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10SB12G Registration of Securities of a Small-Business 34 210K
Issuer
2: EX-2.1 First Amended Joint Plan of Reorganization 40 148K
3: EX-2.2 Order Confirming First Amendment 15 39K
4: EX-3.1 Agreement and Plan of Merger 4 16K
5: EX-3.2 Certificate of Merger 2 9K
6: EX-3.3 Articles of Merger 3 10K
7: EX-3.4 Certificate of Incorporation 5 20K
8: EX-3.5 Bylaws 17 79K
9: EX-4.1 Form of Common Stock Certificate 1 7K
10SB12G — Registration of Securities of a Small-Business Issuer
Document Table of Contents
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As filed with the Securities and Exchange Commission on July 6, 2006.
Registration No. ______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS UNDER SECTION 12(B) OR (G) OF
THE SECURITIES EXCHANGE ACT OF 1934
BTHC VI, INC.
(Name of Small Business Issuer in Its Charter)
Delaware 20-4864095
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
12890 Hilltop Road 76226
Argyle, Texas
(Address of principal executive offices) (Zip Code)
(972) 233-0300
(Issuer's Telephone Number, Including Area Code)
Securities Registered Under Section 12 (b) of the Exchange Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
------------------- ------------------------------
None None
Securities registered under Section 12 (g) of the Exchange Act:
Common Stock, $0.001 par value
(Title of Class)
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Table of Contents
PART I.........................................................................3
ITEM 1. DESCRIPTION OF BUSINESS.............................................3
History..................................................................3
Plan of Reorganization...................................................3
Business Plan............................................................4
Investigation and Selection of Business Opportunities....................5
Risk Factors Relating to Our Business Plan...............................6
Competition..............................................................9
Employees................................................................9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...........9
Plan of Operation........................................................9
Liquidity and Capital Resources.........................................10
ITEM 3. DESCRIPTION OF PROPERTY...........................................10
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....11
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.......11
ITEM 6. EXECUTIVE COMPENSATION.............................................15
Executive Officers......................................................15
Executive Compensation..................................................15
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................15
ITEM 8. DESCRIPTION OF SECURITIES..........................................15
Capital Stock...........................................................15
Provisions Having A Possible Anti-Takeover Effect.......................16
ADDITIONAL INFORMATION.....................................................16
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..........................16
PART II.......................................................................17
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS............................................17
Market Information......................................................17
Transfer Agent..........................................................17
Reports to Stockholders.................................................17
Securities Eligible for Future Sale.....................................17
ITEM 2. LEGAL PROCEEDINGS..................................................18
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
DISCLOSURE.................................................................18
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES............................18
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS..........................18
PART F/S......................................................................20
PART III......................................................................20
ITEM 1. INDEX TO EXHIBITS..................................................20
ITEM 2. DESCRIPTION OF EXHIBITS............................................20
SIGNATURES....................................................................21
INDEX OF EXHIBITS..........................................................IOE-1
2
PART I
ITEM 1. DESCRIPTION OF BUSINESS
BTHC VI, Inc. was organized on June 7, 2005 as a Delaware corporation
to effect the reincorporation of BTHC VI, LLC, a Texas limited liability
company, mandated by the plan of reorganization discussed below. In accordance
with the confirmed plan of reorganization, our current business plan is to seek
to identify a privately-held operating company desiring to become a publicly
held company by merging with us through a reverse merger or acquisition. We are
a development stage company and a shell company as defined in Rule 405 under the
Securities Act of 1933, or the Securities Act, and Rule 12b-2 under the
Securities Exchange Act of 1934, or the Exchange Act. As a shell company, we
have no operations and no or nominal assets. Although we have no assets or
operations, we believe we possess a stockholder base which will make us an
attractive merger or acquisition candidate to an operating, privately-held
company seeking to become publicly held. Our principal office is located at
12890 Hilltop Road, Argyle, TX 76226, and our telephone number is (972)
233-0300.
History
In September 1999, Ballantrae Healthcare LLC and its affiliated limited
liability companies including BTHC VI, LLC, or collectively Ballantrae, were
organized for the purpose of operating nursing homes throughout the United
States. Ballantrae did not own the nursing facilities. Instead, they operated
the facilities pursuant to management agreements and/or real property leases
with the owners of these facilities. Although Ballantrae continued to increase
the number of nursing homes it operated and in June 2000 had received a
substantial equity investment, it was unable to achieve profitability. During
2001 and 2002, Ballantrae continued to experience severe liquidity problems and
did not generate enough revenues to cover its overhead costs. Despite obtaining
additional capital and divesting unprofitable nursing homes, by March, 2003,
Ballantrae was out of cash and unable to meet its payroll obligations.
On March 28, 2003, Ballantrae filed a petition for reorganization under
Chapter 11 of the United States Bankruptcy Code. On November 29, 2004, the
bankruptcy court approved the First Amended Joint Plan of Reorganization, or the
Plan, as presented by Ballantrae, its affiliates and their creditors. On April
11, 2006, pursuant to the Plan, BTHC VI, LLC was merged into BTHC VI, Inc., a
Delaware corporation.
Plan of Reorganization
Halter Financial Group, Inc. or HFG, participated with Ballantrae and
their creditors in structuring the Plan. As part of the Plan, HFG provided
$76,500 to be used to pay professional fees associated with the Plan
confirmation process. HFG was granted an option to be repaid through the
issuance of equity securities in 17 of the Ballantrae entities, including BTHC
VI, Inc.
HFG exercised the option, and as provided in the Plan, 70% of our
outstanding common stock or, 350,000 shares, were issued to HFG, in satisfaction
of HFG's administrative claims. The remaining 30% of our outstanding common
stock, or 150,000 shares, were issued to 499 holders of administrative and tax
claims and unsecured debt. The 500,000 shares, or Plan Shares, were issued
pursuant to Section 1145 of the Bankruptcy Code.
As further consideration for the issuance of the 350,000 Plan Shares to
HFG, the Plan required HFG to assist us in identifying a potential merger or
acquisition candidate. HFG is responsible for the payment of our operating
expenses and HFG will provide us for no cost with consulting services, including
assisting us with formulating the structure of any proposed merger or
acquisition. Additionally, HFG is responsible for paying our legal and
accounting expenses related to this registration statement and our expenses
incurred in consummating a merger or acquisition.
We will remain subject to the jurisdiction of the bankruptcy court
until we consummate a merger or acquisition. Pursuant to the confirmation order,
if we do not consummate a business combination prior to June 20, 2008, the Plan
Shares will be deemed canceled, and the discharge and injunction provisions of
the confirmation order, as they pertain to us, shall be deemed dissolved without
further order of the bankruptcy court. If we timely consummate
3
a merger or acquisition, we will have met the requirements of the Plan and the
discharge and injunction provisions granted to us under the confirmation order
shall continue to be effective.
On February 15, 2006, HFG transferred its 350,000 Plan Shares to Halter
Financial Investments L.P., or HFI, a Texas limited partnership controlled by
Timothy P. Halter.
Timothy P. Halter is the sole officer, director and shareholder of HFG
and an officer and member of Halter Financial Investments GP, LLC, general
partner of HFI. Mr. Halter currently serves as our president and sole director.
Business Plan
Our current business plan is to seek and identify a privately-held
operating company desiring to become a publicly held company by combining with
us through a reverse merger or acquisition type transaction. Private companies
wishing to have their securities publicly traded may seek to merge or effect an
exchange transaction with a shell company with a significant stockholder base.
As a result of the merger or exchange transaction, the stockholders of the
private company will hold a majority of the issued and outstanding shares of the
shell company. Typically, the directors and officers of the private company
become the directors and officers of the shell company. Often the name of the
private company becomes the name of the shell company. We believe that by
becoming a reporting company, under the rules and regulations of the Exchange
Act, we will become a more suitable candidate to engage in a combination
transaction with a privately-held company.
We have no capital and must depend on HFG to provide us with the
necessary funds to implement our business plan. We intend to seek opportunities
demonstrating the potential of long-term growth as opposed to short-term
earnings. However, at the present time, we have not identified any business
opportunity that we plan to pursue, nor have we reached any agreement or
definitive understanding with any person concerning an acquisition or merger.
Timothy P. Halter, our sole officer and director, will be primarily
responsible for investigating combination opportunities. However, we believe
that business opportunities may also come to our attention from various sources,
including HFG, professional advisors such as attorneys, and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. We have no plan,
understanding, agreements, or commitments with any individual for such person to
act as a finder of opportunities for us.
No direct discussions regarding the possibility of a combination are
expected to occur until after the effective date of this registration statement.
We can give no assurances that we will be successful in finding or acquiring a
desirable business opportunity, given the limited funds that are expected to be
available to us for implementation of our business plan. Furthermore, we can
give no assurances that any acquisition, if it occurs, will be on terms that are
favorable to us or our current stockholders.
We do not propose to restrict our search for a candidate to any
particular geographical area or industry, and therefore, we are unable to
predict the nature of our future business operations. Our management's
discretion in the selection of business opportunities is unrestricted, subject
to the availability of such opportunities, economic conditions, and other
factors.
Any entity which has an interest in being acquired by, or merging into
us, is expected to be an entity that desires to become a public company and
establish a public trading market for its securities. In connection with such a
merger or acquisition, it is anticipated that an amount of common stock
constituting control of us would either be issued by us or be purchased from
HFI.
We do not foresee that we will enter into a merger or acquisition
transaction with any business with which HFG, HFI or Timothy P. Halter is
currently affiliated.
4
Investigation and Selection of Business Opportunities
Certain types of business acquisition transactions may be completed
without requiring us to first submit the transaction to our stockholders for
their approval. If the proposed transaction is structured in such a fashion our
stockholders (other than HFI our majority stockholder) will not be provided with
financial or other information relating to the candidate prior to the completion
of the transaction.
If a proposed business combination or business acquisition transaction
is structured that requires our stockholder approval, and we are a reporting
company, we will be required to provide our stockholders with information as
applicable under Regulations 14A and 14C under the Exchange Act.
