U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K AMENDMENT NUMBER 1
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): November 15, 2002
BENTLEYCAPITALCORP.COM, INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 000-31883 91-2022700
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
1150 MARINA VILLAGE PARKWAY, SUITE 103, ALAMEDA, CA 94501
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 865-6412
5076 ANGUS DRIVE
VANCOUVER, BRITISH COLUMBIA, CANADA V6M 3M5
(Former name or former address, if changed since last report)
FORWARD-LOOKING STATEMENTS
Except for the historical information presented in this document, the
matters discussed in this Form 8-K Amendment Number 1 contain "forward-looking
statements" (as such term is defined in the Private Securities Litigation Reform
Act of 1995). These statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should" or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and uncertainties.
The safe harbor provisions of Section 21E of the Securities Exchange Act of
1934, as amended, and Section 27A of the Securities Act of 1933, as amended,
apply to forward-looking statements made by the Registrant. The reader is
cautioned not to place undue reliance on these forward-looking statements. These
forward-looking statements involve risks and uncertainties, including those
identified within this Form 8-K Amendment Number 1 and other filings with the
SEC by the Registrant. The actual results that the Registrant achieves may
differ materially from any forward-looking statements due to such risks and
uncertainties. These forward-looking statements are based on current
expectations, and the Registrant assumes no obligation to update this
information. Readers are urged to carefully review and consider the various
disclosures made by the Registrant in this Form 8-K Amendment Number 1 and in
the Registrant's other reports filed with the Securities and Exchange Commission
that attempt to advise interested parties of the risks and factors that may
affect the Registrant's business.
This Form 8-K Amendment Number 1 contains the financial information related
to our acquisition on November 15, 2002 of Proton Laboratories, LLC. We
previously filed a Form 8-K that contained the other disclosure related to that
acquisition.
1
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) PRO FORMA FINANCIAL INFORMATION (UNAUDITED) PAGE
PROTON LABORATORIES, LLC AND BENTLEYCAPITALCORP.COM INC.
PRO FORMA UNAUDITED COMBINED FINANCIAL STATEMENTS
Introduction 3
Pro Forma Combined Balance Sheet as of September 30, 2002 4
Pro Forma Combined Statement of Operations for the Nine Months Ended
September 30, 2002 5
Pro Forma Combined Statement of Operations for the Year Ended
December 31, 2001 6
Notes to Pro Forma Combined Financial Statements 7
(b) FINANCIAL STATEMENTS OF PROTON LABORATORIES, LLC
Report of Independent Certified Public Accountants 8
Balance Sheets - September 30, 2002 (Unaudited) and December 31, 2001 9
Statements of Operations for the Nine Months Ended September 30, 2002
(Unaudited) and for the Year Ended December 31, 2001 10
Statements of Member's Equity for the year ended December 31, 2001 and
for the Nine Months Ended September 30, 2002 (Unaudited) 11
Statements of Cash Flows for the Nine Months Ended September 30, 2002
(Unaudited) and for the Year Ended December 31, 2001 12
Notes to Financial Statements 13
2
PROTON LABORATORIES, LLC AND BENTLEYCAPITALCORP.COM
PRO FORMA UNAUDITED COMBINED FINANCIAL STATEMENTS
INTRODUCTION
The following pro forma combined financial statements reflect the Agreement and
Plan of Reorganization of BentleyCapitalCorp.com, Inc. ("Bentley") and Proton
Laboratories, LLC, a California limited liability company ("Proton") on November
15, 2002. The pro forma combined balance sheet is derived from the historical
consolidated balance sheet of Bentley as of September 30, 2002 and the
historical balance sheet of Proton as of September 30, 2002 and is presented as
if the merger had been consummated on September 30, 2002. The pro forma combined
statement of operations for the year ended December 31, 2001 is derived from the
historical statement of operations of Bentley and Proton. The pro forma combined
statement of operations for the nine months ended September 30, 2002 is derived
from the historical statement of operations of Bentley and Proton for the nine
months ended September 30, 2002. The pro forma adjustments have been prepared as
if the merger had been consummated on January 1, 2001.
