-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IenQjDFmyeI+c4YApEeI+nX+AuJRV2NVu2CqlLaI0fITndFpP1f+PNJ5ffZLRhcw QcE3ue70NPHj+jfNJ4D9Dw== 0001132714-02-000040.txt : 20020416 0001132714-02-000040.hdr.sgml : 20020416 ACCESSION NUMBER: 0001132714-02-000040 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20020415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEXINGTON BARRON TECHNOLOGIES INC CENTRAL INDEX KEY: 0001168932 IRS NUMBER: 841557072 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-86244 FILM NUMBER: 02610768 BUSINESS ADDRESS: STREET 1: 102 S TEJON ST STREET 2: SUITE 1100 CITY: COLORADO SPRINGS STATE: CO ZIP: 80903 BUSINESS PHONE: 7193517910 MAIL ADDRESS: STREET 1: 102 SOUTH TAJON STREET STREET 2: SUITE 1100 CITY: COLORADO SPRINGS STATE: CO ZIP: 80903 SB-2 1 lexbarsb2final.txt LEXINGTON BARRON SB-2 Registration No. _______ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- LEXINGTON BARRON TECHNOLOGIES, INC. (Name of Small Business Issuer in its Charter) COLORADO 7380 84-1557072 ---------------------- --------------- -------------- (State of Other Jurisdiction (Primary Standard Industrial (IRS Employer of Incorporation or Classification Code Number) Identification No.) Organization) 102 South Tejon Street, Suite 1100 Phillip W. Kilgore Colorado Springs, Colorado 80903 102 South Tejon Street, Suite 1100 (719) 351-7910 Colorado Springs, Colorado 80903 (719) 351-7910 (Address, including zip code, and (Name, address, including zip telephone number, including area code code, and telephone number, of Registrant's principal executive offices) including area code, of agent for service) COPIES TO: James G. Dodrill II 3360 NW 53rd Circle Boca Raton, Florida 33496 (561) 862-0529 Facsimile (561) 862-0927 ---------------------- Approximate date of proposed sale to the public: As soon as practicable after the effective date of this registration statement. ---------------------- If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. (X) If this Form is filed to register additional securities for an offering pursuant to Rule 462 (b) under the Securities Act, check the following box and list the Securities Act registration statement number of earlier effective registration statement for the same offering. ( ) If this Form is a post-effective amendment filed pursuant to Rule 462 (c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ( ). i 1 If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. ( ). CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED TITLE OF EACH CLASS MAXIMUM MAXIMUM OF AMOUNT TO OFFERING AGGREGATE AMOUNT OF SHARES TO BE BE PRICE PER OFFERING REGISTRATION REGISTERED REGISTERED SHARE PRICE FEE - ------------------- ---------- --------- --------- ------------ Common Stock, no par value to be sold by selling 3,750,000 $0.10 $375,000 $34.50 shareholders Common Stock, no par value to be sold 5,000,000 $0.10 $500,000 $46.00 by the company TOTAL 8,750,000 $875,000 $80.50 - ---------------------------------------------------------------------------------- (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457.
------------------------------------------- The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state in which the offer or sale is not permitted. ii 2 PROPECTUS SUBJECT TO COMPLETION, DATED APRIL 15, 2002 8,750,000 Shares of common stock LEXINGTON BARRON TECHNOLOGIES, INC. (A Colorado Corporation) This is our initial public offering. We are registering a total of 8,750,000 shares of our common stock. All of the shares being registered by us will be sold at a price per share of $0.10. The selling shareholders will sell their shares at a price per share of $0.10 until our shares are traded on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Of the shares being registered: 1) 3,750,000 are being registered for sale by selling shareholders and 2) 5,000,000 are being registered for sale by us We will not receive any proceeds from the sale of any of the shares by selling shareholders. We will be selling all of the 5,000,000 shares of common stock we are offering on a "best efforts basis" and will not use an underwriter or pay a commission for the sale of the shares. No arrangements have been made to place funds in escrow, trust or any similar account. There is no minimum amount we are required to raise in this offering and any funds received will be immediately available to us. This offering will terminate on the earlier of the sale of all of the shares or 60 days after effectiveness of this registration statement. There is no established public market for our common stock and we have arbitrarily determined the offering price. Although we hope to be quoted on the OTC Bulletin Board, our common stock is not currently listed or quoted on any quotation service. There can be no assurance that our common stock will ever be quoted on any quotation service or that any market for our stock will ever develop. Proposed Trading Symbol: OTC Bulletin Board - "LEXB" _________________________________ INVESTING IN OUR STOCK INVOLVES RISKS. YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 7 OF THIS PROSPECTUS. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. The information in this prospectus is not complete and may be changed. None of these securities may be sold until a registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. The date of this Prospectus is April 15, 2002 1 3 TABLE OF CONTENTS Page ---- Prospectus Summary 3 The Offering 4 Summary Financial Information 6 Risk Factors 7 Use of Proceeds 14 Determination of Offering Price 16 Dividend Policy 16 Dilution 17 Management's Discussion and Analysis of Financial Condition and Results of Operations 18 Business 22 Management 31 Principal Shareholders 33 Selling Shareholders 34 Certain Transactions 35 Description of Securities 36 Indemnification 38 Plan of Distribution 39 Legal Matters 41 Experts 41 Where You Can Find More Information 42 Index to Financial Statements F-1 2 4 PROSPECTUS SUMMARY Because this is a summary, it does not contain all of the information that may be important to you. You should read the entire prospectus. You should consider the information set forth under "Risk Factors" and our financial statements and accompanying notes that appear elsewhere in this prospectus. We are a development stage company and were incorporated in Colorado on August 23, 2000. The Company's principal offices are located at 102 S. Tejon Street, Suite 1100, Colorado Springs, CO 80903 and our telephone number is 719-733-3484. We are engaged in the business of providing consulting services to smaller companies and startup organizations. As of December 31, 2001 we had no operating capital and a net loss of $234,940 for the year end December 31, 2001. Please be aware that our independent auditor has expressed substantial doubt about our ability to continue as a going concern and believes that our ability to continue as such is dependent on our ability to implement our business plan, raise capital and generate revenues. As of February 15, 2002, we have achieved $3,000 in revenues to date and our loss from inception to February 15, 2002 totaled $251,648. 3 5 The Offering Securities Offered 8,750,000 shares of common stock, 5,000,000 of which we are offering and 3,750,000 of which are being offered by the selling shareholders; See "Description of Securities" common stock Outstanding, before offering 7,051,025 common stock Outstanding, after offering 12,051,025 Proposed OTC Bulletin Board Symbol LEXB Use of Proceeds We will not receive any proceeds from the sale of common stock by our selling shareholders. If we sell all 5,000,000 shares we are offering, we will receive gross proceeds of $500,000. Any and all funds raised from our sale of common stock will be used for sales and marketing, development of our network of associates, and working capital purposes. See "Use of Proceeds." Dividend Policy We do not intend to pay dividends on our common stock. We plan to retain any earnings for use in the operation of our business and to fund future growth. 4 6 Risk Factors The securities offered by this prospectus are highly speculative and very risky. We have described the material risks that we face below. Before you buy, consider the risk factors described and the rest of this prospectus. This prospectus also contains forward- looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus. Please refer to "Risks Associated with Forward-looking Statements" on page 14. 5 7 Summary Financial Information The following is a summary of our Financial Statements, which are included elsewhere in this prospectus. You should read the following data together with the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of this prospectus as well as with our Financial Statements and the notes therewith. Year ended January 1, December 31, through 2001 February 15, ------------ 2002 ----------- Statement of Operations Data: Total Revenue $ 0 $3,000 ============ =========== Net Income (loss) $(234,940) $(11,283) ============ =========== As of As of December February 15, 31, 2001 2002 ------------ ------------ Balance Sheet Data Cash and cash equivalents $ 0 $21,697 Total current assets $ 0 $ 3,000 Total assets $ 12,637 $40,629 Total current liabilities $ 100 $ 100 Total stockholders' equity (deficiency) $ 12,537 $40,529 Total liabilities and stockholders' equity $ 12,637 $40,629 6 8 RISK FACTORS The securities offered are highly speculative. You should purchase them only if you can afford to lose your entire investment in us. You should carefully consider the following risk factors, as well as all other information in this prospectus. Certain important factors may affect our actual results and could cause those results to differ significantly from any forward-looking statements made in this prospectus or otherwise made by us or on our behalf. For this purpose, any statements contained in this prospectus that are not statements of historical fact should be considered to be forward-looking statements. Words such as "may," "expect," "believe," "anticipate," "intend," "could," "estimate," or "continue" or the negatives of those words, identify forward-looking statements. These statements appear in a number of places in this prospectus and include statements as to our intent, belief or expectations. These forward- looking statements are subject to the risks detailed below or elsewhere in this prospectus, or detailed from time to time in our filings with the Securities and Exchange Commission. See "Risks Associated With Forward-Looking Statements" on page 14. Investors should assume that if any of the following risks actually materialize, our business, financial condition or results of future operations could be materially and adversely affected. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. Risks related to our business: - ------------------------------ We have very little operating capital and may be forced to file bankruptcy. - --------------------------------------------------------------------------- The growth of our business will require significant additional investment. We do not presently have adequate cash from operations or financing activities to meet our long-term needs. As of December 31, 2001 we had no capital and as of February 15, 2002, we only had $21,697 in capital to use in executing our business plan. We anticipate that unless we are able to raise net proceeds of at least $200,000 within the next twelve months that we will not be able to execute our business plan in a meaningful way. However, even if all shares offered through this prospectus are sold, and we raise gross proceeds of $500,000 there can be no assurance that we will be successful in executing our plan or achieving profitability. Due to our early stage of development, regardless of the amount of funds we raise, there is a substantial risk that all investors may lose all of their investment. Even if we sell all shares offered through this registration statement, we expect that we will seek additional financing in the future. However, we may not be able to obtain additional capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may be forced to seek a buyer for our business or another entity with which we could create a joint venture. If all of these alternatives fail, we expect that we will be required to seek protection from creditors under applicable bankruptcy laws. Our independent auditor has expressed substantial doubt about our ability to continue as a going concern and believes 7 9 that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. We have a limited operating history, our financial projections may be inaccurate and we may not be able to achieve or maintain profitability. - ---------------------------------------------------------------------- We are a relatively young company and our proposed operations are subject to all of the risks inherent in such a business enterprise. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the development of a business in a competitive and rapidly changing industry. As with an investment in any emerging growth company, ownership of common shares may involve a high degree of risk, and is not recommended if you cannot reasonably bear the risk of a total loss of your investment. The Financial Projections referred to in this prospectus are based upon assumptions made in good faith by our management and such assumptions are an integral part of the Financial Projections and other estimates. Since we have little to no operating history, there is no assurance that the Financial Projections will be indicative of our actual results. Management believes that the Financial Projections are consistent with their prior experience. We expect to continue to incur operating losses in fiscal 2002, which ends December 31, 2002. If we do not achieve revenue growth sufficient to absorb our planned expenditures, we could experience additional losses in future periods. These losses or fluctuations in our operating results could cause the market value of our common stock to decline. We have not undertaken any market studies regarding the existence of a market for our proposed services. - ----------------------------------------------------------------------- In formulating our business plan, we have relied on the judgment of our officers, directors and consultants. No formal independent market studies concerning the demand for our proposed services have been conducted, nor are any planned. An independent marketing study was not commissioned. We are highly dependent on our directors and management and the loss of their services would detrimentally affect our ability to execute our business plan. - ----------------------------------------------------------------------- Our directors and management will encounter a significant challenge in their efforts to expand the business and to manage our growth effectively. There can be no assurance that management's efforts will be successful, that management can manage our growth or that the anticipated benefits of expansion will be fully realized. The dedication of management resources to such efforts may detract attention from our day-to-day business. 8 10 Our success depends to a significant degree upon the continued contributions of our management team, particularly the efforts of founding officers, Phillip W. Kilgore, Jeffrey A. Neal, and David A. Goller. Our employees may voluntarily terminate their employment at any time and no employment contracts are currently in place. This could have a material adverse effect on our business, financial condition and result of operations. Success is also dependent on attracting and retaining qualified management, marketing, sales executives and personnel. The process of locating personnel with the combination of skills and attributes required to carry out our strategies is often lengthy. There can be no assurance that we will be successful in attracting and retaining such executives and personnel. The loss of the services of key personnel, or the inability to attract additional qualified personnel, could have a material adverse effect on our results of operations, development efforts and ability to expand. We have arbitrarily determined the offering price. Accordingly the price you pay may not accurately reflect the value of our common stock. - ---------------------------------------------------------------------- We arbitrarily set the offering price of the common stock. We did not retain any independent investment banking firm to assist in determining the offering price. No market exists for our common stock and there can be no assurance that a trading market will develop for the common stock in the future. The offering price of the common stock may not bear any relation to the actual value of the common stock. Among the factors considered in determining the price were estimates of our prospects, the background and capital contributions of our Management and current conditions in the securities markets and the consulting industry. There is, however, no relationship between the offering price of the common stock and our assets, earnings, book value or any other objective criteria of value. See "PLAN OF PLACEMENT." We have a history of operating losses and limited funds. - -------------------------------------------------------- We have a history of operating losses. If our business plan is not fully executed as planned, we may continue to experience losses as we continue to invest in our core businesses. Our current financial resources are limited and are insufficient for execution and expansion of our business plan. Our ability to execute our business model will depend on our ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that such financing will be obtained. Nor can we give any assurance that we will generate substantial revenues or that our business operations will prove to be profitable. Our independent auditor has expressed doubts about our ability to continue as a going