-----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, EzR7n8e/Q0J2GcA2Ien93UiAK84mN+5Ykxrl1k45uTlhY/q4i9RazLlOW0RdjhmV ird97rUQpvbNrqhvPx7kmw== 0001177660-02-000001.txt : 20020820 0001177660-02-000001.hdr.sgml : 20020820 20020820124219 ACCESSION NUMBER: 0001177660-02-000001 CONFORMED SUBMISSION TYPE: 10-12G PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BS FUNDING INC CENTRAL INDEX KEY: 0001177660 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-12G SEC ACT: 1934 Act SEC FILE NUMBER: 000-49975 FILM NUMBER: 02743635 BUSINESS ADDRESS: STREET 1: 494 ADELAIDE STREETF CITY: WOODSTOCK ONTORIO CANADA STATE: A6 ZIP: 0000 MAIL ADDRESS: STREET 1: 42041 DELMONTE ST CITY: TEMECOLA STATE: CA ZIP: 92591 10-12G 1 bsfunone.txt SEC 1396 (6-00) FORM 10 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549. GENERAL FORM FOR REGISTRATION OF SECURITIES Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934 Registrant: B.S. FUNDING INC. A Delaware Corporation IRS Employer Identification No. Applied for. Address: 494 Adelaide Street, Woodstock , Ontario Canada N4S 4B4 Registrant's Telephone Number: 519 539 2391 Securities to be registered pursuant to Section 12(g) of the Act: Title of each class Name of each exchange on which To be so registered each class is to be registered COMMON SHARES OTC Bulletin board CONTENTS Part I 2 Item 1. Description of Business 2 Item 2. Management's Discussion and Analysis or Plan of Operation 3 Item 3. Description of Property 4 Item 4. Security Ownership of Management and Certain Security Holders 4 Item 5. Directors, Executives, Officers and Significant Employees 5 Item 6. Executive Compensation 6 Item 7. Certain Relationships and Related Transactions 6 Part II 6 Item 8. Legal Proceedings 6 Item 9. Market for Common Equity and Related Stockholder Matters 6 Item 10. Recent Sales of Unregistered Securities 7 Item 11. Description of Securities 8 Item 12. Indemnification of Directors and Officers 9 Part F/S 10 Item 13. Financial Statements 10 Item 14. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 48 Part III 48 Item 15. Financial Statements and Exhibits 48 Item 16. Index to Exhibits 48 Item 17. Description of Exhibits 49 PART 1 Item 1. Business. B.S. Funding Inc. was incorporated under the laws of Delaware on March twenty-third of nineteen hundred ninety-nine with the intent to examine the need for, then develop, and market a senior citizens retirement home. The Company was initially formed to acquire a ten percent interest in a company that owns and operates a forty-six thousand square foot building in Woodstock Ontario Canada. The address of the building is 493 Dundas Street, Woodstock, Ontario, Canada. B.S. Funding Inc. now owns forty percent of the company that owns the building. The company has invested quite some time researching the feasibility of a Senior Citizen complex at this site. An independent feasibility study has been successfully completed to find the need for such a project. It was determined that affordable Senior Citizen Housing would be a successful venture at this location. All regulatory agencies have approved the site for re-development. As part of the feasibility study an independent, bank approved, evaluation firm researched and confirmed the need for affordable retirement living in the Downtown Woodstock Corridor. An engineering report was conducted to derive the building's structural integrity. The report concluded favorably .All by-law and zoning laws conform to the site's desired development. An architectural engineer was commissioned to draft the blueprints for the site. A bank has expressed an interest in the project and has provided a first mortgage on the building to initiate the build-out. Item2. Plan B.S. Funding Inc. is uniquely poised to capture a sizeable share of the available market of affordable, convenient housing for senior citizens. It has been surveyed that downtown Woodstock is in need of at least 60 units to house seniors. There is currently none. B.S. Funding Inc. plans to redevelop the building it has an interest in to accommodate the discussed need for housing. Because the site has already been approved structurally and it already conforms from all zoning respects, and architectural plans are already drawn up, the business that B.S. Funding Inc. needs to accomplish is that of financing and the actual development, and then market it. B.S. Funding Inc. therefore offered its shares for sale to a limited number of people for seed capital. The Company then intends to seek either debt or equity financing or both to complete the project. The Company will then tender bids to contractors to build the project. This will be done on a sub-contractor basis with the Company overseeing the entire project. All contractors will be placed on a performance guarantee to ensure a timely build, emphasizing quality. The Company will then offer the units for rent to the seniors of the area. It is anticipated that vacancies will not be a major problem in the near term after completion of the build out. The Company then intends to repeat the business plan at other locations in Florida, California and Arizona. All locations where affordable senior housing is needed. BREAK EVEN POINT If the project were to spend $1,250,000.00 to complete itself and therefore have to carry additional debt service of $ 11,250.00/ month and additional expenses of 15% of revenues, the project's projected break even point would be 18 units rented of the 40 units it could build. Management believes the break-even point to be easily attained. As of December 31, 2001, Management has accomplished many of its goals. In May of 1999, the Company secured a first mortgage for $300,000.00 to begin the build-out. The Company then acquired cash and inventory worth more than $200,000 from the Secretary John Schell. These monies will be spent to initiate the build-out. As a result of this, the building has begun its first twenty-five units. It is anticipated to have the first twenty-five units done in October of 2002. The second phase should be completed by the winter of 2002. Management has commitments currently in place to finish the project. B.S. Funding Inc. is a two- fold company. Initially, it is a redevelopment company, formed to convert inexpensive buildings into more valuable senior citizen homes. The Company's business will then be that of marketing company. The Company plans to redevelop other properties at other locations throughout North America. The Company ultimately derives revenue from rental leases, services provided to its tenants (value added servicing for its elderly residents, such as shuttle services, nursing care.) and property appreciation. As additional buildings are developed the Company intends to replicate itself, expanding its revenue and equity basis. The Company has no revenues generated to date. The Company is currently in its developmental stages and should be considered highly speculative. There are no comparative revenues. The Company suffers losses on its financial statements. B.S. Funding Inc. has secured mortgages; cash and commitments from institutions and private investors which management believes will be sufficient to complete the project. The Company will still have to market and rent the units it is building for any revenue and potential profits. This Company is therefore a high- risk investment and should only be considered for a long term, speculative investment. See the attached financials in item 13. Of this report. Management is not aware of anything ongoing that might prevent completion of the project. The Company has in place sufficient cash and assets to continue operations through 2003. Management believes it will need revenue or capital infusion for the long-term survival of the Company. On March 28, 1999, the Company completed an offering for 500,000 authorized shares of common stock to thirty-four unaffiliated investors. This offering was made in reliance upon an exemption from the registration provisions of section 4(2) of the Securities Act of 1933 (the Act), as amended, pursuant to Regulation D, Rule 504 of the Act. On that same Day 1,500,000 shares were issued to the President in exchange for ten percent of the outstanding common