U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
OPTICAL CONCEPTS OF AMERICA, INC.
---------------------------------
(Name of Small Business Issuer in its charter)
Florida 65-0705328
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(State of incorporation) (I.R.S.Employer Identification No.)
5605 Northwest 29th Street, Margate, Florida 33063
- -------------------------------------------- ------
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number (954) 917-8700
--------------
Securities to be registered pursuant to 12(b) of the Act:
None None
---- ----
Title of each class to be registered Name of each Exchange on which
each class is to be registered
Securities to be registered pursuant to 12(g) of the Act:
Common Stock $.001 Par Value
----------------------------
(Title of Class)
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
This Form 10-SB contains certain forward -looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. When used in this report, the words "believe",
"anticipate", "think", "intend", "plan", "will be" and similar expressions
identify such forward-looking statements. Such statements regarding future
events and/or the future financial performance of Optical Concepts of America,
Inc. are subject to certain risks and uncertainties which could cause actual
events or the actual future results of the Company to differ materially from any
forward-looking statement. In light of the significant risks and uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such statements should not be regarded as a representation by the Company or any
other person that the objectives and plans of the Company will be achieved.
On August 31, 1998, the Board of Directors of the Company authorized a
1-for-10 reverse stock split of the Company's common stock, with no change to
the par value of the common stock or the authorized capital of the Company. All
numbers referenced herein are adjusted to reflect the effect of the Company's
reverse stock split.
ITEM 1. DESCRIPTION OF BUSINESS
General
- -------
The Company, Optical Concepts of America, Inc. ("OCA"), was originally
incorporated on June 18, 1996 as a Florida corporation under the name Celebrity
Steakhouses, Inc. The Company changed its corporate name to Deerfield Financial
Services, Inc. ("Deerfield") effective October 28, 1996. On January 31, 1998,
Deerfield acquired (the "Acquisition") all of the outstanding stock of Optical
Concepts of America, Inc., a Delaware corporation (OCA-Del) formed on April 30,
1996, (Deerfield and OCA-Del being collectively referred to as the "Company"),
under the terms of a Stock Purchase Agreement (the "Agreement") in exchange for
750,000 shares of common stock of Deerfield. Prior to the Acquisition, as herein
described, the Company had not commenced active operations. The Company
officially adopted its current corporate name of Optical Concepts of America,
Inc. on July 6, 1998.
Optical Concepts of America, Inc., a Florida corporation, ("OCA"),
currently operates as a holding company. Its wholly owned subsidiary, Optical
Concepts of America, Inc., a Delaware corporation, ("OCA-Del"), is engaged in
the development, design and marketing of a collection of fashionable
prescription eyeglass frames as well as a line of upscale, ready-to-wear,
non-prescription reading eyewear. The Company's headquarters are currently
located at 5605 Northwest 29th Street, Margate, Florida 33063.
The Company's strategy since January, 1998 has been to take advantage
of several niche market opportunities in the optical industry. The Company's
present business purpose is the
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design and wholesale distribution of quality prescription eyewear frames and
ready-to-wear reading eyewear. The Company's emphasis has focused primarily on
the growing budget fashion optical market, through its "Bravo Eyewear" division,
and secondarily on the ready-to-wear reading eyewear market, through its "ADEA
Readers" division, by offering a diverse line of products targeted primarily to
managed vision care groups, optometrists, opticians and discount retailers.
While the Company presently intends to maintain its existing business derived
through the Bravo Eyewear and ADEA Readers product lines (the "Products"), the
Company also intends to begin to broaden its focus to include the development
and/or acquisition of one or more related and/or non-related product or service
businesses in order to enhance the Company's overall business potential. There
can be no assurances that, should management successfully identify an
appropriate acquisition or business opportunity unrelated in scope to the
Company's present business operations, that it will be able to fund such
acquisition or business opportunity in addition to its present business
operations. The Company has not yet identified any other such business
opportunity, nor is in negotiations or discussions with any such party.
Bravo Eyewear
- -------------
The Company has designed and introduced a product line consisting of
fashionable budget optical frames marketed under the name "Bravo Eyewear". The
Company began marketing the Bravo Eyewear Collection in June, 1997. The
Company's collection of eyewear, which is currently comprised of 16 different
styles of eyeglass frames, several of which are also available with a fitted,
clip-on accessory sunglass, is targeted for use primarily as stylish yet
budget-conscious selections for coverage by insurance plans, managed health care
plans, and as lower-cost fashionable styles for retail optical outlets. The
Bravo Eyewear Collection, made of nickel-silver alloy and stainless steel, is
designed for use with prescription lenses.
ADEA Readers By Noah Max
- ------------------------
The Company has designed and is marketing a specialized line of
upscale, ready-to-wear reading eyewear targeted specifically for the "baby-boom"
generation seeking fashion-oriented, high quality reading eyewear available
without prescription. This line of reading eyewear, which the Company has named
"ADEA Readers by Noah Max", consists of four different styles available in five
different colorations and five different magnifications ranging from +1.00 D. to
+3.00 D, in 0.50 D steps. The ADEA Readers are intended to fill a perceived void
in the high fashion over-the-counter reader niche market.
Manufacturing and Marketing
- ---------------------------
The Products are produced for the Company by manufacturers (the
"Manufacturers") located in China and Korea. Currently, one Chinese manufacturer
produces all of the Bravo Eyewear product line and one Korean manufacturer
produces all of the ADEA Reader product line. The Manufacturers typically take
between 21 and 120 days to deliver the Product to the Company from the date the
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Product is ordered. The Company does not have long-term contractual
relationships with the Manufacturers. The frames and readers are constructed on
a build to order basis and are paid for by the Company on a cash on delivery
("COD") basis. The Company is satisfied that its present suppliers have
sufficient capacity to meet projected market demand for the Company's Products,
or that alternate sources are available without undue disruption. The Company
has not experienced any significant difficulty over the past several years in
locating or engaging suppliers, or in purchasing components.
While the Company originally marketed the Products primarily through
independent sales representatives, the Company revised its strategy in early
1999 and presently markets its products almost exclusively through word of mouth
and repeat sales from its existing customer base. From time to time, the Company
has also advertised its products for sale by distributing its Catalogues to
retailers by direct mail as well as by utilizing direct-to-the-consumer mail
order pieces. The Company has also maintained a web site
(www.opticalconcepts.com) which it utilizes to promote the Company's product
lines.
Despite the fact that the Company has not made any significant new
product introductions over the past fiscal year, in order to maintain a
competitive position within the marketplace, the Company anticipates that it
will most likely need to introduce new product styles in the foreseeable future.
While there can be no assurance that the Company will be able to successfully
predict new eyewear fashion trends, nor that any such new products will be
profitable, the Company currently anticipates that it will be compelled to
develop new products over the next fiscal year in order to remain competitive.
ITEM 2. DESCRIPTION OF PROPERTY
The Company's current corporate headquarters and distribution
facilities consist of approximately 4,800 square feet located within an office
and industrial complex at 5605 Northwest 29th Street, Margate, Florida, which is
leased from an unrelated third party. The lease is for a term of 63 months
commencing October 1997. The monthly rent is currently $4,100, and is subject to
an increase to $4,300 per month commencing July, 2000 and to $4,525 per month
commencing July, 2001. The anticipated annual rental expense under the lease
agreement is as follows:
2000 $ 50,400
2001 $ 52,950
2002 $ 40,725
The Company has the option to renew the lease for an additional five
years, subject to annual percentage increases of 5% in each year of the renewal
term. Management believes that the Company's current facilities will be
sufficient to meet the Company's operating needs for the immediate future.
