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EX-31 - 302 CERTIFICATIONS - BAYNON INTERNATIONAL CORPbaynon10q1q1ex31.txt
EX-32 - 906 CERTIFICATIONS - BAYNON INTERNATIONAL CORPbaynon10q1q11ex32.txt

                  SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C. 20549

                              FORM 10-Q

 [x] Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended March 31, 2011

-OR-

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities And Exchange Act of 1934 for the transaction period from
_________ to________

                  Commission File Number      0-4006

                       Baynon International Corp.
                       (Exact name of Registrant
                             in its charter)

            Nevada                                88-0285718
-------------------------------            ----------------------
(State or Other Jurisdiction of                (I.R.S. Employer
 Incorporation or Organization)              Identification Number)

266 Cedar Street, Cedar Grove, New Jersey         07009
-----------------------------------------      ----------
(Address of Principal Executive Offices)        (Zip Code)

Baynon's Telephone Number, Including Area Code: (973) 239-2952

Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerate filer, or a small
reporting company as defined by Rule 12b-2 of the Exchange Act):

Large accelerated filer [ ]     Non-accelerated filer     [ ]
Accelerated filer       [ ]     Smaller reporting company [x]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes [x] No [ ]

The number of outstanding shares of the registrant's common stock, May
2, 2011:  Common Stock - 25,860,192




