Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the registrant’ s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. o

 

 

 

 

 

				Page No.
PART I
Item 1.		Description of Business
Item 2.		Description of Properties
Item 3.		Legal Proceedings
Item 4.		Submission of Matters to a Vote by Security Holders
PART II
Item 5.		Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
Item 6.		Management’s Discussion and Analysis or Plan of Operation
Item 7.		Financial Statements
Item 8.		Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
Item 8A (T).		Controls and Procedures
Item 8B.		Other Information
PART III
Item 9.		Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act
Item 10.		Executive Compensation
Item 11.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 12.		Certain Relationships and Related Transactions and Director Independence
Item 13.		Exhibits
Item 14.		Principal Accountant Fees and Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior to Closing, Ponce Acquisition, LLC (“Ponce Acquisition”) also agreed to cancel, and returned to QuikByte, an aggregate of 7,450,000 shares of common stock. The Company had issued 7,500,000 shares of its common stock on January 31, 2007 to Ponce Acquisition for $15,000, or $0.002 per share. The proceeds from this issuance were used to pay a portion of the costs to bring the Company current in its reporting obligations under the Exchange Act. Michael A. Littman, who was the Company’s legal counsel prior to the Change of Control, is the managing member of Ponce.

 

Effective as of the Closing, in accordance with the terms of the Purchase Agreement, the existing officers and directors of QuikByte resigned, and Kevin R. Keating was appointed Director, Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer of QuikByte.

 

In addition, effective as of the Closing, Jeff L. Andrews and Margie L. Blackwell were appointed Directors of the Company. Accordingly, at the Closing, in accordance with the provisions of the Purchase Agreement, a change of a majority of QuikByte’s directors occurred.

 

Kevin R. Keating is the father of Timothy J. Keating, the principal member of Keating Investments, LLC. Keating Investments, LLC is the managing member of KI Equity. Timothy J. Keating is the manager of KI Equity. Additionally, Jeff L. Andrews and Margie L. Blackwell are members of Keating Investments, LLC.

 

Prior to the Closing, on March 21, 2007, the Company issued 60,000,000 shares of its common stock to KI Equity for aggregate consideration of $600,000, or $0.01 per share. The proceeds from this sale were used to settle a variety of pre-existing liabilities of the Company.

 

Following the Closing, on March 26, 2007, the Company issued 7,500,000 shares of its common stock to KI Equity for aggregate consideration of $75,000, or $0.01 per share. The proceeds from this sale are being used for working capital to pay expenses to maintain the reporting status of the Company.

 

Also on March 26, 2007, the Company issued 1,600,000 shares of its common stock to Kevin R. Keating, the sole officer and director of the Company, for services rendered to the Company valued at $16,000, or $0.01 per share. It also issued 5,500,000 shares of its common stock to Garisch Financial, Inc. (“GFI”) for consulting services rendered to the Company valued at $55,000, or $0.01 per share.

 

The shares of Common Stock issued to KI Equity, Kevin R. Keating and GFI in March of 2007 were issued under an exemption from registration under Section 4(2) of the Securities Act. As such, the shares of Common Stock issued to KI Equity, Kevin R. Keating and GFI will be restricted shares, and the holder thereof may not sell, transfer or otherwise dispose of such shares without registration under the Securities Act or an exemption therefrom. The Company has granted demand and piggyback registration rights to KI Equity, Kevin R. Keating and GFI with respect to the above shares.

 

Current Business

 

The Company, based on proposed business activities, is currently a “blank check” company. The SEC defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Exchange Act, and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. The Company is also a “shell company,” defined in Rule 12b-2 under the Exchange Act as a company with no or nominal assets (other than cash) and no or nominal operations. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.