The pro forma combined financial statements are not necessarily indicative of
the results of the future operations of Bentley or Proton. The pro forma
combined statements of operations do not reflect the anticipated cost savings
resulting from integration of the operations of Bentley and Proton or costs to
be incurred to integrate the companies. The pro forma adjustments described in
the accompanying notes are based on estimates derived from information currently
available.
The pro forma combined financial statements should be read in conjunction with
the notes thereto and the historical financial statements of Proton included in
this Form 8-K/A. In addition, reference should be made to the historical
financial statements of Bentley included in Form 10-KSB for the year ended
December 31, 2001 and included in Form 10-QSB for the nine months ended
September 30, 2002 filed with the Securities and Exchange Commission.
3
PROTON LABORATORIES, LLC AND BENTLEYCAPITALCORP.COM
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2002
Proton
Laboratories, BentleyCapital Proforma Proforma As
LLC CORP.COM ADJUSTMENTS ADJUSTED
--------------- ---------------- ------------- -------------
ASSETS
CURRENT ASSETS
Cash $ 9,560 $ 1,808 $ - $ 11,368
Accounts receivable, less allowance of $2,442 32,260 - - 32,260
and $1,800, respectively
Inventory, less reserve for obsolescense of $5,572 62,946 - - 62,946
--------------- ---------------- ------------- -------------
TOTAL CURRENT ASSETS 104,766 1,808 - 106,574
--------------- ---------------- ------------- -------------
PROPERTY AND EQUIPMENT
Furniture and fixtures 4,670 - - 4,670
Equipment and machinery 14,927 - - 14,927
Leasehold improvements 1,886 - - 1,886
Less: accumulated depreciation (4,966) - - (4,966)
--------------- ---------------- ------------- -------------
NET PROPERTY AND EQUIPMENT 16,517 - - 16,517
--------------- ---------------- ------------- -------------
TOTAL ASSETS $ 121,283 $ 1,808 $ - $ 123,091
=============== ================ ============= =============
LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES
Accounts payable $ 113,732 $ 2,000 $ - $ 115,732
Accrued liabilities - 2,750 - 2,750
--------------- ---------------- ------------- -------------
TOTAL CURRENT LIABILITIES 113,732 4,750 - 118,482
--------------- ---------------- ------------- -------------
MEMBER'S EQUITY AND STOCKHOLDERS' DEFICIT
Member's contributions 268,457 - (268,457) b -
Common stock - 1,125 (1,125) a
1,125 b 1,125
Additional paid in capital - 61,875 (61,875) a
170,000 a
268,457 b
(1,125) b 437,332
Accumulated deficit (260,906) - (172,942) a (433,848)
Deficit accumulated during the development stage - (65,942) 65,942 a -
--------------- ---------------- ------------- -------------
TOTAL MEMBER'S EQUITY AND STOCKHOLDERS' 7,551 (2,942) - 4,609
--------------- ---------------- ------------- -------------
EQUITY (DEFICIT)
TOTAL LIABILITIES, MEMBER'S EQUITY
AND STOCKHOLDERS' EQUITY (DEFICIT) $ 121,283 $ 1,808 $ - $ 123,091
=============== ================ ============= =============
4
PROTON LABORATORIES, LLC AND BENTLEYCAPITALCORP.COM
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
Proton
Laboratories, Bentleycapital Proforma Proforma As
LLC CORP.COM ADJUSTMENTS ADJUSTED
--------------- ---------------- ------------- -------------
SALES $ 226,606 $ - $ - $ 226,606
COST OF GOODS SOLD 148,433 - - 148,433
--------------- ---------------- ------------- -------------
GROSS MARGIN 78,173 - - 78,173
--------------- ---------------- ------------- -------------
OPERATING EXPENSES
General and administrative expenses 183,173 11,961 - 195,134
Fair value of officer services 45,000 - - 45,000
--------------- ---------------- ------------- -------------
TOTAL OPERATING EXPENSES 228,173 11,961 - 240,134
--------------- ---------------- ------------- -------------