concern. - ------------------------------------------------------------------ We are a development stage company as defined in Financial Accounting Standards Board Statement No. 7. We are devoting substantially all of our present efforts in establishing a new business and, although planned principal operations have commenced, we have not achieved any revenues. These factors raise substantial doubt about our ability to continue as a going concern. Management's plans regarding our ability to continue as a going concern are disclosed 9 11 in Note 1 to the financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We will face intense competition and may not be able to compete effectively. - --------------------------------------------------------------------------- We will face intense competition for customers because the consulting industry is highly competitive and is dominated by entities that have significantly greater resources than we have. In addition, the consulting industry is particularly affected by name recognition, as firms contracting consultants typically select firms with which they are familiar. As such, we may have a difficult time penetrating the consulting market. Our anticipated future competitors also consist of several well established domestic and foreign companies, the substantial majority of which have significantly greater financial resources than we do, longer operating histories, well established reputations, and greater marketing, management and technical resources. Accordingly, many of these anticipated future competitors will have greater financial resources to devote to areas such as advertising and marketing and consequently the cost of entry into the consulting industry is higher than in many markets. Full execution of our business plan requires that we raise additional funds. - ---------------------------------------------------------------------------- Full implementation of our business plan requires that we raise additional funds in the future. The timing of the need and the amount needed will depend on our success at gaining clients. However, we may not be able to obtain additional capital or generate sufficient revenues to fund these operations. Our ability to grow and maximize revenues will be dependent upon market and competitive conditions as well as on our ability to effectively execute our strategy. All of these factors can affect our ability to produce revenues and profits. If additional funding is not obtained we could be forced to cease or severely curtail operations. All funds may be expended and investors would receive nothing if the contemplated subsequent funding is not obtained. There is no assurance that such additional financing will be available when required in order to proceed with our business plan or that our ability to respond to competition or changes in the market place or to exploit opportunities will not be limited by lack of available capital financing. If we are unsuccessful in securing the additional capital needed to continue operations within the time required, we will not be in a position to continue operations and the purchasers of shares in this offering may lose their entire investment. Our officers and directors are not required to continue as shareholders and may not maintain an equity interest in the company. - ---------------------------------------------------------------------- There is no requirement that our current or any of our future officers and/or directors retain any of their shares of our common stock. Accordingly, there is no assurance that all or any of our officers and/or directors will continue to maintain an equity interest in the company. 10 12 Our existing management has the voting power to greatly influence our affairs and may make decisions that do not necessarily benefit all shareholders equally. - ---------------------------------------------------------------------- Our officers currently own 46.82% of the outstanding common stock. Our Chairman and CEO, Phillip Kilgore, currently owns 22.84% of the our outstanding common stock; Jeffrey A. Neal, President, currently owns 12.04% of our outstanding common stock; and David A. Goller, Vice President, currently owns 11.94% of our outstanding common stock. This gives the three officers and director 46.82% of the Common stock and provides them the ability to greatly influence all of our activities. Even if the maximum number of shares of common stock is sold, current management will control approximately 27.39% of the voting stock, which, may continue to be sufficient to elect all of our directors and control our management, policies and operations. You may not be able to buy or sell our stock at will and may lose your entire investment. - ---------------------------------------------------------------------- We are not listed on any stock exchange at this time. We hope to become a bulletin board traded company. These are often known as "penny stocks" and are subject to various regulations involving certain disclosures to be given to you prior to the purchase of any penny stocks. These disclosures require you to acknowledge you understand the risk associated with buying penny stocks and that you can absorb the entire loss of you investment. Penny stocks are low priced securities that do not have a very high trading volume. Consequently, the price of the stock is volatile and you may not be able to buy or sell the stock when you want. Future sales of our common stock may have a depressive effect upon its price. - ---------------------------------------------------------------------- All 7,051,025 of the currently outstanding shares of common stock were issued at prices lower than the price of the shares of common stock in this offering. With the exception of the shares of common stock being registered in this Registration Statement for our selling shareholders, these shares are "restricted securities" as that term is defined by Rule 144 of the Securities Act, and in the future, may be sold in compliance with Rule 144 or pursuant to an effective registration statement. Rule 144 allows a person, subject to certain requirements, who has beneficially owned restricted securities for a period of one year to, every three months, sell in brokerage transactions an amount that does not exceed the greater of (1) 1% of the outstanding number of shares of a particular class of such securities or (2) the average weekly trading volume in such securities on all national exchanges and/or reported through the automated quotation system of a registered securities association during the four weeks prior to the filing of a notice of sale by a securities holder. In the future, sales of presently restricted securities may have an adverse effect on the market price of our common stock should a public trading market develop for such shares. Risks related to this offering: - ------------------------------- Our shares are "Penny Stocks" which are subject to certain restrictions that could adversely affect the liquidity of an investment in us. - ---------------------------------------------------------------------------- 11 13 Our shares are "penny stocks" within the definition of that term contained in Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, which imposes sales practices and disclosure requirements on certain broker-dealers who engage in certain transactions involving penny stocks. These additional sales practices and disclosure requirements could impede the sale of our securities, including securities purchased herein, in the secondary market. In addition, the liquidity for our securities may be adversely affected, with related adverse effects on the price of our securities. Under the penny stock regulations, a broker-dealer selling penny stocks to anyone other than an established customer or "accredited investor" (generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. In addition, unless the broker-dealer or the transaction is otherwise exempt, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the Registered Representative and current quotations for the securities. A broker-dealer is additionally required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks. There has never been a market for our common stock and one may never develop. - ---------------------------------------------------------------------------- Prior to this offering, there has been no public trading market for our common stock and there can be no assurances that a public trading market for the common stock will develop or, if developed, will be sustained. Although we hope to be accepted for quotations on the Over the Counter Bulletin Board, there can be no assurance that a regular trading market will develop for the common stock offered through this prospectus, or, if developed, that it will be maintained. There is no assurance of future dividends being paid. - ----------------------------------------------------- At this time we do not anticipate paying dividends in the future, but instead plan to retain any earnings for use in the operation of our business and to fund future growth. We are under no legal or contractual obligation to declare or to pay dividends, and the timing and amount of any future cash dividends and distributions is at the discretion of our Board of Directors and will depend, among other things, on our future after-tax earnings, operations, capital requirements, borrowing capacity, financial condition and general business conditions. Risks associated with forward-looking statements. - ------------------------------------------------- 12 14 This prospectus contains certain forward-looking statements regarding management's plans and objectives for future operations, including plans and objectives relating to our planned marketing efforts and future economic performance. The forward-looking statements and associated risks set forth in this prospectus include or relate to: (1) our ability to obtain a meaningful degree of consumer acceptance for our consulting services now and in the future, (2) our ability to market our consulting services at competitive prices now and in the future, (3) our ability to achieve brand-name recognition for our consulting services now and in the future, (4) our success in forecasting demand for our consulting services now and in the future, (5) our success in attracting qualified consultants to work for us, (6) our ability to maintain pricing and thereby maintain adequate profit margins, (7) our ability to achieve adequate intellectual property protection for proprietary consulting methodologies and (8) our ability to obtain and retain sufficient capital for future operations. 13 15 USE OF PROCEEDS We will not receive any proceeds from the sale of securities being offered by our selling shareholders. Our proceeds from this offering will vary depending on how many shares of our common stock we are able to sell. If we sell all shares of common stock being registered in this offering, we will receive gross proceeds of $500,000. Any and all proceeds received will be used for sales and marketing, development of our network of consulting professionals, working capital and general corporate purposes. Working capital expenses include expenses for product development, travel, communications, office supplies, rent and utilities, and other ongoing selling, general and administrative expenses and we consider general corporate purposes to be expenses such as those legal and accounting expenses typically incurred in connection with being a publicly traded company. We expect to incur expenses of approximately $70,000 in connection with the registration of the shares. The table below shows how proceeds from this offering would be used for scenarios where we sell various amounts of the shares and the priority of the use of net proceeds in the event actual proceeds are not sufficient to accomplish the uses set forth. While management has developed the following estimates to the best of its ability, there can be no assurance that we will spend the use of proceeds exactly as laid out in the table.
Total shares offered 5,000,000 5,000,000 5,000,000 5,000,000 Percent of total shares offered 25% 50% 75% 100% Shares sold 1,250,000 2,500,000 3,750,000 5,000,000 Gross proceeds from offering 125,000 250,000 375,000 500,000 Less: offering expenses 70,000 70,000 70,000 70,000 ------------- ------------ ------------ ------------ Net proceeds from offering 55,000 180,000 305,000 430,000 Use of net proceeds Sales & marketing 12,500 40,000 59,250 74,000 eCommerce expenses 4,750 11,000 17,250 23,500 Operating expenses 14,250 27,500 37,950 47,000 Network development (consultants) 12,350 27,500 41,400 51,700 Compensation to management 0 35,625 101,250 135,000 Equipment 1,000 2,500 3,900 4,400 Working capital 10,150 35,875 44,000 94,400 Total use of net proceeds 55,000 180,000 305,000 430,000 ============ ============= ============ ============
It is possible that no proceeds may be raised from this offering. It is also possible that some, but not all, of the 5,000,000 shares offered will be sold. If fewer than all of the shares are sold, we may ultimately need to modify our business plan and our plan of product development and introduction of products into the market may be delayed. There can be no assurance that any delay or modification 14 16 will not adversely affect our development and ultimately our chance of success. If we require additional funds to develop our plan, such funds may not be available on terms acceptable to us, or at all. Any funds not used for the purposes indicated will be used for general working capital. If less than the entire offering is received, funds will be applied according to the priorities outlined above. For example, if $85,000 is received, $70,000 will be used to pay for offering expenses, after which $12,500 will be applied towards sales and marketing expenses, and $1,500 will be used for eCommerce expenses. If the net proceeds are less than $12,500, the entire amount will be applied toward sales and marketing. The amounts set forth above are estimates developed by our management for allocation of net proceeds of this offering based upon our current plans and prevailing economic and industry conditions and assumes that we are able to sell the numbers of the shares set forth in each column above. Although we do not currently contemplate material changes in the proposed use of proceeds set forth above, to the extent that our management finds that adjustments are required, the amounts shown may be adjusted among the uses indicated above. Our proposed use of proceeds is subject to changes in general, economic and competitive conditions, timing and management discretion, each of which may change the amount of proceeds expended for the purposes intended. The proposed application of proceeds is also subject to changes in market conditions and our financial condition in general. Changes in general, economic, competitive and market conditions and our financial condition would include, without limitation, the occurrence of a national economic slowdown or recession, a significant change in the business consulting industry and the environment in which we operate, and/or regulatory changes in general. While our management is not currently aware of the existence or pending threat of any of the foregoing reasons, we provide you no assurance that one or more of such events will not occur. 15 17 DETERMINATION OF OFFERING PRICE Prior to this offering, there has been no market for our common stock. The offering price of the shares was arbitrarily determined and bears no relationship to assets, book value, net worth, earnings, actual results of operations, or any other established investment criteria. Among the factors considered in determining the price were our historical sales levels, estimates of our prospects, the background and capital contributions of management, the degree of control which the current shareholders desired to retain, current conditions of the securities markets and other information. DIVIDEND POLICY It is our present policy not to pay cash dividends and to retain future earnings for use in the operations of the business and to fund future growth. Any payment of cash dividends in the future will be dependent upon the amount of funds legally available, our earnings, financial condition, capital requirements and other factors that the Board of Directors may think are relevant. 16 18 DILUTION Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the total number of shares of common stock outstanding. Our net tangible book value as of February 15, 2002 was $40,529, or $0.0057 per share of common stock. Dilution per share represents the difference between the offering price of $0.10 per share and the net tangible book value per share of common stock, as adjusted, immediately after this offering. After giving effect to the completion of the offering and after deducting offering expenses estimated to be $70,000, our pro forma net tangible book value will be $470,529, or $0.0390 per share. This represents an immediate increase in pro forma net tangible book value of $0.0333 per share to existing stockholders and an immediate dilution of $0.0610 per share, or approximately 60.96% of the offering price, to investors purchasing shares of common stock in the offering. Public offering Price per share $ 0.10 Net Tangible Book Value per share before offering $ .00576 Increase Per Share attributable to sale of these shares $ 0.0333 Pro-Forma Net Tangible Book Value after offering $ 0.039 Dilution per share to Public Investors $ 0.0610 The following table summarizes as of February 15, 2002, the number of shares purchased as a percentage of our total outstanding shares, the aggregate amount paid for such shares, the aggregate amount paid figured as a percentage of the total amount paid, and the average amount paid per share for such shares. For purposes of this table, the sale to the public of these shares, is assumed to have taken place on February 15, 2002.