The Company does not currently own any real property.
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ITEM 3. DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The current executive officers, directors and significant employees of
the Company and its subsidiary are as follows:
Name Age Positions Held
- ---- --- --------------
Jan H. Kaplan 44 Director, President, Secretary
Karen R. Kaplan 45 General Manager, OCA-Del
Jan H. Kaplan has been President, Chief Executive Officer and Director of
Optical Concepts of America, Inc., a Florida Corporation, since January 30,
1998. Mr. Kaplan also founded and served as President and Director of OCA since
its inception in April, 1996. Since January, 1999, Mr. Kaplan has also been a
Director and Secretary of Diversified Business Concepts, Inc., a private
business development company. Additionally, from June, 1996 through to the
present time, Mr. Kaplan has served as President, Director and sole shareholder
of Paramount Resource Group, Inc., a private management consulting and strategic
development company. From 1981 to 1995, Mr. Kaplan was Chairman of the Board of
Directors and served as President and Chief Executive Officer of United Vision
Group, Inc., a public company engaged in the retail, wholesale and managed care
Optical business. United Vision Group, Inc. changed its name to Apollo Eye
Group, Inc. in 1995. Additionally, from 1987 to 1995, Mr. Kaplan served as
President and Chairman of Optiplan, Inc., a Florida based, not-for-profit
managed vision care organization affiliated with United Vision Group, Inc. Mr.
Kaplan previously served as President and Director of Sagamore Trading Group,
Inc., f/k/a VisionCorp, Inc. from October 10, 1997 until January 3, 1999. Mr.
Kaplan received a B.A. in Biology from Colgate University in 1976.
Karen R. Kaplan has been General Manager of the OCA subsidiary since its
formation in 1996. From 1981 to 1995, Ms. Kaplan was a Director and served as
Executive Vice President of United Vision Group, Inc., a public company engaged
in the retail, wholesale and managed care Optical business. Additionally, from
1987 to 1995, Ms. Kaplan served as Secretary of Optiplan, Inc., a Florida based
not-for-profit managed vision care organization affiliated with United Vision
Group, Inc. From 1978 to 1981, Ms. Kaplan served as Educational Program Director
for the Institute for Learning Development at the Eye Institute of New Jersey,
where she worked with learning disabled individuals. Ms. Kaplan received a B.S.
in Education from Boston University in 1976 and an M.S. in Education from the
University of Pennsylvania in 1978.
Jan Kaplan and Karen Kaplan are husband and wife.
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ITEM 4. REMUNERATION OF DIRECTORS, OFFICERS AND SIGNIFICANT EMPLOYEES
Below is the aggregate annual remuneration of each of the persons who
were officers, directors and/or key employees of the Company during the
Company's last fiscal year. The Company's fiscal year end was December 31, 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
=========================== =================================================== ====================================================
Annual Compensation Long-Term Compensation
----------------------------- ----------------------
Awards Payouts
- --------------------------- --------- -------------- ---------- --------------- ---------------- ------------ ------------ ---------
Securi-
ties
Other Under- All
Annual Restricted lying LTIP Other
Name and Salary Bonus Compen- Stock Options/ Payouts Com-
Principal Position Year ($) ($) sation Award(s) SARs pensa-
($) ($) (#) ($) tion
($)
- --------------------------- --------- -------------- ---------- --------------- ---------------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jan H. Kaplan
President and Director 1999 $0 N/A N/A $5,000(1) N/A N/A N/A
- --------------------------- --------- -------------- ---------- --------------- ---------------- ------------ ------------ ---------
Karen R. Kaplan 1999 $39,000 (2,3) N/A N/A N/A N/A N/A N/A
General Manager OCA
Subsidiary
- --------------------------- --------- -------------- ---------- --------------- ---------------- ------------ ------------ ---------
=========================== ========= ============== ========== =============== ================ ============ ============ =========
</TABLE>
1. On two separate occasions in 1998, in lieu of receiving any salary or
other compensation, Mr. Kaplan was granted a total of 3,200,000 shares
of common stock of the Company, par value $0.001.
2. Ms. Kaplan is employed by OCA-Del, a wholly owned subsidiary of the
Company, and did not receive any compensation until July, 1999, at
which time she began receiving a monthly salary of $6,500.00 from
OCA-Del, a wholly owned subsidiary.
3. Ms. Kaplan is neither an Officer nor a Director of the Company.
The Company did not provide any additional compensation to its directors or
executive officers. No
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options were granted to such officers or directors in the last fiscal year.
Employment Agreements
The Company has not entered into any employment agreements.
Grants of Stock Option
None.
Stock Option Plan
None.
ITEM 5. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of December 31, 1999, (a) by each
person known to the Company to own, either directly or beneficially, more than
10% of any class of the Company's securities, including those shares subject to
outstanding options and (b) by each of the Company's Officers and Directors and
(c) by all officers and directors of the Company as a group. As of December 31,
1999, there were a total of 5,633,007 shares of Common Stock of the Company
issued and outstanding.
Name and Address Shares Beneficially Percent
of Owner Owned of Class
-------- ----- --------
Jan H. Kaplan (1 , 2 , 3) 3,835,685 60.6 %
All Officers and Directors
as a Group (1 person) 3,835,685 60.6 %
- -------------------
(1) Includes a total of 3,200,000 shares registered in the name of Karjan
Limited Partnership, a limited partnership in which Jan Kaplan
currently owns less than 50% individually, and Karen Kaplan currently
owns less than 50% individually. However, Jan Kaplan and Karen Kaplan
aggregately control greater than 50% of the limited partnership. The
two children of Jan and Karen Kaplan own the balance of the limited
partnership interests.
(2) Includes 35,685 shares registered in the name of Paramount Resource
Group, Inc., a Florida corporation which is owned 100% by Jan Kaplan
individually.
(3) Includes 380,000 shares registered in the name of Diversified Business
Concepts, Inc., a Florida corporation in which Jan Kaplan acquired a
50% interest in January, 1999.
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Item 6. Interest of Management and Others In Certain Transactions
Jan Kaplan, the Company's sole officer and director, beneficially
controlled both OCA-Del and the Company at the time of the acquisition of
OCA-Del by Optical Concepts of America, Inc. At the time of the acquisition,
OCA-Del received written proxy authorization from a majority of its shareholders
unaffiliated with Jan Kaplan.
On January 30, 1998, the Company entered into a $250,000 promissory
note, under which Jan Kaplan, the Company's sole officer and director, was
listed as Guarantor. On January 11, 2000, the Company entered into a $289,800
Convertible Promissory Note (the "Convertible Note") to replace and refinance
the previous promissory note, which had been acquired by the current
note-holder. Under the terms of the Convertible Note, Jan Kaplan is no longer a
Guarantor. The Convertible Note is due and payable by the Company on January 31,
2002 and bears interest at the rate of 8% per annum, payable upon the due date
of the Note. (see Part II, Item 4 for a further description of the Convertible
Note.)
There have been no other such transactions during the previous two
years, nor are there any presently proposed.