LOSS FROM OPERATIONS (150,000) (11,961) - (161,961)
--------------- ---------------- ------------- -------------
OTHER INCOME AND (EXPENSE)
Loss on acquisition of BentleyCapitalCorp.com - - (172,942) a (172,942)
Interest income (expense) 33 56 - 89
--------------- ---------------- ------------- -------------
TOTAL OTHER INCOME (EXPENSE) 33 56 (172,942) (172,853)
--------------- ---------------- ------------- -------------
NET LOSS $ (149,967) $ (11,905) $ (172,942) $ (334,814)
=============== ================ ============= =============
BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.03)
=============
BASIC AND DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 11,250,000
=============
5
PROTON LABORATORIES, LLC AND BENTLEYCAPITALCORP.COM
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2001
Proton
Laboratories, Bentleycapital Proforma Proforma As
LLC CORP.COM ADJUSTMENTS ADJUSTED
--------------- ---------------- ------------- -------------
SALES $ 484,393 $ - $ - $ 484,393
COST OF GOODS SOLD 316,147 - - 316,147
--------------- ---------------- ------------- -------------
GROSS MARGIN 168,246 - 168,246
--------------- ---------------- -------------
OPERATING EXPENSES
General and administrative expenses 219,157 10,181 - 229,338
Fair value of officer services 60,000 - - 60,000
--------------- ---------------- ------------- -------------
TOTAL OPERATING EXPENSES 279,157 10,181 - 289,338
--------------- ---------------- ------------- -------------
LOSS FROM OPERATIONS (110,911) (10,181) - (121,092)
--------------- ---------------- ------------- -------------
OTHER INCOME AND (EXPENSE)
Loss on disposal of equipment (347) - - (347)
Loss on acquisition - - (161,037) a (161,037)
Interest income (expense) 319 106 - 425
--------------- ---------------- ------------- -------------
TOTAL OTHER INCOME (EXPENSE) (28) 106 (161,037) (160,959)
--------------- ---------------- ------------- -------------
NET LOSS $ (110,939) $ (10,075) $ (161,037) $ (282,051)
=============== ================ ============= =============
BASIC AND DILUTED LOSS PER COMMON SHARE
$ (0.04)
=============
BASIC AND DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 7,765,000
=============
6
NOTES TO PRO FORMA UNAUDITED COMBINED FINANCIAL STATEMENTS
NOTE 1 - AGREEMENT AND PLAN OF REORGANIZATION
BentleyCapitalCorp.com, Inc. ("Bentley") entered into an Agreement and Plan of
Reorganization, finalized on November 15, 2002 whereby Proton Laboratories, LLC,
a California limited liability company ("Proton") merged with and into VWO I
Inc., a wholly owned subsidiary of Bentley (the "Merger"). As a result of the
Merger, Proton's sole owner, Edward Alexander, exchanged 100% of his ownership
of Proton for 8,750,000 shares of Bentley common stock, par value $0.0001 per
share.
On June 3, 2002, Mr. Alexander entered into a Stock Purchase Agreement with
Michael Kirsh. Under the Stock Purchase Agreement, Mr. Alexander purchased
7,500,000 shares of common stock of Bentley from Mr. Kirsh and 1,250,000 shares
of Bentley from a minority shareholder for $170,000. The 8,750,000 shares Mr.
Alexander acquired on June 3, 2002 were canceled as part of the Merger. VWO I
Inc. changed its name to Proton Laboratories, Inc. as part of the Merger.
In accordance with SFAS 141 Business Combinations and EITF 98-3, Determining
Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a
Business, the merger has been accounted for as the reorganization of Proton and
the acquisition of Bentley's assets for $170,000 using the purchase method of
accounting. Accordingly, the assets and liabilities were recorded at their fair
value with the excess amount paid over the net assets reflected as a loss on the
acquisition of Bentley. Due to the short term nature of the assets and
liabilities acquired, the historical cost of the assets and liabilities acquired
were deemed to be fair value.