stock of 1192403 Ontario Inc. In March 2001, the Company acquired an additional thirty percent of 1192403 Ontario Inc. for the issuance of 257 shares of the common restricted shares of B.S. Funding Inc. In December of 2001, the Company sold 862 restricted common shares for appliances to furnish the units. This equated to a $100.00US per share purchase. At the same time the Company sold 835 restricted common shares of its authorized stock for 83,500US. Again a sale equating to $100.00 per share. As of the Date of this Registration the Company has 2,001,954 shares outstanding, with an authorized capital of 25,000,000 common shares at a par value of 0.0001. There are thirty-four shareholders as of the registration date. Item 3. Properties. The Company currently occupies a space onsite at it Woodstock building. The address for the Company is 494 Adelaide Street, Woodstock Ontario, Canada N4S 4B4. The Company occupies approximately one thousand square feet of space on a month-to-month basis at this location. The Company owns forty percent of a company that owns a forty-six thousand square foot building in Woodstock, Ontario,Canada. Management of the Company does not currently have policies regarding the acquisition or sale of assets primarily for possible capital gain or primarily for income. Item 4. Security Ownership of Management and Certain Security Holders. Mary K. Schell, President and Director,owns one million five hundred thousand shares. This represents approximately seventy-four percent of the total outstanding shares. John Schell, Secretary and Director,owns one thousand nine hundred fifty-four shares. This represents approximately one percent of the total outstanding shares. All Officers and Directors as a whole own approximately 75% of the common voting, outstanding shares of the Company. Persons sharing Ownership or control of Shares. No persons other than Mary K. Schell owns or controls the power to vote more than 10% or more of the Company's securities. Non-Voting Securities and Principal Holders Thereof. The Company has not issued any non-voting securities. Options, Warrants and Rights There are no options,warrants or rights to purchase securities of the Company. Parents of the Issuer Under the definition of parent, as including any person or business entity who controls substantially all (more than 80%) of the issuer's common stock, the Company has no parents. Item 5. Directors, Executives, Officers and SignificantEmployees. Mary K. Schell: President and Director age 59 John Schell: Secretary and Director age 64 Management Mary K. Schell - Mrs. Schell, the President and Director, holds a degree in Nursing. In addition to her nursing, Mary Kay is well known for her volunteer work with senior citizens. Mary K. has been a nurse for the Woodstock General Hospital since 1962. Mrs. Schell has been pursuing a senior citizens retirement facility for four years. Mr. John Schell - John Schell, Secretary and Treasurer, has completed his B.A. in Agricultural Science. John has been a successful businessman in the community for decades. Mr. Schell was the CEO of Oxford Sand and Gravel, well-known gravel, aggregate and asphalt refinery in Oxford County. Mr. Schell also held the position of Vice- President of Hillview Farms, a company now called Nugro, publicly traded and owned largely by CIL Industries. John is Husband to the President, Mary K. Schell. John is also active in the home meal delivery for senior citizens. Family Relationships The President and Director Mary K. Schell, is the wife of the Secretary and Director John Shell. V. Kimberly Shell-Micoli is the daughter of John and Mary K. Kim is a minor shareholder. Robert Micoli is son in law to Mary K. Schell and John Schell. There are no other Relationships between Officers, Directors and their shareholders Involvement on Certain Material Legal Proceedings During the last Five Years No current or pending litigation, and no claims or counterclaims involving the Company as a plaintiff or defendant exist. No Director, Officer, significant employee or consultant has been convicted in a criminal proceeding. No Director, Officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities. No Director, Officer, or significant employee has been convicted of violating a federal or state securities or commodities law. Item 6. Executive Compensation There is currently no executive compensation offered. Item 7. Certain Relationships and Related Transactions. In March of 2001, the Secretary, John Schell received 257 shares of common stock in B.S. Funding Inc. for his thirty percent ownership in 1192403 Ontario Inc. In December 2001 the Secretary, John Schell, gave eighty-six thousand two hundred US dollars for the acquisition of appliances for the project. The Company issued John Schell eight hundred sixty-two restricted common shares for that transaction. This equates to a share purchase of one hundred dollars per share. In December of 2001, John Schell, the Secretary also injected eighty-three thousand five hundred US dollars cash to aid the Company's build-out of the Senior's complex. Mr. Schell was issued eight hundred thirty-five shares of restricted common shares. This stock sale was one hundred dollars per share. PART II Item 8. Legal Proceedings The Company has no knowledge of any legal proceedings either past, current, anticipated or forthcoming. Item 9. Market Price of and Dividends on the Registrants Common Equity and Related Stockholder Matters. Not Applicable. The Company is not currently being quoted on an exchange. The Company is listed OTC on the pink sheets and such over-the- counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. There is an absence of an established public trading market of this security and therefore an accurate reference to quotations is currently difficult to determine. There is currently no common stock that is subject to outstanding options or warrants to purchase, or securities convertible into, the Company's common stock. There is currently no common stock of the Company which could be sold under rule 144 under the Securities Act of 1933 as amended except that of Mary K. Schell, the President, which could amount to a significant sale. Under rule 144 Mary K. Schell would be entitled to register 1,500,000 shares under a restricted sales volume outlined pursuant to Rule 144. The Registrant has not agreed to register any shares for sale by security holders and Mary K. Schell has not asked to register those shares. There is currently no common equity that is being, or, is proposed to be publicly offered by the registrant, the offering of which could have a material effect on the market price of the issuer's common equity. Stockholders As of March 31, 2002 there were thirty-four shareholders of record. Dividend Policy The Company has not paid dividends to date, nor does it anticipate paying dividends in the foreseeable future. The Board of Directors may review its dividend policy and determine the feasibility of dividends as it sees fit in the future. Reports to Shareholders The Company intends to furnish its shareholders with annual reports containing audited financial statements and such other periodic reports as the Company may determine to be appropriate or as may be required by law. Upon the effectiveness of this Registration Statement, the Company will be required to comply with periodic reporting, proxy solicitation and certain other requirements by the Securities and Exchange Act of 1934. Transfer Agent The Company's Transfer Agent is Interwest Transfer Co., 1981 East Murray Road Suite 100, Salt Lake City, Utah 84117. Telephone ( 801) 272-9294. Item 10. Recent Sale of Unregistered Securities. On March 28, 1999, the Company completed a public offering of shares of common stock of the company pursuant to Regulation D, Rule 504 of the Securities Act of 1933, as amended, whereby it sold 500,000 shares of the common stock to 32 unaffiliated shareholders. The Company then filed a Form D with the Securities and Exchange Commission on or about April 14, 1999. As of March 31, 2002 there are 34 shareholders of record hold 2,001,954 common shares issued and outstanding. Item 11. Description of Securities to be Registered. The Registrants