Item 7. Description of Securities
The Company's authorized capital consists of 50,000,000 shares of
Common Stock, $0.001 par value, as well as 5,000,000 shares of Preferred Stock,
$0.001 par value. As of December 31, 1999 the Company had a total of 5,633,007
shares of common stock issued and outstanding, and no shares of preferred
stock.. Additionally, as of December 31, 1999, there were a total of 19,750
warrants, with each warrant exercisable for one share of Common Stock per
warrant, at an exercise price of $ 0.50 per share. The warrants expire on August
29, 2000.
The transfer agent for the Company is Florida Atlantic Stock Transfer,
Inc., 7130 Nob Hill Road, Tamarac, Florida 33321.
Common Stock
The authorized capital stock of the Company currently includes 50,000,000 shares
of Common Stock, par value $ .001 per share. The holders of Common Stock: [i]
have equal ratable rights to dividends from funds legally available therefor,
when, as and if declared by the Board of Directors of the Company; [ii] are
entitled to share ratably in all of the assets of the Company available for
distribution to holders of Common Stock upon liquidation, dissolution or winding
up of the affairs of the Company; [iii] do not have preemptive subscription or
conversion rights and there are no redemption or sinking fund provisions
applicable thereto; and [iv] are entitled to one vote per share on all matters
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on which stockholders may vote at all meetings of stockholders. All shares of
Common Stock now outstanding are fully paid and non-assessable. The holders of
shares of Common Stock of the Company do not have cumulative voting rights,
which means that the holders of more than 50% of such outstanding shares, voting
for the election of Directors, can elect all of the Directors to be elected, if
the so choose and in such event, the holders of the remaining shares will not be
able to elect any of the Company's Directors. The holders of 50% percent of the
outstanding Common Stock constitute a quorum at any meeting of shareholders, and
the vote by the holders of a majority of the outstanding shares are required to
effect certain fundamental corporate changes, such as liquidation, merger or
amendment of the Articles of Incorporation. The Company's Board of Directors is
empowered to take all actions necessary to increase or decrease the number of
shares authorized in the Company as the Board deems necessary.
Preferred Stock
The Company is authorized to issue 5,000,000 shares of Preferred Stock with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting or other rights which could adversely effect the
voting power or other rights of the holders of the Company's Common Stock. In
the event of issuance, the Preferred Stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. There are no shares of Preferred Stock issued or
outstanding.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Stockholder Matters
The Company's Common Stock is traded in the over-the-counter market,
and quoted on the Electronic Bulletin Board under the symbol "OICU". There was
no trading in the Company's Common Stock prior to February, 1998. The following
table shows the quarterly high and low bid prices for the Company's Common Stock
since February, 1998 as reported by the National Quotation Bureau Incorporated.
These prices reflect inter-dealer quotations without adjustments for retail
markup, markdown or commission, and do not necessarily represent actual
transactions. On August 31, 1998, the Board of Directors of the Company
authorized a 1-for-10 reverse stock split of the Company's common stock, with no
change to the par value of the common stock or the authorized capital of the
Company. All market price quotes listed herein have been adjusted in order to
reflect the adjusted stock price to reflect the reverse stock split. The number
of shares of record of common stock, $0.001 par value, of the Company was
5,633,007 at January 1, 2000. There were a total of 76 shareholders of record,
and the Company estimates that there were in excess of 100 beneficial owners of
the Company's common stock as of January 1, 2000.
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<TABLE>
<CAPTION>
Year Period High Low
- ---- ------ ---- ---
<S> <C> <C> <C> <C>
1999 Quarter ended Dec. 31 $ 0.035 $ 0.010
Quarter ended Sep. 30 $ 0.093 $ 0.010
Quarter ended Jun. 30 $ 0.093 $ 0.031
Quarter ended Mar. 31 $ 1.000 $ 0.031
1998 Quarter ended Dec. 31 $ 1.437 $ 0.125
Quarter ended Sep. 30 $ 5.62 $ 0.125
Quarter ended Jun. 30 $ 0.30 $ 0.10
Quarter ended Mar. 31 $ 0.30 $ 0.10
</TABLE>
The Company has never paid, and does not anticipate paying, any
dividends on its Common Stock in the foreseeable future. The Company currently
intends to retain its future earnings, if any, for use in operations and
expansions of its business. Declaration and payment of future dividends, if any,
will be at the sole discretion of the Board of Directors.
Item 2. Legal Proceedings
The Company's officers and directors are aware of no threatened or
pending litigation to which the Company or its subsidiary is a party or which
any of their property is the subject and which would have any material, adverse
effect on the Company.
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable.
Item 4. Recent Sales of Unregistered Securities
The following information sets forth certain information with respect
to all securities of the
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Company sold by it in the past three years. During such period no securities
were registered under the Securities Act of 1933, as amended (the "Securities
Act").
On August 31, 1998, the Board of Directors of the Company authorized a 1-for-10
reverse stock split of the Company's common stock, with no change to the par
value of the common stock or the authorized capital of the Company. All
transactions referenced in this Item 4 for the period prior to August 31, 1998
do not reflect an adjustment to reflect any effect of the Company's reverse
stock split.
At various times between January 30, 1997 and March 1, 1997, the
Company issued a total of 2,750,000 shares of common stock to five individuals
at a price per share of $0.001 as founders' shares. Inasmuch as all individuals
to whom shares were issued played an active role in developing the business plan
of Deerfield Financial Services, Inc. and had access to all books and records of
Deerfield available at the date of the issuance, the issuance was predicated on
the exemption provided in Section 4(2) of the Securities Act.
On August 11, 1997, the Company issued a total of 20,000 shares of its
common stock at $0.30 per share and 990,000 warrants at a price of $0.002 per
warrant in a private offering of its shares pursuant to Rule 504 of Regulation D
promulgated under the Securities Act. Each redeemable warrant would, upon
exercise, entitle the holder to purchase one share of common stock at a price of
$1.00 per share. The warrants are exercisable until August 29, 2000
On January 30, 1998, pursuant to the terms of a Stock Purchase
Agreement, Deerfield Financial Services, Inc. issued a total of 750,000 shares
of its common stock in exchange for 100% of the issued and outstanding shares of
Optical Concepts of America, Inc., a Delaware corporation.
On March 10, 1998, six individuals exercised a total of 780,000
warrants to purchase common stock of the Company at a price of $0.05 per share.
Pursuant to the terms of the warrants, the Company issued a total of 780,500
shares of its common stock. The warrants were originally issued as part of the
Company's August, 1997 offering pursuant to Rule 504 of Regulation D.
On August 21, 1998, the Company issued a total of 2,000,000 shares of
its common stock at par value ($0.001) to Jan Kaplan in exchange for services
rendered to the Company, pursuant to Section 4 (2) of the Securities Act .
On August 24, 1998, the Company issued a net total of 2,125,000 shares
of its common stock to ten individuals at $0.12 per share, payable in cash,
notes, or services rendered, in a private offering of its shares pursuant to
Rule 504 of Regulation D promulgated under the Securities Act.
On September 30, 1998, the Company issued a total of 3,000,000 shares
of its common stock at par value ($0.001) to Jan Kaplan in exchange for services
rendered to the Company, pursuant to Section 4 (2) of the Securities Act.
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On November 6, 1998, the Company issued a net total of 2,500,000 shares
of common stock to twenty-one individuals at $0.12 per share, payable in cash,
notes, or services rendered, in a private offering of its shares pursuant to
Rule 504 of Regulation D promulgated under the Securities Act.