NOTE 2 - PRO FORMA ADJUSTMENTS
(a) To record the acquisition of the net assets of Bentley for $170,000. The
$170,000 acquisition was recorded as common stock and additional paid in
capital. The acquisition was allocated to the net assets of Bentley and the
remaining portion was deemed to be a loss and recorded as an addition to
the accumulated deficit. The deficit accumulated during the development
stage was adjusted as Proton is not a development stage company.
(b) To reclassify member's capital to common stock and additional paid in
capital to properly present the change of Proton from an LLC to a
corporation.
7
HANSEN, BARNETT & MAXWELL (801) 532-2200
A Professional Corporation Fax (801) 532-7944
CERTIFIED PUBLIC ACCOUNTANTS 5 Triad Center, Suite 750
Salt Lake City, Utah 84180
www.hbmcpas.com
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and the Stockholders
Proton Laboratories, LLC
We have audited the balance sheet of Proton Laboratories, LLC as of December 31,
2001, and the related statements of operations, member's equity and cash flows
for the year ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
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 Proton Laboratories, LLC as of
December 31, 2001, and the results of its operations and its cash flows for the
year ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
June 14, 2002
8
PROTON LABORATORIES, LLC
BALANCE SHEETS
PROFORMA
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
2002 2002 2001
--------------- --------------- --------------
(UNAUDITED) (UNAUDITED)
(SEE NOTE 1)
ASSETS
CURRENT ASSETS
Cash $ 9,560 $ 12,618
Accounts receivable, less allowance of $2,442 and 32,260 25,089
$1,800, respectively
Inventory, less reserve for obsolescence of $5,572 62,946 65,441
--------------- --------------
TOTAL CURRENT ASSETS 104,766 103,148
--------------- --------------
PROPERTY AND EQUIPMENT
Furniture and fixtures 4,670 4,670
Equipment and machinery 14,927 11,512
Leasehold improvements 1,886 1,886
Less: accumulated depreciation (4,966) (2,352)
--------------- --------------
NET PROPERTY AND EQUIPMENT 16,517 15,716
--------------- --------------
TOTAL ASSETS $ 121,283 $ 118,864
=============== ==============
LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES
Accounts payable $ 113,732 $ 98,174
--------------- --------------
TOTAL CURRENT LIABILITIES 113,732 98,174
--------------- --------------
MEMBER'S AND STOCKHOLDER'S EQUITY
Member's contributions $ - 268,457 131,629
Common stock, 100,000,000 common shares 5,357
authorized with a par value of $0.0001;
5,357,000 shares issued and outstanding. - -
Additional paid in capital 263,100 - -
Accumulated deficit (260,906) (260,906) (110,939)
--------------- --------------- --------------
TOTAL MEMBER'S AND
STOCKHOLDER'S EQUITY $ 7,551 7,551 20,690
=============== --------------- --------------
TOTAL LIABILITIES AND MEMBER'S EQUITY $ 121,283 $ 118,864
=============== ==============
9
PROTON LABORATORIES, LLC
STATEMENTS OF OPERATIONS
FOR THE NINE FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
2002 2001
--------------- --------------
(UNAUDITED)
SALES $ 226,606 $ 484,393
COST OF GOODS SOLD 148,433 316,147
--------------- --------------
GROSS MARGIN 78,173 168,246
--------------- --------------
OPERATING EXPENSES
General and administrative expenses 183,173 219,157
Fair value of officer services 45,000 60,000
--------------- --------------
TOTAL OPERATING EXPENSES 228,173 279,157
--------------- --------------
LOSS FROM OPERATIONS (150,000) (110,911)
--------------- --------------
OTHER INCOME AND (EXPENSE)
Loss on disposal of equipment - (347)
Interest income 33 319
--------------- --------------
TOTAL OTHER INCOME (EXPENSE) 33 (28)
--------------- --------------
NET LOSS $ (149,967) $ (110,939)
=============== ==============
10
PROTON LABORATORIES, LLC
STATEMENTS OF MEMBER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2001
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 (UNAUDITED)
TOTAL
MEMBER'S MEMBER'S
CONTRIBUTIONS EQUITY
-------------- ----------
BALANCE - DECEMBER 31, 2000 $ - $ -
Assets contributed by member 43,929 43,929
Cash contributions from member 27,700 27,700
Fair value of officer services 60,000 60,000
Net loss for the period - (110,939)
-------------- ----------
BALANCE - DECEMBER 31, 2001 131,629 20,690
Cash contributions from member (unaudited) 91,828 91,828
Fair value of officer services (unaudited) 45,000 45,000
Net loss for the period (unaudited) - (149,967)
-------------- ----------