Securities to be registered are common shares. Description and Rights of Common Shareholders Dividend Rights- The holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available therefore at such times and in such amounts as the board of directors of the Company may from time to time determine. Voting Rights - Each holder of the Company's stock are entitled to one vote for each share held of record on all matters submitted to the vote of stockholders, including the election of directors. All voting is non-cumulative, which means that the holder of fifty percent of the voting shares for the election of the directors can elect all the directors. The board of directors may issue shares for consideration of previously authorized but unissued common stock without future stockholder action. Liquidation Rights - Upon liquidation, the holder of the common stock are entitled to receive pro rata all of the assets of the Company available for distribution to such holders. Preemptive Rights - Holders of common stock are not entitled to preemptive rights. Conversion Rights - No shares of common stock are currently subject to outstanding options, warrants, or other convertible securities. Redemptive Rights - No redemptive rights exist for shares of common stock. Sinking Fund Provisions - No sinking fund provisions exist. Further Liability For Calls - No common shares are subject to further call or assessment by the issuer. The Company has not issued stock options as of the date of this Registration Statement. Potential Liabilities of Common Stockholders to State and Local Authorities - No material potential liabilities are anticipated to be imposed on stockholders under state statute. Certain Delaware regulations, however, require regulation of beneficial owners of more than 5% of the voting securities. Stockholders that fall into this category, therefore, may be subject to fines in circumstances where non- compliance with these regulations is established. Debt Securities - The Company is not registering any debt securities, nor is there any outstanding. Other Securities To Be Registered - The Company is not registering any security other than its common stock. The issuer has an authorized capitalization of twenty-five million shares at a par value of $ 0.0001 The issuer has two million one thousand and nine hundred fifty-four common shares issued and outstanding as of July 30, 2002. The common shares currently trade over the counter on the pink sheets. Item 12. Indemnification of Directors and Officers. No Director of the Corporation shall have personal liability to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that this provision shall not eliminate or limit the liability of a director (a) for any breach of the director's duty or loyalty to the corporation or its stockholders (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the Delaware Corporation Law, or (d) for any transaction from which the director derived an improper personal benefit. Item 13. Financial Statements and Supplementary Data. BS FUNDING INC. (Incorporated under the laws of the State of Delaware) FINANCIAL STATEMENTS MARCH 31, 1999 Thomson, Fisher & Bossy Chartered Accountants 333 Dufferin Avenue London, Ontario N6B 1Z3 (519) 679-2080 Fax (519) 439-4714 John M. Thomson, C.A. 52 Ridout Street, West Stan J. Fisher, C.A. Tillsonburg, Ontario N4G 2E3 (519) 842-4263 Fax (519) 842-5241 Michael R. Bossy, C.A. 47 Perry Street R. Brock MacAlpine, C.A. Woodstock, Ontario N4S 3C4 (519) 537-2371 Fax (519) 539-9962 Rick E. Hamilton, C.A. 197 Main Street Parkhill, Ontario N0M 2K0 (519) 294-0340 5 Albert Street Langton, Ontario N0E 1G0 (519) 875-1111 INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of BS Funding Inc.: We have audited the balance sheet of BS Funding Inc. as at March 31, 1999 and the statements of loss and accumulated deficit and shareholders' equity and cash flows for the 8-day period then ended. (note 1) These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtained reasonable assurance 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. In our opinion, these financial statements present fairly, in all material respects, the financial position of BS Funding Inc. as at March 31, 1999 and the results of its operations for the 8-day period then ended in accordance with generally accepted accounting principles. Woodstock, Canada Thomson, Fischer, Bossy June 28, 1999 Chartered Accountants STATEMENT 1 BS FUNDING INC. (Incorporated under the laws of the State of Delaware) BALANCE SHEET MARCH 31, 1999 (note 1) 1999 (note 2) ASSETS Current: Bank $5,000 Investment in 1192403 Ontario Inc. (note 3) 8,810 Incorporation costs 100 $13,910 LIABILITIES AND SHAREHOLDERS' EQUITY Current: Accounts payable and accrued charges $1,079 Shareholder's equity: Share capital - Authorized: 25,000,000 common shares with par value of $0.0001 Issued and outstanding: 2,000,000 common shares 200 Additional paid in capital 13,610 Accumulated deficit (statement 3) (979) 12,831 $13,910 STATEMENT 2 BS FUNDING INC. STATEMENT OF OPERATIONS FOR THE 8 DAY PERIOD ENDED MARCH 31, 1999 (note 1) 1999 (note 2) Interest income $1 Expenses: Accounting 979 Bank charges and interest 1 980 Net loss for the period $(979) Loss per share assuming dilution $ 0.00 Weighted average shares outstanding 2,000,000 STATEMENT 3 BS FUNDING INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE 8 DAY PERIOD ENDED MARCH 31, 1999 (note 1) Additional Common Stock Paid in Accumulated Shareholders' Shares Amount Capital Deficit Equity Balance, March 23, 1999 - $ - $ - $ - $ - Common stock issued 500,000 50 4,950 - 5,000 Common stock issued for investment in 1192403 Ontario Inc. valued at $0.00594 per share 1,500,000 150 8,660 - 8,810 Net loss for the period (statement 2) - - - (979) (979) Deficit, March 31, 1999 2,000,000 $200 $13,610 $(979) $12,831 STATEMENT 4 BS FUNDING INC. STATEMENT OF CASH FLOWS FOR THE 8 DAY PERIOD ENDED MARCH 31, 1999 (note 1) 1999 (note 2) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss (statement 2) $(979) Changes in assets and liabilities: Accounts payable and accrued charges 1,079 Cash provided by operating activities 100 CASH FLOWS FROM INVESTING ACTIVITIES: Incorporation costs (100) Cash utilized in investing activities (100) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common shares 5,000 Cash provided by financing activities 5,000 Increase in cash 5,000 Cash, beginning - Cash, ending $5,000 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Common stock issued for investment in 1192403 Ontario Inc. $8,810 BS FUNDING INC. NOTES TO THE FINANCIAL STATEMENTS MARCH 31, 1999 1. ORGANIZATION AND ACCOUNTING POLICIES INCORPORATION BS Funding Inc. was incorporated March 23, 1999 in the state of Delaware. Effective March 28, 1999, a share offering was accepted issuing 500,000 common shares at $0.01 per share, to various shareholders. Additionally on that date, 1,500,000 common shares were issued in exchange for 10% of the outstanding common stock of 1192403 Ontario Inc. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The company considers all investments with a maturity of three months or less to be cash equivalents. EARNINGS PER SHARE Earnings per share is provided in accordance with Accounting Principles Board Opinion No. 15 (APB No. 15), "Earnings Per Share". Due to the Company's simple capital structure, only one earnings per share calculation is presented. Earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. 2. CURRENCY These financial statements are presented in American dollars. 