The analysis of business opportunities will be undertaken by or under
the supervision of Timothy P. Halter, our president and sole director. In
analyzing potential merger candidates, our management will consider, among other
things, the following factors:
* Potential for future earnings and appreciation of value of securities;
* Perception of how any particular business opportunity will be received
by the investment community and by our stockholders;
* Eligibility of a candidate, following the business combination, to
qualify its securities for listing on a national exchange or on a
national automated securities quotation system, such as NASDAQ.
* Historical results of operation;
* Liquidity and availability of capital resources;
* Competitive position as compared to other companies of similar size and
experience within the industry segment as well as within the industry
as a whole;
* Strength and diversity of existing management or management prospects
that are scheduled for recruitment;
* Amount of debt and contingent liabilities; and
* The products and/or services and marketing concepts of the target
company.
There is no single factor that will be controlling in the selection of
a business opportunity. Our management will attempt to analyze all factors
appropriate to each opportunity 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. Because
of our limited capital available for investigation and our dependence on one
person, Timothy P. Halter, we may not discover or adequately evaluate adverse
facts about the business opportunity to be acquired.
We are unable to predict when we may participate in a business
opportunity. We expect, however, that the analysis of specific proposals and the
selection of a business opportunity may take several months.
Prior to making a decision to participate in a business transaction, we
will generally request that we be provided with written materials regarding the
business opportunity containing as much relevant information as possible,
including, but not limited to, a description of products, services and company
history; management resumes; financial information; available projections, with
related assumptions upon which they are based; an explanation of proprietary
products and services; evidence of existing patents, trademarks, or service
marks, or rights thereto; present and proposed forms of compensation to
management; a description of transactions between such company and its
affiliates during the relevant periods; a description of present and required
facilities; an analysis of risks and competitive conditions; a financial plan of
operation and estimated capital requirements; audited financial statements, or
if audited financial statements are not available, unaudited financial
statements, together with reasonable assurance that audited financial statements
would be able to be produced to comply with the requirements of a Current Report
on Form 8-K to be filed with the Securities and Exchange Commission, or
Commission, upon consummation of the business combination.
As part of our investigation, our executive officer may meet personally
with management and key personnel, may visit and inspect material facilities,
obtain independent analysis or verification of certain provided information,
check references of management and key personnel, and take other reasonable
investigative measures, to the extent of our limited financial and management
resources.
5
We believe that various types of potential candidates might find a
business combination with us to be attractive. These include candidates desiring
to create a public market for their securities in order to enhance liquidity for
current stockholders, candidates which have long-term plans for raising capital
through public sale of securities and believe that the prior existence of a
public market for their securities would be beneficial, and candidates which
plan to acquire additional assets through issuance of securities rather than for
cash, and believe that the development of a public market for their securities
will be of assistance in that process. Companies, which have a need for an
immediate cash infusion, are not likely to find a potential business combination
with us to be a prudent business transaction alternative.
Risk Factors Relating to Our Business Plan
Our business plan and our ability to successfully implement our
business plan are subject to certain risk factors, including, the following:
We will be unable to successfully implement our business plan if HFG
does not, or is unable, to provide us with adequate capital to conduct
our operations and pay the expenses necessary to consummate a business
combination.
We are dependent upon HFG to pay our operating expenses and to fund the
implementation of our plan of operation. If HFG fails, or is unable, to provide
us with adequate capital to conduct our business operations including the
implementation of our business plan, we may be unable to complete a merger or
acquisition on or before June 20, 2008 as required by the Plan. In such event,
Plan Shares held by HFI and our other stockholders will be cancelled and voided
and the discharge and injunction provisions of the confirmation order, as they
pertain to us, shall be deemed dissolved.
There is no trading market for our securities which could impair our
ability to find a suitable merger candidate.
There is no public trading market for our securities and there can be
no assurance that a trading market for our securities will exist if we complete
a business combination. Although we intend to make our shares eligible for
trading on the NASD's OTC Bulletin Board, the Plan provides that no active
trading market shall exist for our securities until after the consummation of a
business combination. The Plan further provides that our stockholders are
enjoined from trading, selling or assigning the shares of common stock they
received pursuant to the Plan until we consummate a business transaction. HFG,
however, may transfer in a private transaction, a portion of its shares of our
common stock prior to the consummation of a business combination to a single
transferee or group of transferees under common control and to HFG employees and
representatives, subject to compliance with applicable federal and state
securities laws. Any such transfer shall be subject to the same restrictions as
applicable to HFG under the Plan. Until such time as our securities are eligible
for quotation on the OTC Bulletin Board, we will be at a competitive
disadvantage with other companies, including shell companies, who have publicly
traded securities, in attracting suitable candidates to participate in a
business combination with us.
We have no agreement for a business combination and we do not have any
minimum requirements for a business combination.
We have no current arrangement, agreement or understanding with respect
to engaging in a business combination with a specific entity. We may not be
successful in identifying and evaluating a suitable merger candidate or in
consummating a business combination. We have not selected a particular industry
or specific business within an industry for a target company. We have not
established a specific length of operating history or a specified level of
earnings, assets, net worth or other criteria which we will require a target
company to have achieved, or without which we would not consider a business
combination with such business entity.
The loss of the services of Timothy P. Halter, our sole officer and
director, would adversely affect our ability to implement our business
plan.
Our management consists of only one person, Timothy P. Halter, our
president and sole director. He will be the only person responsible for
conducting our day-to-day operations and implementing our business plan. We will
6
rely solely on the judgment of Mr. Halter when selecting a target company. Mr.
Halter will only devote a limited amount of his time each month to our business.
Mr. Halter has not entered into a written employment agreement with us and he is
not expected to do so. The loss of the services of Mr. Halter would adversely
affect our ability to implement our business plan.
Conflicts of interest may arise between us and our stockholders, and
HFG and Timothy P. Halter, during the implementation of our business
plan which may have a negative impact on our ability to consummate a
business transaction.
Our sole officer and director, Timothy P. Halter, is not required to
commit his full time to our affairs, which may result in a conflict of interest
in allocating his time between our operations and other businesses. We do not
intend to have any full time employees prior to the consummation of a business
combination. Mr. Halter is engaged in several other business endeavors and is
not obligated to contribute any specific number of hours to our affairs. If his
other business affairs require him to devote more substantial amounts of time to
such interests, it could limit his ability to devote time to our affairs and
could have a negative impact on our ability to consummate a business
combination.
Mr. Halter, HFG and HFI, our majority stockholder, are affiliated with
other shell companies with business activities similar to those intended to be
conducted by us. Mr. Halter. HFG and HFI may become aware of business
opportunities which may be appropriate for presentation to us as well as the
other entities to which they have fiduciary obligations. Accordingly, there may
be conflicts of interest in determining to which entity a particular business
opportunity should be presented.
Depending upon the nature of a proposed transaction, our stockholders,
other than HFI, may not be afforded the opportunity to approve or consent to a
particular transaction.
To implement our business plan we may be required to employ
accountants, technical experts, appraisers, attorneys, or other consultants or
advisors. The selection of any such advisors will be made by Mr. Halter and
their fees will be paid by HFG. We anticipate that such persons may be engaged
on an as needed basis without a continuing fiduciary or other obligation to us.
If Mr. Halter considers it necessary to hire outside advisors, he may elect to
hire persons who are affiliates of HFG. Such advisors because of their
relationship with HFG and Mr. Halter may not fully consider our best interest in
rendering advice and services to us.
We have no cash and no operations and may not have access to sufficient
capital to consummate a business combination.
Payment of our operating expenses and expenses of implementing our
business plan is the responsibility of HFG. We may not be able to take advantage
of any available business opportunities because of the limited and uncertain
availability of capital. There is no assurance that HFG will have sufficient
capital to provide us with the necessary funds to successfully implement our
plan of operation or that HFG will continue to provide us with capital in the
future.
There may be a scarcity of and/or significant competition for business
opportunities and combinations, which may impede our ability to
consummate a merger or acquisition.
We are and will continue to be an insignificant participant in the
business of seeking mergers with and acquisitions of privately-held business
entities. A large number of established and well-financed entities, including
venture capital firms, are active in seeking potential merger and acquisition
candidates for their clients and investors. Substantially all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than we have and, consequently, we will be at a competitive
disadvantage in identifying possible business opportunities and successfully
completing a business combination. Moreover, we will also compete in seeking
merger or acquisition candidates with other public shell companies who may have
more available funds or other assets that make them a more attractive candidate
for a merger than we are.
7
If we issue restricted stock in a merger transaction, such securities
may only be resold pursuant to registration under the Securities Act of
1933, which may impair our ability to consummate a merger transaction.
The securities we issue in a merger transaction will most likely be
restricted securities as defined under Rule 144 of the Securities Act. Since we
are a blank check or shell company, we believe the resale of restricted
securities issued in a merger transaction will be subject to the restrictions as
stated in the Wulff Letter. The Wulff Letter, as discussed below under "Part II,
Item 1 Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholders Matters - Securities Eligible for Future Sale," stated, in
part, that the promoters and affiliates of blank check or shell companies, as
well as transferees of their securities are "underwriters" with respect to such
securities. Accordingly, transactions by promoters, affiliates or their
transferees in securities of a blank check or shell company do not fall within
the scope of the Rule 144 "safe harbor" for resales of securities or the Section
(4)(1) exemption from registration for resales under the Securities Act. It is
the position of the SEC that these securities may be resold by such persons only
pursuant to registration under the Securities Act. According to the Wulff
Letter, this restriction would continue to apply even after the blank check or
shell company completes a merger or acquisition transaction with an operating
entity. The restriction on the resale of securities issued by us could impair
our ability to consummate a merger transaction with the shareholders of an
operating entity.
Reporting requirements under the Exchange Act may delay or preclude a
merger or acquisition.
The rules and regulations of the Commission require a reporting shell
company to timely provide in a Current Report on Form 8-K financial and other
information, including audited financial statements, of the acquired company if
we engage in a business combination, or if there is a change in our control. The
additional time and costs that may be incurred by the potential target company
to prepare audited financial statements and other information may significantly
delay or essentially preclude consummation of an otherwise desirable
acquisition.
A business combination will result in a change in control of our
company and significantly reduce the ownership interest of our current
stockholders.