BALANCE - SEPTEMBER 30, 2002 (UNAUDITED) $ 268,457 $ 7,551
============== ==========
11
PROTON LABORATORIES, LLC
STATEMENTS OF CASH FLOWS
FOR THE NINE FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
2002 2001
--------------- --------------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (149,967) $ (110,939)
Adjustments to reconcile net loss to cash used
in operating activities:
Depreciation 2,614 2,525
Loss on impairment of inventory - 5,572
Loss on disposal of property and equipment - 347
Fair value of officer services 45,000 60,000
Changes in operating assets and liabilities
Accounts receivable (7,171) (25,089)
Inventory 2,495 (40,282)
Accounts payable 15,558 98,174
--------------- --------------
NET CASH USED IN OPERATING ACTIVITIES (91,471) (9,692)
--------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (3,415) (5,390)
--------------- --------------
NET CASH USED IN INVESTING ACTIVITIES (3,415) (5,390)
--------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributions from member 91,828 27,700
--------------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 91,828 27,700
--------------- --------------
NET INCREASE (DECREASE) IN CASH (3,058) 12,618
CASH AT BEGINNING OF PERIOD 12,618 -
--------------- --------------
CASH AT END OF PERIOD $ 9,560 $ 12,618
=============== ==============
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment contributed by member $ - $ 13,198
Inventory contributed by member $ - $ 30,731
12
PROTON LABORATORIES, LLC
NOTES TO FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO SEPTEMBER 30, 2002 IS UNAUDITED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - Proton Laboratories, LLC (the "Company") was incorporated on
February 16, 2000 in the State of California. A limited liability company is
similar to a limited partnership with limitation of members' liability. The
Company did not begin its operations until January 1, 2001. On January 1, 2001,
the Company's president contributed inventory and property and equipment to the
Company. For a further description of the transaction see Note 2 to the
financial statements.
UNAUDITED PRO FORMA STOCKHOLDER'S EQUITY - Due to the subsequent merger
explained in Note 4, the Company was changed from an LLC to a corporation on
November 15, 2002. The effect of the corporate status of the Company has been
reflected as unaudited pro forma stockholder's equity in the accompanying
balance sheet. The common stock reflected in the pro forma stockholder's equity
represents the pro rata number of shares the Company would have held if the
merger had taken place on September 30, 2002. The calculated basis for the
shares is the member's contributions of $268,457 plus the $170,000 to acquire
the interest in Bentley as a percentage of the number of shares outstanding on
September 30, 2002.
NATURE OF OPERATIONS - The Company's operations are located in Alameda,
California. The core business of the Company consists of the sales and
marketing for industrial, environmental and residential systems which alter the
properties of water to produce functional water throughout the United States of
America. The Company acts as an exclusive importer and master distributor of
these products to various companies for use in various products ranging from
food processing to retail water sales. Additionally, the Company formulates
intellectual properties under licensing agreements, supply consumer products,
consult on projects utilizing functional water, facilitate between manufacturer
and industry and act as educators on the benefits of functional water.
USE OF ESTIMATES - 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, disclosure of contingent assets and
liabilities and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
FINANCIAL INSTRUMENTS -The Company is subject to concentration of credit risk
with respect to sales primarily in the functional water industry, sales to a
significant customer, and purchases from a significant vendor. Accounts
receivable are generally unsecured. The Company normally obtains payments from
customers prior to delivery of the related products. Otherwise, the Company does
not require collateral for accounts receivable. The amounts reported as cash and
cash equivalents, accounts receivable, inventory and accounts payable are
considered to be reasonable approximations of their fair values. The fair value
estimates presented herein were based on market information available to
management at the time of the preparation of the financial statements.