3. INVESTMENT IN 1192403 ONTARIO INC. During the period, the company acquired 10% of the outstanding shares of 1192403 Ontario Inc. which carries on a commercial real estate rental business. The remaining 90% of the shares are closely held and accordingly, BS Funding Inc. can not control the operations of 1192403 Ontario Inc. The investment is being accounted for utilizing the cost method. BS FUNDING INC. (Incorporated under the laws of the State of Delaware) FINANCIAL STATEMENTS MARCH 31, 2000 INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of BS Funding Inc.: I have audited the balance sheetof BS Funding Inc. as at March 31, 2000 and March 31, 1999 and the statements of loss and accumulated deficit and shareholders' equityand cash flows for the year and 8day period then ended. (note 1) These financial statements are the responsibility of the company'smanagement. My responsibility is to express an opinion on thesefinancial statements based on my audit. I conduct my audits in accordance with generally accepted auditingstandards. Those standards require that I plan and perform my auditsto obtained reasonable assurancewhether the financial statementsare 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. In my opinion, these financialstatements present fairly, in allmaterial respects, the financial position of BS Funding Inc. as atMarch 31, 2000 and March 31, 1999 andthe results of its operations for theyear and 8 day period then ended in accordance with generally accepted accounting principles. Woodstock, Canada R. Brock MacAlpine January 10, 2001 Chartered Accountant STATEMENT 1 BS FUNDING INC. (Incorporated under the laws of the State of Delaware) BALANCE SHEETS MARCH 31, 2000 (with comparative amounts for March 31, 1999) (note 2) 2000 1999 ASSETS Current assets Cash - $5,000 Other assets Investment in 1192403 Ontario Inc. (note 3) 8,810 8,810 Incorporation costs 90 100 less accumulated 8910 8910 amortization 8900 13910 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued charges $1,156 1,079 Shareholders' equity: Common stock - Authorized: 25,000,000 common shareswith par value of $0.0001 Issued and outstanding: 2,000,000 shares 200 200 Additional paid in capital 13,610 13,610 Accumulated deficit (statement 3) (6,066) (979) 7,744 12,831 $8,900$ 13,910 STATEMENT 2 BS FUNDING INC. STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2000 (with comparative amounts for the 8 day period ended March 31,1999) (note 2) 2000 1999 Interest income $1 $1 Expenses: Accounting 1,000 979 Amortization 10 - Bank charges and interest - 1 Consulting 477 - Rent 3,600 - 5,087 980 Net loss for the period $ (5,087) $ (979) Loss per share assuming Dilution $0.00 $0.00 Weighted average shares outstanding 2,000,000 2,000,000 STATEMENT 3 BS FUNDING INC. STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED MARCH 31, 2000 (with comparative amounts for the 8 day period ended March 31, 1999) (note 2) Additional Total Common Stock Paid in Accum- share- Ulated holders' Shares Amount Capital Deficit Equity Balance, March 23, 1999 - $- $- $- $- Common stock Issued 500,000 50 4,950 - 5,000 Common stock issued for investment in 1192403 Ontario Inc. valued at $0.01 per share 1,500,000 150 8,660 - 8,810 Net loss for the period (statement2) - - - (979) (979) Deficit ,March 31, 1999 2,000,000 200 13,610 (979) 12,831 Net loss for the year (statement 2) - - - (5,087) (5,087) Deficit, March 31, 2000 2,000,000 $200 $13,610 $(6,066) $7,744 STATEMENT 4 BS FUNDING INC. =STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2000 (with comparative amounts for the 8 day period ended March 31, 1999) (note 2) 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss (statement 2) $(5,087) $(979) Amortization 10 - Changes in assets and liabilities: Accounts payable and accrued charges 77 1,079 Cash provided by operating activities (5,000) 100 CASH FLOWS FROM INVESTING ACTIVITIES: Incorporation costs - (100) Cash utilized in investing activities - (100) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common shares - 5,000 Cash provided by financing activities - 5,000 Increase (decrease) in cash (5,000) 5,000 Cash, beginning 5,000 - Cash, ending $ - $5,000 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Common stock issued for investment in 1192403 Ontario Inc. $ - $8,810 BS FUNDING INC. NOTES TO THE FINANCIAL STATEMENTS MARCH 31, 2000 1. ORGANIZATION AND 2. ACCOUNTING POLICIES INCORPORATION BS Funding Inc. was incorporated March 23, 1999 in the state of Delaware. Effective March 28, 1999, a share offering was accepted issuing 500,000 shares at $0.01 per share, to various shareholders. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The company considers all investments with a maturity of three months or less to be cash equivalents. EARNINGS PER SHARE Earnings per share is provided in accordance with Accounting Principles Board Opinion No. 15 (APB No. 15), "Earnings Per Share". Due to the Company's simple capital structure, only one earnings per share calculation is presented. Earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. 2. CURRENCY These financial statements are presented in American dollars. 3. INVESTMENT IN 1192403 ONTARIO INC. During the period, the company acquired 10% of the outstanding shares of 1192403 Ontario Inc. which carries on a commercial real estate rental business. The investment was acquired by issuing 1,500,000 common shares in exchange. The investment is being accounted for utilizing the cost method. BS FUNDING INC. (Incorporated under the laws of the State of Delaware) FINANCIAL STATEMENTS DECEMBER 31, 2001 R. BROCK MACALPINE, CHARTERED ACCOUNTANT INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of BS Funding Inc.: I have audited the balance sheetsof BS Funding Inc. as at December 31, 2001 and December 31, 2000 and the statements of loss andaccumulated deficit and shareholders' equity for the 275 day periods then ended. These financial statements are the responsibility of the company'smanagement. My responsibility is toexpress an opinion on these financialstatements based on my audit. I conduct my audits in accordance with generally accepted auditing standards.Those standards require that I plan and perform my audits to obtained reasonable assurance 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. In my opinion, these financial statements present fairly, in all material respects, the financial position of BS Funding Inc.as at December 31, 2001 and December 31, 2000 and the results of its operations for the 275day periods then ended in accordance with generally accepted accounting principles. Woodstock,Canada R. Brock MacAlpine January 8, 2002 Chartered Accountant STATEMENT 1 BS FUNDING INC. (Incorporated under the laws of the State of Delaware) INTERIM BALANCE SHEETS DECEMBER 31, 2001 (with comparative amounts for December 31, 2000) 2001 2000 ASSETS Current assets Cash $83,500 $- Other assets Appliances 86,200 - Investment in 1192403 Ontario Inc. (note 2) 34,510 8,810 Incorporation costs less: accumulated amortization 73 90 120,783 8,900 $204,283 $8,900 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued charges $3,156 $1,156 Shareholders' equity: Common stock - Authorized: 25,000,000 common shares with par value of $0.0001 Issued and outstanding: 2,001,954 shares 200 200 Additional paid in capital 209,010 13,610 Accumulated deficit (statement 3) (8,083) (6,066) 201,127 7,744 $204,283 $8,900 STATEMENT 2 BS FUNDING INC. INTERIM STATEMENTS OF OPERATIONS FOR THE 275 DAY PERIOD ENDED DECEMBER 31, 2001 (with comparative amounts for the 275 day period ended December 31, 2000) 2001 2000 Expenses: Accounting $1,000 $- Net loss for the period $(1,000) $- Loss per share assuming dilution $0.00 $0.00 Weighted average shares outstanding 2,000,294 2,000,000 STATEMENT 3 BS FUNDING INC. INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE 275 DAY PERIOD ENDED DECEMBER 31, 2001 (with comparative amounts for the 275 day period December 31, 2000) Addit- ional Total Common Stock Paid Accum- Share- In ulated holders' Shares Amount Capital Deficit Equity Deficit, March 31, 2000 2,000,000 $200 $13,610 $(6,066) $7,744 Net loss for the period (statement2) - - - - - Deficit, December 31, 2000 2,000,000 $200 $13,610 $(6,066) $7,744 Deficit, March 31 2001 2,000,257 $200 $39,310 $(7,083) $32,427 Common stock issued for appliances (note 3) 862 - 86,200 - 86,200 Common stock issued for cash (note 3) 835 - 83,500 - 83,500 Net loss for the period (statement 2) - - - (1,000) (1,000) Deficit, December 31, 2001 2,001,954 $200 $209,010 $(8,083) $201,127 STATEMENT 4 BS FUNDING INC. INTERIM STATEMENTS OF CASH FLOWS FOR THE 275 DAY PERIOD ENDED DECEMBER 31, 2001 (with comparative amounts for the 275 day period ended December 31, 2000) 2001 2000 CASH FLOWS FROM OPERATING ACTIVITIES: Netloss (statement 2) $(1,000) $- Adjustments to reconcile net loss to net cash used in operating activities: Changes in assets and liabilities: Appliances (86,200) - Accounts payable and accrued charges 1,000 - Cash utilized in operating activities (86,200) - CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common shares 169,700 - Cash provided by financing activities 169,700 - Increase in cash 83,500 - Cash, beginning - - Cash, ending $83,500 $- SUPPLEMENTAL DISCLOSUREOF CASH FLOW INFORMATION Common stock issued for appliances $86,200 $- Common stock issued for cash 83,500 - $169,700 $- BS FUNDING INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2001 1. ORGANIZATION AND ACCOUNTING POLICIES INCORPORATION BS Funding Inc. was incorporated March 23, 1999 in the state of Delaware. Effective March 28, 1999, a share offering was accepted issuing 500,000 shares at $0.01 per share, to various shareholders. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The company considers all investments with a maturity of three months or less to be cash equivalents. EARNINGS PER SHARE Earnings per share is provided in accordance with Accounting Principles Board Opinion No. 15 (APB No. 15), "Earnings Per Share". Due to the Company's simple capital structure, only one earnings per share calculation is presented. Earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. 2. INVESTMENT IN 1192403 ONTARIO INC. The company owns 40% of the outstanding shares of 1192403 Ontario Inc. which carries on a commercial real estate rental business. The investment was acquired by issuing 1,500,257 common shares in exchange. The investment is being accounted for utilizing the cost method since the remaining common shares of 1192403 Ontario Inc. are closely held 3. APPLIANCES During the period, the corporation issued stock to a related party in exchange for appliances. The company issued 862 common shares at $100.00 each to purchase the appliances. Also during the period the corporation issued stock to the same related party for cash consideration. The company issued 835 common shares at $100 each. BS FUNDING INC. (Incorporated under the laws of the State of Delaware) FINANCIAL STATEMENTS MARCH 31, 2002 R. BROCK MACALPINE, CHARTERED ACCOUNTANT INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of BS Funding Inc.: I have audited the balance sheets of BS Funding Inc. as at March 31, 2002 and March 31, 2001 and the statements of operations and accumulated deficit and shareholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the company's management. My responsibility is to express an opinion on these financial statements based on my audit. I conduct my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform my audits to obtained reasonable assurance 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. In my opinion, these financial statements present fairly, in all material respects, the financial position of BS Funding Inc. as at March 31, 2002 and March 31, 2001 and the results of its operations for the years then ended in accordance with generally accepted accounting principles. Woodstock, Canada R. Brock MacAlpine July 11, 2002 Chartered Accountant STATEMENT 1 BS FUNDING INC. (Incorporated under the laws of the State of Delaware) BALANCE SHEETS MARCH 31, 2002 (with comparative amounts for March 31, 2001) 2002 2001 ASSETS Other assets Appliances $27,333 $- Investment in 1192403 Ontario Inc. (note 2) 34,510 34,510 Note receivable from 1192403 Ontario Inc. 142,268 - Incorporation costs less: accumulated amortization 70 73 $204,181 $34,583 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued charges $4,055 $2,156 Shareholders' equity: Common stock - Authorized: 25,000,000 common shares with par value of $0.0001 Issued and outstanding: 2,001,954 shares 200 200 Additional paid in capital 209,010 39,310 Accumulated deficit (statement 3) (9,084) (7,083) 200,126 32,427 $204,181 $34,583 STATEMENT 2 BS FUNDING INC. STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2002 (with comparative amounts for the year ended March 31, 2001) 2002 2001 Expenses: Accounting $1,998 $1,000 Amortization 3 17 2,001 1,017 Net loss for the year $(2,001) $(1,017) Loss per share assuming dilution $0.00 $0.00 Weighted average shares outstanding 2,000,703 2,000,011 STATEMENT 3 BS FUNDING INC. STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED MARCH 31, 2002 (with comparative amounts for the year ended March 31, 2001) Addit- Total ional Accum- Share- Common Stock Paid in ulated holders' Shares Amount Capital Deficit Equity Deficit, March 31, 2000 2,000,000 $200 $13,610 $(6,066) $7,744 Common stock issued for investment in 1192403 Ontario Inc. valued at $0.01 per share 257 - 25,700 - 25,700 Net loss for the year (statement 2) - - - (1,017) (1,017) Deficit, March 31, 2001 2,000,257 200 39,310 (7,083) 32,427 Common stock issued for appliances (note 3) 862 - 86,200 - 86,200 Common stock issued forcash (note 3) 835 - 83,500 - 83,500 Net loss for the year (statement 2) - - - (2,001) (2,001) Deficit, March 31, 2002 2,001,954 $200 $209,010 $(9,084) $200,126 STATEMENT 4 BS FUNDING INC. STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2002 (with comparative amounts for the year ended March 31, 2001) 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss (statement 2) $(2,001) $(1,017) Adjustments to reconcile net loss to net cash used in operating activities: Amortization 3 17 Changes in assets and liabilities: Appliances (27,333) - Investment in 1192403 Ontario Inc. - (25,700) Note receivable (142,268) - Accounts payable and accrued charges 1,899 1,000 Cash utilized in operating activities (169,700) (25,700) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common shares 169,700 25,700 Cash provided by financing activities 169,700 25,700 Cash, beginning - - Cash, ending $ - $ - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Common stock issued for investment in 1192403 Ontario Inc. $- $25,700 Common stock issued for appliances 86,200 - Common stock issued for cash 83,500 - $169,700 $25,700 BS FUNDING INC. NOTES TO THE FINANCIAL STATEMENTS MARCH 31, 2002 1. ORGANIZATION AND ACCOUNTING POLICIES INCORPORATION BS Funding Inc. was incorporated March 23, 1999 in the state of Delaware. Effective March 28, 1999, a share offering was accepted issuing 500,000 shares at $0.01 per share, to various shareholders. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS The company considers all investments with a maturity of three months or less to be cash equivalents. EARNINGS PER SHARE Earnings per share is provided in accordance with Accounting Principles Board Opinion No. 15 (APB No. 15), "Earnings Per Share". Due to the Company's simple capital structure, only one earnings per share calculation is presented. Earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. 2. INVESTMENT IN 1192403 ONTARIO INC. During the year, the company acquired an additional 30% of the outstanding shares of 1192403 Ontario Inc. which carries on a commercial real estate rental business. The investment was acquired by issuing 257 common shares in exchange. Therefore the company owns 40% of the outstanding shares of 1192403 Ontario Inc. The investment is being accounted for utilizing the cost method since the remaining common shares of 1192403 Ontario Inc. are closely held. 3. APPLIANCES During the period, the corporation issued stock to a related party in exchange for appliances. The company issued 862 common shares at$100.00 each to purchase the appliances. Also, during the period the corporation issued stock to the same related party for cash consideration. The company issued 835 common shares at $100.00 each. 3. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) These financial statements are prepared in accordance with American GAAP. B.S. FUNDING INC. UNAUDITED BALANCE SHEETS AS AT JUNE 30, 2002. ( with comparative amounts for June 30, 2001. ) ASSETS 2002 2001 Other Assets: Appliances $27,333 $0 Investment in 1192403 Ontario Inc. (note2) $34,510 $34,510 Note receivable from 1192403 Ontario Inc. $142,268 $0 Incorporation costs (net of accumulated amortization) $70 $72 ___________________ $204,181 $34,582 ___________________ LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts Payable and Accrued Charges $4055 $2,156 ______________________ Shareholders' Equity: Common Stock Authorized : 25,000,000 common shares with par value $0.0001 Issued and outstanding: 2,001,954 shares $200 $200 Additional paid in capital $209,010 $39,310 Accumulated Deficit ($9,084) ($7,084) $200,126 $32,426 _____________________ $204,181 $34,582 _______________________ (The Accompanying notes are an integral part of these statements) B.S. FUNDING INC. Unaudited Statements of Change in Shareholders' Equity For the 3 months ended June 30, 2002 (With comparative amounts for the 3 months ended June 30, 2001) Additional Total Common Stock Paid Accumu- Share- in lated holders Shares Amount Capital Deficit Equity Balance March 31, 2001 2,000,257 $200 $39,310 ($7,083) $32,427 Net Loss for the Period ($1) ($1) Balance June 30, 2001. 2,000,257 $200 $39,310 ($7,084) $32,426 ______________________________________________________ Balance March 31, 2002 2,001954 $200 $209,010 ($9,084) $200,126 Net Loss for the Period 0 0 Balance June 30, 2002 2,001,954 $200 $209,010 ($9084) $200,126 (The accompanying notes are an integral part of these financial statements) B.S. FUNDING INC. Unaudited Statements of Operations For the 3 months ended June 30, 2002 (With comparative amounts for the 3 months ended June 30, 2001) 2002 2001 Expenses Amortization $0 $1 Net Loss for the Period $0 $1 Loss per share assuming dilution (note 1) $0.00 $0.00 Weighted average shares outstanding 2,001,954 2,000,257 (The accompanying notes are an integral part of these financial statements) B.S. FUNDING INC. Notes to Financial Statements June 30, 2002 ORGANIZATION AND ACCOUNTING POLICIES Incorporation B.S. Funding Inc. was incorporated March 23, 1999 in the state of Delaware. Effective March 28,1999, a share offering was accepted issuing 500,000 shares at $0.01 per share to various shareholders. Cash and Cash Equivalents The company considers all investments with maturity of three months or less to be cash equivalents. Loss per Share Earnings (loss) per share is provided in accordance with Accounting Principles Board Opinion No. 15 (APB No. 15), "Earnings per share". Due to the company's simple capital structure, only one earnings per share calculation is represented. Earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. CURRENCY These financial statements are presented in American dollars. INVESTMENT IN 1192403 ONTARIO INC. The company owns 40% of the outstanding shares of 1192403 Ontario Inc., which carries on a commercial real estate rental business. The investment is being accounted for using the cost method. Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. There are neither changes in/ nor disagreements with accountants on accounting and financial disclosure. PART III Item 15. Financial Statements and Exhibits. The following documents are filed as part of this report. B.S. Funding Inc. report of Thomson, Fisher, and Bossy Chartered Accountants - March 31,1999 Financial Statements B.S. Funding Inc. report ofR. Brock MacAlpine Chartered Accountant - March 31,2000 Financial Statements. B.S, Funding Inc. report of R. Brock MacAlpine Chartered Accountant - March 31, 2001 Financial Statements B. S. Funding Inc. report of R. Brock MacAlpine Chartered Accountant - December 31, 2001 Financial Statements B.S. Funding Inc. report of R. Brock MacAlpine Chartered Accountants - March 31, 2002 Financial Statements B. S. Funding Inc. Unaudited Interim Financial Statements for the period ending June 30, 2002. Financial Statements of Businesses Acquired or to be acquired are not provided - not applicable. The Company has not and is not acquiring any new companies at this time. Pro-Forma Financial Information is not provided at this time - not applicable. Item 16. Index to Exhibits (Pursuant to Item 601 of Regulation SB) Exhibit Name and/or Number Identification of Exhibit 1. Underwriting Agreement 2. Plan of Acquisition, Reorganization, Arrangement, Liquidation, or Succession. 3. Articles of Incorporation and By-Laws 4. Instruments Defining the Rights of Security Holders 5. Opinion on Legality 6. Reserved 7. Reserved 8. Opinion On Tax Matters 9. Voting Trust Agreement and Amendments 10. Material Contracts 11. Statement Re Computation of Per Share Earnings 12. Statement Re Computation of Ratios 13. Annual or Quarterly Reports Form 10Q 14. Reserved 15. Letter on Unaudited Interim Financial Information 16. Letter on Change in Certifying Accountant 17. Letter on Director Resignation 18. Letter on Change in Accounting Principles 19. Reports Furnished to Security Holders 20. Other Documents or Statements to Security Holders 21. Subsidiaries of the Registrant 22. Published Report Regarding Matters Submitted to Vote of Security Holders 23. Consent of Experts and Counsel 24. Power of Attorney 25. Statement of Eligibility of Trustee 26. Invitation for Competitive Bids 27. Reserved 28. Reserved 29-98. Reserved 99. Additional Exhibits Item 17. Description of Exhibits. 1. Underwriting Agreement Not applicable 2. Plan off Acquisition, Reorganization, Arrangement, Liquidation, or Succession. None - Not applicable 3. Articles of Incorporation & By-Laws Articles of Incorporation of the Company filed March 23,1999. By-Laws of the Company adopted March 23, 1999. CERTIFICATE OF INCORPORATION OF B.S. FUNDING INC. FIRST: The name of the corporation is B.S. FUNDING INC. SECOND: The address of its registered office in the State of Delaware is Three Mill Road, Suite 104, City of Wilmington, County of New Castle, 19806-2146. Its registered agent at such address is the Incorporators Ltd. THIRD: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The Corporation shall have the authority to issue twenty-five million shares of common stock with a par value of $0.0001. FIFTH: The Board of Directors is expressly authorized to adopt, amend, or repeal the By-Laws of the corporation. SIXTH: The stockholders and directors may hold their meetings and keep the books and documents of the corporation outside the State of Delaware, at such places from time to time designated by the By-Laws, except as otherwise required by the Laws of Delaware. SEVENTH: The corporation is to have perpetual existence. EIGHTH: The name and mailing address of the incorporator is Matthew D. Esteves, Three Mill Road, Suite 104, Wilmington, DE 19806-2146 NINTH: The number of directors of the corporation shall be fixed from time to time by its By-Laws and may be increased or decreased. TENTH: The Board of Directors is expressly authorized and shall have such Authority as set forth in the By-Laws to the extent such authority would be valid under Delaware Law. ELEVENTH: No director of the corporation shall have personal liability to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that this provision shall not eliminate or limit the liability of a director (a) for any breach of the director's duty or loyalty to the corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the Delaware Corporation Law, or (d) for any transaction from which the Director derived an improper personal benefit. THE UNDERSIGNED Incorporator for the purpose of forming a corporation pursuant to the laws of the State of Delaware, does make this Certificate,hereby declaring and certifying that the facts herein stated are true. August 12, 1998 By: Signature Matthew D. Esteves - Incorporator STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 03/23/1999 991111547 - 3017855 CORPORATE BY-LAWS OF B.S. FUNDING INC. OFFICES 1. The registered office of the corporation shall be in the city of Wilmington, Delaware and the resident agent in charge thereof shall be the Incorporators Ltd. The corporation may also have offices at such otherplaces both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporationmay require. CORPORATE SEAL 2. The corporation may transact any and all business without the need for a corporate seal. If a seal is required by law, the corporation may use a facsimile where inscribed therein is the name of the corporation,the year of its incorporation, and the words "Corporate Seal, Delaware". In its discretion, the Board is permitted to acquire and use a true seal setting forth the information noted above. MEETING OF STOCKHOLDERS 3. The annual meeting of stockholders for the election of directors shall be held on the 31st day of May in each year, or if that day be a legal holiday,on the next succeeding day not a legal holiday, at nine 0'clock A.M., at which meeting the stockholders shall elect by plurality vote, a Board of Directors,and may transact such other business as may come before the meeting. 