 

The Company’s current business strategy is to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business

 

Employees

 

As of December 31, 2007, the Company had no employees or consultants. Prior to the Change of Control, Reed Clayson, our former President, allocated a portion of his time to our business activities, primarily maintaining our status as a reporting company under the Exchange Act and seeking a business combination with a private operating company, without compensation. Following the Change of Control, Kevin R. Keating, our current Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer, assumed these responsibilities, also without compensation.

 

Risk Factors

 

An investment in our common stock involves investment risks and the possibility of the loss of an investor's entire investment. A prospective investor should evaluate all information about us and the risk factors discussed below in relation to his financial circumstances before investing in us.

 

No Current Operating Business. We currently have no relevant operating business, revenues from operations or assets. Our business plan is to seek a merger or business combination with an operating business. We face all of the risks inherent in the investigation, acquisition, or involvement in a new business opportunity. An investor's purchase of any of our securities must be regarded as placing funds at a high risk in a new or "start-up" venture with all of the unforeseen costs, expenses, problems, and difficulties to which such ventures are subject.

 

Going Concern. Since inception, the Company has generated no revenues and has incurred a cumulative operating loss of $1,749,928 and a cumulative net loss of $1,473,782. We currently have no source of operating revenue, and only limited working capital with which to pursue our business plan, which contemplates the completion of a business combination with an operating company. The amount of capital required to sustain operations until the successful completion of a business combination is subject to future events and uncertainties. It may be necessary for the Company to secure additional working capital through loans or sales of common stock, and there can be no assurance that such funding will be available in the future. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Our auditor has issued a “going concern” qualification as part of its opinion in the Audit Report for the year ended December 31, 2007.

 

No Assurance of Success or Profitability. There is no assurance that we will acquire a suitable and favorable business opportunity in a reverse merger or similar transaction. In addition, even if we become involved in a business opportunity, there is no assurance that the business we acquire will generate revenues or profits, or that the value of our common stock will increase as a result of the acquired business opportunity.

 

 

Possible Business -- Not Identified and Highly Risky. We have not identified and have no commitments to enter into or acquire a specific business opportunity. Therefore we can disclose the risks and hazards of a business or opportunity that we might acquire only in a general manner, and cannot disclose the risks and hazards of any specific business or other opportunity that we may enter into. An investor can expect a potential business opportunity to be quite risky. Our acquisition of or participation in a business opportunity could result in a total loss to our investors and stockholders if the target business is unsuccessful. Further, any investment in us may continue to be highly illiquid.

 

Type of Business Acquired. The type of business that may be acquired is not identified. Therefore, our investors and stockholders have to rely on our management to determine which target business to pursue. There are no controlling parameters of the business to be acquired. Thus, ultimately an investment will depend on the target business and therefore investors in us will be subject to all the risks that would be associated with that selected business. Our management may have the right to approve and authorize a reverse merger transaction with a target company without obtaining the vote of the majority of our stockholders.

 

Impracticability of Exhaustive Investigation. We have limited funds and lack full-time management which will likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a business opportunity before we commit our limited capital and other resources to acquire a target business. Management decisions, therefore, likely will be made without detailed feasibility studies, independent analysis, market surveys, and the like which, if we had more funds available to us, would be desirable. We will be particularly dependent in making decisions upon information provided by the promoter, owner, sponsor, or others associated with the business opportunity seeking to be acquired by us.

 

Lack of Diversification. Because of our limited financial resources, it is unlikely that we will be able to diversify our acquisitions or operations. The inability to diversify our activities into more than one area will subject our investors and stockholders to economic fluctuations within a particular business or industry and therefore increase the risks associated with the investment. We only intend to acquire a single business opportunity and thus your investment will lack diversification.

 

Maintenance of Reporting Company Status. We will require audited financial statements from target companies that we propose to acquire. No assurance can be given, however, that the post-transaction company will, following the closing of the reverse merger transaction, be able to continue to meet the reporting requirements under the Exchange Act including, without limitation, the timely preparation of reviewed and audited financial statements. We, at the time of acquisition, will be subject to the reporting provisions of the Exchange Act, and thus will be required to furnish certain information about significant acquisitions, including audited financial statements for any business that the shell company acquires. In cases where we have completed a reverse merger transaction and reviewed audited financial statements cannot subsequently be obtained, the continued ability of the post-transaction company to remain a reporting company and publicly trading will be in jeopardy and may significantly reduce the value of your investment.