2 BAYNON INTERNATIONAL CORP. FORM 10-Q INDEX Page ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Balance Sheets at March 31, 2011 and December 31, 2010 3 Statements of Operations for the three months ended March 31, 2011 and 2010 4 Statements of Cash Flows for the three months ended March 31, 2011 and 2010 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Quantitative and Qualitative Disclosure About Market Risk 10 Item 4. Controls and Procedures 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings 12 Item 1A. Risk Factors 12 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 12 Item 3. Defaults Upon Senior Securities 12 Item 4. (Removed and Reserved) 12 Item 5. Other Information 12 Item 6. Exhibits 12 SIGNATURES 12
3 BAYNON INTERNATIONAL CORP. BALANCE SHEETS March 31, December 31, 2011 2010 --------- --------- (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,094 $ 7,890 -------- -------- TOTAL CURRENT ASSETS 5,094 7,890 -------- -------- TOTAL ASSETS $ 5,094 7,890 ======== ======== LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 15,675 $ 14,049 Convertible notes payable - stockholders 45,000 45,000 Accrued interest - stockholders 2,798 2,132 -------- -------- TOTAL CURRENT LIABILITIES 63,473 61,181 -------- -------- STOCKHOLDERS' DEFICIENCY: Common stock, par value $.001, authorized 50,000,000 shares, issued and outstanding 25,860,192 shares 25,860 25,860 Additional paid-in capital 178,948 178,948 Accumulated deficit (263,187) (258,099) -------- -------- TOTAL STOCKHOLDERS' DEFICIENCY (58,379) (53,291) -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 5,094 $ 7,890 ======== ======== The accompanying notes are an integral part of these financial statements
4 BAYNON INTERNATIONAL CORP. STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31 2011 2010 ---------- ---------- Revenues $ - $ - Cost of revenue - - ---------- ---------- Gross Profit - - ---------- ---------- Other Costs: General and administrative expenses 4,426 2,102 ---------- ---------- Total other costs 4,426 2,102 ---------- ---------- Operating loss (4,426) (2,102) ---------- ---------- Other Income (Expense): Interest income 4 4 Interest expense - stockholders (666) (296) ---------- ---------- Total Other Income (Expense) (662) (292) ---------- ---------- Net Loss $ (5,088) $ (2,394) ========== ========== Loss per share: Basic and diluted loss per common share $ - $ - ========== ========== Basic and diluted common shares outstanding 25,860,192 25,860,192 ========== ========== The accompanying notes are an integral part of these financial statements
5 BAYNON INTERNATIONAL CORP. STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED) 2011 2010 ------- ------- Cash flows from Operating Activities: Net loss $(5,088) $(2,394) Adjustments to reconcile net loss to net cash used in operating activities: Increase (decrease) in accounts payable and accrued expenses 1,626 (302) Increase in accrued interest - stockholders 666 296 ------- ------- Net cash used in operating activities (2,796) (2,400) ------- ------- Decrease in Cash and Cash Equivalents (2,796) (2,400) Cash and Cash Equivalents, beginning of period 7,890 4,631 ------- ------- Cash and Cash Equivalents, end of period $ 5,094 $ 2,231 ======= ======= Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Income taxes $ 500 $ 500 ======= ======= Interest $ - $ - ======= ======= The accompanying notes are an integral part of these financial statements
6 BAYNON INTERNATIONAL CORP. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 AND 2010 (UNAUDITED) 1. THE COMPANY Baynon International Corp. formerly known as Technology Associates Corporation (the "Company"), was originally incorporated on February 29, 1968 under the laws of the Commonwealth of Massachusetts to engage in any lawful corporate undertaking. On December 28, 1989, the Company reincorporated under the laws of the State of Nevada. The Company was formerly engaged in the technology marketing business and its securities traded on the National Association of Securities Dealers OTC Bulletin Board. The Company has not engaged in any business operations for at least the last eight fiscal years and has no operations to date. The Company will attempt to identify and negotiate with a business target for the merger of that entity with and into the Company. In certain instances, a target company may wish to become a subsidiary of the company or wish to contribute assets to the Company rather than merge. No assurance can be given that the Company will be successful in identifying or negotiating with any target company. The Company provides a means for a foreign or domestic private company to become a reporting (public) company whose securities would be qualified for trading in the United States secondary market. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Presentation The December 31, 2010 balance sheet data was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. In the opinion of management, the accompanying unaudited financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of the Company as of March 31, 2011, its results of operations for the three ended March 31, 2011 and 2010 and its cash flows for the three months ended March 31, 2011 and 2010. The statements of operations for the three months ended March 31, 2011 and 2010 are not necessarily indicative of the results for the full year. While the Company believes that the disclosures presented are adequate to make the information not misleading, these financial statements should be read in conjunction with the financial statements and accompanying notes included in the Company's annual Report on Form 10-K for the year ended December 31, 2010. Loss Per Share The Company computes loss per share in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 260, "Earnings Per Share".
7 BAYNON INTERNATIONAL CORP. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 AND 2010 (UNAUDITED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding, Diluted earnings per share reflects the potential dilution that could occur if securities or other agreements to issue common stock were exercised or converted into common stock. Diluted earnings per share is computed based upon the weighted average number of common shares and dilutive common equivalent shares outstanding, which includes convertible debentures, stock options and warrants. The following securities have been excluded from the calculation of loss per share for the three months ended March 31, 2011 and 2010 as their effect would be anti-dilutive: 2011 2010 ---------- ----------- Convertible note payable and accrued interest Interest - stockholder 22,912,658 2,069,370 Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred continuing operating losses and has an accumulated deficit of $263,187 at March 31, 2011. The Company has no revenue generating operations and has limited cash resources. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management believes that it will be able to achieve a satisfactory level of liquidity to meet the Company's obligations through March 31, 2012 by obtaining additional financing from key officers, directors and certain investors. However, there can be no assurance that the Company will be able to generate sufficient liquidity to maintain its operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Fair Value of Financial Instruments The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts payable, notes payable, and accrued expenses approximate fair value based on the short-term maturity of those instruments. Recently Issued Accounting Standards Management does not believe that any recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.