Shares Purchased Total Consideration Paid Average Price Number Percent Amount Percent per Share ----------- ------- --------- ------- --------- Existing Shareholders 7,051,025 58.51% $ 35,000 6.54% $0.005 New Investors 5,000,000 41.49% $ 500,000 93.46% $0.10 ----------- ------- --------- ------- --------- Total 12,051,025 100.0% $ 535,000 100.0% $0.044
The following table sets forth the estimated net tangible book value ("NTBV") per share after the offering and the dilution to persons purchasing shares based upon various levels of sales of the shares being achieved:
Shares outstanding prior to offering 7,051,025 Total shares offered 5,000,000 5,000,000 5,000,000 5,000,000 Shares sold 1,250,000 2,500,000 3,750,000 5,000,000 Public offering price $0.10 $0.10 $0.10 $0.10 Per share increase attributable to new investors $0.0058 $0.0173 $0.0262 $0.0333 Net tangible book value per share prior to offering $0.0057 $0.0057 $0.0057 $0.0057 ------- ------- ------- ------- Post offering pro forma NTBV/share $0.0115 $0.0231 $0.0320 $0.0390 Dilution to new investors $0.0885 $0.0769 $0.0680 $0.0610 Percent of dilution of the offering price 88.49% 76.91% 68.01% 60.96%
17 19 MANAGEMENT'S PLAN OF OPERATIONS Results and Plan of Operations - ------------------------------ For the period from inception through December 31, 2001 no revenue was generated or anticipated by management's forecast. Management planned on its first revenue generating project by the first quarter of 2002. The Company performed start-up business consulting services to Aspin Incorporated in February and booked $3,000 worth of accounts receivable income. Management believes it will collect this revenue by April 15, 2002. Management is also currently working on securing two other customers that would generate revenue for the Company by June 1, 2002. We wish to remind investors that there can be no assurance that the Company will successfully obtain these customer contracts. We incurred expenses from inception to February 15, 2002 of $254,648, and during the year ending December 31, 2001 we incurred expenses of $234,940. These expenses have been financed exclusively through receipts from equity subscriptions and through the issuance of restricted shares of our common stock and contributed services by our offices. Our loss per share for the year ending December 31, 2001 was $(0.05). Management believes that, even though our auditors have expressed substantial doubt about our ability to continue as a going concern, due to our low burn rate and the cooperation of our management in deferring salaries, even if we are unsuccessful in selling any of the shares of common stock offered by this prospectus, assuming that we do not commence our anticipated operations, we will be able to satisfy our cash requirements for at least the next 12 months. Fully executing our business plan, however, will significantly change our cash needs and monthly burn rate and we will not be able to begin such execution until we have raised at least $250,000 in gross proceeds. We do not anticipate that there will be any significant changes in the number of employees or expenditures from what is discussed in this prospectus. There can be no assurance, however, that conditions will not change forcing us to make changes to any of our plan of operations or business strategies. Liquidity and Capital Resources - ------------------------------- At this time we do not have any significant current liabilities. Our business expansion will require significant capital resources that may be funded through the issuance of notes payable or other debt arrangements that may affect our debt structure. To date we have spent a total of $403 in general operating expenses and expenses associated with monthly operations and securing the company's first customer. These expenses included communications, rent and other general and administrative costs. We raised the amounts used in these activities from a Regulation D offering in which we raised $35,000. 18 20 To date, we have managed to keep our monthly burn rate under an estimated $800 per month for two reasons. First, our officers have agreed to defer their salaries until the earlier of June 1, 2003 or until we have raised a minimum of $250,000 in gross proceeds from this offering. Second, we have been able to keep our operating expenses to a minimum by operating in space owned by our sole officer and are only paying the direct expenses associated with our business operations. Given our low monthly burn rate and the agreement of our officers, management believes that, even though our auditors have expressed substantial doubt about our ability to continue as a going concern, and assuming that we do not fully commence our anticipated operations it has sufficient financial resources to meet its obligations for at least the next twelve months. In the first stage of our business plan which management has estimated will be from June 2002 through December 2002, we will need cash for marketing to secure customer contracts, travel to meet with prospective clients and communications. The most important milestone will be securing five consulting projects that collectively total $25,000 because management believes that these revenues would cover the cost of doing business in this first stage since management will continue to defer its salaries. The next important milestone would be to secure and perform on a consulting contract worth at least $50,000, which management believes it could then utilize as a success story to market the company as a provider of high quality consulting services. There can be no assurance that we will successfully reach either of these benchmarks. In the next stage of business, our main cash need will be for expenses relating to growth, such as hiring additional staff that are experienced in providing consulting services for emerging companies, moving into larger office space and increased expenses associated with performing consulting contracts. Management expects this stage to start January 2003 and last through December 2003. We anticipate that during this stage, in order to fully execute our business plan, we would need to spend a minimum of $150,000 on growth or expansion related expenses. The most important milestone during this stage will be breaking into the larger contract management consulting market by securing a $100,000 contract. Such a contract is important for its prestige value, as contracts of this size (and larger) are extremely competitive, and securing one would be a significant stamp of validation upon the company's consulting services. There can be no assurance that the Company will meet this objective. We hope to raise funds through this offering. If we are unable to raise the needed funds through this offering we will seek alternative financing through means such as borrowings from institutions or private individuals. There can be no assurance that we will be able to keep costs from being more than these estimated amounts or that we will be able to raise such funds. Even if we sell all shares offered through this registration statement, we expect that we will seek additional financing in the future. However, we may not be able to obtain additional capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, management believes it can continue seeking opportunities in the business consulting industry that require less capital. An example of such an opportunity would be securing a 19 21 consulting contract and then subcontracting the project to other consultants to perform on the contract. If no alternative financing can be found and management is unable to identify and capitalize on opportunities in the business consulting industry, we may be forced to seek a buyer for our business or another entity with which we could create a joint venture. If all of these alternatives fail, we expect that we will be required to seek protection from creditors under applicable bankruptcy laws. Our independent auditor has expressed substantial doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. See Note 1 of our financial statements. Uncertainties - ------------- There is intense competition in the consulting industry with other companies that are much larger and both national and international in scope and which have greater financial resources than we have. At present, we require additional capital to make our full entrance into the consulting industry. Forward Looking Statements Certain statements in this report are forward-looking statements within the meaning of the federal securities laws. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, there are risks and uncertainties that may cause actual results to differ materially from expectations. These risks and uncertainties are discussed in the preceding pages and elsewhere in this prospectus (see "Risk Factors").. Recent Accounting Pronouncements SFAS No. 141, "Business Combinations", establishes financial accounting and reporting standards for business combinations and supercedes APB Opinion No. 16, "Business Combinations" and SFAS No. 38, "Accounting for Preacquisition Contingencies of Purchased Enterprises". All business combinations in the scope of SFAS No. 141 are to be accounted for using the purchase method of accounting. Adoption of SFAS No. 141 is not expected to have a material effect on the Company, inasmuch as we have historically not participated in any business combinations. SFAS No. 142, "Goodwill and Other Intangible Assets", establishes financial accounting and reporting standards for acquired goodwill and other intangible assets and supercedes APB Opinion No. 17, "Intangible Assets". SFAS No. 142 establishes standards as to how intangible assets that are acquired (but not acquired in a business combination) should be accounted for in financial statements upon their acquisition. In addition, SFAS No. 142 establishes standards how goodwill and other intangible assets should be accounted for after they have been initially recognized in the financial statements. Adoption of SFAS No. 142 is not expected to have a material effect on 20 22 the Company, inasmuch as we have historically not had a material amount of intangible assets and no goodwill recorded in the financial statements. Statement No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" supercedes Statement No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121"). Though it retains the basic requirements of SFAS 121 regarding when and how to measure an impairment loss, SFAS 144 provides additional implementation guidance. SFAS 144 excludes goodwill and intangibles not being amortized among other exclusions. SFAS 144 also supercedes the provisions of APB 30, "Reporting the Results of Operations," pertaining to discontinued operations. Separate reporting of a discontinued operation is still required, but SFAS 144 expands the presentation to include a component of an entity, rather than strictly a business segment as defined in SFAS 131, Disclosures about Segments of an Enterprise and Related Information. SFAS 144 also eliminates the current exemption to consolidation when control over a subsidiary is likely to be temporary. This statement is effective for all fiscal years beginning after December 15, 2001. The Company believes that the future implementation of SFAS 144 on January 1, 2002 will not have a material effect on the Company's financial position, results of operations or liquidity. 21 23 BUSINESS DESCRIPTION OF BUSINESS General Lexington Barron Technologies, Inc. was formed on August 23, 2000 and is authorized to issue 20,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of the date of this memorandum, 7,051,025 shares are issued and outstanding and no shares of preferred stock are issued and outstanding. Background - ---------- The recent significant increase in technology start-up companies and in-home businesses has created a substantial demand for micro- level management consulting particularly in the United States. With the increase in such issues as deregulation, privatization and market complexities, the consulting industry has experienced a boom since 1997. In addition, companies are finding new ways to define and combine jobs as well as cut costs by outsourcing to consulting companies. However, because many of the well-established consulting firms tend to deal with large organizations, a gap in services is evident at the start-up level. This gap has in turn created a demand for management consulting service for start-up companies and smaller businesses. We were founded to address the specific needs of smaller companies and startup organizations by providing a broad range of consulting and advisory services, ranging from market research and analysis to business plan and systems development to financial consulting. The Facets of Service Market Research and Analysis We provide market research and analysis services for start-up firms. These services serve as an entry point for clients, where we can deliver an easy to understand view of the marketplace as well as key customer segments specific to the client's desired characteristics. Additionally, this point of entry enables us to have a screening process whereby we can thoroughly analyze the client to determine if it is a viable candidate that warrants further involvement. Furthermore, the process is at least a break-even mechanism, as we generate revenues from our services even in cases that we determine do not merit further participation. Upon analysis, we provide feedback to the client in the form of a report, a formal presentation, and/or a one-to-one consultation, depending on the client's needs. We are able to provide our clients with quality data, useful interpretations of that data, and focused strategies based upon the results of that data. Our expertise enables clients to outsource this critical business function and receive results in a timely manner, saving the client time and money. Examples of this type of research and analysis include the following: - Analysis of capital markets 22 24 - International market entry strategy - Capital budgeting - Taxation planning - Corporate structuring - Management of information systems - Strategic and financial planning Business Plan Development Business plan development requires significantly more input and cooperation from the client for the purpose of producing the most accurate and useful business plan for their organization. This service provides not only market research and analysis, but also economic analysis and preliminary rounds of company valuation. The output of this process is a 360-degree analysis of the company that results in an operational framework, 3 to 5 year strategy and projected timeline, which all together provide the client with an outline of the procedural aspects of starting and growing the business. More importantly, at the end of this stage, the client not only has a focused and specific plan but a selling piece that it can utilize to attract investors or communicate its goal. In this business plan development process, we typically cover product design, sales and marketing strategies and systems, financial analysis and projections, logistics, and a plan of operation that is ready for implementation. Through this intense process, we are usually able to identify any key resources and competitive or sustainable advantages of the organization. Most importantly, we then provide a recommended method of how to best leverage those critical success factors, a component that most start-up companies and small businesses overlook. In addition to the services mentioned above, the following provide a sampling of topics that we often address when we conduct business plan development services: - Economic analysis of industry and market - Development of strategic plans, acquisition plans, and industry forecasts - Cost/benefit analyses with regard to investment, financing, and dividend decisions - Investment performance, rate of return analysis and diversion of corporate assets - Market risk analysis which includes events such as the effects of government regulation, governmental expropriation, competitor transactions, or technology change - Intercompany and intracompany transfer pricing for tangible and intangible assets - Royalty rate and licensing analysis of intangible assets and intellectual properties - Remaining useful life analysis for tangible and intangible assets - Development of merger acquisition strategies and criteria - Identification and assessment of merger acquisition candidates - Due diligence analysis of individual targets - Financing - debt versus equity and an appropriate capital structure - Negotiation of deal pricing, terms, and conditions - Deal structuring and securities design - Structuring equity allocation 23 25 - Structuring transactions to comply with IRS or other regulatory authorities - Refinancing and restructuring of current debt - Valuation of stock options, warrants, and grants Systems Development and Organizational Growth Systems development is the most complex and demanding service we offer. This service is designed to be a fix-it approach to a start-up that already has a business plan developed. Typically, small businesses or start-ups reach a point we call "the leap of faith period", where the business has shown that its product or service has generated interest and that its business model is viable. To grow beyond this point, however, often requires additional financing or an assessment of the systems that are in place. In most cases, businesses that are at this point are unable to obtain this on their own. It is at this point that businesses come to us to obtain analysis of their operational systems and their plan for growth. We conduct an internal analysis of the current system or systems that are at capacity or are not performing to the desired level. This process requires a significant amount of interaction between the start-up client and our agent in order to understand the business, identify the current systems and why they are being used. As a result, we expect to generate the most revenue under this category of service. An analysis of the systems and the strategies surrounding those systems is then done in order to measure performance quality and strategic accuracy. We refer to this process as "corporate chiropractic servicing", where we check to see what systems and strategies are out of alignment. At this point, we also examine the client's benchmarks to ensure that the client has established appropriate performance measurement criteria and goals. An adjustment or replacement of appropriate systems and strategies is then developed in order to "realign" the client's objectives and performance. Once the client has had a full analysis of its systems and strategies, alternatives for growth can then be examined. We then walk the client through the most viable alternatives, and together, develop a recommended action plan that can be supported by our resources, capabilities and identified strategic partnerships. Continuous communication with the client helps to facilitate this process, and upon completion, the client has a viable action plan that is customized to the client's specific needs and market conditions. Market Segmentation and Sales Strategy The small business and start-up consulting market can be divided into three distinct categories of customers: Entrepreneurs with an idea and no business Start-ups in need of assistance with corporate structuring and launching the business Young businesses that require assistance to reach the next level 24 26 The first two categories rarely receive consulting services from firms because few have the capital to pay for consulting services and they also tend to be very risky projects. The third category may receive consulting services, but few companies target this segment. Because we have a low cost structure, we can target businesses in the second and third segments, and will focus primarily on businesses that fall within the third category. Our founders have significant contacts in Colorado Springs and Denver, where we will initially focus our efforts. Our President and Vice President of Marketing will be responsible for direct consultative selling to potential clients. We are positioned to receive multiple referrals from accountants, business lawyers and small business incubators. Additionally, we will utilize our website as a resource page for start-up companies and small businesses to generate both name brand recognition and credibility. Potential clients will able to "interview" us via our website, as well as review case studies of our successes. Our understanding of small business challenges and the dynamics of growing a start-up comes from management's experience in the banking, accounting and consulting industries. Promotion Strategy The Promotion Strategy will focus on identifying the types of interface opportunities that are available to reach start-up entrepreneurs in order to deliver our message. We believe entrepreneurs and small businesses will respond to the message: "You don't have to have all the capabilities yourself. You can rent them!" We will advertise in specialized trade magazines including printed matter as well as websites dedicated to relevant content. The strategy is to point the digital promotion strategy towards start-ups seeking information on how to build a company. This is a quality approach to promotion rather than the more traditional large-scale approach. The advertising will provide a link to our website where the prospect can review our qualifications, our case study/success page, and register to be interviewed for a consultation. For clients that are further along in the process and or long time business partners, the website will provide secure access to business information specific to the start-up industry and will serve as a small business forum. We will focus our business development, sales and marketing efforts on clients who have solid management teams, products that are appropriate to market conditions, and viable business models. Within the framework of establishing a geographically concentrated client base, the following strategy will be undertaken utilizing a portion of the proceeds from this offering: Develop and implement a direct mail campaign targeting small business owners and entrepreneurs as part of an overall sales plan Develop a website capable of demonstrating our services and stimulating qualified sales leads Utilize promotional activities such as press releases, case histories and articles in relevant trade publications. 