In conjunction with completion of a business acquisition, we anticipate
that we will issue an amount of our authorized but unissued common stock that
will represent a significant majority of the voting power and equity of our
company, which will, in all likelihood, result in stockholders of a target
company obtaining a controlling interest in us and thereby reducing the
ownership interest of our current stockholders. We may also issue preferred
stock to the stockholders of a target company. Holders of preferred stock may
have rights, preferences and privileges senior to those of our existing holders
of common stock. As a condition of the business combination, HFI, our majority
stockholder, may agree to sell or transfer all or a portion of the common stock
it owns to provide the target company with majority control. The resulting
change in control will likely result in the removal of our present officer and
director and a corresponding reduction in, or elimination of, his participation
in future business activities.
We may engage in a business combination with a foreign entity which
will subject us to additional business risks.
We may effectuate a business combination with a merger target whose
business operations or even headquarters, place of formation or primary place of
business are located outside the United States of America. In such event, we may
face the significant additional risks associated with doing business in that
country. In addition to the language barriers, different presentations of
financial information, different business practices, and other cultural
differences and barriers that may make it difficult to evaluate such a merger
target, we may encounter ongoing business risks associated with uncertain legal
systems and applications of law, prejudice against foreigners, corrupt
practices, uncertain economic policies and potential political and economic
instability that may be exacerbated in various foreign countries.
We may engage in a business combination that may have tax consequences
to us and our stockholders.
Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination that we may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
8
both companies and their stockholders, pursuant to 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 our company and the target entity
and their stockholders. However, there can be no assurance that such 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, which may have an adverse effect on both
parties to the transaction.
Competition
We expect to encounter substantial competition in our efforts to locate
potential business combination opportunities. The competition may in part come
from business development companies, venture capital partnerships and
corporations, small investment companies and brokerage firms. Most of these
organizations are likely to be in a better position than us to obtain access to
potential business acquisition candidates because they have greater experience,
resources and managerial capabilities than we do. We also will experience
competition from other public companies with similar business purposes, some of
which may also have funds available for use by an acquisition candidate.
Employees
We have no employees. It is anticipated that HFG and Timothy P. Halter
will engage consultants, attorneys and accountants as necessary for us to
conduct our business operations and to implement and successfully complete our
business plan. We do not anticipate employing any full-time employees until we
have achieved our business purpose.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
As a shell company, we have no operations and no or nominal assets.
Although we have no assets or operations, we believe we possess a stockholder
base which will make us an attractive merger or acquisition candidate to an
operating privately-held company seeking to become publicly-held.
We intend to locate and combine with an existing, privately-held
company which has profitable operations or, in our management's view, potential
for earnings and appreciation of value of its equity securities, irrespective of
the industry in which it is engaged. A combination may be structured as a
merger, consolidation, exchange of our common stock for stock or assets or any
other form which will result in the combined companies becoming an operating
publicly-held corporation.
Pending negotiation and consummation of a business combination, we
anticipate that we will have, aside from carrying on our search for a
combination partner, no business activities, and, thus, will have no source of
revenue. Should we incur any significant liabilities prior to a combination with
a private company, we may not be able to satisfy such liabilities as they are
incurred.
If our management pursues one or more combination opportunities beyond
the preliminary negotiations stage and those negotiations are subsequently
terminated, it is likely that such efforts will exhaust our ability to continue
to seek such combination opportunities before any successful combination can be
consummated.
In our pursuit for a business combination partner, our management
intends to consider only combination candidates which are profitable or, in
management's view, have growth potential. Our management does not intend to
pursue any combination proposal beyond the preliminary negotiation stage with
any combination candidate which does not furnish us with audited financial
statements for its historical operations or can furnish audited financial
statements in a timely manner. HFG may engage attorneys and/or accountants to
investigate a combination candidate and to consummate a business combination. We
may require payment of fees by such merger candidate to fund all or a portion of
such expenses. To the extent we are unable to obtain the advice or reports from
experts, the risks of any combined business combination being unsuccessful will
be enhanced.
9
We are not registered and we do not propose to register as an
investment company under the Investment Company Act of 1940. We intend to
conduct our business activities so as to avoid application of the registration
and other provisions of the Investment Company Act of 1940 and the related
regulations thereunder.
We have no operating history, no cash, no assets and our business plan
has significant business risks. Because of these factors, our Independent
Registered Certified Public Accounting Firm has issued an audit opinion on our
financial statements which includes a statement describing our going concern
status. This means in our auditor's opinion, there is substantial doubt about
our ability to continue as a going concern.
Liquidity and Capital Resources.
We have no operations and will not generate any revenue until we
consummate a business combination. We will need funds to support our operation
and implementation of our plan of operation and to comply with the periodic
reporting requirements of the Exchange Act. HFG has agreed to fund the expenses
in implementing our plan of operation and to fund our operating expenses until
we complete a business combination. We believe sufficient working capital will
be provided by HFG for at least the next 12 months to support and preserve the
integrity of our corporate entity and to fund the implementation of our business
plan. If adequate funds are not available to us, we may be unable to complete
our plan of operation. If we do not consummate a business combination by June
20, 2008, our Plan Shares will be cancelled and voided and the discharge and
injunction provisions of the confirmation order, as they pertain to us, shall be
deemed dissolved.
We have no current plans, proposals, arrangements or understandings
with respect to the sale or issuance of additional securities prior to the
identity of a merger or acquisition candidate and we do not anticipate that we
will incur any significant debt prior to a consummation of a business
combination.
ITEM 3. DESCRIPTION OF PROPERTY
We do not own property. We currently maintain a mailing address at
12890 Hilltop Road, Argyle, TX 76226. Our telephone number is (972) 233-0300.
Other than this mailing address, we do not currently maintain any other office
facilities, and do not anticipate the need for maintaining office facilities at
any time until we complete a business combination. We pay no rent or other fees
for the use of the mailing address. The facilities are also used by HFG for its
business operations. HFG provides us with the use of office equipment and
administrative services as necessary to conduct our business activities,
including the implementation of our business plan.
10
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information at July 5, 2006,
regarding the beneficial ownership of our common stock of each person or group
know by us to beneficially own 5% or more of our outstanding shares of common
stock; each of our executive officers and directors; and all our executive
officers and directors as a group:
Unless otherwise noted, the persons named below have sole voting and
investment power with respect to the shares as beneficially owned by them.
Shares Beneficially Owned (1)
Name and Address (2) Number Percent (3)
------------------------------------ -------------- --------------
Timothy P. Halter (4) 350,000 (5) 70.0
Halter Financial Investments, LP (6) 350,000 70.0
Olga Guerra (7) 58,294 11.7
Directors and officers as a group 350,000 70.0
(1 person)
--------------------------
(1) On July 5, 2006 there were 500,000 shares of our common stock
outstanding and no shares of preferred stock issued and outstanding. We
have no outstanding stock options or warrants.
(2) Under applicable SEC rules, a person is deemed the "beneficial
owner" of a security with regard to which the person directly or
indirectly, has or shares a) the voting power, which includes the power
to vote or direct the voting of the security, or (b) the investment
power, which includes the power to dispose, or direct the disposition,
of the security, in each case irrespective of the person's economic
interest in the security. Under SEC rules, a person is deemed to
beneficially own securities which the person has the right to acquire
within 60 days through the exercise of any option or warrant or through
the conversion of another security.
(3) In determining the percent of voting stock owned by a person on
July 5, 2006 (a) the numerator is the number of shares of common stock
beneficially owned by the person, including shares the beneficial
ownership of which may be acquired within 60 days upon the exercise of
options or warrants or conversion of convertible securities, and (b)
the denominator is the total of (i) the 500,000 shares of common stock
outstanding on July 5, 2006, and (ii) any shares of common stock which
the person has the right to acquire within 60 days upon the exercise of
options or warrants or conversion of convertible securities. Neither
the numerator nor the denominator includes shares which may be issued
upon the exercise of any other options or warrants or the conversion of
any other convertible securities.
(4) Mr. Halter is our president and director. He also is a member of
Halter Financial Investments GP, LLC, the general partner of Halter
Financial Investments L.P. Mr. Halter's address is 12890 Hilltop Road,
Argyle, TX 76226.
(5) Mr. Halter is deemed to beneficially own the Plan Shares owned by
Halter Financial Investments, L.P.
(6) HFI's address is 12890 Hilltop Road, Argyle, TX 76226.
(7) Olga Guerra's address is 800 W. Weatherford Street, Fort Worth,
Texas 76102.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our directors and executive officers are as follows:
Name Age Positions Held
---- --- --------------
Timothy P. Halter 40 President, Chief Executive Officer,
Secretary, Chief Financial Officer
and Director
Our directors serve until the next annual meeting of stockholders or
until their successors are duly elected and have qualified. Directors are
elected for one-year terms at the annual stockholders meeting. Officers will
hold their positions at the pleasure of the board of directors, absent any
employment agreement, of which none currently exists or is contemplated. There
is no arrangement or understanding between Mr. Halter or any other person
pursuant to which any director or officer was or is to be selected as a director
or officer, and there is no arrangement, plan or understanding as to whether
non-management stockholders will exercise their voting rights to continue to
elect directors to our board. There are also no arrangements, agreements or
understandings between non-management stockholders that may directly or
indirectly participate in or influence the management of our affairs. Our board
of directors does not have any committees at this time.
11
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Timothy P. Halter. Since 1995, Mr. Halter has been the president and
the sole stockholder of Halter Financial Group, Inc., a Dallas, Texas based
consulting firm specializing in the area of mergers, acquisitions and corporate
finance. In September 2006, Mr. Halter and other minority partners formed HFI.
HFI conducts no business operations. Mr. Halter currently serves as a director
of DXP Enterprises, Inc., a public corporation (Nasdaq: DXPE), and is an officer
and director of Nevstar Corporation, a Nevada corporation, RTO Holdings, Inc., a
Nevada corporation, Concept Ventures Corporation, a Nevada corporation, Robcor
Properties, Inc., a Florida corporation, and BTHC III, Inc., a Delaware
corporation. Each of the afore-referenced companies is current in the filing of
their periodic reports with the SEC. Except for DXP Enterprises, each of the
afore-referenced companies for which Mr. Halter acts as an officer and director
may be deemed shell corporations. Mr. Halter will devote as much of his time to
our business affairs as may be necessary to implement our business plan.