8 BAYNON INTERNATIONAL CORP. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 AND 2010 (UNAUDITED) 3. CONVERTIBLE NOTES PAYALE - STOCKHOLDER On September 1, 2009, the Company issued an unsecured note payable to a stockholder in exchange for $20,000 in cash, for the Company's working capital needs. The note bored interest at 6% per annum and matured on September 1, 2010. The stockholder had the option to convert the note and accrued interest into the Company's common stock at $.01 per share. On September 1, 2010, the note was extended (renewed) to September 1, 2011, with the same terms as the original note. The option expires on September 1, 2011. On August 23, 2010, the Company issued an unsecured note payable to the same stockholder in exchange for $25,000 in cash, for the Company's working capital needs. The not bears interest at 6% per annum, and matured on August 23, 2011. The stockholder has the option to convert the note and accrued interest into the Company's common stock at $.00125 per share. The option expires on August 23, 2011. At March 31, 2011 and December 31, 2010, accrued interest on the notes was $2,797 and $2,132, respectively. Interest expense amounted to $666 and $296 for the three months ended March 31, 2011 and 2010, respectively. 4. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date that the financial were issued.
9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements This Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These statements include those concerning the following: Our intentions, beliefs and expectations regarding the fair value of all assets and liabilities recorded; our strategies; growth opportunities; product development and introduction relating to new and existing products; the enterprise market and related opportunities; competition and competitive advantages and disadvantages; industry standards and compatibility of our products; relationships with our employees; our facilities, operating lease and our ability to secure additional space; cash dividends; excess inventory, our expenses; interest and other income; our beliefs and expectations about our future success and results; our operating results; our belief that our cash and cash equivalents will be sufficient to satisfy our anticipated cash requirements, our expectations regarding our revenues and customers; investments and interest rates. These statements are subject to risk and uncertainties that could cause actual results and events to differ materially. Baynon undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q. Critical Accounting Policies The financial statements and accompanying footnotes included in this report has been prepared in accordance with accounting principles generally accepted in the United States with certain amount based on management's best estimates and judgments. To determine appropriate carrying values of assets and liabilities that are not readily available from other sources, management uses assumptions based on historical results and other factors that believe are reasonable. Actual results could differ from those estimates. Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2010. There have been no material changes to our critical accounting policies as of and for the three months ended March 31, 2011. Trends and Uncertainties There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on our limited operations. There are no known causes for any material changes from period to period in one or more line items of Baynon's financial statements. Liquidity and Capital Resources At March 31, 2011, Baynon had a cash balance of $5,094, which represents a $2,796 decrease from the $7,890 balance at December 31, 2010. This decrease was primarily the result of cash used to satisfy the requirements of a reporting company. Baynon's working capital deficit at March 31, 2011 was $58,379 as compared to a December 31, 2010 deficit of $53,291. The focus of Baynon's efforts is to acquire or develop an operating business. Despite no active operations at this time, management intends to continue in business and has no intention to liquidate Baynon. Baynon has considered various business alternatives including the possible acquisition of an existing business, but to date has found
10 possible opportunities unsuitable or excessively priced. Baynon does not contemplate limiting the scope of its search to any particular industry. Management has considered the risk of possible opportunities as well as their potential rewards. Management has invested time evaluating several proposals for possible acquisition or combination; however, none of these opportunities were pursued. Baynon presently owns no real property and at this time has no intention of acquiring any such property. Baynon's sole expected expenses are comprised of professional fees primarily incident to its reporting requirements. The accompanying financial statement has been prepared assuming Baynon will continue as a going concern. As shown in the accompanying financial statements, Baynon has incurred losses of $5,088 and $2,394 for the three months ended March 31, 2011 and 2010, respectively, and a working capital deficiency which raises substantial doubt about the Company's ability to continue as a going concern. Management believes Baynon will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional equity or debt financing to sustain its operations until it can achieve profitability and positive cash flows, if ever. Management plans to seek additional debt and/or equity financing for the Company, but cannot assure that such financing will be available on acceptable terms. Baynon's continuation as a going concern is dependent upon its ability to ultimately attain profitable operations, generate sufficient cash flow to meet its obligations, and obtain additional financing as may be required. Our auditors have included a "going concern" qualification in their auditors' report dated March 23, 2011. Such a "going concern" qualification may make it more difficult for us to raise funds when needed. The outcome of this uncertainty cannot be assured. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that management will be successful in implementing its business plan or that the successful implementation of such business plan will actually improve Baynon's operating results. Results of Operations for the Three Months Ended March 31, 2011, compared to the Three months ended March 31, 2010. Baynon incurred a net loss of $5,088 in the current period versus a net loss of $2,394 in the prior period. General and administrative expenses were $4,426 compared to $2,102 in the prior period, an increase of $2,324. General and administrative expenses were incurred primarily to enable Baynon to satisfy the requirements of a reporting company. During the current and prior period, Baynon did not record an income tax benefit due to the uncertainty associated with Baynon's ability to merge with an operating company, which might permit Baynon to avail itself of those advantages. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not applicable for a smaller reporting company.
11 Item 4. Controls and Procedures. During the three months ended March 31, 2011, there were no changes in our internal controls over financial reporting (as defined in Rule 13a- 15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2011. Based on this evaluation, our chief executive officer and chief principal financial officers have concluded such controls and procedures to be effective as of March 31, 2011 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
12 PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 1A. Risk Factors Not applicable for smaller reporting company. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None Item 3. Defaults Upon Senior Securities None Item 4. (Removed and Reserved) Item 5. Other Information None Item 6. Exhibits Exhibit 31 - Certifications pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 Exhibit 32 - Certifications pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: May 2, 2011 BAYNON INTERNATIONAL CORP. By: /s/Pasquale Catizone ------------------------- Pasquale Catizone, Principal Executive Officer /s/Daniel Generelli ----------------------------- Daniel Generelli Chief Financial Officer