25 27 Attend trade shows, seminars and conferences to present our services Place advertisements in journals to develop brand awareness Pricing Our pricing schedule is a simple model based on the anticipated number of hours required to deliver the desired service and the complexity of the required resource. The cost of the job will vary from client to client and will also depend on the cost of the resources required to produce the final deliverable. For example, we expect to have the following price schedule: Description of Service Fees (per hour) Market research $60.00 Business plan development $75.00 Strategy development $100.00 Financial modeling and forecasting $125.00 Pre-IPO and IPO consulting $150.00 and higher In cases we deem appropriate, we will accept equity stakes in the client as a form of payment for services rendered. This is an extremely important area of leverage for us because it provides the opportunity for the client to still be serviced despite any cash flow problems at the time of negotiation or payment. An equity stake in the start-up also buttresses the notion of the dedicated best effort we will deliver to the client. From the opposite perspective, this channel of payment creates the opportunity for us to grow much more quickly because of ownership stakes in multiple start-ups. A second source of revenue is the residual Networkers fee. This is an opportunity for the client to join the community of start-ups and other businesses in a network format to be continued on an annual fee basis. The annual fee will depend on the size of the member, and will be reviewed annually. Initially the fee will not be considered a significant source of revenue. As our client base grows, however, annual fees could represent a significant portion of revenues. The average annual fee is estimated to be $350 year. The benefits to the members are that they have immediate access to follow-up service with us for quick questions and answers. Secondly, the Networkers community provides ample opportunity for former clients and other members to develop business relationships for future growth in their respective businesses, thus fostering a forum for entrepreneurs and start-ups. Customers The primary customer base will be start-up companies and small businesses that need assistance with the development and management of their growth. While this will be our focus, we expect to secure contracts with some small to medium sized enterprises. Management believes that it can obtain 5 main clients in its first year, 8 clients in its second year and 12 clients in its third year. 26 28 The Networkers members will be considered key customers of the past and a source of future business as well. Competitive Environment During the late 1980's and throughout the 1990's, the consulting industry exploded as technology advances and a changing global market created demand for qualified business advice. With companies turning to consulting firms in unprecedented numbers, the consulting industry became intensely competitive as the market became flooded with consulting firms. The high demand coupled with the need for fast solutions resulted in a proliferation of cookie-cutter style consulting solutions. In fact, through the use of strategic alliances with high-technology giants such as IBM, SAP, Oracle, HP, and Cisco Systems, many consulting companies essentially became sales networks for high-technology solutions. In the last couple of years, the industry has seen a resurgence of consulting firms that are branding them as "fresh" and "innovative", in a backlash against the cookie-cutter style consulting solutions. The industry is now recognizing that the explosion of consultants has left an unserved market, primarily start-ups and small businesses that were overlooked in the rush to secure large accounts with multi-million dollar corporations. Venture capital firms are the main ones that have traditionally served start-ups and small businesses with consulting services. We believe that the main competitive threat for our niche market of consulting for start-up companies is the venture capital community. Due to its primary role of financing start-up operations, venture capitalists have had to provide consulting services in order to strengthen their client's prospects. However, most venture capitalists are reluctant to offer consulting services to companies they do not envision financing. Therefore, the pool of businesses receiving consulting services from venture capitalists is very small. Nevertheless, venture capitalists overlap significantly with us with regard to target market and services provided. As of 1998 there were over 44,900 consulting service firms in the United States. The domestic market has seen a shift in this service to a technology based and strategic focused approach to consulting and the firms are concentrating on the entire business process. Today, technology planning, strategic services and enterprise consulting represent 35 percent, 20 percent and 15 percent respectively of the worldwide consulting spending. Currently there are six dominant Management Consulting Companies in the US and hundreds of smaller ones. The continuous advancements in technology and the individual needs of companies will shape the ways in which consultants serve their clients throughout the next decade. There are a plethora of companies providing business plan consulting services for start-ups with the main objective being attracting investors. Most small business sites are non-profit organizations that provide entrepreneurs and small businesses with links and resources. Following these links leads to few companies that actually focus on serving all needs of start-ups and small businesses. - --------------------------- 1 http://www.cob.ohio-state.edu/~fin/jobs/mco/trend.htm ----------------------------------------------------- 27 29 We have identified three main significant competitors in our targeted area of initial penetration. While it seems to offer packaged solutions primarily through its website, MindSpringBiz is catering to the same targeted customers as us. Another direct competitor we have identified is iEmploy.com, which provides resources to help startups and small businesses - ranging from human resources outsourcing to venture capital to valuation strategies. The other direct competitor is Laurel Ventures, which is based in Menlo Park, although its services are heavily biased towards technology start-ups. General We estimate that there are more than 250,000 consultants in the U.S. and the consulting industry has been on a sustained growth curve for well over a decade. In fact, it is estimated that total management consulting revenues worldwide hit $89 billion in 1998 and are growing at over 20% per year. While many of the world's largest consulting firms are growing even faster than the market, consulting remains a fragmented business where thousands of small specialty firms prosper. Even though there are thousands of consulting organizations across the country, these firms can be tough to measure because most are privately held. In addition, almost all work directly with other businesses rather than with your average consumer, meaning they tend to be intensely private about the names of the clients they work with and the actual work they do. Analysts typically divide the industry into six different categories: the industry elite, the Big Five, boutiques, information technology (IT) consultancies, human resources specialists, and the independents. According to wetfeet.com, most consultant firms in the industry can be put into one or more of these six different categories. Industry Elite Companies in this category provide cutting-edge strategy and operations advice to the top management of large corporations. Players in this group include Arthur D. Little, A.T. Kearney, Bain & Co., Booz-Allen & Hamilton, The Boston Consulting Group, McKinsey & Co., Mercer Management Consulting, and Monitor Co. Big Five This category refers to the consulting operations of the Big Five accounting firms. Although these firms provide some of the same strategy and operations advice as the elite, they tend to put a stronger emphasis on implementation work, particularly in the IT world. The players are Andersen Consulting , Deloitte Consulting (part of Deloitte & Touche), Ernst & Young, KPMG, and PricewaterhouseCoopers. - ---------------------------------- 2 http://business.mindspring.com/ - ---------------------------------- 3 http://www.startupuniversity.com/seminars/index.html - ------------------------------------------------------- 4 http://sites.netscape.net/laurelventures/homepage - ---------------------------------------------------- 5 http://www.consultingcentral.com/career/background.html - ---------------------------------------------------------- 6 http://www.wetfeet.com/industries/quicks/consulting-online.asp - ----------------------------------------------------------------- 28 30 Boutique Firms in this category specialize along industry or functional lines. Although often smaller, these firms may have top reputations and do the same operations and strategy work the elite firms do, but with more of an industry focus. Representative players include: Advisory Board Company and APM (health care), Corporate Executive Board (cross- company research), CSC Planmetrics (energy and utility industry), Cluster Consulting (telecommunications and the internet), Marakon Associates (strategy), Mitchell Madison Group (financial and strategy), Oliver Wyman (financial services), Oxford Associates (sales), PRTM (high-tech operations), Strategic Decisions Group (decision analysis), Roland Berger & Partners (strategy and operations), and Vertex Partners (strategy). IT Information technology specialists constitute one of the fastest- growing sectors of the consulting world, although this sector's growth isn't quite as meteoric as that of strategy consulting, according to Kennedy Information Group. IT firms provide advice, implementation, and programming work on issues related to computer systems, telecommunications, and the Internet. Representative players include American Management Systems, Computer Sciences Corp., Diamond Technology Partners, EDS, IBM, Mondial, and the Big Five firms. Human Resources This area of consulting focuses on personnel issues such as employee management and evaluation systems, payroll and compensation programs, pensions, and other benefits programs. Representative firms include The Hay Group, Hewitt Associates, William M. Mercer, Sibson & Co., Towers Perrin, and Watson Wyatt Worldwide. In addition, several of the Big Five firms have practices devoted to this area. Independents This category describes "one-man or one-woman" shops, which far outnumber the larger firms with 45 percent of all consultants classifying themselves as independents. They typically have some sort of industry or functional specialty and get hired on a project basis. Analysts predict that the next few years will be boom years for consultants, as the profession has a fertile, creative base with thousands of small and large firms offering rich expertise in specialized areas. As eCommerce continues to grow, technology demand for consulting promises to be a large area of growth. While analysts expect large consulting groups to jockey for position in serving the world's major corporations, there is little being mentioned about the increasing need for consulting services for start-ups and small businesses. Research and Development We have not conducted any research and development activities, nor do we expect to do so in the near future. No funds are set aside in this offering to provide for research and development. 29 31 Government Regulation There are no federal, state and local government regulations that directly apply to us, nor is there a need for governmental approval to provide our services. Government regulation is not expected in the future, but should it occur, it could possibly affect our provision of services. 30 32 MANAGEMENT A list of the current officers and directors appears below. Our directors are elected annually by the shareholders and do not presently receive any fees or other remuneration for their services, although they are reimbursed for expenses associated with attending meetings of the Board of Directors. Our officers are elected by the Board of Directors. Phillip Kilgore. Founder, Chairman and Interim Chief Executive Officer, (Age 39). Mr. Kilgore has served as our Chairman and Chief Executive Officer since inception. From 1993 to 2000, Mr. Kilgore worked with Honeywell Technology Solutions. He held positions with Honeywell as a Quality Manager and System Security Engineer. From 1984 to 1992, Mr. Kilgore was a Criminal Investigator with the US Air Force. Prior to that he was a communications Electronics Officer for the Air Force. His wealth of experience will help us to expand our systems development and organizational growth consulting services division. As a Quality Manager and systems engineer, Mr. Kilgore is an expert in systems, processes and procedures that give a company a competitive edge. Mr. Kilgore has a Bachelor of Science in History from the US Air Force Academy. Mr. Kilgore has earned numerous awards and certificates including the following: Software Quality Engineering Course, 2001; member of the American Society for Quality; ISO 9000 Lead Auditor and Internal Auditor Training Courses; AlliedSignal Process Management Course; AlliedSignal Total Quality Facilitator and Examiner Course; and the United States Air Force Basic Investigator's Course. David A. Goller, Executive Vice President, (Age 46). Mr. Goller has served as the Executive Vice President of the Company since inception. Before Lexington Barron Technologies, Mr. Goller worked for Honeywell Technical Solutions (formerly Allied Signal) as the Information Systems Manager. In 1995, Honeywell promoted him to a Senior Executive Manager. Mr. Goller's significant business background and training will help the Company to provide clients expertise in management consulting. His experience as an information systems manager helps to integrate business strategy with technology solutions that optimize a company's performance and efficiency. Mr. Goller has a Bachelor of Science in Political Science from the University of Indianapolis. Mr. Goller completed a Masters degree in Management and Supervision in 1982 and earned a Masters of Business Administration in 2000. Jeffrey A. Neal, Vice President, (Age 46). Mr. Neal has served as the Company's Vice President. From 1993 to 2000, Mr. Neal worked with Honeywell Technology Solutions. He held positions with Honeywell as a Quality Auditor and ISO 9000 Coordinator. Mr. Neal's experience and training in human resource management and quality assurance will help the company to provide clients with organizational structuring and efficiency consulting. Mr. Neal has a Bachelor of Science in Psychology from Indiana University. Mr. Neal completed a Masters degree in Human Resources in 1986. 31 33 All directors hold office until the next meeting of shareholders or until their successors are elected and have qualified. The executive officers of the Company serve at the discretion of the board of Directors. EXECUTIVE COMPENSATION - ---------------------- Employment and Consulting Agreements We have no employment or consulting agreements in place at this time. Summary Compensation Table The following table sets forth the total compensation paid to or accrued for the year ended December 31, 2001 to our principal executive officer and the individuals who we anticipate will be our two other most highly compensated officers. To date, no officers have received any compensation. Annual Compensation
Name and Other Restricted Securities Principal Annual Stock Underlying LTIP All other Position Year Salary Bonus Compensation Awards Options Payouts Compensation - ---------------------------------------------------------------------------------------------------- Phillip Kilgore 2000 $0 0 0 0 0 0 0 Chairman and 2001 $0 0 0 0 0 0 0 Interim CEO David A.Goller 2000 $0 0 0 0 0 0 0 Executive Vice 2001 $0 0 0 0 0 0 0 President Jeffrey A. Neal, 2000 $0 0 0 0 0 0 0 Vice President 2001 $0 0 0 0 0 0 0
Stock Option Grants in the past fiscal year We have not issued any grants of stock options in the past fiscal year. 32 34 PRINCIPAL SHAREHOLDERS The following table sets forth information regarding beneficial ownership of our common stock as of the date of this prospectus and as adjusted to reflect the sale of all shares which may potentially be sold in connection with this registration statement, by (i) those shareholders known to be the beneficial owners of more than five percent of the voting power of our outstanding capital stock, (ii) each director, and (iii) all executive officers and directors as a group:
Number of Percent Number of Shares Owned Owned Shares Owned Percent Name and Address of Before Before After After Beneficial Owner Offering Offering Offering Offering - ------------------- ------------- ----------- ----------- --------- Phillip Kilgore 1,610,475 22.84% 1,610,475 13.36% Jeffrey Neale 848,955 12.04% 848,955 7.04% David Goller 841,595 11.94% 841,595 6.98% All Directors and Officers as A Group (3 persons) 3,301,025 46.82 3,301,025 27.39% _____________ (1) Assumes the sale of all shares offered hereunder.
33 35 SELLING SHAREHOLDERS The following table sets forth certain information with respect to the ownership of our common stock by selling shareholders as of April 11, 2002. Unless otherwise indicated, none of the selling shareholders has or had a position, office or other material relationship with us within the past three years.