 

Investment Company Regulation. We do not intend to become classified as an "investment company" under the Investment Company Act of 1940 (the "Investment Act"). We believe that we will not become subject to regulation under the Investment Act because (i) we will not be engaged in the business of investing or trading in securities, and (ii) any acquisition undertaken will result in the target company obtaining a majority interest in us. Should there be a requirement to register as an investment company, it would cause significant registration and compliance costs. Any violation of the Investment Act will subject us to materially adverse consequences. Should the SEC find that we are subject to the Investment Act, and order registration under the Investment Act, we would resist such finding and take steps to avoid such registration. Irrespective of whether the SEC or we were to prevail in such dispute about whether or not we are an investment company, the damages and delays would be costly.

 

 

Other Regulation. Any acquisition made by us may be of a business that is subject to regulation or licensing by federal, state, or local authorities. Foreign companies may also be considered, and be subject to similar business regulations as are applicable in the United States and also may be subject to limitations on ownership by foreign persons and entities. Compliance with such regulations and licensing can be expected to be a time-consuming, expensive process and may limit our other investment opportunities. We intend to pursue potential business opportunities in foreign countries, including China, and as such, such opportunities will be subject to foreign country laws and regulations affecting foreign investment, business operations, currency exchange, repatriation of profits, and taxation, which will increase the risk of your investment.

 

Dependence upon Management. We will be heavily dependent upon the skills, talents, and abilities of our management to implement our business plan. Our management may devote limited time to our affairs, which may be inadequate for our business, and may delay the acquisition of any business opportunity considered. Furthermore, management has little experience in seeking, investigating, and acquiring businesses and will depend upon its limited business knowledge in making decisions regarding our acquisition of a business opportunity. Because investors will not be able to evaluate the merits of possible business acquisitions by us, they should critically assess the information concerning the management.

 

Dependence upon Outside Advisors. To supplement the business experience of management, we may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. Some of these outside advisors may be our affiliates or their affiliated entities. The selection of any such advisors will be made by our management without any input from stockholders.

 

Conflicts of Interest. Our management has other business interests to which they will devote primary attention. As a result, conflicts of interest may arise that can be resolved only through the exercise by them of their judgment as may be consistent with their fiduciary duties. Our management will try to resolve conflicts to the best advantage of all concerned.

 

Need for Additional Financing. In all likelihood we will need additional funds to take advantage of any available acquisition business opportunity. Even if we were to obtain sufficient funds to acquire an interest in a business opportunity, we may not have sufficient capital to fully exploit the opportunity. Our ultimate success will depend upon our ability to raise additional capital at the time of the acquisition and thereafter. When additional capital may be needed, there can be no assurance that funds will be available from any source or, if available, that they can be obtained on acceptable terms.

 

Borrowing Transactions. There is a possibility that any acquisition of a business opportunity by us will require borrowing against the assets of the business opportunity to be acquired, or against the projected future revenues or profits of the business opportunity. This leverage could increase our exposure to larger losses. There is no assurance that any business opportunity acquired through borrowing and leverage will generate sufficient revenues to cover the related debt and expenses.

 

No Foreseeable Dividends. We do not intend to pay any dividends. We do not foresee making any cash distributions in the manner of a dividend or otherwise.

 

 

Loss of Control by Present Management and Stockholders. It is likely that any acquisition of an operating company will result in a change in control of the then current directors, officers and the stockholders. Therefore, our management prior to the acquisition will be changed to those of the target company and its stockholders, who will then control the combined company. At that time, our stockholders will be at investment risk for the decisions about the business by persons that they may not know or have any ability to influence through a board seat or by the voting mechanism of stockholders.