On January 11, 2000, the Company entered into a $289,800.00 Convertible
Promissory Note (the "Convertible Note") to replace and refinance an existing
Promissory Note which was acquired by the current Note Holder. The Convertible
Note is due and payable on January 31, 2002 and bears interest at the rate of 8%
per annum, payable upon the due date of the Note. The Convertible Note is
convertible into the Company's common stock by the Note Holder at any time, at a
price equal to 80% of the average bid price of the Company's common stock for
the thirty-day period immediately preceeding the Conversion Date. The
Convertible Note is also convertible at the option of the Company at any time,
conditioned upon the average closing bid price of the Company's common stock,
being equal to or greater than $1.00 per share for the ten days immediately
preceeding the date of such conversion, with the Conversion Price being equal to
80% of the average closing bid price of the Company's common stock for the
thirty-day period immediately preceeding the Conversion Date. In the event of
any such conversion at either party's option, the Company has granted the Note
Holder demand registration rights upon any such shares of the Company's common
stock obtained through conversion.
Item 5. Indemnification of Officers and Directors.
The Florida Business Corporation Act (the "Corporation Act") permits
the indemnification of directors, employees, officers and agents of Florida
corporations. The Articles of Incorporation and Bylaws of the Company require
the Company to indemnify its directors and officers to the fullest extent
permitted by the Business Corporation Act of the State of Florida. The above
indemnification provisions notwithstanding, the Company is aware that insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
12
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PART F/S
The following financial statements are filed as part of this registration
statement on Form 10-SB:
13
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
TABLE OF CONTENTS
PAGE NO.
Independent Auditors' Report F-2
Consolidated Balance Sheets F-3
Consolidated Statements of Income F-5
Statement of Changes in Stockholders' Equity F-6
Consolidated Statements of Cash Flows F-8
Notes to Financial Statements F-9
Supplemental Information
Independent Auditors' Report on Supplemental
Information F-15
Consolidated Balance Sheets F-16
Consolidated Statements of Income F-20
Consolidated Statements of Cash Flows F-22
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors and Stockholders
of Optical Concepts of America, Inc. and Subsidiary
Margate, Florida
We have audited the accompanying consolidated balance sheets of Optical Concepts
of America, Inc. and Subsidiary (a Florida corporation) as of December 31, 1999
and 1998, and the related consolidated statements of income, statement of
changes in stockholders' equity and cash flows for the years then ended. These
consolidated 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 the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit and the report of other auditors provide
a reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Optical Concepts of America, Inc.
and Subsidiary as of December 31, 1999 and 1998, and the results of their
operations, and their cash flows for the year then ended in conformity with
generally accepted accounting principles.
SEWELL AND COMPANY, PA
Hollywood, Florida
January 4, 2000, except as to Note 9, which is dated January 11, 2000
F-2
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OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
1999 1998
-------- --------
Assets
Current Assets
Cash $ 3,366 $ 50,681
Accounts receivable net of allowance for
doubtful accounts 2,911 2,914
Prepaid expenses -- 1,110
Inventory 37,096 69,086
-------- --------
Total Current Assets 43,373 123,791
Note receivable related parties 59,469 31,760
Interest receivable 11,817 3,996
Stock subscriptions receivable 199,200 379,200
Deposits 8,711 8,711
Other assets -- 11,561
-------- --------
$322,570 $559,019
======== ========
See auditors' report and notes to financial statements.
F-3
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998
1999 1998
--------- ---------
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 2,686 $ 5,010
Deposits 5,000
Accrued expenses 6,000 16,328
--------- ---------
Total current liabilities 13,686 21,338
Long term liabilities
Note payable 250,000 250,000
Accrued interest 38,333 18,333
--------- ---------
288,333 268,333
Shareholders' equity
Common stock 5,633 6,324
Additional paid in capital 580,475 759,794
Retained deficit (565,557) (496,770)
--------- ---------
20,551 269,348
--------- ---------
$ 322,570 $ 559,019
========= =========
See auditors' report and notes to financial statements.
F-4
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
--------- ---------
Revenue
Sales, net of discounts and returns $ 37,341 $ 84,954
Cost of Goods Sold (13,290) (23,383)
--------- ---------
Gross Profit 24,051 61,571
Expenses
Sales, general and administrative 100,456 234,734
Management fees 0 6,060
Rent 48,000 35,400
Consulting 0 122,878
Interest expense 20,000 18,333
--------- ---------
Total Expenses 168,456 417,405
Other Income 75,618 8,929
--------- ---------
Net Income (Loss) $ (68,787) $(346,905)
========= =========
Net Loss Per Common Share $ (0.02) $ (0.25)
See auditors' report and notes to financial statements.
F-5
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Common Stock Paid in Accumulated
Shares Amount Capital Deficit Total
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1997 2,782,000 $ 2,782 $ 19,948 $ (22,699) $ 31
Issuance of common stock in connection with the acquisition
of Oca, Inc. (Delaware) on January 30, 1998 750,000 750 152,625 (127,166) 26,209
Issuance of common stock in connection with warrants
exercised on March 10, 1998 ($ 0.05 per share) 780,500 781 38,244 39,025
Issuance of common stock for consulting services based on
Board of Directors assessments of value of services rendered
on August 21, 1998 ($ 0.001 per share) 2,000,000 2,000 2,000
Issuance of common stock according to the private offering
dated May 11, 1998 on August 24, 1998 ($0.12 per share) 2,125,000 2,125 252,875 255,000
On August 31, 1998 the Board of Directors authorized a 1:10
stock split, with no change to the par value to the stock (7,593,743) (7,594) 7,594 --
-----------------------------------------------------------------
Sub-total 843,757 844 471,286 (149,865) 322,265
On September 10, 1998 shares of common stock were cancelled (19,750) (20) (8,992) (9,012)
Issuance of common stock for consulting services based on
Board of Directors assessments of value of services rendered
on September 30, 1998 ($ 0.001 per share) 3,000,000 3,000 3,000
-----------------------------------------------------------------
Sub-totals 3,824,007 $ 3,824 $ 462,294 $ (149,865) $ 316,253
=================================================================
</TABLE>
See auditors' report and notes to financial statements.
F-6
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Common Stock Paid in Accumulated
Shares Amount Capital Deficit Total
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sub-totals 3,824,007 $ 3,824 $ 462,294 $ (149,865) $ 316,253
Issuance of common stock according to the private offering
dated October 2, 1998 on November 6, 1998 ($0.12 per share) 2,500,000 2,500 297,500 300,000
Net loss for the year ended December 31, 1998 (346,905) (346,905)
------------------------------------------------------------------
Balance December 31, 1998 6,324,007 6,324 759,794 (496,770) 269,348
On December 28, 1999 shares of common stock were cancelled (691,000) (691) (179,319) (180,010)
Net loss for the year ended December 31, 1999 (68,787) (68,787)
------------------------------------------------------------------
Balance December 31, 1999 5,633,007 $ 5,633 $ 580,475 $ (565,557) $ 20,551
===================================================================
</TABLE>
See auditors' report and notes to financial statements.