Ownership of Ownership of common stock Number of common stock Prior to Offering Shares offered After Offering Selling Shareholder Shares Percent Hereby Shares Percent - ---------------------------------------------------------------------------------------------------- Jamie Luis Perez Marquez 750,000 10.64% 750,000 0 * Graciela Ballersteros DeColomer 1,250,000 17.73% 1,250,000 0 * Ruben Garduno 625,000 8.86% 625,000 0 * Jim Dodrill 250,000 3.55% 250,000 0 * Camilla Edblem 50,000 * 50,000 0 * Darren Woosley 25,000 * 25,000 0 * Derek Bannister 25,000 * 25,000 0 * Eric Majors 50,000 * 50,000 0 * Ernesto Angel 25,000 * 25,000 0 * Gary Killian 12,500 * 12,500 0 * Brent Madison 25,000 * 25,000 0 * Chuck Fishel 50,000 * 50,000 0 * David Lirette 12,500 * 12,500 0 * Dennis Davis 50,000 * 50,000 0 * George McDaniel 25,000 * 25,000 0 * Jesus Romero 25,000 * 25,000 0 * Joshua Wolcott 25,000 * 25,000 0 * Kerri Wolcott 25,000 * 25,000 0 * Kim Arel 25,000 * 25,000 0 * Marcy Richfield 12,500 * 12,500 0 * Monte J. Diede 25,000 * 25,000 0 * Nathan Enger 25,000 * 25,000 0 * Nolen G. Brown 25,000 * 25,000 0 * Pamela Parris 12,500 * 12,500 0 * Peter Contreras 25,000 * 25,000 0 * Richard Estrada 25,000 * 25,000 0 * Rosiland McDaniel 25,000 * 25,000 0 * Sarah McDaniel 25,000 * 25,000 0 * Steve Goller 12,500 * 12,500 0 * Steve Wernli 12,500 * 12,500 0 * Troy Lynette 25,000 * 25,000 0 * Iris Silva 25,000 * 25,000 0 * Susan Scotland 25,000 * 25,000 0 * Fone Likitkorn 12,500 * 12,500 0 * Total 3,750,000 * Indicates less than 1% 1) Assumes that all shares are sold pursuant to this offering and that no other shares of common stock are acquired or disposed of by the selling shareholders prior to the termination of this offering. Because the selling shareholders may sell all, some or none of their shares or may acquire or dispose of other shares of common stock, no reliable estimate can be made of the aggregate number of shares that will be sold pursuant to this offering or the number or percentage of shares of common stock that each shareholder will own upon completion of this offering. 2) Mr. Dodrill is the president of The Law Office of James G. Dodrill II, PA, which serves as our legal counsel
34 36 CERTAIN TRANSACTIONS In January 2001, we issued to our three founders a total of 3,301,025 shares of our common stock in exchange for expenses paid on behalf of the company in the amount of $1,683 and equipment purchased for the Company in the amount of $4,919. On the transaction date, the Company's common stock had no reliable market value. The shares issued were valued by the amount of reimbursement at $.002 per share. During January 2002, the Company conducted a private placement offering whereby it sold 875,000 shares of its no par value common stock for $.04 per share pursuant to an exemption from registration claimed under sections 3(b) and 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. The shares were sold through the Company's officers and directors. The Company received proceeds in the amount of $35,000 and paid $7,500 in related offering expenses as of February 15, 2002. In September 2001, the Company issued 250,000 shares of its common stock to the Law Office of James G. Dodrill II, P.A. as a retainer for legal services. The transaction was valued at $.04 per share in accordance with contemporaneous stock sales in January 2002. In March 2001, the Company issued 750,000 shares of its common stock to Jaime Luis Perez Marquez, an independent consultant, in exchange for financial consulting services valued at $15,000. On the transaction date, the Company's common stock had no reliable market value. The shares issued were valued by the amount of services provided at $.02 per share. As a result, the Company recognized a stock-based compensation expense totaling $15,000 in the accompanying financial statements. In March 2001, the Company issued 1,250,000 shares of its common stock to Graciela Ballesteros De Colomer, a business consultant, in exchange for a database of marketing and suppliers contacts and related assets valued at $25,000. On the transaction date, the Company's common stock had no reliable market value. The Company valued the shares issued by the value of the marketing expenditure at $.02 per share. As a result, the Company recognized a stock-based compensation expense totaling $25,000 in the accompanying financial statements. In March 2001, the Company issued 625,000 shares of its common stock to Ruben Garduno, a computer consultant, in exchange for systems and software consulting services valued at $12,500. On the transaction date, the Company's common stock had no reliable market value. The shares issued were valued by the amount of services provided at $.02 per share. As a result, the Company recognized a stock-based compensation expense totaling $12,500 in the accompanying financial statements. 35 37 DESCRIPTION OF SECURITIES General Our authorized capital stock consists of 20,000,000 shares of common stock, having no par value per share, and 5,000,000 shares of preferred stock, having no par value per share. As of the date of this prospectus, 7,051,025 shares of common stock and no shares of preferred stock were outstanding. We presently act as the transfer agent for our common stock but, prior to an active trading market developing, anticipate hiring ComputerShare of Denver, Colorado to serve as our transfer agent. Common stock We are authorized to issue 20,000,000 shares of our common stock, having no par value, of which 7,051,025 shares are issued and outstanding as of the date of this prospectus. The issued and outstanding shares of common stock are fully paid and non-assessable. Except as provided by law or our certificate of incorporation with respect to voting by class or series, holders of common stock are entitled to one vote on each matter submitted to a vote at a meeting of shareholders. Subject to any prior rights to receive dividends to which the holders of shares of any series of the preferred stock may be entitled, the holders of shares of common stock will be entitled to receive dividends, if and when declared payable from time to time by the board of directors, from funds legally available for payment of dividends. Upon our liquidation or dissolution, holders of shares of common stock will be entitled to share proportionally in all assets available for distribution to such holders. Preferred stock The board of directors has the authority, without further action by our shareholders, to issue up to 5,000,000 shares of preferred stock, having no par value per share, in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series or the designation of such series. No shares of preferred stock are currently issued and outstanding. The issuance of preferred stock could adversely affect the voting power of holders of common stock and could have the effect of delaying, deferring or preventing a change of our control. Market for Common Equity and Related Stockholder Matters There is no established public market for our common stock and we have arbitrarily determined the offering price. Although we hope to be quoted on the OTC Bulletin Board, our common stock is not currently listed or quoted on any quotation service. There can be no assurance that our common stock will ever be quoted on any quotation service or that any market for our stock will ever develop or, if developed, will be sustained. 36 38 As of April 11, 2002, there were 40 shareholders of record of our common stock and a total of 7,051,025 shares outstanding. Of the 7,051,025 shares of common stock outstanding, 3,301,025 shares of common stock are held by officers of the company. All shares of common stock registered pursuant to this Registration Statement will be freely transferable without restriction or registration under the Securities Act, except to the extent purchased or owned by our "affiliates" as defined for purposes of the Securities Act. Under certain circumstances, restricted shares may be sold without registration, pursuant to the provisions of rule 144. In general, under rule 144, a person (or persons whose shares are aggregated) who has satisfied a one-year holding period may, under certain circumstances, sell within any three-month period a number of restricted securities which does not exceed the greater of one percent of the shares outstanding or the average weekly trading volume during the four calendar weeks preceding the notice of sale required by rule 144. In addition, rule 144 permits, under certain circumstances, the sale of restricted securities without any quantity limitations by a person who is not an affiliate of ours and has satisfied a two-year holding period. Any sales of shares by shareholders pursuant to rule 144 may have a depressive effect on the price of our common stock. 37 39 DISCLOSURE OF SEC POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Our By-Laws provide for the indemnification of directors, officers, former directors and former officers of the corporation to the fullest extent provided by the Corporate Law of the State of Colorado and the By-Laws. These sections generally provide that the Company may indemnify any person who was or is a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative except for an action by or in right of the corporation by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation. Generally, no indemnification may be made where the person has been determined to be negligent or guilty of misconduct in the performance of his or her duties to the Company. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or 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 Securities Act of 1933, and is, therefore, unenforceable. 38 40 PLAN OF DISTRIBUTION Upon effectiveness of this registration statement, we will conduct the sale of the shares we are offering on a self-underwritten, best-efforts basis. This means that we do not have an underwriter and that we will sell the shares directly to investors. Participating on our behalf in the distribution will be Phillip Kilgore, Jeffrey Neale and David Goller, who are exempt from registration as broker dealers under Rule 3a4-1 of the Securities Exchange Act. All shares of our common stock that we are registering for sale by the company that we are able to sell will be sold at a price per share of $0.10. There can be no assurance that we will sell all or any of the shares offered. We have no arrangement or guarantee that we will sell any shares. All subscription checks shall be made to the order of Lexington Barron Technologies, Inc. While we do not anticipate utilizing any registered securities broker-dealers in connection with any sales of the shares and have no arrangements to use any broker-dealers, we may, in our discretion, accept subscriptions for shares through broker-dealers that are members of the National Association of Securities Dealers, Inc. and are willing to, in connection with such sales, pay a commission of up to 10% of the price of each share sold. No officers or directors shall receive any commissions or compensation for their sale of the shares pursuant to the terms hereof. The selling shareholders will sell their shares at a price per share of $0.10 until our shares are quoted on the Over The Counter Bulletin Board and thereafter at prevailing market prices or in privately negotiated transactions. The selling shareholders may sell or distribute their common stock from time to time themselves, or by donees or transferees of, or other successors in interests to, the selling shareholders, directly to one or more purchasers or through brokers, dealers or underwriters who may act solely as agents or may acquire such common stock as principals, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. Accordingly, the prices at which the selling shareholder's shares are sold may be different than the price of shares that we sell. These sales by Selling Shareholders may occur contemporaneously with sales by us. The sale of the common stock offered by the selling shareholders through this prospectus may be affected in one or more of the following: - - Ordinary brokers' transactions; - - Transactions involving cross or block trades or otherwise - - Purchases by brokers, dealers or underwriters as principal and resale by such purchasers for their own accounts pursuant to this prospectus; - - "at the market" to or through market makers or into any market for the common stock which may develop; - - in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales effected through agents; - - in privately negotiated transactions; or - - any combination of the foregoing. 39 41 Brokers, dealers, underwriters or agents participating in the distribution of the shares as agents may receive compensation in the form of commissions, discounts or concessions from the selling shareholders and/or purchasers of the common stock for whom such broker-dealers may act as agent, or to whom they may sell as principal, or both. The compensation paid to a particular broker-dealer may be less than or in excess of customary commissions. Neither we nor any selling shareholder can presently estimate the amount of compensation that any agent will receive. We know of no existing arrangements between any selling shareholder, any other shareholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares. In the event that we use an underwriter or a broker-dealer to consummate the sale of the shares we are registering for sale by the company, we will file a post-effective amendment to this registration statement setting forth the name of such entity and the terms under which such entity is participating in this offering. We will pay all of the expenses incident to the registration, offering and sale of the shares to the public, but will not pay commissions and discounts, if any, of underwriters, broker-dealers or agents, or counsel fees or other expenses of the selling shareholders. We have also agreed to indemnify the selling shareholders and related persons against specified liabilities, including liabilities under the Securities Act. We have advised the selling shareholders that while they are engaged in a distribution of the shares included in this prospectus they are required to comply with Regulation M promulgated under the Securities Exchange Act of 1934, as amended. With certain exceptions, Regulation M precludes the selling shareholders, any affiliated purchasers, and any broker-dealer or other person who participates in such distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases make in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the shares offered hereby in this prospectus. 40 42 LEGAL MATTERS The Law Office of James G. Dodrill II, PA, of Boca Raton, Florida will give an opinion for us regarding the validity of the common stock offered in this prospectus. Mr. James Dodrill, president of The Law Office of James G. Dodrill II, PA is the holder of 250,000 shares of our common stock, which was received in September 2001 in lieu of payment for services rendered. Mr. Dodrill is a selling shareholder under this registration statement and all shares he holds are being registered hereunder. EXPERTS The financial statements as of December 31, 2001 and February 15, 2002 and for the period from August 23, 2000 (inception) to the year ended December 31, 2001 and January 1, 2002 through February 15, 2002 included in this prospectus have been so included in reliance on the report of Cordovano & Harvey, independent certified public accountants, given on the authority of said firm as experts in auditing and accounting. 41 43 WHERE YOU CAN FIND MORE INFORMATION We have filed a registration statement under the Securities Act with respect to the securities offered hereby with the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. This prospectus, which is a part of the registration statement, does not contain all of the information contained in the registration statement and the exhibits and schedules thereto, certain items of which are omitted in accordance with the rules and regulations of the Commission. For further information with respect to Lexington Barron Technologies, Inc. and the securities offered hereby, reference is made to the registration statement, including all exhibits and schedules thereto, which may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N. W., Room 1024, Washington, D. C. 20549, at prescribed rates during regular business hours. You may obtain information on the operation of the public reference facilities by calling the Commission at 1-800-SEC-0330. Also, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission at http://www.sec.gov. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance reference is made to the copy of such contract or document filed as an exhibit to the registration statement, each such statement being qualified in its entirety by such reference. We will provide, without charge upon oral or written request of any person, a copy of any information incorporated by reference herein. Such request should be directed to us at Lexington Barron Technologies, Inc., 102 S. Tejon Street, Suite 1100, Colorado Springs, Colorado 80903, attention: Phillip Kilgore. Following the effectiveness of this registration statement, we will file reports and other information with the Commission. All of such reports and other information may be inspected and copied at the Commission's public reference facilities described above. The Commission maintains a web site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. The address of such site is http://www.sec.gov. In addition, we intend to make available to our shareholders annual reports, including audited financial statements, unaudited quarterly reports and such other reports as we may determine. 42 44 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Index to Financial Statements Page -------- Independent Auditors' Report........................................ F-2 Balance Sheets at February 15, 2002 and December 31, 2001........... F-3 Statements of Operations from January 1 through February 15, 2002, for the year ended December 31, 2001, from August 23, 2000 (inception) through December 31, 2000, and from August 23, 2000 (inception) through February 15, 2002.................... F-4 Statement of Changes in Shareholders' Equity for the period from August 23, 2000 (inception) through February 15, 2002......... F-5 Statements of Cash Flows from January 1 through February 15, 2002, for the year ended December 31, 2001, from August 23, 2000 (inception) through December 31, 2000, and from August 23, 2000 (inception) through February 15, 2002.................... F-6 Notes to Financial Statements....................................... F-7 45 Independent Auditors' Report The Board of Directors Lexington Barron Technologies, Inc.: We have audited the accompanying balance sheets of Lexington Barron Technologies, Inc. as of February 15, 2002 and December 31, 2001, and the related statements of operations, changes in shareholders' equity, and cash flows for the period from January 1 through February 15, 2002, the year ended December 31, 2001, from August 23, 2000 (inception) through December 31, 2000, and from August 23, 2000 (inception) through February 15, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audits 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 audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lexington Barron Technologies, Inc. as of February 15, 2002 and December 31, 2001, and the results of its operations, changes in shareholders' equity, and cash flows for the period from January 1 through February 15, 2002, the year ended December 31, 2001, from August 23, 2000 (inception) through December 31, 2000, and from August 23, 2000 (inception) through February 15, 2002 in conformity with accounting principles generally accepted in the United States. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered significant operating losses since inception, which raises a substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Cordovano and Harvey, P.C. Denver, Colorado April 2, 2002 F-2 46 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Balance Sheets February 15, December 31, 2002 2001 Assets ------------ ------------ Cash....................................... $ 21,697 $ - Accounts receivable........................ 3,000 - Equipment, net of accumulated depreciation of $2,487 and $2,282, respectively....... 5,932 2,637 Deferred offering costs (Note 3)........... 10,000 10,000 ------------ ------------ $ 40,629 $ 12,637 ============ ============ Liabilities and Shareholders' Equity Liabilities: Due to officer (Note 2).................. $ 100 $ 100 ------------- ------------ Total liabilities........... 100 100 ------------- ------------ Shareholders' equity (Notes 2 and 3): Preferred stock , no par value; authorized 5,000,000 shares, issued and outstanding -0- and -0- shares, respectively.............. - - Common stock , no par value; authorized 20,000,000 shares, issued and outstanding 7,051,025 and 6,176,025 shares, respectively.... 96,602 69,102 Additional paid-in capital.............. 197,575 183,800 Subscription receivable................. (2,000) - Deficit accumulated during development stage..................... (251,648) (240,365) ------------- ------------ Total shareholders' equity........ 40,529 12,537 ------------- ------------ $ 40,629 $ 12,637 ============= ============ See accompanying notes to financial statements. F-3 47 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Statement of Operations