BUSINESS CONDITION - As shown in the financial statements for the nine months
ended September 30, 2002 and the year-ended December 31, 2001, the Company
incurred net losses of $149,967 and $110,939, respectively, and has depended on
capital contributions from the president of the Company to fund operations. The
Company had negative cash flows from operations of $91,471 and $9,692 for the
nine months ended September 30, 2002 and the year ended December 31, 2001,
respectively. The Company
13
PROTON LABORATORIES, LLC
NOTES TO FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO SEPTEMBER 30, 2002 IS UNAUDITED)
had a working capital deficit of $8,966 and working capital of $4,974 at
September 30, 2002 and December 31, 2001, respectively. The Company intends to
raise additional equity capital and increase the profitability of operations for
the continued funding of future operations. The president of the Company also
maintains that, as needed, he will contribute additional funds to meet the
Company's obligations on a timely basis.
INVENTORY - Inventory consists of purchased finished goods and is stated at the
lower of cost (using the first-in, first-out method) or market value. As of
September 30, 2002 and December 31, 2002, the Company maintained an obsolescence
reserve of $5,572 on its inventory.
PROPERTY AND EQUIPMENT - Equipment, and furniture and fixtures are stated at
cost. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Estimated useful lives range from 3 to 7 years.
Depreciation expense for the nine months ended September 30, 2002 and for the
year ended December 31, 2001 was $2,614 and $2,525, respectively. Expenditures
for maintenance, repairs, and renewals are charged to expense as incurred.
Expenditures for major renewals and betterments that extend the useful lives of
existing equipment are capitalized and depreciated. On retirement or disposition
of property and equipment, the cost and accumulated depreciation are removed
from the accounts and any resulting gain or loss is recognized in the statement
of operations.
The Company records impairment losses on property and equipment when indicators
of impairment are present and estimated undiscounted cash flows to be generated
by those assets are less than the assets' carrying amount.
CASH AND CASH EQUIVALENTS - The Company considers all highly liquid instruments
purchased with a maturity of less than three months to be cash equivalents.
INCOME TAXES - Prior to November 22, 2002, the Company elected a Limited
Liability Corporation status. Taxable income or loss and tax credits were passed
directly to the member in accordance with the percentage number of shares owned
and taxed at the member's individual income tax rates. Accordingly, no provision
for income taxes is included in these financial statements.
As noted above, on November 22, 2002, the Company became a corporation due to
the merger. Beginning in November 2002, the Company recognizes an asset or
liability for the deferred tax consequences of all temporary differences between
the tax bases of assets or liabilities and their reported amounts in the
financial statements that will result in taxable or deductible amounts in future
years when the reported amounts of the asset or liabilities are recovered.
These deferred tax assets or liabilities are measured using the enacted tax
rates that will be in effect when the differences are expected to reverse.
Deferred tax assets are reviewed periodically for recoverability and valuation
allowances and adjustments are provided as necessary.
ADVERTISING - The Company follows the policy of charging the cost of advertising
to expense as incurred. Advertising expense for the nine months ended September
30, 2002 and for the year ended December 31, 2001 was $2,397 and $8,486,
respectively.
14
PROTON LABORATORIES, LLC
NOTES TO FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO SEPTEMBER 30, 2002 IS UNAUDITED)
MAJOR CUSTOMER - During the nine months ended September 30, 2002 and the year
ended December 31, 2001, sales to one customer accounted for 17% and 11% of
total sales, respectively. The Company believes the loss of this customer may
have a negative impact on the Company's financial statements.
MAJOR VENDOR - During the nine months ended September 30, 2002, purchases from
three vendors accounted for 95% of total purchases. During the year ended
December 31, 2001, purchases from one vendor accounted for 29% of total
purchases. As of September 30, 2002, amounts due to the four vendors accounted
for 100% of accounts payable. As of December 31, 2001, amounts due to the one
vendor accounted for 82% of accounts payable. The Company believes the loss of
these vendors may have a negative impact on the Company's financial statements.