 

Dilutive Effects of Issuing Additional Common Stock. In any reverse merger transaction, for tax reasons and management reasons, the owners of the target company will be issued a large number of shares of common stock and/or preferred stock which will dilute the ownership interest of our current stockholders. In addition, at the time of the reverse merger, it will be likely that there will be additional authorized but unissued shares that may be later issued by the then new management for any purpose without the consent or vote of the stockholders. The acquisition issuance and additional issuances that may occur will dilute the interests of our stockholders after any reverse merger transaction.

 

Thinly-traded Public Market. Our securities will be very thinly traded, and the price, if traded, may not reflect the value of the Company. In the event of a reverse merger transaction, we may have to undertake a further reverse split of our shares, similar to the reverse split we effectuated this year. There can be no assurance that there will be an active market for our shares either now or after we complete the reverse merger. The market liquidity will be dependant on the perception of the operating business and any steps that its management might take to bring the Company to the awareness of investors. There can be no assurance given that there will be any awareness generated. Consequently investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of the business. If a more active market should develop, the price may be highly volatile. Because there may be a low price for our securities, many brokerage firms may not be willing to effect transactions in the securities. Even if an investor finds a broker willing to effect a transaction in the securities, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of such securities as collateral for any loans. Our shares are currently quoted on the Over-the-Counter Bulletin Board (“OTCBB”). Management intends to strongly consider undertaking a business transaction with a private operating company which will allow our shares to be quoted and traded on the NASDAQ Global Market, NASDAQ Capital Market or a national exchange. However, there can be no assurance that, upon a business combination, we will qualify our shares for quotation or listing on NASDAQ or a national exchange, or be able to maintain the criteria necessary to insure continued quotation or listing.

 

Penny Stock Regulations. Our securities are subject to the SEC's "penny stock" rules. The penny stock rules may affect the ability of owners of our shares to sell them. There may be a limited market for penny stocks due to the regulatory burdens on broker-dealers. The market among dealers may not be active. Investments in penny stocks often are unable to sell stock back to the dealer that sold them the stock. The mark-ups or commissions charged by the broker-dealers might be greater than any profit an investor may make. Because of large spreads that market makers quote, investors may be unable to sell the stock immediately back to the dealer at the same price the dealer sold the stock to the investor.

 

SEC Sales Regulations. Our securities are subject to the SEC's rule that imposes special sales practice requirements upon broker-dealers that sell such securities to other than established customers or accredited investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of purchasers of our securities to buy or sell in any market.

 

 

Possible Rule 144 Sales. The majority of our shares currently outstanding are "restricted securities" within the meaning of Rule 144 under the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemption from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that a person must hold their restricted securities for certain periods of time before restrictions may be removed from their shares and/or their shares may be sold. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to subsequent registrations of our shares, may have a depressive effect upon the price of our shares in any market that may develop.

 

Item 2. Description of Properties

 

Our current mailing address is 190 Lakeview Way, Vero Beach, Florida 32963, which is the office of Vero Management, L.L.C., a Delaware limited liability company (“Vero Management”). Vero Management provides management services to our Company for a nominal monthly fee pursuant to a management agreement effective March 26, 2007 (the “Management Agreement”). The initial term of the Management Agreement is twelve months. At the end of the initial twelve month term, the agreement will continue to remain in effect until terminated in writing by either party. Management believes that this arrangement meets our needs for the foreseeable future and that no physical office space is needed at this time.

 

We do not own any real or personal property nor do we have any plans to acquire any real or personal property in the future. We do not own any significant business operating assets nor do we maintain any policy of insurance to insure any property or business operations.

 

Item 3. Legal Proceedings

 

The Company is not currently a party to any material legal proceedings.