August 23, August 23, 2000 2000 January 1, For the (Inception) (Inception) through Year Ended through through February 15, December 31, December 31, February 15, 2002 2001 2000 2002 ------------ ------------ ------------ -------------- Consulting revenue............................... $ 3,000 $ - $ - $ 3,000 ------------ ------------ ------------ -------------- Operating expenses: Stock-based compensation (Notes 2 and 3): Consulting .................................. - 27,500 - 27,500 Marketing.................................... - 25,000 - 25,000 Expense reimbursement........................ - - 1,683 1,683 Contributed services (Note 2).................. 12,650 171,800 - 184,450 Contributed rent (Note 2)...................... 1,125 9,000 3,000 13,125 Depreciation................................... 205 1,640 100 1,945 Other general and administrative costs......... 303 - 642 945 ------------ ------------ ------------ ------------- Total operating expenses................. 14,283 234,940 5,425 254,648 ------------ ------------ ------------ ------------- Loss before income taxes................. (11,283) (234,940) (5,425) (251,648) Income tax provision (Note 4).................. - - - - ------------ ------------ ------------ ------------- Net loss................................. $ (11,283) $ (234,940) $ (5,425) $ (251,648) ============ ============ ============ ============= Basic and diluted loss per share................. $ (0.00) $ (0.05) $ (0.00) ============ ============ ============ Weighted average common shares outstanding....... 6,176,025 5,184,038 3,301,025 ============ ============ ============
See accompanying notes to financial statements. F-4 48 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Statement of Changes in Shareholders' Equity
Additional During Common Stock Paid-In Subscription Development Shares Amount Capital Receivable Stage Total ------ ------ ---------- ------------ ------------- ---- Balance at August 23, 2000 (inception).......... - $ - $ - $ - $ - $ - December 2000, common stock issued to founders in exchange for expenses paid on behalf of the Company ($.002/share) (Note 2)................... 3,301,025 6,602 - - - 6,602 Value of office rent contributed by an officer (Note 2)...................... - - 3,000 - - 3,000 Net loss......................................... - - - - (5,425) (5,425) --------- -------- ----------- -------------- -------------- -------- Balance at December 31, 2000.................... 3,301,025 6,602 3,000 - (5,425) 4,177 March 2001, common stock issued to consultants in exchange for services ($.02/share) (Note 3)........... 2,625,000 52,500 - - - 52,500 September 2001, common stock issued to lawyer as retainer ($.04/share) (Note 3).................... 250,000 10,000 - - - 10,000 Value of services contributed by officers (Note 2)..................... - - 171,800 - - 171,800 Value of office rent contributed by an officer (Note 2)...................... - - 9,000 - - 9,000 Net loss......................................... - - - - (234,940) (234,940) --------- -------- --------- ------------ ---------- --------- Balance at December 31, 2001.................... 6,176,025 69,102 183,800 - (240,365) 12,537 January 2002, sale of common stock pursuant to a private placement offering, net of offering costs of $7,500 ($.04/share) (Note 3)................... 875,000 27,500 - (2,000) - 25,500 Value of services contributed by officers (Note 2).................... - - 12,650 - - 12,650 Value of office rent contributed by an officer (Note 2)..................... - - 1,125 - - 1,125 Net loss........................................ - - - - (11,283) (11,283) ---------- --------- ---------- ------------- ----------- ---------- Balance at February 15, 2002................... 7,051,025 $ 96,602 $ 197,575 $(2,000) $(251,648) $ 40,529 ========== ========= ========== ============= =========== ==========
See accompanying notes to financial statements. F-5 49 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Statements of Cash Flows
August 23, August 23, 2000 2000 January 1, For the (Inception) (Inception) through Year Ended through through February 15, December 31, December 31, February 15, 2002 2001 2000 2002 ------------ ------------ ------------ ------------ Cash flows from operating activities: Net loss........................................ $ (11,283) $ (234,940) $ (5,425) $ (251,648) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation................................ 205 1,640 642 2,487 Common stock issued in exchange for services and property (Notes 2 and 3)...... - 52,500 1,683 54,183 Services contributed by officers (Note 2)... 12,650 171,800 - 184,450 Rent contributed by an officer (Note 2)..... 1,125 9,000 3,000 13,125 Changes in operating assets and liabilities: Receivables............................. (3,000) - - (3,000) ------------ ------------ ------------ ------------ Net cash provided by (used in) operating activities.............. (303) - (100) (403) ------------ ------------ ------------ ------------ Cash flows from investing activities: Capital Expenditures............................ (3,500) - - (3,500) ------------ ------------ ------------ ------------ Net cash (used in) investing activities.............. (3,500) - - (3,500) ------------ ------------ ------------ ------------ Cash flows from financing activities: Working capital advances from an officer (Note 2).............................. - - 100 100 Net proceeds from sale of common stock (Note 3). 25,500 - - 25,500 ------------ ------------ ------------ ------------ Net cash provided by financing activities.............. 25,500 - 100 25,600 ------------ ------------ ------------ ------------ Net change in cash................ 21,697 - - 21,697 Cash, beginning of period......................... - - - - ------------ ------------ ------------ ------------ Cash, end of period............................... $ 21,697 $ - $ - $ 21,697 ============ ============ ============ ============ Supplemental disclosure of cash flow information: Cash paid for: Income taxes................................ $ - $ - $ - $ - ============ ============ ============ ============ Interest.................................... $ - $ - $ - $ - ============ ============ ============ ============ Non-cash investing and financing activities: Common stock issued for equipment (Note 2)...................... $ - $ - $ (4,919) $ (4,919) ============ ============ ============ ============ Common stock issued as retainer (Note 3)........................ $ - $ (10,000) $ - $ (10,000) ============ ============ ============ ============
See accompanying notes to financial statements. F-6 50 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Notes to Financial Statements (1) Summary of Significant Accounting Policies Organization and Basis of Presentation Lexington Barron Technologies, Inc. (the "Company") was incorporated on August 23, 2000 to engage in financial, operational and systems consulting to startup and small businesses. The Company's services include market research, business plan development, strategy development, financial modeling and forecasting, and Pre-IPO and IPO consulting. Inherent in the Company's business are various risks and uncertainties, including its limited operating history, historical operating losses, and dependence upon its officers and strategic alliances. Management plans to raise capital through the sale of securities to enable the Company to expand its operations. The Company's future success will be dependent upon its ability to create and provide effective and competitive consulting services on a timely and cost-effective basis and the Company's ability to locate, attract and retain quality customers. Development Stage Company The Company is in the development stage in accordance with Financial Accounting Standards Board Statements of Financial Accounting Standards ("SFAS") No. 7 Accounting and Reporting by Development Stage Enterprises. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying financial statements contain estimates of the fair value of the consideration (shares of common stock) exchanged for expenses, equipment, compensation and consulting services that have a material affect on the financial statements. In estimating the fair value of the shares of the common stock issued, the Board of Directors considered contemporaneous transactions with unrelated third parties. In estimating the value of contributed services, the Board of Directors considered prevailing rates. Cash and Cash Equivalents The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. The Company had no cash equivalents at February 15, 2002 or December 31, 2001. Valuation and Qualifying Accounts The Company has no allowance established for doubtful accounts as management considers all receivables to be fully collectible. Property, equipment and depreciation Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which is F-7 51 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Notes to Financial Statements estimated to be three years. Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing equipment, are capitalized and depreciated. F-8 52 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Notes to Financial Statements Offering Costs The Company incurred consulting fees related to the preparation of its private placement memorandum and legal fees for its proposed Form SB-2 registration statement. Such costs are initially deferred until the offering is completed, at which time they will be recorded as a reduction of gross proceeds from the offering. Impairment of Long-Lived Assets The Company evaluates the carrying value of its long-lived assets under the provisions of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. SFAS No. 121 requires impairment losses to be recorded on long-lived assets used in operations, including goodwill, when indicators of impairment are present and the undiscounted future cash flows estimated to be generated by those assets are less than the assets' carrying amount. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying value or fair value, less costs to sell. Income Taxes The Company accounts for income taxes under the provisions of SFAS No. 109, Accounting for Income Taxes. SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Revenue Recognition Revenue is recognized when earned. The Company's revenue recognition policies are in compliance with all applicable accounting regulations, including Securities and Exchange Commission Staff Accounting Bulletin No. 101, Revenue Recognition, and American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 97-2, Software Revenue Recognition, and SOP 98-9, Modification of SOP 97-2, With Respect to Certain Transactions. Revenue from consulting and other services is recognized as the consultation and other services are performed. Revenues from technology consulting, user fees and marketing services contracts are recognized ratably over the contract period in accordance with the period in which the services are performed. Revenues attributable to undelivered elements, including technical support are recognized ratably on a straight-line basis over the contract period. Financial Instruments The Company's financial instruments consist of cash and accounts receivable. At February 15, 2002 and December 31, 2001, the fair value of the Company's financial instruments approximate fair value due to the short-term maturity of the instruments. F-9 53 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Notes to Financial Statements Stock-based Compensation Stock-based compensation is valued by either the value of the services provided or the value of the stock issued based on contemporaneous stock sales. (2) Related Party Transactions An officer contributed office space to the Company during all periods presented. The office space was valued at $750 per month based on the market rate in the local area and is included in the accompanying financial statements as contributed rent expense with a corresponding credit to additional paid-in capital. Three officers contributed product and service development, business development and administrative services to the Company during the period from January 1, 2001 through February 15, 2002. The time and effort was recorded in the accompanying financial statements based on the prevailing rates for such services, which ranged from $50 to $100 per hour based on the level of services performed. The services are reported as contributed services with a corresponding credit to additional paid-in capital. During December 2000, the Company issued 3,301,025 shares of it's no par value restricted common stock to three officers of the Company in exchange for expenses paid on behalf of the company in the amount of $1,683 and equipment purchased for the Company in the amount of $4,919. On the transaction date, the Company's common stock had no reliable market value. The shares issued were valued by the amount of reimbursement at $.002 per share. On August 23, 2000, an officer advanced the Company $100 for working capital. The advance is included in the accompanying financial statements as due to officer. (3) Shareholders' Equity Preferred Stock The Board of Directors is authorized to issue 5,000,000 shares of no voting power, no par value preferred stock. The Company had no preferred shares issued and outstanding at February 15, 2002 or December 31, 2001. Private Placement Offering During January 2002, the Company conducted a private placement offering whereby it sold 875,000 shares of its no par value common stock for $.04 per share pursuant to an exemption from registration claimed under sections 3(b) and 4(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. The shares were sold through the Company's officers and directors. The Company received proceeds in the amount of $33,000, a subscription receivable in the amount of $2,000 and paid $7,500 in related offering expenses as of February 15, 2002. Common Stock Issuances In September 2001, the Company issued 250,000 shares of its common stock as a retainer for legal services related to the Company's proposed Form SB-2 registration statement. The transaction was valued at $.04 per share in accordance with contemporaneous stock sales in January 2002. As a result, the Company recognized deferred offering costs totaling $10,000 in the accompanying financial statements. F-10 54 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Notes to Financial Statements In March 2001, the Company issued 750,000 shares of its common stock in exchange for financial consulting services valued at $15,000. On the transaction date, the Company's common stock had no reliable market value. The shares issued were valued by the amount of services provided at $.02 per share. As a result, the Company recognized a stock-based compensation expense totaling $15,000 in the accompanying financial statements. In March 2001, the Company issued 1,250,000 shares of its common stock in exchange for a database of marketing and suppliers contacts and related assets valued at $25,000. On the transaction date, the Company's common stock had no reliable market value. The Company valued the shares issued by the value of the marketing expenditure at $.02 per share. As a result, the Company recognized a stock-based compensation expense totaling $25,000 in the accompanying financial statements. In March 2001, the Company issued 625,000 shares of its common stock in exchange for systems and software consulting services valued at $12,500. On the transaction date, the Company's common stock had no reliable market value. The shares issued were valued by the amount of services provided at $.02 per share. As a result, the Company recognized a stock-based compensation expense totaling $12,500 in the accompanying financial statements. F-11 55 LEXINGTON BARRON TECHNOLOGIES, INC. (A Development Stage Company) Notes to Financial Statements (4) Income Taxes A reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows: August 23, 2000 January 1 For the (Inception) through Year Ended through February 15, December 31, December 31, 2002 2001 2000 ------------ ------------ ------------ U.S. federal statutory graduated rate... 15.00% 15.00% 15.00% State income tax rate, net of federal benefit................. 4.63% 4.63% 4.63% Contributed rent and services........... -23.81% -15.27% -11.17% Net operating loss for which no tax benefit is currently available......... 4.18% -4.36% -8.46% ------------ ------------ ------------ 0.00% 0.00% 0.00% ============ ============ ============ At February 15, 2002, deferred tax assets consisted of a net tax asset of $8,518, due to operating loss carryforwards of $54,073, which was fully allowed for, in the valuation allowance of $8,518. The valuation allowance offsets the net deferred tax asset for which there is no assurance of recovery. The change in the valuation allowance for the period from January 1 through February 15, 2002, the year ended December 31, 2001 and the period from August 23, 2000 (inception) through December 31, 2000 totaled ($623), $8,777 and $364, respectively. The current tax benefit also totaled $8,518, $9,141 and $364 for the period from January 1 through February 15, 2002, the year ended December 31, 2001 and the period from August 23, 2000 (inception) through December 31, 2000, respectively. The net operating loss carryforward expires through the year 2022. The valuation allowance will be evaluated at the end of each year, considering positive and negative evidence about whether the deferred tax asset will be realized. At that time, the allowance will either be increased or reduced; reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no longer required. Should the Company undergo an ownership change as defined in Section 382 of the Internal Revenue Code, the Company's tax net operating loss carryforwards generated prior to the ownership change will be subject to an annual limitation, which could reduce or defer the utilization of these losses. (5) Subsequent event The Company plans to file a Form SB-2 Registration Statement to register to sell 5,000,000 shares of its no par common stock at $.10 per share and 3,750,000 shares from selling shareholders in April 2002. F-12 56 No dealer, salesman or other person is authorized to give any information or to make any representations not contained in this prospectus in connection with the offer made hereby, and, if given or made, such information or representations must not be relied upon as having been authorized by Lexington Barron Technologies, Inc. This prospectus does not constitute an offer to sell or a solicitation to an offer to buy the securities offered hereby to any person in any state or other jurisdiction in which such offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that the information contained herein is correct as of any time subsequent to the date hereof. Until _________ __, 2002 (90 days after the date of this prospectus) all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. - ---------------------------------------- TABLE OF CONTENTS Page ---- Prospectus Summary.................... 3 Lexington Barron Technologies, Inc. The Offering.......................... 4 Summary Financial Data................ 6 Risk Factors.......................... 7 Use of Proceeds.......................14 Determination of Offering Price.......16 Dividend Policy.......................16 Dilution..............................17 8,750,000 SHARES Management's Discussion and Analysis..18 Business..............................22 Management............................31 Principal Shareholders................33 Selling Shareholders..................34 Certain Transactions..................35 Description of Securities.............36 ---------- Indemnification.......................38 PROSPECTUS Plan of Distribution..................39 ---------- Legal Matters.........................41 Experts...............................41 Where You Can Find More Information...42 Financial Statements.................F-1 - ---------------------------------------- April 15, 2002 57 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS Our By-Laws provide for the indemnification of directors, officers, former directors and former officers of the corporation to the fullest extent provided by the Corporate Law of the State of Colorado and the By-Laws. These sections generally provide that the Company may indemnify any person who was or is a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative except for an action by or in right of the corporation by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation. Generally, no indemnification may be made where the person has been determined to be negligent or guilty of misconduct in the performance of his or her duties to the Company. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or 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 Securities Act of 1933, and is, therefore, unenforceable. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION We estimate that expenses in connection with this registration statement will be as follows: SEC registration fee* $ 80.50 Accounting fees and expenses $ 7,500.00 Legal $ 57,500.00 Miscellaneous* $ 4,919.50 ------------ Total $ 70,000.00 * estimates II-1 58 ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES The following information is furnished with regard to all securities sold by us within the past three years that were not registered under the Securities Act. The issuances described hereunder were made in reliance upon the exemptions from registration set forth in Section 4(2) of the Securities Act or Regulation D, Rule 504 of the Securities Act. None of the foregoing transactions involved a distribution or public offering. Date Name # of Shares Total Price - --------------------------------------------------------------------- 1/1/00 Phillip Kilgore 1,610,475 * 1/1/00 Jeffrey Neale 848,955 * 1/1/00 David Goller 841,595 * 4/5/01 Jamie Luis Perez Marquez 750,000 * 4/20/01 Graciela Ballersteros DeColomer 1,250,000 * 5/30/01 Ruben Garduno 625,000 * 9/28/01 Jim Dodrill 250,000 * 1/16/02 Camilla Edblem 50,000 $2,000 1/16/02 Darren Woosley 25,000 $1,000 1/16/02 Derek Bannister 25,000 $1,000 1/16/02 Eric Majors 50,000 $2,000 1/16/02 Ernesto Angel 25,000 $1,000 1/16/02 Gary Killian 12,500 $500 1/28/02 Brent Madison 25,000 $1,000 1/28/02 Chuck Fishel 50,000 $2,000 1/28/02 David Lirette 12,500 $500 1/28/02 Dennis Davis 50,000 $2,000 1/28/02 George McDaniel 25,000 $1,000 1/28/02 Jesus Romero 25,000 $1,000 1/28/02 Joshua Wolcott 25,000 $1,000 1/28/02 Kerri Wolcott 25,000 $1,000 1/28/02 Kim Arel 25,000 $1,000 1/28/02 Marcy Richfield 12,500 $500 1/28/02 Monte J. Diede 25,000 $1,000 1/28/02 Nathan Enger 25,000 $1,000 1/28/02 Nolen G. Brown 25,000 $1,000 1/28/02 Pamela Parris 12,500 $500 1/28/02 Peter Contreras 25,000 $1,000 1/28/02 Richard Estrada 25,000 $1,000 1/28/02 Rosiland McDaniel 25,000 $1,000 1/28/02 Sarah McDaniel 25,000 $1,000 1/28/02 Steve Goller 12,500 $500 1/28/02 Steve Wernli 12,500 $500 1/28/02 Troy Lynette 25,000 $1,000 1/29/02 Iris Silva 25,000 $1,000 1/29/02 Susan Scotland 25,000 $1,000 2/7/02 Fone Likitkorn 12,500 $500 * issued for services rendered and reimbursements for expenses. II-2 59 ITEM 27. EXHIBITS Exhibit Number Description - -------------- ----------- 3.1 Articles of Incorporation of Lexington Barron Technologies, Inc. 3.2 Bylaws of Lexington Barron Technologies, Inc. 3.3 Specimen certificate of the common stock of Lexington Barron Technologies, Inc. 5.1 Opinion of Law Office of James G. Dodrill II, PA as to legality of securities being registered 23.1 Consent of Cordovano & Harvey 23.2 Consent of Law Office of James G. Dodrill II, PA (included in Exhibit 5.1) II-3 60 ITEM 28. UNDERTAKINGS Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the Company 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 and as expressed in the Act and is, therefore, unenforceable. The Company hereby undertakes to: (1) File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: i. Include any prospectus required by Section 10(a)(3) of the Securities Act; ii. Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. iii. Include any additional or changed material information on the plan of distribution. (2) For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering. (3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. (4) For determining any liability under the Securities Act, treat the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Company under Rule 424(b)(1) or (4) or 497(h) under the Securities Act as part of this registration statement as of the time the Commission declared it effective. (5) For determining any liability under the Securities Act, treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time as the initial bona fide offering of those securities. (6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised by the Securities and Exchange Commission that 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 than the payment by us of expenses incurred or paid by one of our directors, officers or controlling persons 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 us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-4 61 Signatures In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable ground to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Colorado Springs state of Colorado, on April 15, 2002. LEXINGTON BARRON TECHNOLOGIES, INC. By:/s/ Phillip Kilgore ------------------- Phillip Kilgore Principal Executive Officer, President, Principal Financial Officer and Chairman of the Board of Directors In accordance with the requirements of the Securities Act of 1933, this registration statement has been signed by the following person in the capacities indicated on April 15, 2002. By:/s/ Phillip Kilgore ------------------- Phillip Kilgore Principal Executive Officer President Principal Financial Officer and Chairman of the Board of Directors By:/s/ David A. Goller ------------------- David A. Goller Executive Vice President and Director By:/s/ Jeffrey A. Neal ------------------- Jeffrey A. Neal Vice President and Director 62 EX-3.1 3 lexbararticles.txt ARTICLES OF INCORPORATION FOR LEXINGTON BARRON Articles of Incorporation of Lexington Barron Technologies, Inc. ----------------------------------- adopted August 18, 2000 A Corporation formed under the statutes of The State of Colorado of the United States of America. 1 1 ARTICLE I CORPORATION NAME AND ADDRESS SECTION 1. The corporation name shall be, "Lexington Barron Technologies, Inc." and shall hereafter be referred to as the Corporation. Lexington Barron Technologies, Inc. shall be established in the State of Colorado of the United States of America. SECTION 2. The principal business address of Lexington Barron Technologies, Inc. shall be: Lexington Barron Technologies, Inc. 2 N. Cascade Ave. Suite 1100 Colorado Springs, CO 80903 ARTICLE II PURPOSE OF LEXINGTON BARRON TECHNOLOGIES, INC. SECTION 1. Lexington Barron Technologies, Inc. is formed to engaged in the following business endeavors: a. Technical report writing and market analysis for technology companies. b. Creation and maintenance of a web site that hosts technical market reports. ARTICLE III SHARES ISSUED SECTION 1. The classes of shares that will be issued are Type A, Common Shares with full voting rights attached to each share and Type B, Preferred Shares without voting rights. SECTION 2. The total number of Authorized shares are twenty five million (25,000,000) consisting of 20,000,000 Shares of Type A and 5,000,000 Shares of Type B. SECTION 3. There will be no Par Value for each share or a Par Value of zero (0). ARTICLE IV INTIAL REGISTERED AGENT SECTION 1. The initial Registered Agent shall be: a. Eric Majors 2 N. Cascade Ave. Suite 1100 Colorado Springs, CO 80903 b. The undersigned consents to the appointment as the initial Registered Agent. /s/ Eric Majors _____________________________________ Signature of Eric Majors, Registered Agent c. These Articles are to have the delayed effective date of _______________ 2 2 ARTICLE V INTIAL BOARD OF DIRECTORS SECTION 1. There will be three directors serving on the Board of Directors of Lexington Barron Technologies, Inc.. SECTION 2. The name and addresses of the initial Board Members are: Phillip W. Kilgore 18135 Spur Ranch Rd., Peyton, CO 80831 Jeffrey A. Neal 3110 Navigation Dr., Colorado Springs, CO 80920 David A. Goller 3115 Birnamwood Dr., Colorado Springs, CO 80920 ARTICLE VI CORPORATE OFFICERS SECTION 1. The office of the, Chief Executive Officer will be held by: Phillip W. Kilgore 18135 Spur Ranch Rd., Peyton, CO 80831 SECTION 2: The office of the President will be held by: Jeffrey A. Neal 3110 Navigation Dr., Colorado Springs, CO 80920 SECTION 3: The office of the Vice President will be held by: David A. Goller 3115 Birnamwood Dr., Colorado Springs, CO 80920 ARTICLE VII INCORPORATORS SECTION 1. The names and addresses of the initial share holders and Incorporators are: a. Phillip W. Kilgore 18135 Spur Ranch Rd., Peyton, CO 80831 b. Jeffrey A. Neal 3110 Navigation Dr., Colorado Springs, CO 80920 c. David A. Goller 3115 Birnamwood Dr., Colorado Springs, CO 80920 3 3 d. Ernesto Rojano Angel 12549 McKenzie Ct., Broomfield, CO 80020 c. The undersigned are acting as incorporator(s) of a corporation under the Colorado Business Corporation Act, adopt the above Articles of Incorporation. /s/ Phillip W. Kilgore _____________________________ Signature, Phillip W. Kilgore /s/ Jeffrey A. Neal _____________________________ Signature, Jeffrey A. Neal /s/ David A. Goller _____________________________ Signature, David A. Goller 4 4 EX-3.2 4 lexbarbylaws.txt BYLAWS FOR LEXINGTON BARRON BYLAWS OF LEXINGTON BARRON TECHNOLOGIES, INC. 1 BYLAWS OF LEXINGTON BARRON TECHNOLOGIES, INC. ARTICLE I Section 1. The known place of business of the Corporation, which shall also be known as its principal place of business, shall be at the address so designated in the Articles of Incorporation, or if no address is so designated, at the address of the Corporation's statutory agent as set forth in the Articles of Incorporation. The address of the Corporation's known place of business may be changed from time to time by the Board in the manner provided in the Colorado Revised Statutes and without amending the Articles of Incorporation. Section 2. The Corporation may have offices at such places, both within and without the State of Colorado, as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II Section 1. Any meeting of the stockholders for the election of directors or for any other purpose may be held at such time and place, within or without the State of Colorado, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. An Annual meeting of stockholders shall be held on such a date as to be determined by the Board of Directors of the Corporation, commencing in 2000, at the principal place of business of the Corporation in the State of Colorado, or on such other date and at such other place as the Board of Directors may specify, within or without the State of Colorado, at which meeting the stockholders entitled to vote shall elect a board of directors (by the cumulative system of voting if, but only if, the same shall then be mandatory for corporations organized under the laws of the State of Colorado) and shall transact such other business as may properly be brought before the meeting. The candidates receiving the greatest number of votes, up to the number of directors to be elected, shall be the directors. Section 3. Written notice stating the time and place of the annual meeting shall be given to each stockholder entitled to vote thereat at least ten days (but no more than fifty days) before the date of the meeting. Section 4. The officer who has charge of the stock transfer books of the Corporation shall prepare and make a complete record of the stockholders entitled to vote at each meeting of the stockholders, arranged in alphabetical order with the address of and the number of shares and voting shares held by each. Such record shall be produced and kept open at the time and place of the meeting during the whole time thereof and shall be subject to the inspection of any stockholder during the whole time of the meeting for the purposes thereof. 2 2 Section 5. A special meeting of the stockholders, for any purpose or purposes, unless otherwise provided by statute or by the Articles of Incorporation, may be called by the President and shall be called by the President or Secretary at the request in writing of [at least 10% of] the Board of Directors, or at the request in writing of stockholders owning at least ten percent (10%) un amount of all of the stock of the Corporation issued and outstanding and entitled to vote at such meeting. Such request shall state the purpose or purposes of the proposed meeting. Section 6. Written notice of a special meeting of stockholders, stating in reasonable detail the time, place and purposes thereof, shall be given to each stockholder entitled to vote thereat, at least ten days (but no more than fifty days) before the date fixed for the meeting. Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote on any matter to be considered thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Articles of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, a majority of the stockholders entitled to vote on any matter to be considered thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time for an aggregate period not in excess of 30 days, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power with respect to each question, present in person or represented by proxy, shall decide such question brought before meeting, unless the question is one upon which, by express provision of statute or of the Articles of Incorporation or these Bylaws, a different vote is required, in which case such express provision shall govern and control the decisions of such question. Section 10. Each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, except as may otherwise be specified by the Articles of Incorporation. The Board of Directors may establish such reasonable record of dates for determining stockholders entitled to notice of a meeting and to vote thereat, and for other purposes, as may be consistent with applicable law, as contemplated by Article VII, Section 5 hereof. No proxy shall be effective unless in writing and in compliance with (i) applicable law and (ii) such reasonable requirements as the Board of Directors may prescribe. Unless demanded by a shareholder present in person or by proxy at any meeting of the shareholders and entitled to vote thereat, or unless so directed by the chairman of the meeting, the vote thereat on any question need not be by ballot. If such demand or direction is made, a vote by ballot shall be taken, and each ballot shall be signed by the shareholder voting, or by his or her proxy, and shall state the number of shares voted. 3 3 Section 11. Any action requires or permitted to be taken at a meeting of stockholders may be effected by an instrument in writing setting forth such action, executed by each stockholder with the minutes maintained for meetings of stockholders. ARTICLE III DIRECTORS Section 1. The business and affairs of the Corporation shall be, managed by its Board of Directors, which may exercise all powers of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders. Section 2. The number of directors shall be fixed from time to time by resolution of the Board of Directors within the limits (if any) prescribed by the Articles of Incorporation. The directors shall be elected at the annual meeting of stockholders, or by unanimous written consent of stockholders (in accordance with Article II hereof), except as provided in Section 4 of this Article; and each director elected shall hold office until his successor is elected unless sooner displaced. Directors need not be stockholders. Subject to the limitations imposed by applicable law, the holders of a majority of the shares then entitled to a vote at an election of directors may remove a director or directors (or all directors) at any time, with or without cause. Section 3. Any director may resign at any time by giving written notice of his or her resignation to the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time when it shall become effective is not specified therein, it shall take effect immediately upon its receipt by the President or the Secretary; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 4. Vacancies, by death, resignation, removal or otherwise, and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors, or the sole remaining director, then in office, though less than a quorum; and the director(s) so chosen shall hold office until the next election of directors when their successor(s) are duly elected, unless sooner displaced. MEETINGS OF THE BOARD OF DIRECTORS Section 5. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Colorado; and such meetings may behold by means of conference telephone or other similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to such communication shall constitute presence in person at such meeting. Section 6. The first meeting of each newly elected Board of Directors shall be held at the same place as, and immediately after, the annual meeting of stockholders. No notice of such meeting shall be necessary to the newly elected directors in order legally to 4 4 constitute the meeting, provided a quorum shall be present. In the event such meeting is not held at such time and place, or in the event a unanimous written consent of stockholders shall be filed in lieu of the annual meeting of stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors. Section 7. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board. Section 8. Special meetings of the Board of Directors may be called by the President and shall be called by the Secretary upon the written request of a majority of the Board of Directors. Notice of special meetings of the Board of Directors shall be given to each director at least twenty-four hours before the time of the meeting. Section 9. At all meetings of the Board, a majority of the total number of directors then set shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except, in either event, as may be otherwise specifically provided by statute or by the Articles of Incorporation or these Bylaws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting until a quorum shall be present. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed. Section 10. Any action required or permitted to be taken at a meeting of directors may be effected by an instrument in writing setting forth such action, executed by al the directors, which instrument shall be filed at the principal office of the Corporation or with the minutes maintained for meetings or directors. COMMITTEES OF DIRECTORS Section 11. The Board of Directors may, by resolution passed by a majority of the whole Board, designate, change or dissolve one or more committees, each committee to consist of one or more of the directors of the Corporation, which (to the extent provided in the resolution, subject to the Articles of Incorporation and applicable law) shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution. Section 12. The committees shall keep regular minutes of their proceedings and report the same to the Board of Directors when required. COMPENSATION OF DIRECTORS 5 5 Section 11. As set by resolution of the Board, the directors may be; paid their actual expenses, if any, of attending meetings of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or stated salaries as directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefore. Members of special or standing committees may similarly be allowed compensation for attending committee meetings. ARTICLE IV NOTICES Section 1. Except as otherwise provided below, notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the Corporation. Notice by mail shall be deemed to be given three days after the time when the same shall be mailed, postage prepaid, to such addresses. Notice to directors may be given by telegram, any other form of written communication or by telephone. Section 2. Any notice required to be given under the provisions of applicable law or of the Articles of Incorporation or of these Bylaws may be waived in writing, either before or after the event requiring such notice, provided such waiver is signed by the person or persons entitled to said notice. Attendance at a meeting by a person shall constitute a conclusive waiver of any objections made by any person with respect to the notice given to such a person unless attendance shall be solely for the purpose of objection. ARTICLE IV OFFICERS Section 1. The officers of the Corporation shall be elected by the Board of Directors and shall be a president, a vice president, a secretary and a treasurer. The Board of Directors may also elect a Chairman of the Board, one or more additional vice-presidents and assistant secretaries and assistant treasurers. Two or more offices may be held by the same person; provided, however that the same person shall not simultaneously hold the offices of president and secretary. Section 2. The Board of Directors at its first meeting after each annual meeting of stockholders (or pursuant to a unanimous consent in lieu thereof) shall elect a president, one or more vice presidents, a secretary and a treasurer, none of whom need be a member of the Board. Section 3. The Board of Directors may appoint and remove such agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The power to appoint and remove agents may be delegated by the Board. 