4. Special meetings of the stockholders may be called at any time by the President and shall be called by the President or Secretary on the request in writing of a majority of the directors or at the request in writing of a majority of stockholders entitled to vote. 5. All meetings of the stockholders for the elections of directors shall be held at the office of the corporation in the City of Wilmington, State of Delaware, or at such other place as may be fixed by the Board of Directors, provided that at least ten days' notice be given to the stockholders of the place so fixed. All other meetings of the stockholders shall be held at such place or places, within or without the State of Delaware, as may from time to time be fixed in the notices or waivers of notices thereof 6. Stockholders of the corporation entitled to vote shall be such persons as are registered on the stock transfer books of the corporation as owners of stock. The Board of Directors may set a record date for annual meetings, but such record date may not be more than 45 days prior to the annualmeeting. 7. A complete list of stockholder entitled to vote, arranged in alphabetical order, and showing the address of each stockholder shall be prepared by the Secretary and shall be open to the examination of any stockholder at the place of election. 8. Each stockholder entitled to one vote shall, at every meeting of the stockholders, be entitled to one vote for each share held in person or by proxy signed by the stockholder, but no proxy shall be voted on or after three years from its date, unless it provides for a longer period. Such right to vote shall be subject to the right of the Board of Directors to fix a record date for stockholders as provided by these By-Laws. 9. The holders of a majority to the stock issued and outstanding and entitled to vote at a meeting of the stockholders, 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 Certificate of Incorporation. If such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote at the meeting, present in person or represented by proxy,shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. 10. When a quorum is present at any meeting, the vote of the holdersof a majority of the stock having voting power present in person or represented by proxy shall decide any question properly brought before such meeting, unless the question is one which by express provision of the statutes of the State of Delaware or of the Certificate of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. 11. Notice of all meetings shall be mailed by the Secretary to each stockholder of record entitled to vote at his last known post officeaddress, for annual meetings fifteen days and for special meetings ten days prior thereto. 12. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. 13. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of voters that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon where present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent, shall be given to those stockholders who have not consented in writing. DIRECTORS 14. The property and business of the corporation shall be managed and controlled by the Board of Directors. 15. The directors shall hold office until the next annual election and until their successors are elected and qualified. Directors shall be elected by the stockholders, except that if there by any vacancies on the Board of Directors by reason of death, resignation, or otherwise, or if there be any newly created directorships may be filled for the unexpired term by a majority of the directors then in office, though less than a quorum. POWERS OF DIRECTORS 16. The Board of Directors shall have all such powers as may be exercised by directors of a Delaware corporation, subject to the provisions of the statutes of Delaware, the Certificate of Incorporation, and the By-Laws. MEETINGS OF DIRECTORS 17. After each annual election of directors, the newly elected directors may meet for the purpose of organization,, the election of officers, and the transaction of other business, at such time and place as shall be fixed by the stockholders at the annual meeting, and, if a majority of the directors be present at such place and time, no prior notice of such meeting will be required to be given to the directors. The place and time of such meeting may also be fixed by written consent of the directors. 18. Regular meeting of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determinedby the Board. 19. Special meeting of the directors may be called by the president on two days' notice by telegram to each director and shall be called by the president in like manner on the written request of two directors. 20. Special meetings of the directors may be held within or without the State of Delaware at such place as is indicated in the notice or waiver of notice thereof 21. A majority of the directors in office at the time of any regular or special meeting shall constitute a quorum unless the By-Laws specify a single director in which case a single director shall constitute a quorum. 22. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if all members of theBoard consent thereto in writing, and the writings are filed with the minutes of proceedings of the Board. 23. Members of the Board of Directors may participate in a meeting ofd the Board of Directors by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting may hear one another, and such participation in a meeting shall constitute presence in person at the meeting. COMMITTEES 24. The Board of Directors may, by resolution, create committees from time to time, which committees shall have and may exercise all the powers and authority of the Board of Directors to manage the business and affairs of the corporation. However, the committees shall not have the power to amend the Certificate of Incorporation, adopt an agreement of merger or consolidation,recommend to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommend to the stockholders a dissolution of the corporation or a revocation of a dissolution, amend the By-Laws of the corporation; and unless a resolution or the Certificate of Incorporation expressly so provides, no such committee shall have the power to declare a dividend or authorize the issuance of stock. OFFICERS OF THE CORPORATION 25. The officers of the corporation shall be a president, a secretary,a treasurer, and such other officers as may from time to time be chosen by the Board of Directors. All offices may be held by the same person. 26. The officers of the corporation shall hold office until their successors are chosen and qualify in their stead. Any officer chosen or appointed by the Board of Directors may be removed either with or without cause at any time by the affirmative vote of a majority of the whole Board ofDirectors. If the office of any officer or officers becomes vacant for any reason, the vacancy shall be filled by the affirmative vote of a majority of the whole Board of Directors. 27. In case of the absence or disability of any officer of the corporation, or for any other reason deemed sufficient by a majority of duties to any other officer or to any director. SECRETARY 27. The secretary shall attend all meetings of the corporation,the Board of Directors, and committees. He shall act as clerk thereof and shall record all of the proceedings of such meetings in a book keptfor that purpose. He shall have custody of the corporate seal of the corporation and shall have authority to affix the seal to any instrument requiring it and when so affixed, it may be attested by his signature. He shall give proper notice of meetings of stockholders and directors and shall perform other such duties as shall be assigned to him by the president or the Board of Directors. TREASURER 28. The treasurer shall have custody of the funds and securities of the corporation and shall keep 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. 