F-7
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (68,787) $ (346,905)
-------------------- -------------------
Adjustments to reconcile net loss to net
cash provided by operating activities:
(Increase) decrease in accounts receivable 3 21,070
(Increase) decrease in inventories 31,990 (47,032)
(Increase) decrease in other receivables (27,709) (23,694)
(Increase) decrease in other assets 4,840 (10,291)
Increase (decrease) in accounts payable (2,324) (7,684)
Increase (decrease) other payables 25,000 (16,890)
Increase (decrease) in accrued liabilities (10,328) 10,428
-------------------- -------------------
Total adjustments 21,472 (74,093)
-------------------- -------------------
Net cash used by operating activities (47,315) (420,998)
-------------------- -------------------
Cash flows from investing activities:
Proceeds for the sale of property 13,834
Cash payments for the purchase of property
-------------------- -------------------
Net cash provided by investing activities - 13,834
-------------------- -------------------
Cash flows from financing activities:
Proceeds from issuance of common stock - 210,287
Proceeds from long term debt 250,000
-------------------- -------------------
Net cash provided by financing activities - 460,287
-------------------- -------------------
Net increase (decrease) in cash and cash equivalents (47,315) 53,123
Cash and cash equivalents, beginning of year 50,681 (2,442)
-------------------- -------------------
Cash and cash equivalents, end of year $ 3,366 $ 50,681
==================== ===================
</TABLE>
Shareholders' equity note:
On January 30, 1998 the Company issued 750,000 shares of its common stock in
connection with the acquisition of all the shares of common stock of Optical
Concepts of America, Inc. (Delaware) for $ 26,209; the company acquired assets
with a fair value of $ 82,499 and assumed liabilities for $ 56,290.
See auditors' report and notes to financial statements.
F-8
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Optical Concepts of America, Inc. ("the Company), formerly Deerfield Financial
Services, Inc., was incorporated under the laws of the State of Florida on June
16, 1996. The Company acquired Optical Concepts of America, Inc. (a Delaware
corporation) on January 30, 1998. On June 29, 1998, the Company amended its
Articles of Incorporation changing its name from Deerfield Financial Services,
Inc. to Optical Concepts of America, Inc.
The Company currently operates as a holding company. Its wholly owned
subsidiary, Optical Concepts of America, Inc. (a Delaware corporation), is
engaged in the development, design, and marketing of a collection of fashionable
prescription eyeglass frames as well as a line of upscale, ready-to-wear,
nonprescription reading eyewear. Results of consolidated operations and cash
flows include the transactions of Optical Concepts of America, Inc. (a Florida
corporation) and Optical Concepts of America, Inc. (a Delaware corporation) for
the years ended December 31, 1999, and 1998.
Principles of Consolidation
- ---------------------------
The consolidated financial statements of the Company include those accounts of
Optical Concepts of America, Inc. (a Florida corporation), and Optical Concepts
of America, Inc. (a Delaware corporation). All significant intercompany
transactions and balances have been eliminated in the consolidation.
Accounting Estimates
- --------------------
The preparation of consolidated 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 at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Cash and Cash Equivalents
- -------------------------
The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.
Inventories
- -----------
Inventories from Optical Concepts of America, Inc. (a Delaware corporation),
consist of finished goods valued at average cost.
Accounting Pronouncements
- -------------------------
In June 1997, the Financial Accounting Standards Board issued Statement of
Accounting Standards No. 131, Disclosures About Segments of an Enterprise and
Related Information (SFAS No. 131) which established presentation of financial
data based on the "management approach". SFAS No. 131 is applicable for fiscal
years beginning after December 15, 1997. For the current fiscal year, segment
reporting is not presented due to immateriality.
Revenue Recognition
- -------------------
Revenues are recognized when the products are shipped. Revenue is reduced for
estimated customer returns and allowances.
Accounts Receivable
- -------------------
It is the policy of management to review the outstanding accounts receivable at
year end, as well as review for bad debts, and establish an allowance for
doubtful accounts and uncollectible amounts.
F-9
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Income Taxes
- ------------
The Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 109 Accounting for Income Taxes, which requires
companies to use the asset and liability method of accounting for income taxes.
Concentration of Risk
- ---------------------
Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of balances at financial institutions.
The Company had deposits with one financial institution amounting to $3,366 at
December 31, 1999, which was insured for up to $100,000 by the U.S. Federal
Deposit Insurance Corporation. The Company believes that risks relating to cash
balances are minimized as a result of the size and stature of the financial
institutions in which the Company maintains its account.
Advertising
- -----------
Advertising costs are charged to operations when incurred. Advertising costs
during 1999 and 1998 amounted to $5,057 and $78,124, respectively.
Basic Loss per Share and Diluted Loss per Share
- -----------------------------------------------
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings Per Share (SFAS No. 128), which
specifies the computation, presentation and disclosure requirements for earnings
per share. SFAS No. 128 supercedes Accounting Principle Board Opinion No. 15
entitled Earnings Per Share. Basic earnings per share are computed by dividing
income available to common stockholders (the numerator) by the weighted-average
number of common shares (the denominator) for the period. The computation of
diluted earnings per share is similar to basic earnings per share, except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potentially dilutive common shares had
been issued.
The numerator in calculating basic earnings per share is reported net loss. The
denominator is based on the following weighted-average number of common shares:
1999 1998
---- ----
Basic 4,195,040 1,368,456
The 19,750 shares of common stock reserved in connection with warrants for the
years ended December 31, 1999 and 1998, are not included in the diluted earnings
per share calculations, since the exercise price is greater than the average
market price.
NOTE 2 STOCKHOLDERS' EQUITY
The Articles of Incorporation provided for the authorization of 50,000,000
shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock
at $.001 par value. None of the preferred shares were issued at December 31,
1998.
F-10
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2 STOCKHOLDERS' EQUITY - continued
On January 30, 1997, the Company issued 550,000 shares common stock at $0.001
par value in exchange for pre incorporation services.
On March 1, 1997, the Company issued 2,200,000 shares of common stock at $0.001
par value in exchange for cash.
On August 11, 1997, the Company, according to a private offering, completed a
sale of 20,000 shares of common stock at a price of $0.30 per share and 990.000
warrants at a price of $0.002. Each redeemable warrant would, upon exercise,
entitle the holder to purchase one share of common stock for $1.00 per share.
The exercise period of these warrants is on the third anniversary.
During 1997, a total of 12,000 warrants were exercised at a price of $1.00 per
share.
On January 30, 1998, 750.000 shares of common stock were issued according to the
merger with Optical Concepts of America, Inc. (Delaware) stockholders.
On March 5, 1998, the board of directors amended the provisions of its warrants
to reduce the exercise price from $1.00 to $0.05 per share.
On March 10, 1998, a total of 780,500 warrants were exercised at a price of
$0.05 per share.
On August 21, 1998, 2,000,000 shares of common stock were issued as compensation
for consulting services to an officer of the Company. These shares have been
valued by the Company at $0.001 per share. The Company recorded these shares as
consultant fees.
On August 24, 1998, the Company, according to the private offering dated May 11,
1998, completed a sale of 2,125,000 shares of common stock at a price of $0.12
per share.
On August 31, 1998, the board of directors of the Company authorized a 01 for 10
reverse stock split pursuant to which outstanding common stock will be reduced
to 843,757 shares with no change to the par value of the common stock or the
authorized capital of the Company.
On September 10, 1998, 19,750 shares of common stock were cancelled.
On September 30, 1998, 3000,000 shares of common stock were issued as
compensation for consulting services to an officer of the company. These shares
have been valued by the Company at $0.001 per share. The Company recorded these
shares as consultant fees.