 

Item 4. Submission of Matters to a Vote by Security Holders

 

During the fourth quarter of fiscal year 2007, no matters were submitted to a vote by security holders.

 

PART II

 

Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

 

Market Information

 

Our common stock began quotation, on an unpriced basis, on the OTCBB in December 2006. Our common stock is traded from time to time on the over-the-counter market, and priced quotations may be found in NASD's OTCBB. Shares of our common stock were traded under the symbol QKBY until March 16, 2007, when the symbol was changed to QBYT.

 

 

Our common stock trades only sporadically and has experienced in the past, and is expected to experience in the future, significant price and volume volatility. Since our shares were initially quoted on an unpriced basis, there is no available information on the high and low bid quotation for our stock on the Over-the-Counter Bulletin Board during December 2006.

The following table shows the high and low closing price of the Company's Common Stock for each quarterly period for last two fiscal years as reported by the OTCBB for the periods indicated:

For the Fiscal Year Ended on December 31, 2006

 

		High			Low
Quarter Ended March 31, 2006			N/A			N/A
Quarter Ended June 30, 2006			N/A			N/A
Quarter Ended September 30, 2006			N/A			N/A
Quarter Ended December 31, 2006		$	N/A		$	N/A

  

For the Fiscal Year Ended on December 31, 2007

		High*			Low*
Quarter Ended March 31, 2007			0.55			0.16
Quarter Ended June 30, 2007			1.00			0.20
Quarter Ended September 30, 2007			0.20			0.15
Quarter Ended December 31, 2007		$	0.35		$	0.15

 

The quotations set forth in the table above reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.

 

Holders of Common Stock

 

As of March 28, 2008, there are 79,302,460 shares of our common stock outstanding. There were approximately 227 holders of record of our common stock as of such date and an indeterminate number of additional stockholders through nominee or street name accounts with brokers. The company is authorized to issue 250,000,000 shares of common stock. Our transfer agent is Computershare, Inc. in Denver, Colorado (Branch Office).

 

Preferred Stock

 

The Company is authorized to issue 2,000,000 shares of preferred stock. The Company has not yet issued any of the Preferred Stock.

 

Dividend Policy

 

We have not declared any dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, if any, to generate growth. The payment by us of dividends, if any, in the future, rests within the discretion of our board of directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other relevant factors.

 

 

Equity Compensation Plan Information

 

As of December 31, 2007, our board of directors had not adopted an equity compensation plan under which we would be authorized to issue our common stock, rights and/or stock options.

 

Recent Sales of Unregistered Securities

During the period covered by this Annual Report, we have issued the following unregistered securities which have not been previously reported under this Item. None of these transactions involved any underwriters, underwriting discounts or commissions, except as specified below, or any public offering, and we believe that each transaction was exempt from the registration requirements of the Securities Act by virtue of Section 4(2) thereof and/or Regulation D promulgated thereunder.

 

On March 21, 2007, the Company issued 60,000,000 shares of Common Stock to KI Equity for aggregate proceeds equal to $600,000. The Company sold these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder.

On March 26, 2007, the Company issued 7,500,000 shares of Common Stock to KI Equity for aggregate proceeds equal to $75,000. The Company sold these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder.

On March 26, 2007, the Company issued 5,500,000 shares of Common Stock to Garisch Financial, Inc. for consulting services rendered to the Company valued at $55,000, or $0.01 per share. On March 26, 2007, the Company also issued 1,600,000 shares of Common Stock to Kevin R. Keating, our sole officer and director, for services rendered to the Company valued at $16,000, or $0.01 per share. The Company issued these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder.

 

Item 6. Management’s Discussion and Analysis or Plan of Operation

 

The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements, as well as information relating to the plans of our current management. This report includes forward-looking statements. Generally, the words “believes,” “anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “continue,” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including, but not limited to, those described in the “Risk Factors” set forth in Item 1 - Business and the matters set forth in other reports or documents we file with the SEC from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue relianc