Mr. Halter has significant experience acting in the capacity of the
principal stockholder, a director and an executive officer of blank check
companies. The following table identifies those companies with which Mr. Halter
has been affiliated that operated as a blank check company at some point in
their history and whose securities are registered under the Exchange Act. The
table also details Mr. Halter's prior and present involvement with each
referenced company and the current status of each company's business operations.
The business descriptions provided below are derived from the respective
entities' periodic reports as filed with the SEC, and we have made no
independent verification of the accuracy of the disclosure found in such reports
or whether the enities, except for Nevstar Corporation, BTHC III, Inc., Concept
Ventures Corporation, RTO Holdings, Inc, and Robcor Properties, Inc. are current
in the filing of their respective periodic reports with the SEC.
As noted in the table below, Mr. Halter is currently a director,
officer and principal shareholder of BTHC III, Inc., Concept Ventures
Corporation, Nevstar Corporation, RTO Holdings, Inc. and Robcor Properties, Inc.
Regarding the other registrants listed in the table, Mr. Halter was not
affiliated with any of the operating businesses prior to the consummation of the
reverse merger transaction and resigned as an officer and director upon
consummation of the transaction. After the merger transaction, Mr. Halter did
not participate in the management of any of the registrants and ceased being a
principal shareholder. Other than being a minority shareholder of certain of the
registrants, Mr. Halter is not affiliated with, and does not control, any of the
registrants.
------------------- -------------------------------- ---------------------------- ---------------------------
Name of Registrant Date of Registration/SEC File Nature of Interest Current Status of
Number Registrant
------------------- -------------------------------- ---------------------------- ---------------------------
Avatar Systems, Form 10 filed on June 25, 2001; Mr. Halter remains a The company is in the
Inc. SEC File Number 000-32925 minority stockholder of business of providing
the company. Mr. Halter petroleum industry
resigned as an officer and solutions for accounting
director of the company as and financial management.
a result of a change in
control transaction
completed on November 14,
2000.
------------------- -------------------------------- ---------------------------- ---------------------------
Bitech Pharma, Form 10 filed on December 16, Mr. Halter remains a The company is in the
Inc. 2005; SEC File Number minority stockholder of business of developing
000-51684 the company. Mr. Halter and producing therapeutic
resigned as an officer and protein products.
director of the company as
a result of a change in
control transaction
completed on June 30, 2005.
------------------- -------------------------------- ---------------------------- ---------------------------
BTHC III, Inc. Form 10 filed on April 4, 2006; Mr. Halter acquired control The company is a shell
SEC File Number 0-51891 on November 2, 2005 and company.
currently serves as its
sole officer and director.
------------------- -------------------------------- ---------------------------- ---------------------------
China Agritech, Form 10 filed on February 2, Mr. Halter acquired a The company is currently
Inc. 2002; Current SEC File Number controlling interest in engaged in the business
0-49608 the company on May 25, of producing organic
2004, and acted as its liquid compound
sole officer and director fertilizers.
until his resignation as a
result of a change in
control transaction
completed on February 3,
2005. Mr. Halter remains
a minority stockholder of
the company.
------------------- -------------------------------- ---------------------------- ---------------------------
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------------------- -------------------------------- ---------------------------- ---------------------------
China BAK The company originally filed a Mr. Halter acquired a The company is a
Battery, Inc. registration statement on Form controlling interest in manufacturer of lithium-
S-1 on June 10, 2000 and a the company on June 14, ion batteries and
Form 8-A12G on March 29, 2002; 2004, and acted as its related products.
SEC File Number 000-49712 sole officer and director
until his resignation as a
result of a change in
control transaction
completed on January 20,
2005. Mr. Halter remains
a minority stockholder of
the company
------------------- -------------------------------- ---------------------------- ---------------------------
China Digital The company originally became Mr. Halter acquired a The company is a provider
Wireless, Inc. obligated to file reports with controlling interest in of value added
the SEC in 1983 with the the company on February information services to
filing of a Registration 23, 2004, and acted as its mobile phone subscribers
Statement on Form S-18(File sole officer and director in China.
Number 2-84351); Current SEC until his resignation as a
File Number 0-12536. result of a change in
control transaction
completed on June 23,
2004. Mr. Halter remains
a minority stockholder of
the company.
------------------- -------------------------------- ---------------------------- ---------------------------
China Pharma Form 10 filed on February 15, Mr. Halter acquired a The company's primary
Holdings, Inc. 2000; SEC File Number 000-29523 controlling interest in business is research,
the company on May 11, development, manufacturing
2005, and acted as its and sale of bio-
sole officer and director pharmaceutical products.
until the completion of a
change in control
transaction on October 20,
2005. Mr. Halter remains
a minority stockholder of
the company.
------------------- -------------------------------- ---------------------------- ---------------------------
Concept Capital Form 10-SB filed on April 29, Mr. Halter acquired control The company is a shell
Corporation 1999; SEC File Number 000-25901 of the company on June 30, company.
2006 and currently serves
as its soleofficer and
director.
------------------- -------------------------------- ---------------------------- ---------------------------
Games, Inc. Form 10 filed on November 15, Mr. Halter remains a The company is a
2001; SEC File Number 000-33345 minority stockholder of technology company
the company. Mr. Halter operating in the area of
resigned as an officer and interactive entertainment.
director of the company as
a result of a change in
control transaction
completed on September 30,
2001.
------------------- -------------------------------- ---------------------------- ---------------------------
KMG Chemicals, Form 10 filed on December 6, Mr. Halter is not a The company is a seller
Inc. 1996; SEC File Number 000-29278 current stockholder of the of industrial wood
company. Mr. Halter preserving chemicals in
resigned as an officer and the United States.
director of the company
as a result of a change in
control transaction
completed on
October 15, 1996.
------------------- -------------------------------- ---------------------------- ---------------------------
MGCC Investment The company became public via Mr. Halter remains a The company is a
Strategies, Inc. the filing of a SB-2 minority stockholder of the manufacturer of auto
registration statement filed in company. Mr. Halter parts.
October 2001, SEC File Number resigned as an officer and
000-50883 director of the company as
a result of the change in
control transaction
completed on June 22, 2006.
------------------- -------------------------------- ---------------------------- ---------------------------
Microwave Form 10 filed on March 31, Mr. Halter is not a The company is currently
Transmission 2000; SEC File Number 000-30722 current stockholder of the engaged in the business
Systems, Inc. company. Mr. Halter of constructing and
resigned as an officer and maintaining wireless
director of the company on communications
as a result of a change in transmitting and
control transaction recovering facilities.
completed on August 6,
1999.
------------------- -------------------------------- ---------------------------- ---------------------------
Nevstar The Company filed a registration Mr. Halter acquired control The company is a shell
Corporation statement on Form S-1 on of the company on October company.
September 24, 1997; SEC File 11, 2005 and currently
Number 000-21071 serves as its sole officer
and director.
------------------- -------------------------------- ---------------------------- ---------------------------
13
------------------- -------------------------------- ---------------------------- ---------------------------
Playlogic The company filed with the SEC Mr. Halter acquired a The company is presently
Entertainment, a registration statement on controlling interest in engaged in the business
Inc. Form SB-2 on August 30, 2001 the company on December of developing gaming
and a Form 8-A12G on February 15, 2004, and acted as its software.
28, 2002; SEC File Number sole officer and director
000-49649 until the completion of a
change in control
transaction on June 3,
2005. Mr. Halter remains
a minority stockholder of
the company.
------------------- -------------------------------- ---------------------------- ---------------------------
Polymedix, Inc. Form 10 filed on April 5, Mr. Halter resigned as an The company is a
2006; SEC File Number officer and director on bio-technology company
000-51895 October 6, 2005. Mr. focusing on research of
Halter remains a minority infectious diseases.
stockholder of the company
------------------- -------------------------------- ---------------------------- ---------------------------
Robcor The company became public via Mr. Halter acquired The company will continue
Properties, Inc. the filing of a SB-2 control of the company on its current business
registration statement filed May 6, 2006 and currently operations of owning and
on May 19, 2005; SEC File serves as its sole officer operating income
Number 000-51708 and director producing real estate.
However, the company is
seeking a combination
transaction with a
private operating
business.
------------------- -------------------------------- ---------------------------- ---------------------------
RTO Holdings, Inc. The Company originally became Mr. Halter acquired control The company is a shell
public in 1986 pursuant to the of the company on June 21, company.
filing of a registration 2006 and currently serves as
statement under the Securities its sole officer and
Act of 1933; SEC File Number director
000-15579
------------------- -------------------------------- ---------------------------- ---------------------------
Segmentz, Inc. Form 10 filed on January 30, Mr. Halter remains a The company is currently
2002; SEC File Number 000-49606 minority stockholder of engaged in the business
the company. Mr. Halter of providing transportation
resigned as officer and services to clients in the
director of the company as U.S. and Canada.
a result of a change in
control transaction
completed on January 31,
2001.
------------------- -------------------------------- ---------------------------- ---------------------------
Shelron Group, Form 10 filed on October 11, Mr. Halter is not a The company is currently
Inc. 2000; SEC File Number 000-31176 current stockholder of the engaged in the business
company. Mr. Halter of developing business
resigned as an officer and intelligence software and
director of the company as comparative shopping
a result of a change in software programs.
control transaction
completed on April 26,
2000.
------------------- -------------------------------- ---------------------------- ---------------------------
Tiens Biotech Form 10 filed on March 7, Mr. Halter remains a The Company primarily
Group, Inc. 2002; SEC File Number 000-49666 minority stockholder of engages in the
the company. Mr. Halter development, manufacturing,
resigned as an officer and and marketing of nutrition
director of the company as supplement products.
a result of a change in
control transaction
completed on February 11,
2002.
------------------- -------------------------------- ---------------------------- ---------------------------
Winner Medical The company originally became Mr. Halter acquired a The company is involved
Group, Inc. obligated to file reports with controlling interest in in the development,
the SEC as the result of its the company on November 4, manufacturing and
1989 filing of a registration 2005, and acted as its marketing of medical
statement on Form S-18; sole officer and director dressings and medical
SEC File Number 000-16547 until the completion of a disposables.
change in control
transaction on December
16, 2005. Mr. Halter
remains a minority
stockholder of the company.