On November 6, 1998, the Company, according to the private offering dated
October 2, 1998, completed a sale of 2,500,000 shares of common stock at a price
of $0.12 per share. From this sale, $199,200 is comprised of subscription
receivables.
On December 28, 1999, 691,000 shares of common stock were cancelled.
The total shares of common stock at December 31, 1999 and 1998 was as follows:
1999 1998
---- ----
Issued and Outstanding ($0.001 par value) 5,633,007 6,324,007
F-11
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2 STOCKHOLDERS' EQUITY - continued
The warrants not exercised will expire August 29, 2000.
The total amount of warrants outstanding at December 31, 1999 and 1998 was
19,750.
NOTE 3 INVENTORY
At December 31, 1999, inventory consisted of the following:
Finished Goods $37,096
========
NOTE 4 SHORT-TERM DEBT
At December 31, 1999 and 1998, short-term debt consisted of the following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Note payable with an interest rate of 8% per annum;
Payable on demand principal plus interest $ 288,333 $ 268,333
Less: Current portion (288,333) (268,333)
------------ ----------
$ 0 $ 0
============ ==========
</TABLE>
Interest expense for the years ended December 31, 1999 and 1998 was $20,000 and
$18,333, respectively.
NOTE 5 LEASES
The Company rents office space in Margate, Florida. The lease is for a term of
63 months, commencing October 1997. The monthly rent is currently $4,100. The
Company has the option to renew the lease for five years, with a 5% annual
increase.
Rental expense for the years ended December 31, 1999 and 1998 was $48,000 and
$35,400, respectively. Future anticipated minimum annual rental expenses for
subsequent years are as follows:
2000 $ 50,400
2001 52,950
2002 40,725
Thereafter 0
-----------
Total $144,075
===========
The Company subleases office space to a related party (see Note 6) for $7,000
monthly rent under a one-year lease (renewable annually). The total income from
this sublease is $84,000 for the year ended December 31, 1999.
F-12
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 6 RELATED PARTY TRANSACTIONS
Management Fees
- ---------------
The subsidiary has a management agreement with Paramount Resource Group, Inc.
The total payments related to this management agreement at December 31, 1999 and
1998 was $0 and $6,060, respectively.
Notes Receivable
- ----------------
At December 31, 1999 and 1998, the Company holds notes receivable from Paramount
Resource Group, Inc. in the amount of $59,469 and $31,760, respectively. The
loans bear interest at 8%. The interest income for the years ended December 31,
1999 and 1998 was $11,817 and $3,996, respectively.
Rents
- -----
The Company subleases office space to Diversified Business Concepts, Inc. under
a one year lease (renewable annually). Rental income for the year totaled
$84,000.
NOTE 7 UNCERTAINTY DUE TO YEAR 2000 ISSUE
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems, which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 issue may be experienced before, on, or after
January 1, 2000, and if not addressed, the impact on operations and financial
reporting may range from minor errors in significant systems failure, which
could affect an entity's ability to conduct normal business operations. It is
not possible to be certain that all aspects of the Year 2000 issued affecting
the entity, including those related to the efforts of customers, suppliers, or
other third parties will be fully resolved.
NOTE 8 INCOME TAXES
The Company and its subsidiary will file consolidated income tax returns. No
provision has been made in the accompanying financial statements for income
taxes payable because of the Company's operating loss from operations.
The Company has a federal net operating loss carryforward for the years ended
December 31, 1999 and 1998 of $68,787 and $369,604, respectively, of which
$22,699 expires in 2012, $346,905 expires in 2017, and $68,787 expires in 2018.
NOTE 9 SUBSEQUENT EVENT
On January 11, 2000, the Company renegotiated the $289,800 note payable (see
Note 4) to Strategic Capital Investment, Ltd. which includes interest as of
January 11, 2000. The new note shall bear an interest rate of 8% per annum and
will be due on January 31, 2002. The note also includes conversion rights to
redeem all or any part of the outstanding note (including interest) in shares of
common stock. The conversion price should be equal to 80% of the average closing
price of the Company's common stock for the thirty days immediately prior to
conversion.
F-13
<PAGE>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
SUPPLEMENTAL INFORMATION
FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998
F-14
<PAGE>
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION
--------------------------------------------------------
To the Board of Directors and Stockholders
of Optical Concepts of America, Inc. and Subsidiary
Margate, Florida
Our report on our audit of the basic financial statements of Optical Concepts of
America, Inc. and Subsidiary for the years ended December 31, 1999 and 1998
appears on page 2. That audit was conducted for the purpose of forming an
opinion on the basic financial statements taken as a whole. The consolidated
information is presented for purposes of additional analysis of the consolidated
financial statements rather than to present the financial position, results of
operations and cash flows of the individual companies, and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
SEWELL AND COMPANY, PA
Hollywood, Florida
January 4, 2000, except as to Note 11, which is dated January 11, 2000
F-15
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999
Consolidated Consolidated
OCA, Inc. OCA, Inc. Before After
(Florida) (Delaware) Eliminations Eliminations Eliminations
--------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash $ - $ 3,366 $ 3,366 $ 3,366
Accounts receivable net of allowance for - -
doubtful accounts 2,911 2,911 2,911
Prepaid expenses - - -
Inventory - 37,096 37,096 - 37,096
Total Current Assets - 43,373 43,373 - 43,373
Note receivable related parties 15,875 43,594 59,469 59,469
Interest receivable 1,838 9,979 11,817 11,817
Stock subscriptions receivable 199,200 199,200 199,200
Deposits 8,711 8,711 8,711
Investment in OCA 26,209 - 26,209 (26,209) -
------------- --------------- ----------------- ----------------- ------------
$ 243,122 $ 105,657 $ 348,779 $ (26,209) $ 322,570
============= =============== ================= ================= ============
</TABLE>
See auditors' report and notes to financial statements.
F-16
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999
Consolidated Consolidated
OCA, Inc. OCA Inc. Before After
(Florida) (Delaware) Eliminations Eliminations Eliminations
--------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ - $ 2,686 $ 2,686 $ - $ 2,686
Deposits 5,000 5,000 5,000
Accrued expenses - 6,000 6,000 6,000
-------------- ------------- --------------- ----------------- ---------------
Total current liabilities - 13,686 13,686 - 13,686
Long term liabilities
Note payable 250,000 250,000 250,000
Accrued interest - 38,333 38,333 - 38,333
-------------- ------------- --------------- ----------------- ---------------
- 288,333 288,333 - 288,333
Shareholders' equity
Common stock 5,633 5,225 10,858 (5,225) 5,633
Additional paid in capital 580,475 148,150 728,625 (148,150) 580,475
Retained deficit (342,986) (349,737) (692,723) 127,166 (565,557)
-------------- ------------- --------------- ----------------- ---------------
243,122 (196,362) 46,760 (26,209) 20,551
-------------- ------------- --------------- ----------------- ---------------
$ 243,122 $ 105,657 $ 348,779 $ (26,209) $ 322,570
============== ============= =============== ================= ===============
</TABLE>
See auditors' report and notes to financial statements.