REVENUE RECOGNITION - The Company recognizes revenue when all four of the
following criteria are met: (i) persuasive evidence that the arrangement exists;
(ii) delivery of the products and/or services has occurred; (iii) the selling
price is both fixed and determinable and; (iv) collectibility is reasonably
probable. The Company's revenues are derived from sales of their industrial,
environmental and residential systems which alter the properties of water to
produce functional water.
NEW ACCOUNTING STANDARDS - In June 2001, the FASB issued SFAS No. 141, "Business
Combinations." SFAS No. 141 requires usage of the purchase method for all
business combinations initiated after June 30, 2001, and prohibits the usage of
the pooling of interests method of accounting for business combinations. The
provisions of SFAS No. 141 relating to the application of the purchase method
are generally effective for business combinations completed after July 1, 2001.
Such provisions include guidance on the identification of the acquiring entity,
the recognition of intangible assets other than goodwill acquired in a business
combination and the accounting for negative goodwill. The Company does not
believe this statement has any impact to the Company as of December 31, 2001 but
was utilized as part of the merger mentioned in Note 4.
In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 changes the current accounting model that requires
amortization of goodwill, supplemented by impairment tests, to an accounting
model that is based solely upon impairment tests. SFAS No. 142 also provides
guidance on accounting for identifiable intangible assets that may or may not
require amortization. The provisions of SFAS No. 142 related to accounting for
goodwill and intangible assets will be generally effective for the Company at
the beginning of 2002, except that certain provisions related to goodwill and
other intangible assets are effective for business combinations completed after
July 1, 2001. The Company does not believe this statement has any impact to the
Company as of September 30, 2002 and December 31, 2001.
In June 2001, the FASB issued SFAS No. 143 "Accounting for Asset Retirement
Obligations." SFAS No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of intangible long-lived assets and
associated asset retirement costs. SFAS No. 143 requires that the fair value of
a liability for an asset retirement obligation be recognized in the period in
which it has occurred. The asset retirement obligations will be capitalized as
a part of the carrying amount of the long-lived asset. SFAS No. 143 applies to
legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development and normal operation of
long- lived assets. SFAS No. 143 is effective for years beginning after June
15, 2002, with earlier adoption permitted. Currently, the Company does not
believe this statement will have any impact to the Company.
15
PROTON LABORATORIES, LLC
NOTES TO FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO SEPTEMBER 30, 2002 IS UNAUDITED)
In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 establishes a single accounting
model for long-lived assets to be disposed of by sale and the recognition of
impairment of long-lived assets to be held and used. SFAS No. 144 is effective
for fiscal years beginning after December 15, 2001, with an earlier adoption
encouraged. The Company believes the standard will not have a material effect on
the Company's results of operations or financial position.
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
Among other provisions, the statement modifies the criteria classification of
gains and losses on debt extinguishments such that they are not required to be
classified as extraordinary items if they do not meet the criteria for
classification as extraordinary items in APB Opinion No. 30. The Company
elected to adopt this standard during the year ended December 31, 2002. The
adoption of this standard has had no material effect on the Company's financial
position or results of operations.
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal activities." The statement requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination costs and
certain employee plan severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity. The
Company will be required to apply this statement prospectively for any exit or
disposal activities initiated after December 31, 2002. The adoption of this
standard is not expected to have a material effect on the Company's financial
position or results of operations.
In December 2002, the FASB issued Statement No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure." This statement amends Statement No.
123, Accounting for Stock-Based Compensation, to provide alternative methods of
transition for an entity that voluntarily changes to the fair value method of
accounting for stock-based employee compensation. It also amends the disclosure
provisions of Statement No. 123 to require prominent disclosure about the
effects on reported net income of an entity's accounting policy decisions with
respect to stock-based employee compensation. Statement No. 148 also requires
disclosure about those effects in interim financial information. The adoption
of this standard has had no material effect on the Company's financial position
or results of operations.