------------------- -------------------------------- ---------------------------- ---------------------------
Zeolite The company originally became Mr. Halter acquired a The company owns and
Exploration public with the filing of a controlling interest in operates a nano
Company Registration Statement on Form the company on November precipitated calcium
SB-2 on October 23, 2002; SEC 30, 2005, and acted as its carbonate manufacturing
File Number 333-74670 sole officer and director company in China.
until the completion of a
change in control
transaction on March 31,
2006. Mr. Halter remains
a minority stockholder of
the company
------------------- -------------------------------- ---------------------------- ---------------------------
14
In addition to the companies listed above, Mr. Halter is an officer,
director, and shareholder of several private companies, including the Ballantrae
entities discussed in "Item 1. Description of Business - Plan of
Reorganization."
It is specifically noted that the relative success or failure of any of
the entities referenced above subsequent to Mr. Halter's affiliation should not
be deemed an indication of the possibility of our success or failure upon the
completion of our current plan of operations.
ITEM 6. EXECUTIVE COMPENSATION
Executive Officers
No officer or director has received any compensation from us. Until we
consummate a business combination, it is not anticipated that any officer or
director will receive compensation from us.
We have no stock option, retirement, pension, or profit-sharing
programs for the benefit of directors, officers or other employees.
Our board of directors appoints our executive officers to serve at the
discretion of the board. Timothy P. Halter is our sole officer and director. Our
directors receive no compensation for serving on the board. Until we consummate
a business combination, we do not intend to reimburse our officers or directors
for travel and other expenses incurred in connection with attending the board
meetings or for conducting business activities.
Executive Compensation
Timothy P. Halter has received no compensation nor have we accrued any
cash or non-cash compensation for his services since he was elected as an
officer and director. He will not receive any compensation for his services as
our sole officer and director until after we complete a business combination.
We do not have any employment or consulting agreements with any parties
nor do we have a stock option plan or other equity compensation plans.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than the participation of HFG and Timothy P. Halter in our Plan
of Reorganization and the issuance to HFG of 350,000 shares of our common stock
for satisfaction of certain administrative claims and for HFG's agreement to
provide us with certain services as discussed in "Item 1- Description of
Business", there are no relationships or transactions between us and any of our
directors, officers and principal stockholders.
ITEM 8. DESCRIPTION OF SECURITIES
Capital Stock
Our authorized capital stock consists of 40 million shares of common
stock and 10 million shares of preferred stock. Each share of common stock
entitles a stockholder to one vote on all matters upon which stockholders are
permitted to vote. No stockholder has any preemptive right or other similar
right to purchase or subscribe for any additional securities issued by us, and
no stockholder has any right to convert the common stock into other securities.
No shares of common stock are subject to redemption or any sinking fund
provisions. All the outstanding shares of our common stock are fully paid and
non-assessable. Subject to the rights of the holders of the preferred stock, if
any, our stockholders of common stock are entitled to dividends when, as and if
declared by our board from funds legally available therefore and, upon
liquidation, to a pro-rata share in any distribution to stockholders. We do not
anticipate declaring or paying any cash dividends on our common stock in the
foreseeable future.
15
Pursuant to our Certificate of Incorporation, our board has the
authority, without further stockholder approval, to provide for the issuance of
up to 10 million shares of our preferred stock in one or more series and to
determine the dividend rights, conversion rights, voting rights, rights in terms
of redemption, liquidation preferences, the number of shares constituting any
such series and the designation of such series. Our board has the power to
afford preferences, powers and rights (including voting rights) to the holders
of any preferred stock preferences, such rights and preferences being senior to
the rights of holders of common stock. No shares of our preferred stock are
currently outstanding. Although we have no present intention to issue any shares
of preferred stock, the issuance of shares of preferred stock, or the issuance
of rights to purchase such shares, may have the effect of delaying, deferring or
preventing a change in control of our company.
Provisions Having A Possible Anti-Takeover Effect
Our Certificate of Incorporation and Bylaws contain certain provisions
that are intended to enhance the likelihood of continuity and stability in the
composition of our board and in the policies formulated by our board and to
discourage certain types of transactions which may involve an actual or
threatened change of our control. Our board is authorized to adopt, alter, amend
and repeal our Bylaws or to adopt new Bylaws. In addition, our board has the
authority, without further action by our stockholders, to issue up to 10 million
shares of our preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof The issuance of our preferred
stock or additional shares of common stock could adversely affect the voting
power of the holders of common stock and could have the effect of delaying,
deferring or preventing a change in our control.
ADDITIONAL INFORMATION
Statements contained in this registration statement regarding the
contents of any contract or any other document are not necessarily complete and,
in each instance, reference is hereby made to the copy of such contract or other
document filed as an exhibit to the registration statement. As a result of this
registration statement, we will be subject to the informational requirements of
the Securities Exchange Act of 1934 and, consequently, will be required to file
annual and quarterly reports, proxy statements and other information with the
Securities and Exchange Commission, or SEC. The registration statement,
including exhibits, may be inspected without charge at the SEC's principal
office in Washington, D.C., and copies of all or any part thereof may be
obtained from the Public Reference Section, Securities and Exchange Commission,
450 Fifth Street, NW, Washington, D.C. 20549 upon payment of the prescribed
fees. You may obtain information on the operation of the Public Reference Room
by calling the SEC at l.800.SEC.0330. The SEC maintains a Website that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with it. The address of the SEC's Website
is http://www.sec.gov.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This registration statement contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms or other
comparable terminology. Forward-looking statements are speculative and uncertain
and not based on historical facts. Because forward-looking statements involve
risks and uncertainties, there are important factors that could cause actual
results to differ materially from those expressed or implied by these
forward-looking statements, including those discussed under "Description of
Business" and "Management's Discussion and Analysis or Plan of Operation". These
uncertainties and other factor include, but are not limited to: our ability to
locate a business opportunity for merger; the terms of our acquisition of or
participation in a business opportunity; and the operating and financial
performance of any business combination with us.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance, or achievements, the reader is advised to
consult any further disclosures made on related subjects in our future SEC
filings.
16
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Market Information
There is no public trading market for our securities. We will seek to
make our shares eligible for quotation on the NASD's OTC Bulletin Board.
However, the Plan provides that no active trading market shall exist for our
securities until after the consummation of a business combination. No assurance
can be given that an active market will exist after we complete a business
combination. The Plan further provides that our stockholders are enjoined from
trading, selling or assigning their Plan Shares until we consummate a
transaction. HFG, however, may transfer in a private transaction, a portion of
its shares of our common stock prior to the consummation of a business
combination to a single transferee or group of transferees under common control
and to HFG employees and representatives, subject to compliance with applicable
federal and state securities laws. Any such transferee shall be subject to the
same restrictions as applicable to HFG under the Plan.
On February 15, 2006, HFG transferred 350,000 Plan Shares to its
affiliate, HFI.
We have no equity compensation or other types of employee benefit
plans.
Transfer Agent
We have engaged Securities Transfer Corporation, 2591 Dallas Parkway,
Suite 102, Frisco, Texas 75034 (telephone number 469.633.0100) as our transfer
agent. The Plan Shares have been issued and are being held by the transfer agent
until a business combination is consummated.
Reports to Stockholders
We plan to furnish our stockholders with an annual report for each
fiscal year ending December 31 containing financial statements audited by our
independent registered public accounting firm. In the event we enter into a
business combination with another company, we anticipate that management will
continue furnishing annual reports to stockholders. Additionally, we may, in our
sole discretion, issue unaudited quarterly or other interim reports to our
stockholders when we deem appropriate. Upon effectiveness of this registration
statement, we intend to maintain compliance with the periodic reporting
requirements of the Exchange Act.
Holders. As of July 5, 2006, there were a total of 500,000 shares of
our common stock outstanding, held by approximately 499 stockholders of record.
Dividends. We have not declared any dividends on our common stock since
inception and do not intend to pay dividends on our common stock in the
foreseeable future.
Securities Eligible for Future Sale
We relied, based on the confirmation order we received from the
Bankruptcy Court, on Section 1145(a)(1) of the Bankruptcy Code to exempt from
the registration requirements of the Securities Act of 1933, as amended, both
the offer of the Plan Shares which may have been deemed to have occurred through
the solicitation of acceptances of the Plan of Reorganization and the issuance
of the Plan Shares pursuant to the Plan of Reorganization. In general, offers
and sale of securities made in reliance on the exemption afforded under Section
1145(a)(1) of the Bankruptcy Code are deemed to be made in a public offering, so
that the recipients thereof, are free to resell such securities without
registration under the Securities Act.
We currently do not have any outstanding restricted securities as
defined in Rule 144. We do not intend to issue any securities prior to
consummating a reverse merger transaction. The securities we issue in a merger
transaction will most likely be restricted securities. Since we are a blank
check or shell company, we believe the resale of restricted securities we issue
in a merger transaction will be subject to the restrictions as stated in the
Wulff Letter discussed below.
17
Generally, restricted securities can be resold under Rule 144 once they
have been held for at least one year, provided that the securities satisfies the
current public information requirements of the Rule; no more than 1% of the
outstanding securities of the issuer are sold in any three month period; the
seller does not arrange or solicit the solicitation of buyers for the securities
in anticipation of or in connection with the sale transactions and does not make
any payment to anyone in connection with the sale transactions except the broker
dealer who executes the trade or trades in the securities; the shares are sold
in broker's transactions only; the seller files a Notice on Form 144 with the
Securities and Exchange Commission at or prior to the sales transactions; and
the seller has a bona fide intent to sell the securities within a reasonable
time of the filing. Once two years have lapsed, assuming the holder of the
securities is not an affiliate of the issuer, unlimited sales can be made
without further compliance with the terms and provisions of Rule 144. In
January, 2000, Richard K. Wulff, the Chief of the Securities and Exchange
Commission's Office of Small Business, wrote a letter to Ken Worm, the Assistant
Director of the OTC Compliance Unit of NASD Regulation, Inc. (the Wulff Letter).
The Wulff Letter was written in response to a request for guidance from Mr.