F-17
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998
Consolidated Consolidated
OCA, Inc. OCA, Inc. Before After
(Florida) (Delaware) Eliminations Eliminations Eliminations
--------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash $ - $ 50,681 $ 50,681 $ 50,681
Accounts receivable net of allowance for - -
doubtful accounts 2,914 2,914 2,914
Prepaid expenses 1,110 1,110 1,110
Inventory - 69,086 69,086 - 69,086
Total Current Assets - 123,791 123,791 - 123,791
Note receivable related parties 15,875 15,885 31,760 31,760
Interest receivable 526 3,470 3,996 3,996
Stock subscriptions receivable 379,200 379,200 379,200
Deposits 8,711 8,711 8,711
Investment in OCA 26,209 - 26,209 (26,209) -
Other assets 11,561 11,561 11,561
--------------- --------------- ----------------- ---------------- ----------------
$ 421,810 $ 163,418 $ 585,228 $ (26,209) $ 559,019
=============== =============== ================= ================ ================
</TABLE>
See auditors' report and notes to financial statements.
F-18
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998
Consolidated Consolidated
OCA, Inc. OCA, Inc. Before After
(Florida) (Delaware) Eliminations Eliminations Eliminations
--------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ - $ 5,010 $ 5,010 $ - $ 5,010
Deposits - - -
Accrued expenses - 16,328 16,328 16,328
-------------- ---------------- ----------------- ---------------- -----------------
Total current liabilities - 21,338 21,338 - 21,338
Long term liabilities
Note Payable 250,000 250,000 250,000
Accrued interest - 18,333 18,333 - 18,333
-------------- ---------------- ----------------- ---------------- -----------------
- 268,333 268,333 - 268,333
Shareholders' equity
Common stock 6,324 5,225 11,549 (5,225) 6,324
Additional paid in capital 759,794 148,150 907,944 (148,150) 759,794
Retained deficit (344,308) (279,628) (623,936) 127,166 (496,770)
-------------- ---------------- ----------------- ---------------- -----------------
421,810 (126,253) 295,557 (26,209) 269,348
-------------- ---------------- ----------------- ---------------- -----------------
$ 421,810 $ 163,418 $ 585,228 $ (26,209) $ 559,019
============== ================ ================= ================ =================
</TABLE>
See auditors' report and notes to financial statements.
F-19
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999
Consolidated Consolidated
OCA, Inc. OCA, Inc. Before After
(Florida) (Delaware) Eliminations Eliminations Eliminations
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue
Sales, net of discounts and returns $ - $ 37,341 $ 37,341 $ 37,341
Cost of Goods Sold - (13,290) (13,290) - (13,290)
----------------------------------------------------------------------------------------
Gross Profit - 24,051 24,051 - 24,051
Expenses
Sales, general and administrative (10) 100,466 100,456 100,456
Management fees - - - -
Rent - 48,000 48,000 48,000
Consulting - - - -
Interest expenses - 20,000 20,000 - 20,000
----------------------------------------------------------------------------------------
Total Expenses (10) 168,466 168,456 - 168,456
Other Income & Expenses 1,312 74,306 75,618 75,618
----------------------------------------------------------------------------------------
Net Income (Loss) $ 1,322 $ (70,109) $ (68,787) $ - $ (68,787)
========================================================================================
</TABLE>
See auditors' report and notes to financial statements.
F-20
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
Consolidated Consolidated
OCA, Inc. OCA, Inc. Before After
(Florida) (Delaware) Eliminations Eliminations Eliminations
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Sales, net of discounts and returns $ - $ 84,954 $ 84,954 $ 84,954
Cost of Goods Sold - (23,383) (23,383) - (23,383)
--------------------------------------------------------------------------------------------
Gross Profit - 61,571 61,571 - 61,571
Expenses
Sales, general and administrative 76,269 158,465 234,734 234,734
Management fees - 6,060 6,060 6,060
Rent - 35,400 35,400 35,400
Consulting 118,700 4,178 122,878 122,878
Interest expenses - 18,333 18,333 - 18,333
--------------------------------------------------------------------------------------------
Total Expenses 194,969 222,436 417,405 - 417,405
Other Income & Expenses 526 8,403 8,929 8,929
--------------------------------------------------------------------------------------------
Net Loss $ (194,443) $ (152,462) $ (346,905) $ - $ (346,905)
============================================================================================
</TABLE>
See auditors' report and notes to financial statements.
F-21
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
Consolidated Consolidated
OCA, Inc. OCA, Inc. Before After
(Florida) (Delaware) Eliminations Eliminations Eliminations
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,322 $ (70,109) $ (68,787) $ - $ (68,787)
-------------------------------------------------------------------------------
Decrease in accounts receivable 3 3 3
(Increase) decrease in other receivables (27,709) (27,709) (27,709)
Increase in inventories 31,990 31,990 31,990
Decrease in other assets (1,322) 6,162 4,840 4,840
Increase (decrease) in accounts payable (2,324) (2,324) (2,324)
Increase (decrease) in accrued liabilities (10,328) (10,328) (10,328)
Increase (decrease) in other payables 25,000 25,000 - 25,000
-------------------------------------------------------------------------------
Total adjustments (1,322) 22,794 21,472 - 21,472
-------------------------------------------------------------------------------
- -
Net cash used by operations - (47,315) (47,315) - (47,315)
Cash flows from investing activities:
Disposition of equipment - - - -
-------------------------------------------------------------------------------
- -
Net cash provided (used) by investing activities - - - - -
- -
Cash flows from financing activities: - -
Proceeds from issuance of long term debt - -
Proceeds from issuance of common stock - - - -
-------------------------------------------------------------------------------
Net cash provided (used) by financing activities - - - - -
-------------------------------------------------------------------------------
-
Net increase (decrease) in cash and cash equivalents - (47,315) (47,315) - (47,315)
Cash and cash equivalents, beginning of year - 50,681 50,681 - 50,681
-------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ - $ 3,366 $ 3,366 $ - $ 3,366
===============================================================================
</TABLE>
See auditors' report and notes to financial statements.
F-22
<PAGE>
<TABLE>
<CAPTION>
OPTICAL CONCEPTS OF AMERICA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
Consolidated Consolidated
OCA, Inc. OCA, Inc. Before After
(Florida) (Delaware) Eliminations Eliminations Eliminations
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (194,443) $ (152,462) $ (346,905) $ - $ (346,905)
------------------------------------------------------------------------------
Decrease in accounts receivable 21,070 21,070 21,070
(Increase) Decrease in other receivables (23,694) (23,694) (23,694)
Increase in inventories (47,032) (47,032) (47,032)
Decrease in other assets (10,291) (10,291) (10,291)
Increase (decrease) in accounts payable (7,684) (7,684) (7,684)
Increase (decrease) in accrued liabilities 10,428 10,428 10,428
Increase (decrease) in other payables (15,875) (1,015) (16,890) - (16,890)
------------------------------------------------------------------------------
Total adjustments (15,875) (58,218) (74,093) - (74,093)
------------------------------------------------------------------------------
- -
Net cash used by operating activities (210,318) (210,680) (420,998) - (420,998)
Cash flows from investing activities:
Proceeds from the sale of property - 13,834 13,834 - 13,834
------------------------------------------------------------------------------
- -
Net cash provided by investing activities - 13,834 13,834 - 13,834
- -
Cash flows from financing activities: - -
Proceeds from issuance of long term debt 250,000 250,000 250,000
Proceeds from issuance of common stock 210,287 - 210,287 - 210,287
------------------------------------------------------------------------------
-
Net cash provided by financing activities 210,287 250,000 460,287 - 460,287
------------------------------------------------------------------------------
-
Net increase (decrease) in cash and cash equivalents (31) 53,154 53,123 - 53,123
Cash and cash equivalents, beginning of year 31 (2,473) (2,442) - (2,442)
------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ - $ 50,681 $ 50,681 $ - $ 50,681
==============================================================================
</TABLE>
See auditors' report and notes to financial statements.