NOTE 2 - RELATED PARTY TRANSACTIONS
On January 1, 2001, the Company's sole member and president contributed $30,731
of inventory and $13,198 of property and equipment to the Company for
commencement of its operations. The inventory and property and equipment were
recorded at the member's basis due to the transaction being between related
parties. The member originally received the inventory and property and equipment
through a severance agreement with a previous employer. Under the agreement the
member received the assets in lieu of scheduled cash payments that were to be
made to the member. During the nine months and year ended September 30, 2002
and December 31, 2001, the member contributed $91,828 and $27,700 in cash to the
Company, respectively.
16
PROTON LABORATORIES, LLC
NOTES TO FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO SEPTEMBER 30, 2002 IS UNAUDITED)
During the nine months ended September 30, 2002 and the year ended December 31,
2001, the member did not receive any amounts related to his salary. The
shareholder will start receiving a salary in the future. The Company determined
that the fair value of the member services during the nine months ended
September 30, 2002 and the year ended December 31, 2001 were $45,000 and
$60,000, respectively. Thus the Company recorded a salary expense and
contributed capital of $45,000 and $60,000 during the nine months and year ended
September 30, 2002 and December 31, 2001, respectively.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
OPERATING LEASES - The Company currently leases office and storage space from a
third party. At December 31, 2001, the Company's minimum monthly lease payment
was $1,925 extending through June 1, 2002. However on March 6, 2002, the
Company entered into a new lease agreement whereby the Company will pay a
minimum monthly lease payment of $2,204 increasing by 4% annually until May
2005. Additionally, under the leases the Company is required to pay a percentage
of the property taxes and maintenance expenses.
Future minimum lease payments under operating lease obligations as of December
31, 2001, were as follows:
Year ending December 31:
2002 $19,824
2003 19,847
2004 20,641
2005 8,740
-------
Minimum lease payments $69,052
=======
Rent expense for the nine months ended September 30, 2002 and for the year ended
December 31, 2001 was $30,562 and $27,029, respectively.
NOTE 4 - SUBSEQUENT EVENTS (UNAUDITED)
REORGANIZATION AND MERGER - On November 15, 2002, the Company entered into an
Agreement and Plan of Reorganization with BentleyCapitalCorp.com, Inc.
("Bentley") whereby the Company merged with and into VWO I Inc. (VWO), a wholly
owned subsidiary of Bentley (the "Merger"). As a result of the Merger, the
Company's sole owner, Edward Alexander, exchanged 100% of his ownership of
Proton for 8,750,000 shares of Bentley common stock, par value $0.0001 per
share. Prior to the merger Bentley and VWO were development stage entities with
no operations and minimal assets and liabilities.
On June 3, 2002, Mr. Alexander entered into a Stock Purchase Agreement with
Michael Kirsh. Under the Stock Purchase Agreement, Mr. Alexander purchased
7,500,000 shares of common stock of Bentley from Mr. Kirsh and 1,250,000 shares
of Bentley from a minority shareholder for $170,000. The 8,750,000 shares Mr.
Alexander acquired on June 3, 2002 were canceled as part of the Merger. VWO I
Inc. changed its name to Proton Laboratories, Inc. as part of the Merger.
17
PROTON LABORATORIES, LLC
NOTES TO FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO SEPTEMBER 30, 2002 IS UNAUDITED)
In accordance with SFAS 141 Business Combinations and EITF 98-3, Determining
Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a
Business, the merger has been accounted for as the reorganization of Proton and
the acquisition of Bentley's assets for $170,000 using the purchase method of
accounting. Accordingly, the assets and liabilities were recorded at their fair
value with the excess amount paid over the net assets reflected as a loss on the
acquisition of Bentley.
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BENTLEYCAPITALCORP.COM INC.
Date: March 28, 2003
(signed) _______________________
/s/ Edward Alexander
Edward Alexander
Chief Executive Officer and Chief Financial Officer
19