Worm. In his request, Mr. Worm referred to several situations in which
non-affiliate stockholders of blank check or shell companies had sought to treat
their shares as free trading or unrestricted securities. As defined in the Wulff
Letter, a blank check or shell company is a development stage company that has
no specific business plan or purpose or has indicated its business plan is to
engage in a merger or acquisition with an unidentified company or companies, or
other entity or person.
Citing the concerns of the United States Congress and the Securities
and Exchange Commission over potential fraud and market manipulations involving
blank check or shell companies, the Wulff Letter stated that the promoters and
affiliates of blank check or shell companies, as well as transferees of their
securities, are "underwriters" with respect to such securities. Accordingly,
transactions in these companies' securities by promoters, affiliates or their
transferees do not fall within the scope of the Rule 144 "safe harbor" resales
for securities that have been beneficially owned for at least one year and that
satisfy informational and certain other requirements of the Rule, or the Section
4(1) exemption from registration for resales under the Securities Act, that
exempts sales by persons other than "an issuer, underwriter or a dealer." As a
result, it is the position of the Securities and Exchange Commission that these
securities may be resold by these persons only pursuant to registration under
the Securities Act. According to the Wulff Letter, this restriction would
continue to apply even after the blank check or shell company completes a merger
or acquisition transaction with an operating entity.
ITEM 2. LEGAL PROCEEDINGS
Other than being subject to the provisions of the Plan and confirmation
order, we are not a party to any legal proceedings.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING DISCLOSURE
Not Applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Pursuant to the Plan of Reorganization, we issued an aggregate of
500,000 shares of our common stock to 499 of our holders of administrative and
tax claims and unsecured debt. Such shares were issued in accordance with
Section 1145 under the United States Bankruptcy Code and the transaction was
thus exempt from the registration requirements of Section 5 of the Securities
Act of 1933.
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS
We have the authority under the Delaware General Corporation Law to
indemnify our directors and officers to the extent provided for in such statute.
Set forth below is a discussion of Delaware law regarding indemnification which
we believe discloses the material aspects of such law on this subject. The
18
Delaware law provides, in part, that a corporation may indemnify a director or
officer or other person who was, is or is threatened to be made a named
defendant or respondent in a proceeding because such person is or was a
director, officer, employee or agent of the corporation, if it is determined
that such person:
o conducted himself in good faith;
o reasonably believed, in the case of conduct in his official capacity as
a director or officer of the corporation, that his conduct was in the
corporation's best interest and, in all other cases, that his conduct
was at least not opposed to the corporation's best interests; and
o in the case of any criminal proceeding, had no reasonable cause to
believe that his conduct was unlawful.
A corporation may indemnify a person under the Delaware law against
judgments, penalties, including excise and similar taxes, fines, settlement,
unreasonable expenses actually incurred by the person in connection with the
proceeding. If the person is found liable to the corporation or is found liable
on the basis that personal benefit was improperly received by the person, the
indemnification is limited to reasonable expenses actually incurred by the
person in connection with the proceeding, and shall not be made in respect of
any proceeding in which the person shall have been found liable for willful or
intentional misconduct in the performance of his duty to the corporation. The
corporation may also pay or reimburse expenses incurred by a person in
connection with his appearance as witness or other participation in a proceeding
at a time when he is not a named defendant or respondent in the proceeding.
Our Certificate of Incorporation provides that none of our directors
shall be personally liable to us or our stockholders for monetary damages for an
act or omission in such directors' capacity as a director; provided, however,
that the liability of such director is not limited to the extent that such
director is found liable for (a) a breach of the directors' duty of loyalty to
us or our stockholders, (b) an act or omission not in good faith that
constitutes a breach of duty of the director to us or an act or omission that
involves intentional misconduct or a knowing violation of the law, (c) a
transaction from which the director received an improper benefit, whether or not
the benefit resulted from an action taken within the scope of the director's
office, or (d) an act or omission for which the liability of the director is
expressly provided under Delaware law. Limitations on liability provided for in
our Certificate of Incorporation do not restrict the availability of
non-monetary remedies and do not affect a director's responsibility under any
other law, such as the federal securities laws or state or federal environmental
laws.
We believe that these provisions will assist us in attracting and
retaining qualified individuals to serve as executive officers and directors.
The inclusion of these provisions in our Certificate of Incorporation may have
the effect of reducing a likelihood of derivative litigation against our
directors and may discourage or deter stockholders or management from bringing a
lawsuit against directors for breach of their duty of case, even though such an
action, if successful, might otherwise have benefited us or our stockholders.
Our Bylaws provide that we will indemnify our directors to the fullest
extent provided by Delaware General Corporation Law and we may, if and to the
extent authorized by our board of directors, so indemnify our officers and other
persons whom we have the power to indemnify against liability, reasonable
expense or other matters.
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 foregoing provisions, 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 Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
that the payment by BTHC VI, Inc., of expenses incurred or paid by a director,
officer or controlling person of BTHC VI, Inc., 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.
19
PART F/S
The financial information beginning on page F-l hereof is provided in
accordance with the requirements of Item 310 of Regulation S-B.
PART III
ITEM 1. INDEX TO EXHIBITS
See attached Index to Exhibits.
ITEM 2. DESCRIPTION OF EXHIBITS
The following documents are filed as exhibits to this Registration
Statement:
Exhibit Description of Exhibit
--------------------------------------------------------------------------------
2.1 First Amended Joint Plan of Reorganization filed by the Debtors and
Official Committee of Unsecured Creditors, In the United States
Bankruptcy Court, Northern District of Texas, Dallas Division, In Re:
Ballantrae Healthcare, LLC, et. al., Debtors, Case No. 03-33152-HDH-11,
dated September 29, 2004.
2.2 Order Confirming First Amended and Joint Plan of Reorganization,
Chapter 11, Case No. 03-33152-HDH-11, Signed November 29, 2004.
3.1 Agreement and Plan of Merger by and between BTHC VI, Inc. and BTHC VI,
LLC, dated April 10, 2006.
3.2 Certificate of Merger as filed with the Secretary of State of the State
of Delaware on April 11, 2006.
3.3 Articles of Merger as filed with the Secretary of State of the State of
Texas on April 11, 2006.
3.4 Certificate of Incorporation of BTHC VI, Inc.
3.5 Bylaws of BTHC VI, Inc.
4.1 Form of common stock certificate.
-----------------
20
BTHC VI, Inc.
(a development stage company)
Contents
Page
----
Report of Independent Registered Certified Public Accounting Firm F-2
Financial Statements
Balance Sheets
as of June 30, 2006, December 31, 2005 and 2004 F-3
Statements of Operations and Comprehensive Loss
for the six months ended June 30, 2006,
the year ended December 31, 2005,
the period from November 29, 2004 (date of bankruptcy settlement)
through December 31, 2004 and
the period from November 29, 2004 (date of bankruptcy settlement)
through June 30, 2006 F-4
Statements of Changes in Stockholders' Equity
for the period from November 29, 2004 (date of bankruptcy settlement)
through June 30, 2006 F-5
Statements of Cash Flows for the six months ended June 30, 2006,
the year ended December 31, 2005,
the period from November 29, 2004 (date of bankruptcy settlement)
through December 31, 2004 and
the period from November 29, 2004 (date of bankruptcy settlement)
through June 30, 2006 F-6
Notes to Financial Statements F-7
F-1
LETTERHEAD OF S. W. HATFIELD, CPA
---------------------------------
REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM
-----------------------------------------------------------------
Board of Directors and Stockholders
BTHC VI, Inc.
We have audited the accompanying balance sheets of BTHC VI, Inc. (a Delaware
corporation and a development stage company) as of June 30, 2006, December 31,
2005 and 2004 and the related statements of operations and comprehensive loss,
changes in stockholders' equity and cash flows for the six months ended June 30,
2006, the year ended December 31, 2005, the period from November 29, 2004 (date
of bankruptcy settlement) through December 31, 2004 and the period from November
29, 2004 (date of bankruptcy settlement) through June 30, 2006, respectively.
These financial statements are the sole responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides 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 BTHC VI, Inc. (a development
stage company) as of June 30, 2006, December 31, 2005 and 2004 and the results
of its operations and cash flows for the six months ended June 30, 2006, the
year ended December 31, 2005, the period from November 29, 2004 (date of
bankruptcy settlement) through December 31, 2004 and the period from November
29. 2004 (date of bankruptcy settlement) through June 30, 2006, respectively, in
conformity with generally accepted accounting principles generally accepted in
the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note D to the
financial statements, the Company has no viable operations or significant assets
and is dependent upon significant stockholders to provide sufficient working
capital to maintain the integrity of the corporate entity. These circumstances
create substantial doubt about the Company's ability to continue as a going
concern and are discussed in Note D. The financial statements do not contain any
adjustments that might result from the outcome of these uncertainties.
/s/ S. W. Hatfield, CPA
-------------------------
S. W. HATFIELD, CPA
Dallas, Texas
July 3, 2006
F-2
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BTHC VI, Inc.
(a development stage company)
Balance Sheets
June 30, 2006, December 31, 2005 and 2004
June 30, December 31, December 31,
2006 2005 2004
------------ ------------ ------------
ASSETS
------
Current Assets
Cash on hand and in bank $ -- $ -- $ --
Due from bankruptcy trust -- 1,000 1,000
------------ ------------ ------------
Total Assets $ -- $ 1,000 $ 1,000
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
Current Liabilities
Accounts payable - trade $ -- $ -- $ --
Advances from controlling shareholder 511 -- --
------------ ------------ ------------
Total Liabilities 511 -- --
------------ ------------ ------------
Commitments and Contingencies
Stockholders' Equity (Deficit)
Preferred stock - $0.001 par value
10,000,000 shares authorized
None issued and outstanding -- --
Common stock - $0.001 par value
40,000,000 shares authorized
500,000 shares issued and outstanding 500 500 500
Additional paid-in capital 500 500 500
Deficit accumulated during the development stage (1,511) -- --
------------ ------------ ------------
Total Stockholders' Equity (Deficit) (511) 1,000 1,000
------------ ------------ ------------
Total Liabilities and
Stockholders' Equity (Deficit) $ -- $ 1,000 $ 1,000
============ ============ ============
The accompanying notes are an integral part of these financial statements.