6 6 Section 4. The salaries of all officers and agents of the Corporation shall be fixed by the Board of Directors. Election or appointment of an officer or agent shall not itself create contract rights. Section 5. The officers of the Corporation shall hold office until their successors are chosen or until sooner displaced. Any officer elected by the Board of Directors may be removed, with or without cause, at any time by the affirmative vote of a majority of the directors then serving. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 6. Any officer may resign at any time by giving written notice of his or her resignation to the Board, the President or the Secretary. Any such resignation shall take effect at the time specified therein, or, if the time when it shall become effective is not specified therein, it shall take effect immediately upon its receipt by the Board, the President or the Secretary; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. THE CHIEF EXECUTIVE OFFICER CHAIRMAN OF THE BOARD OF DIRECTORS Section 7. The Chief Executive Officer ("CEO") shall be the chief officer of the Corporation, shall preside at all meetings of the stockholders and the Board of Directors, shall be ex officio a member of all standing committees and shall have general and active management of the business of the Corporation. Section 8. The CEO may execute all bonds, mortgages and other contracts or instruments in the ordinary course of the business of the Corporation. Unless the Board of Directors specifies otherwise, the CEO shall have authority to vote (or grant a proxy with respect to) any securities held or owned by the Corporation. Section 9. In the event the Board of Directors elects a Chairman of the Board of Directors who is not also the CEO, he shall have all the powers of the CEO in the CEO's absence or inability to act and such other powers as the Board of Directors shall designate. THE PRESIDENT Section 10. In the event the President is not also the CEO or Chairman of the Board of Directors, he shall have all the powers of the CEO in the CEO's absence or inability to act and such other powers as the Board of Directors shall designate. THE VICE PRESIDENTS Section 11. The Vice Presidents in the order of their seniority of election, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the CEO, Chairman of the Board of Directors, and President, if there be one, perform the duties and exercise the powers of the CEO, Chairman of the Board of Directors or 7 7 President. They shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. THE SECRETARY AND ASSISTANT SECRETARIES Section 12. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record or cause to be recorded all the proceedings of such meetings in a book or books to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, required notices of all meetings of the stockholders and the Board of Directors or CEO, under whose supervision he shall be. He shall keep in safe custody the seal of the Corporation and, when authorized by the Board of Directors, affix the same to any contract or instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary. He shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 13. The Assistant Secretaries in the order of their seniority of election, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. THE TREASURER AND ASSISTANT TREASURERS Section 13. The Treasurer shall have the custody of the corporate funds and securities, shall keep or cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 14. He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. Section 15. If required y the Board of Directors, he shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. Section 16. The Assistant Treasurers in the order of their seniority of election, unless otherwise determined by the Board of Directors, shall, in the absence of disability of the Treasurer, 8 8 perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. ARTICLE VI INDEMNIFICATION OF DIRECTORS AND OFFICERS Subject to the further provisions hereof the Corporation shall indemnify any and all of its directors, officers, former directors, and former officers, to the full extent permitted under applicable law against all amounts incurred by them and each of them, including but not limited to expenses, legal fees, costs, judgments, fines and amounts paid in settlement which may be actually and reasonable incurred, rendered or levied in any threatened, pending or completed action, suit or proceeding brought against any of them for or on account of any action or omission alleged to have been committed while acting within the scope of his duties as a director or officer of the Corporation. Whenever any such director or officer shall report to the President of the Corporation or the Board of Directors that he has incurred or may incur such amounts, the Corporation shall, within a reasonable time thereafter, determine in a manner consistent with applicable law (including Colorado Revised Statute Section 3-21-111.5) whether, in regard to the matter involved, such person acted or failed to act in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding had no reasonable cause to believe his conduct was unlawful. If the Corporation so determines that such person acted or failed to act in such a manner with regard to the matter involved, indemnification shall be mandatory and shall be automatically extended as specified herein; provided, however, that the Corporation shall have the right to refuse indemnification in any instance in which the person to whom indemnification would otherwise have been applicable shall not offer the Corporation the opportunity, at its own expense and through counsel of its own choosing, to defend him in the action, suit or proceeding. Nothing contained herein is intended to limit any right of indemnification or other rights provided by Colorado Revised Statute Section 3-21-111.5, or other applicable law. ARTICLE VII CERTIFICATES OF STOCK; DEBT INSTRUMENTS Section 1. Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by, the CEO, President or a Vice President and the Secretary or an Assistant Secretary, certifying the number of shares owned by him in the Corporation. If the Corporation shall be authorized to issued more than one class of stock or more than one series of any class of stock, the designations, preferences, limitations and rights of each class or series shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock; provided, however, that except as otherwise provided by applicable law, in lieu of the foregoing requirements, there may be set forth on 9 9 the face or back of a certificate a statement to the effect that the Corporation will furnish any shareholder upon request and without charge such a description or summary. Section 2. Where a certificate, bond, debenture or other debt security instrument is (1) signed by a transfer agent or an assistant transfer agent or (2) registered by a registrar other than the Corporation or an employee of the Corporation, the signature of any CEO, President, Vice President, Secretary, or Assistant Secretary may be facsimile. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or instrument shall cease to be such officer of officers of the Corporation, whether because of death, resignation or otherwise before such certificate or instrument have been delivered by the Corporation, such certificate or instrument may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or instrument or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation. LOST CERTIFICATES Section 3. The Board of Directors may direct a new certificate or instrument to be issued in place of any certificate or instrument theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate or instrument to be lost or destroyed. When authorizing such issue of a new certificate or instrument, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or instrument, or his legal representative, to give the Corporation such indemnity as it may direct against any claim that may be made against the Corporation with respect to the certificate or instrument alleged to have been lost or destroyed. TRANSFER OF STOCK Section 4. Transfers of shares of stock of the Corporation shall be made only on the stock transfer books of the Corporation. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares properly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, and payment of all taxes thereon the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. RECORD DATES Section 5. The Board of Directors may fix in advance a date, not more than seventy (70) days (nor less than ten (10) days) preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or the date of any other lawful action, for the determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or to receive payment of any such dividend, or to receive any such allotment of rights, or to exercise the rights in respect of any such 10 10 change, conversion or exchange of capital stock, and in such case each such stockholder and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to express such consent, or to receive payment of such dividend, or to receive such allotment rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. REGISTED STOCKHOLDERS Section 6. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, to vote as such owner, to transfer such shares and for all other purposes; and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Colorado. ARTICLE IX AMENDMENTS DIVIDENDS Section 1. Dividends upon the capital stock of the Corporation, subject to the provisions of the Articles of Incorporation (or of any resolution of the Board of Directors establishing any series of any class of stock adopted pursuant to the provisions of the Articles of Incorporation), if any, may be declared by the Board of Directors at any regular or special meeting pursuant to the law. Dividends may be paid in cash, in property, or in share of the capital stock, subject to the provisions of the Articles of Incorporation and applicable law. Section 2. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, equalize dividends, or to repair or maintain any property of the Corporation, and for such other purpose as the directors shall determine to be in the best interests of the Corporation. The directors may modify or abolish any such reserve in the manner in which it was created. CHECKS Section 3. All checks, drafts, or orders or demands for or to pay money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate or in the absence of such designation by the President or the Treasurer. 11 11 CONTRACTS Section 4. Except as otherwise required by law or by these Bylaws, any contract or instrument approved by the Board may be executed and delivered in the name of the Corporation and on its behalf by the President or a Vice President. In addition, the Board may authorize any other officer or officers or agent or agents to execute and deliver any contract or instrument on in the name of the Corporation and on its behalf, and such authority may be general or confined to specific instances as the Board may be resolution determine. ATTESTATION Section 5. Any Vice president, the Secretary, or any Assistant Secretary may attest the execution of any contract, instrument or document by the President or any other duly authorized officer or agent of the Corporation and may affix the corporate seal, if any, in witness thereof, but neither such attestation nor the affixing of a corporate seal shall be requisite to the validity of any such document or instrument. FISCAL YEAR Section 6. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. SEAL Section 7. A corporate seal shall not be requisite to the validity of any contract, instrument or document executed by or on behalf of the Corporation. The corporate seal, if any, shall have inscribed thereon the name of the Corporation, and the year of its organization. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced. LOANS TO DIRECTORS AND EMPLOYEES Section 8. The Corporation shall not make any loan to a director, or guarantee an indebtedness of a director or otherwise use its credit to assist a director, without the express authorization by the stockholders in each particular case. The Board of Directors may authorize the Corporation to make a loan to any employee of the Corporation (including any director who is also an employee), or to guarantee indebtedness of or otherwise use its credit to assist such employee, if the Board determines that the same may be reasonable expected to benefit the Corporation; any resolution properly adopted by the Board authorizing a loan to any employee by the Corporation (or authorizing any such guarantee or use of credit) shall conclusively evidence such a determination by the Board, whether or not expressed therein. BOOKS AND RECORDS Section 9. Any person who shall have been a holder of record of shares or of a voting trust beneficial interest therefore at least six months immediately preceding his demand or shall be the holder of record of, or the holder of record of a voting trust beneficial interest for, at least five percent of all the outstanding shares of the corporation, upon written demand stating the purpose thereof, 12 12 shall have the right toe examine, in person, or by agent or attorney, at any reasonable time or times, for any purpose the Corporation's relevant books and records of accounts, minutes and record of shareholders and to make copies of or extracts therefrom. INTERPRETATIONS Section 10. To the extent permitted by the context in which used, words in the singular number shall include the plural, words in the masculine gender shall include the feminine and neuter, and vice versa. Section 11. Captions used herein are for convenience only and are not a part of the Bylaws and shall not be deemed to limit or alter any provisions hereof and shall not be deemed relevant in construing these Bylaws. ARTICLE IX AMENDMENTS Section 1. Subject to the Articles of Incorporation, these Bylaws may be altered, amended or repealed at any regular or special meeting of the stockholders or of the Board of Directors. Adopted on August 23, 2000. Confirmed as to adoption: /s/ Phillip W. Kilgore ________________________________________________________ Phillip W. Kilgore, Chairman and Chief Executive Officer /s/ David A. Goller ________________________________________________________ David A. Goller, Treasurer 13 13 EX-3.3 5 lexbarstkcert.txt FORM OF COMMON STOCK CERT ====================================================================== NUMBER SHARES - ---------------- ------------ LEXINGTON BARRON TECHNOLOGIES, INC. - ---------------- ------------ COMMON STOCK SEE REVERSE FOR CERTAIN DEFINITIONS CUSIP ______________ INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO - ------------------------------------------------------------------------------ THIS IS TO CERTIFY THAT is the owner of - ------------------------------------------------------------------------------ fully paid and non-assessable shares of Common Stock, $.0001 par value, of LEXINGTON BARRON TECHNOLOGIES, INC. transferable only on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby are issued under and subject to the laws of the State of Colorado and to the Certificate of Incorporation and Bylaws of the Corporation, all as in effect from time to time. This Certificate is not valid until countersigned and registered by the Transfer Agent and Registrar. WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. Dated: Treasurer President LEXINGTON BARRON TECHNOLOGIES, INC. Colorado [Corporate Seal] COUNTERSIGNED AND REGISTERED: ------------------------------- TRANSFER AGENT AND REGISTRAR AUTHORIZED SIGNATURE 1 ============================================================================== LEXINGTON BARRON TECHNOLOGIES, INC. The Corporation shall furnish without charge to each stockholder who so requests a statement of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock of the Corporation or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Such requests shall be made to the Corporation's Secretary at the principal office of the Corporation. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT -- Custodian ------------------------ (Cust) (Minor) under Uniform Gifts to Minors Act --------------------------------- (State) Additional abbreviations may also be used though not in the above list. For value received, _______________ hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE -------------------------------------- -------------------------------------- - ------------------------------------------------------------------------------ (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) ______________________________________________________________________________ ______________________________________________________________________________ ________________________________________________________________________ shares of the capital stock represented by the within Certificate, and do(es) hereby irrevocably constitute and appoint _____________________________________________________________________________ ______________ Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. Dated _____________________ ---------------------------------------- - ---------- NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. ------------------------------------------------ Signature Guaranteed: THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE l7Ad-15. 2 EX-5.1 6 jgdpalexbaropin.txt LEGAL OPINION The Law Office of James G. Dodrill II, P.A. 3360 NW 53rd Circle Boca Raton, Florida 33496 Tel. (561) 862-0529 Fax: (561) 862-0927 Email: jimdodrill@adelphia.net - ------------------------------------------------------------------------------- April 15, 2002 Lexington Barron Technologies, Inc. 102 South Tejon Street, Suite 1100 Colorado Springs, Colorado 80903, Gentlemen and Ladies: At your request, I have acted as counsel for Lexington Barron Technologies, Inc., a Colorado corporation (the "Company"), in connection with preparation of the Company's Registration Statement on Form SB-2 (the "Registration Statement") under the Securities Act of 1933, as amended, concerning registration of 5,000,000 shares of the Company's $.001 par value common stock (the "Common Stock") to be issued by the Company and 3,750,000 shares previously issued by the Company and to be sold by Selling Shareholders. I have examined the Certificate Of Incorporation, the Bylaws of the Company and the record of the Company's corporate proceedings concerning the registration described above. In addition, I have examined such other certificates, agreements, documents and papers, and have made such other inquiries and investigations of law as I have deemed appropriate and necessary in order to express the opinion set forth in this letter. In these examinations, I have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, photostatic, or conformed copies and the authenticity of the originals of all such latter documents. In addition, as to certain matters I have relied upon certificates and advice from various state authorities and public officials, and have assumed the accuracy of the material and the factual matters contained herein. Subject to the foregoing and on the basis of the aforementioned examinations and investigations, it is my opinion that the shares of Common Stock will have been legally issued and will constitute fully paid and non-assessable shares of the Company's Common Stock. I hereby consent (a) to be named in the Registration Statement and in the prospectus that constitutes a part of the Registration Statement as acting as counsel in connection with the offering, including with respect to the issuance of securities offered in the offering; and (b) to the filing of this opinion as an exhibit to the Registration Statement. This opinion is to be used solely for the purpose of the registration of the Common Stock and may not be used for any other purpose. Sincerely, Law Office of James G. Dodrill II, PA /s/ James G. Dodrill II, Esq. ----------------------------- By: James G. Dodrill II, Esq. EX-23.1 7 lexbarconsent.txt AUDITORS CONSENT INDEPENDENT AUDITORS' CONSENT Securities and Exchange Commission Washington, DC We consent to the use in this registration statement of Lexington Barron on Form SB-2 of our report dated April 15, 2002, appearing in the Prospectus, which is part of this Registration Statement. We also consent to the reference to us under the heading "Experts" in such Prospectus. /s/ Cordovano and Harvey, P.C. Cordovano and Harvey, P.C. Denver, Colorado April 15, 2002 -----END PRIVACY-ENHANCED MESSAGE-----