29. The treasurer shall disburse the funds of the corporation as may be ordered by the Board or the president, taking proper vouchers for such disbursements and shall render to the president and directors, whenever they may require it, an account of all his transactions as treasurer and of the financial condition of the corporation, and at the regular meeting of the Board next preceding the annual members meeting, a like report for the preceding year. 30. The treasurer shall keep and account of stock registered and transferred in such manner subject to such regulations as the Board of Directors may prescribe. 31. The treasurer shall give the corporation a bond if requiredby the Board of Directors in such sum and with security satisfactory tothe Board of Directors for the faithful performance of the duties of his office and the restoration to the corporation, in the case of his death, resignation, or removal from office, of all books, paper, vouchers, money and other property of whatever kind in his possession, belonging to the corporation. He shall perform such other duties as the Board of Directors or executive committee may from time to time prescribe or require. PRESIDENT 32. The president shall be the chief executive officer of the corporation. He shall preside at all meetings of the stockholders andthe Board of Directors, and shall have general and active managementof the business of the corporation, and shall see that all orders and resolutions of the Board of Directors are carried into effect. 33. The president shall execute bonds, mortgages, and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed, and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officeor agent of the corporation. STOCKS 34. Every holder of stock in the corporation shall be entitledto have a certificate, signed by, or in the name of the corporation by,the president or secretary of the corporation, certifying the number ofshares owned by him in the corporation. Certificates may be issued for partly paid shares, and in such case upon the face or back of thecertificates issued to represent any such partly paid shares, the totalamount of the consideration to be paid therefore, and the amount paidthereon, shall be specified. 35. Any or all of the signatures on the certificates may be facsimile. 36. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificatestheretofore issued by the corporation alleged to have been lost, stolen,or destroyed, upon the making of an affidavit of the fact by the person claiming their certificate of stock to be lost, stolen or destroyed. The Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged tohave been lost, stolen, or destroyed. CHECKS 37. All checks, drafts, or orders for the payment of money shall be signed by the treasurer or by such other officer or officers as the Board of Directors may from time to time designate. No check shall be signed in blank. BOOKS AND RECORDS 38. The Books, accounts, and records of the corporation, except as otherwise required by the laws of the State of Delaware, may be kept within or without the State of Delaware, at such place or places as may from time to time be designated by the By-Laws or by the resolutions of the directors. NOTICES 39. Notice required to be given under the provisions of these By- Laws to any director, officer or stockholder, shall not be construed to mean personal notice, but may be given in writing by depositing the same in a post office or letter box, in a post-paid sealed wrapper, addressed to such stockholder, officer, or director at such address as appears on the books of the corporation, and such notice shall be deemed to be given at the time when the same shall thus be mailed. Any stockholder, officer, or director, may waive, in writing, any notice required to be given under these By-Laws, whether before or after the time stated therein. DIVDENDS 40. Dividends upon the capital stock of the corporation, subject to the Certificate of Incorporation, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation. 41. 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 or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the directors shall think conducive to the best interest of the corporation. The directors may modify or abolish any such reserve in the manner by which it was created. FISCAL YEAR 42. The fiscal year of the corporation shall be determined by the Board of Directors. AMENDMENT OF BY-LAWS 43. These By-Laws may be amended, altered, repealed, or added to at any regular meeting of the stockholders or of the Board of Directors,or at any special meeting called for that purpose, by affirmative vote of a majority of the stockholders entitled to vote, or by affirmative vote of a majority of the whole board, as the case may be. 44. Any and all disputes and controversies by and between the shareholders or the directors arising out of or with respect to the business of or affecting the affairs of the corporation, witch disputes and controversies cannot be resolved under the terms of the corporate By-Laws or Certificate of incorporation, because of a tie vote or deadlock between the directors and shareholders shall be settled by arbitration inthe following manner. Each side of the dispute shall be entitled to name one arbitrator and both arbitrators so named shall together agree upon a third arbitrator, with the findings of the arbitration panel to be binding upon all parties of the dispute. Unless otherwise mutually agreed by the parties the arbitration shall take place in accordance with and subject to the provisions of the Delaware Uniform Arbitration Act, 10Del. C. "5701 et.seq. 4. Instruments Defining the Rights of Security Holders No instruments other than those included in Exhibit 3. 5. Opinion on Legality Not applicable 6. Reserved Not applicable 7. Reserved Not applicable 8. Opinion on Tax Matters Not applicable 9. Voting Trust Agreement Not applicable 10. Material Contracts None - Not applicable 11. Statements Re Computation of Per Share Earnings Not applicable - Computation of per share earnings can be clearly determined from the statement of Operations in the Company's financial statements 12. Statements Re Computation of Ratios Not applicable 13. Annual or Quarterly Reports -Form 10Q Not applicable 14. Reserved Not applicable 15. Letter on Un- audited Interim Financial Information We have compiled the financials for B. S. Funding Inc. for the Quarter ending June 30, 2002.Although management believes the financials to be accurate, they are unaudited and should be viewed with this in mind. Management believes these financials to accurately reflect the the status of the company. No independant audit has confirmed these statements and any reader should be apprised that the financials could differ as a result of an audit. Management believes it followed USGAAP to compile these financials but make no warranty as to the accuracy of this statement. Sincerely, MARY K. SCHELL, President, B.S. Funding Inc.. Date June 30, 2002. 16. Letter on Change in Certifying Accountant Not applicable 17. Letter on Director Resignation Not applicable 18. Letter on Change in Accounting Principles Not applicable 19. Reports Furnished to Securities Holders Not applicable 20. Other Documents or Statements to Security Holders None - Not applicable 21. Subsidiaries of the Registrant None - Not applicable 22. Published Report Regarding Matters Submitted to Vote of Security Holders Not applicable 23. Consent of Experts and Counsel August, 20, 2002. I, R. Brock MAcAlpine do hereby consent to the use of the audits performed on B. S. Funding Inc. by my firms, for March 31, 1999, March 31, 2000, March 31, 2001 and the March 31, 2002 for the filing of a form 10 with the Securities and Exchange Commission. Signature: R. Brock MacAlpine 24. Power of Attorney Not applicable 25. Statement of Eligibility of Trustee Not applicable 26. Invitation for Competitive Bids Not applicable 27. Reserved Not applicable 28. Reserved Not applicable 29 -98. Reserved Not applicable 99. Addition Exhibits None SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 10, 2002. B.S. FUNDING INC. (Registrant) By: Mary K. Schell - President (Signature) Mary K. Schell -----END PRIVACY-ENHANCED MESSAGE-----