F-3
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BTHC VI, Inc.
(a development stage company)
Statements of Operations and Comprehensive Loss
Six months ended June 30, 2006,
Year ended December 31, 2005,
Period from November 29, 2004 (date of bankruptcy settlement)
through December 31, 2004 and
Period from November 29, 2004 (date of bankruptcy settlement)
through June 30, 2006
Period from Period from
November 29, November 29,
2004 2004
(date of (date of
bankruptcy bankruptcy
Six months Year settlement) settlement)
ended ended through through
June 30, December 31, December 31, June 30,
2006 2005 2004 2006
------------ ------------ ------------ ------------
Revenues $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------
Operating expenses
Reorganization costs 1,511 -- -- 1,511
------------ ------------ ------------ ------------
Income from operations (1,511) -- -- (1,511)
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net loss (1,511) -- -- (1,511)
Other comprehensive income -- -- -- --
------------ ------------ ------------ ------------
Comprehensive loss $ (1,511) $ -- $ -- $ (1,511)
============ ============ ============ ============
Loss per weighted-average share
of common stock outstanding,
computed on net loss - basic
and fully diluted nil nil nil nil
============ ============ ============ ============
Weighted-average number of shares
of common stock outstanding -
basic and fully diluted 500,000 500,000 500,000 500,000
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
F-4
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BTHC VI, Inc.
(a development stage company)
Statement of Changes in Stockholders' Equity (Deficit)
Period from November 29, 2004 (date of bankruptcy settlement)
through June 30, 2006
Deficit
accumulated
Common Stock Additional during the
------------------------- paid-in development
Shares Amount capital stage Total
----------- ----------- ----------- ----------- -----------
Stock issued through bankruptcy
settlement on November 29, 2004 500,000 $ 500 $ 500 $ -- $ 1,000
Net loss for the period -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Balances at December 31, 2004 500,000 500 500 -- 1,000
Net loss for the year -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Balances at December 31, 2005 500,000 500 500 -- 1,000
Net loss for the period -- -- -- (1,511) (1,511)
----------- ----------- ----------- ----------- -----------
Balances at June 30, 2006 500,000 $ 500 $ 500 $ (1,511) $ (511)
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
F-5
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BTHC VI, Inc.
(a development stage company)
Statements of Cash Flows
Six months ended June 30, 2006,
Year ended December 31, 2005,
Period from November 29, 2004 (date of bankruptcy settlement)
through December 31, 2004 and
Period from November 29, 2004 (date of bankruptcy settlement)
through June 30, 2006
Period from Period from
November 29, November 29,
2004 2004
(date of (date of
bankruptcy bankruptcy
Six months Year settlement) settlement)
ended ended through through
June 30, December 31, December 31, June 30,
2006 2005 2004 2006
------------ ------------ ------------ ------------
Cash Flows from Operating Activities
Net loss for the period $ (1,511) $ -- $ -- $ (1,511)
Adjustments to reconcile net loss
to net cash provided by
operating activities
Increase in accounts payable-trade -- -- -- --
------------ ------------ ------------ ------------
Net cash used in operating activities (1,511) -- -- (1,511)
------------ ------------ ------------ ------------
Cash Flows from Investing Activities -- -- -- --
------------ ------------ ------------ ------------
Cash Flows from Financing Activities
Cash funded from bankruptcy trust 1,000 -- -- 1,000
Cash advanced by stockholder 511 -- -- 511
------------ ------------ ------------ ------------
Net cash provided by financing activities 1,511 -- -- 1,511
------------ ------------ ------------ ------------
Increase in Cash -- -- -- --
Cash at beginning of period -- -- -- --
------------ ------------ ------------ ------------
Cash at end of period $ -- $ -- $ -- $ --
============ ============ ============ ============
Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid during the period $ -- $ -- $ -- $ --
============ ============ ============ ============
Income taxes paid during the period $ -- $ -- $ -- $ --
============ ============ ============ ============
Supplemental Disclosure of Non-Cash
Investing and Financing Activities
Recapitalization to be funded
by Bankruptcy Trust $ -- $ 1,000 $ 1,000 $ --
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
F-6
BTHC VI, Inc.
(a development stage company)
Notes to Financial Statements
Note A - Background and Description of Business
BTHC VI, Inc. (Company) was reincorporated on June 7, 2005 under the laws of the
State of Delaware. The Company is the U. S. Bankruptcy Court mandated
reincorporation of and successor to BTHC VI, LLC, a Texas Limited Liability
Company which was discharged from bankruptcy on November 29, 2004. The effective
date of the merger of BTHC VI, Inc. and BTHC VI, LLC was April 11, 2006.
The Company's emergence from Chapter 11 of Title 11 of the United States Code on
November 29, 2004 created the combination of a change in majority ownership and
voting control - that is, loss of control by the then-existing stockholders, a
court-approved reorganization, and a reliable measure of the entity's fair value
- resulting in a fresh start, creating, in substance, a new reporting entity.
Accordingly, the Company, post bankruptcy, has no significant assets,
liabilities or operating activities. Therefore, the Company, as a new reporting
entity, qualifies as a "development stage enterprise" as defined in Statement of
Financial Accounting Standard No. 7, as amended.
The Company's post-bankruptcy business plan is to locate and combine with an
existing, privately-held company which is profitable or, in management's view,
has growth potential, irrespective of the industry in which it is engaged.
However, the Company does not intend to combine with a private company which may
be deemed to be an investment company subject to the Investment Company Act of
1940. A combination may be structured as a merger, consolidation, exchange of
the Company's common stock for stock or assets or any other form which will
result in the combined enterprise's becoming a publicly-held corporation.
Note B - Bankruptcy Action
Commencing on March 28, 2003, BTHC VI, LLC filed for protection under Chapter 11
of the Federal Bankruptcy Act in the United States Bankruptcy Court, Northern
District of Texas - Dallas Division (Bankruptcy Court). The Company's bankruptcy
action was part of a combined case (Case No. 03-33152-HDH-11) encompassing the
following related entities: Ballantrae Healthcare, LLC; Ballantrae Texas, LLC;
Ballantrae New Mexico, LLC; Ballantrae Missouri, LLC; Ballantrae Illinois, LLC;
BTHC I, LLC; BTHC II, LLC; BTHC III, LLC; BTHC IV, LLC; BTHC V, LLC; BTHC VI,
LLC; BTHC VII, LLC; BTHC VIII, LLC; BTHC X, LLC; BTHC XI, LLC; BTHC XII, LLC;
BTHC XIV, LLC; BTHC XV, LLC; BTHC XVII, LLC; BTHC XIX, LLC; BTHC XX, LLC; BTHC
XXI, LLC; BNMHC I, LLC; BMOHC II, LLC; BILHC I, LLC, BILHC II, LLC; BILHC III,
LLC; BILHC IV, LLC; BILHC V, LLC.
All assets, liabilities and other claims against the Company and it's affiliated
entities were combined for the purpose of distribution of funds to creditors.
Each of the entities otherwise remained separate corporate entities. From the
commencement of the bankruptcy proceedings through November 29, 2004 (the
effective date of the Plan of Reorganization), all secured claims and/or
administrative claims during this period were satisfied through either direct
payment or negotiation.
A Plan of Reorganization was approved by the United States Bankruptcy Court,
Northern District of Texas - Dallas Division on November 29, 2004. The Plan of
Reorganization, which contemplates the Company entering into a reverse merger
transaction, provided that certain identified claimants as well as unsecured
creditors, in accordance with the allocation provisions of the Plan of
Reorganization, and the Company's new controlling stockholder would receive
"new" shares of the Company's post-reorganization common stock, pursuant to
Section 1145(a) of the Bankruptcy Code. As a result of the Plan's approval, all
liens, security interests, encumbrances and other interests, as defined in the
Plan of Reorganization, attach to the creditor's trust. Specific injunctions
prohibit any of these claims from being asserted against the Company prior to
the contemplated reverse merger.
F-7
BTHC VI, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note B - Bankruptcy Action - Continued
The cancellation of all existing shares at the date of the bankruptcy filing and
the issuance of "new" shares of the reorganized entity caused an issuance of
shares of common stock and a related change of control of the Company with more
than 50.0% of the "new" shares being held by persons and/or entities which were
not pre-bankruptcy stockholders. Accordingly, per American Institute of
Certified Public Accountants' Statement of Position 90-7, "Financial Reporting
by Entities in Reorganization Under the Bankruptcy Code", the Company adopted
"fresh- start" accounting as of the bankruptcy discharge date whereby all
continuing assets and liabilities of the Company were restated to the fair
market value. As of November 29, 2004, by virtue of the confirmed Plan of
Reorganization, the only asset of the Company was approximately $1,000 in cash
due from the Bankruptcy Estate.
Note C - Preparation of Financial Statements
The Company follows the accrual basis of accounting in accordance with generally
accepted accounting principles and retains the Company's pre-bankruptcy year-end
of December 31.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Management further acknowledges that it is solely responsible for adopting sound
accounting practices, establishing and maintaining a system of internal
accounting control and preventing and detecting fraud. The Company's system of
internal accounting control is designed to assure, among other items, that 1)
recorded transactions are valid; 2) valid transactions are recorded; and 3)
transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of
operations and cash flows of the Company for the respective periods being
presented
Note D - Going Concern Uncertainty
The Company has no post-bankruptcy operating history, no cash on hand, no assets
and has a business plan with inherent risk. Because of these factors, the
Company's auditors have issued an audit opinion on the Company's financial
statements which includes a statement describing our going concern status. This
means, in the auditor's opinion, substantial doubt about our ability to continue
as a going concern exists at the date of their opinion.
The Company's majority stockholder maintains the corporate status of the Company
and has provided all nominal working capital support on the Company's behalf
since the bankruptcy discharge date. Because of the Company's lack of operating
assets, its continuance is fully dependent upon the majority stockholder's
continuing support. The majority stockholder intends to continue the funding of
nominal necessary expenses to sustain the corporate entity.
The Company's continued existence is dependent upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis. Further, the Company faces considerable risk in it's business plan
and a potential shortfall of funding due to our inability to raise capital in
the equity securities market. If no additional operating capital is received
during the next twelve months, the Company will be forced to rely on existing
cash in the bank and additional funds loaned by management and/or significant
stockholders.
F-8
BTHC VI, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note D - Going Concern Uncertainty - Continued
The Company's business plan is to seek an acquisition or merger with a private
operating company which offers an opportunity for growth and possible
appreciation of our stockholders' investment in the then issued and outstanding
common stock. However, there is no assurance that the Company will be able to
successfully consummate an acquisition or merger with a private operating
company or, if successful, that any acquisition or merger will result in the
appreciation of our stockholders' investment in the then outstanding common
stock.
The Company remains dependent upon additional external sources of financing;
including being dependent upon its management and/or significant stockholders to
provide sufficient working capital in excess of the Company's initial
capitalization to preserve the integrity of the corporate entity.
The Company anticipates offering future sales of equity securities. However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional equity securities or, that such funding, if
available, will be obtained on terms favorable to or affordable by the Company.
The Company's certificate of incorporation authorizes the issuance of up to
10,000,000 million shares of preferred stock and 40,000,000 shares of common
stock. The Company's ability to issue preferred stock may limit the Company's
ability to obtain debt or equity financing as well as impede potential takeover
of the Company, which takeover may be in the best interest of stockholders. The
Company's ability to issue these authorized but unissued securities may also
negatively impact our ability to raise additional capital through the sale of
our debt or equity securities.
It is the intent of management and significant stockholders to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.
In such a restricted cash flow scenario, the Company would be unable to complete
its business plan steps, and would, instead, delay all cash intensive
activities. Without necessary cash flow, the Company may become dormant during
the next twelve months, or until such time as necessary funds could be raised in
the equity securities market.
While the Company is of the opinion that good faith estimates of the Company's
ability to secure additional capital in the future to reach its goals have been
made, there is no guarantee that the Company will receive sufficient funding to
sustain operations or implement any future business plan steps.
Note E - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, certificates of
deposit and other highly-liquid investments with maturities of three months
or less, when purchased, to be cash and cash equivalents.
2. Reorganization costs
--------------------
The Company has adopted the provisions of AICPA Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities" whereby all costs incurred
with the incorporation and reorganization, post-bankruptcy, of the Company
were charged to operations as incurred.
F-9
BTHC VI, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note E - Summary of Significant Accounting Policies - Continued
3. Income taxes
------------
The Company uses the asset and liability method of accounting for income
taxes. At June 30, 2006, December 31, 2005 and December 31, 2004,
respectively, the deferred tax asset and deferred tax liability accounts,
as recorded when material to the financial statements, are entirely the
result of temporary differences. Temporary differences represent
differences in the recognition of assets and liabilities for tax and
financial reporting purposes, primarily accumulated depreciation and
amortization, allowance for doubtful accounts and vacation accruals.
As of June 30, 2006, December 31, 2005 and December 31, 2004, the deferred
tax asset related to the Company's net operating loss carryforward is fully
reserved. Due to the provisions of Internal Revenue Code Section 338, the
Company may have no net operating loss carryforwards available to offset
financial statement or tax return taxable income in future periods as a
result of a change in control involving 50 percentage points or more of the
issued and outstanding securities of the Company.
4. Income (Loss) per share
-----------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) available to common stockholders by the weighted-average number of
common shares outstanding during the respective period presented in our
accompanying financial statements.
Fully diluted earnings (loss) per share is computed similar to basic income
(loss) per share except that the denominator is increased to include the
number of common stock equivalents (primarily outstanding options and
warrants).
Common stock equivalents represent the dilutive effect of the assumed
exercise of the outstanding stock options and warrants, using the treasury
stock method, at either the beginning of the respective period presented or
the date of issuance, whichever is later, and only if the common stock
equivalents are considered dilutive based upon the Company's net income
(loss) position at the calculation date.
As of June 30, 2006, December 31, 2005 and December 31, 2004, and
subsequent thereto, the Company had no outstanding stock warrants, options
or convertible securities which could be considered as dilutive for
purposes of the loss per share calculation.
Note F - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
Interest rate risk is the risk that the Company's earnings are subject to
fluctuations in interest rates on either investments or on debt and is fully
dependent upon the volatility of these rates. The Company does not use
derivative instruments to moderate its exposure to interest rate risk, if any.
Financial risk is the risk that the Company's earnings are subject to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the volatility of these rates. The Company does not use derivative
instruments to moderate its exposure to financial risk, if any.
F-10
BTHC VI, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note G - Income Taxes
The components of income tax (benefit) expense for the six months ended June 30,
2006, the year ended December 31, 2005, the period from November 29, 2004 (date
of bankruptcy settlement) through December 31, 2004 and the period from November
29, 2004 (date of bankruptcy settlement) through June 30, 2006, respectively,
are as follows:
Period from Period from
November 29, November 29,
2004 2004
(date of (date of
bankruptcy bankruptcy
Six months Year settlement) settlement)
ended ended through through
June 30, December 31, December 31, June 30,
2006 2005 2004 2006
------------ ------------ ------------ ------------
Federal:
Current $ -- $ -- $ -- $ --
Deferred -- -- -- --
------------ ------------ ------------ ------------
-- -- -- --
------------ ------------ ------------ ------------
State:
Current -- -- -- --
Deferred -- -- -- --
------------ ------------ ------------ ------------
-- -- -- --
------------ ------------ ------------ ------------
Total $ -- $ -- $ -- $ --
============ ============ ============ ============
As of June 30, 2006, the Company had a nominal net operating loss
carryforward(s) to offset future taxable income. The amount and availability of
any net operating loss carryforwards will be subject to the limitations set
forth in the Internal Revenue Code. Such factors as the number of shares
ultimately issued within a three year look-back period; whether there is a
deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate; continuity of historical business; and subsequent income of
the Company all enter into the annual computation of allowable annual
utilization of any net operating loss carryforward(s).
(Remainder of this page left blank intentionally)
F-11
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BTHC VI, Inc.
(a development stage company)
Notes to Financial Statements - Continued
Note G - Income Taxes - Continued
The Company's income tax expense for the six months ended June 30, 2006, the
year ended December 31, 2005, the period from November 29, 2004 (date of
bankruptcy settlement) through December 31, 2004 and the period from November
29, 2004 (date of bankruptcy settlement) through June 30, 2006, respectively,
are as follows:
Period from Period from
November 29, November 29,
2004 2004
(date of (date of
bankruptcy bankruptcy
Six months Year settlement) settlement)
ended ended through through
June 30, December 31, December 31, June 30,
2006 2005 2004 2006
------------ ------------ ------------ ------------
Statutory rate applied to
income before income taxes $ (500) $ -- $ -- $ (500)
Increase (decrease) in income
taxes resulting from:
State income taxes -- -- -- --
Difference between book method and
statutory recognition differences on
organization costs 500 -- -- 500
Other, including reserve for
deferred tax asset and application
of net operating loss carryforward -- -- -- --
------------ ------------ ------------ ------------
Income tax expense $ -- $ -- $ -- $ --
============ ============ ============ ============
The Company's only temporary differences as of June 30, 2006, December 31, 2005
and December 31, 2004 relate to the Company's net operating loss and the
statutory deferrals of expenses for organizational costs pursuant to the
applicable Federal Tax Law. Accordingly, any deferred tax asset, as fully
reserved, or liability, if any, as of June 30, 2006, December 31, 2005 and
December 31, 2004, respectively, is nominal and not material to the accompanying
financial statements.
Note H - Capital Stock Transactions
Pursuant to the First Amended Joint Plan of Reorganization Proposed By The
Debtors affirmed by the U. S. Bankruptcy Court - Northern District of Texas -
Dallas Division on November 29, 2004, the Company "will include the issuance of
a sufficient number of Plan shares to meet the requirements of the Plan. Such
number is estimated to be approximately 500,000 Plan Shares relative to each
Post Confirmation Debtor. The Plan Shares shall all be of the same class."
As provided in the Plan, 70.0% of the Plan Shares of the Company were issued to
Halter Financial Group, Inc., the Company's controlling shareholder, in exchange
for the release of its Allowed Administrative Claims and for the performance of
certain services and the payment of certain fees related to the anticipated
reverse merger or acquisition transactions described in the Plan. The remaining
30.0% of the Plan Shares of the Company were issued to other holders of various
claims as defined in the Order Confirming First Amended Joint Plan of
Reorganization.
Based upon the calculations provided by the Creditor's Trustee, the Company
issued an aggregate 500,000 shares of the Company's "new" common stock to all
unsecured creditors and the controlling stockholder in settlement of all unpaid
pre-confirmation obligations of the Company and/or the bankruptcy trust.
F-12
SIGNATURES
In accordance with Section 12 of the Exchange Act, the Company caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
BTHC VI, INC.
DATE: July 6, 2006 By: /s/ Timothy P. Halter
---------------------------------------------
Timothy P. Halter, President, Chief
Executive Officer and Chief Financial Officer
21
INDEX OF EXHIBITS
The following documents are filed as exhibits to this Registration
Statement
Exhibit Description of Exhibit
--------------------------------------------------------------------------------
2.1 First Amended Joint Plan of Reorganization filed by the Debtors and
Official Committee of Unsecured Creditors, In the United States
Bankruptcy Court, Northern District of Texas, Dallas Division, In Re:
Ballantrae Healthcare, LLC, et. al., Debtors, Case No. 03-33152-HDH-11,
dated September 29, 2004.
2.2 Order Confirming First Amended and Joint Plan of Reorganization,
Chapter 11, Case No. 03-33152-HDH-11, Signed November 29, 2004.
3.1 Agreement and Plan of Merger by and between BTHC VI, Inc. and BTHC VI,
LLC, dated April 10, 2006.
3.2 Certificate of Merger as filed with the Secretary of State of the State
of Delaware on April 11, 2006.
3.3 Articles of Merger as filed with the Secretary of State of the State of
Texas on April 11, 2006.
3.4 Certificate of Incorporation of BTHC VI, Inc.
3.5 Bylaws of BTHC VI, Inc.
4.1 Form of common stock certificate.
-----------------
IOE-1
Dates Referenced Herein and Documents Incorporated by Reference
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