F-23
<PAGE>
PART III
Item 1. Index to Exhibits
The following list describes the exhibits filed as part of this registration
statement on Form 10-SB:
<TABLE>
<CAPTION>
Exhibit Number Document Exhibit
-------------- ----------------
<S> <C> <C>
1.1 Articles of Incorporation of Celebrity Steakhouses, Inc.
1.2 Amendment to Articles of Incorporation Changing Name to
Deerfield Financial Services, Inc.
1.3 Amendment to Articles of Incorporation Changing Name to
Optical Concepts of America, Inc.
1.4 Amendment to Articles of Incorporation Authorizing 1:10 Reverse Split
Of Shares of Common Stock
1.5 By-Laws of Optical Concepts of America, Inc.
1.6 Stock Purchase Agreement between Optical Concepts of America, Inc.
and Deerfield Financial Services, Inc.
2.1 Lease between Company and John A. Roschman dated 1/31/97
2.2 Notification of sale of property and lease and new landlord dated 5/28/99
6.1 Deed of Loan between Commercial Nominees Ltd and Optical Concepts
of America, Inc.
6.2 Convertible Promissory Note between Strategic Capital Solutions Ltd.
and Optical Concepts of America, Inc.
7.1 Form of Company's Common Stock Certificate
7.2 Form of Company's Common Stock Warrant Certificate
</TABLE>
14
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant causes registration to be signed on its behalf by the
undersigned, thereunto duly authorized, on this 17th day of February, 2000.
OPTICAL CONCEPTS OF AMERICA, INC.
(Registrant)
By: /s/ Jan Kaplan President
---------------------------------------
Jan Kaplan, President and Sole Director
15
STATE OF FLORIDA
[GRAPHIC OMITTED]
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of
Incorporation of CELEBRITY STEAKHOUSES INC., a Florida corporation, filed on
June 18, 1996, as shown by the records of this office.
The document number of this corporation is P96000052403
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Nineteenth day of June, 1996
[GRAPHIC OMITTED] /s/ Sandra B. Mortham
CR2EO22 (2-95) ---------------------
Sandra B. Mortham
Secretary of State
<PAGE>
[GRAPHIC OMITTED]
FLORIDA DEPARTMENT OF STATE
Sandra B. Mortham
Secretary of State
June 19, 1996
PAUL M. GALANT
4630 S. KIRKMAN ROAD
SUITE 437
ORLANDO, FL 32811
The Articles of Incorporation for CELEBRITY STEAKHOUSES INC. were filed on
June 18, 1996 and assigned document number P96000052403. Please refer to this
number whenever corresponding with this office regarding the above corporation.
The certification you requested is enclosed.
PLEASE NOTE: COMPLIANCE WITH THE FOLLOWING PROCEDURES IS ESSENTIAL TO
MAINTAINING YOUR CORPORATE STATUS. FAILURE TO DO SO MAY RESULT IN DISSOLUTION OF
YOUR CORPORATION.
A CORPORATION ANNUAL REPORT MUST BE FILED WITH THIS OFFICE BETWEEN JANUARY 1 AND
MAY 1 OF EACH YEAR BEGINNING WITH THE CALENDAR YEAR FOLLOWING THE YEAR OF THE
FILING DATE NOTED ABOVE AND EACH YEAR THEREAFTER. FAILURE TO FILE THE ANNUAL
REPORT ON TIME MAY RESULT IN ADMINISTRATIVE DISSOLUTION OF YOUR CORPORATION.
A FEDERAL EMPLOYER IDENTIFICATION (FEI) NUMBER MUST BE SHOWN ON THE ANNUAL
REPORT FORM PRIOR TO ITS FILING WITH THIS OFFICE. CONTACT THE INTERNAL REVENUE
SERVICE TO RECEIVE THE FEI NUMBER IN TIME TO FILE THE ANNUAL REPORT AT
1-800-829-3676 AND REQUEST FORM SS-4.
SHOULD YOUR CORPORATE MAILING ADDRESS CHANGE, YOU MUST NOTIFY THIS OFFICE IN
WRITING, TO INSURE IMPORTANT MAILINGS SUCH AS THE ANNUAL REPORT NOTICES REACH
YOU.
Should you have any questions regarding corporations, please contact this office
at the address given below.
Brenda Baker, Corporate Specialist
New Filings Section Letter Number: 496A00030509
Division of Corporations - P.O. BOX 6327 -Tallahassee, Florida 32314
<PAGE>
ARTICLES OF INCORPORATION
OF
CELEBRITY STEAKHOUSES INC.
--------------------------
Article I. The name of this Corporation is: CELEBRITY STEAKHOUSES INC.
Article II. This Corporation shall have perpetual existence commencing upon the
filing of these Articles of Incorporation by the Florida Secretary of State.
Article III. This Corporation may engage in any lawful business activity
permitted under the General Corporation Act of the State of Florida.
Article IV. This Corporation is authorized to issue THIRTY MILLION (30,000,000)
shares of Capital Stock as follows:
A) FIVE MILLION (5,000,000) shares of which shall be designated as
"Preferred Stock", each share thereof having the par value of One
Dollar ($1.00). The board of directors may, from time to time
issue part or all of said preferred shares on terms and conditions
as the board may determine without further action required by the
stockholders; and such shares may be convertible into shares of
Common Stock, have cumulative dividends, be redeemable by the
corporation, or such other terms and conditions as may be
determined by the board of directors at the time of issuance.
B) TWENTY-FIVE MILLION (25,000,000) shares of which shall be
designated as "Common Stock", having the par value of One Mill
($0.001) per share, and each such share shall have one vote in
every vote required to be submitted to Stockholders.
Article V. The name and address of the initial Registered Agent is:
Paul M. Galant, 4630 S. Kirkman Road, Suite 437, Orlando, Florida
32811.
Article VI. The address of the Corporation is:
4630 S. Kirkman Road, Suite 437, Orlando, Florida 32811.
Article VII. This Corporation shall initially have no less than One Director and
no more than Nine Directors. The number of Directors may be increased or
diminished, from time to time, by the action of the board of directors or by the
majority vote of the stockholders.
Article VIII. The By-Laws of this Corporation may be adopted, altered, amended
or repealed by the affirmative vote of a majority of the board of directors or
the Stockholders.
<PAGE>
Article IX. This Corporation may indemnify any Officer or Director, or any
former Officer or Director, the full extent permitted by law.
Article X. The name and address of the person signing these Articles as
Incorporator is: Paul M. Galant, 4630 S. Kirkman Road, Suite 437, Orlando,
Florida 32811.
Article XI. This Corporation reserves the right to amend or repeal any
provisions contained in these Articles of Incorporation, in full accord with the
provisions of the General Corporation Act of the State of Florida.
IN WITNESS WHEREOF, the undersigned has executed these Articles of Incorporation
this 14th day of June, 1996.
/s/ Paul M. Galant
----------------------------
Paul M. Galant, Incorporator
ACCEPTANCE BY REGISTERED AGENT
------------------------------
Having been named to accept service of process for the above stated Corporation,
at the place designated in Article V. of these Articles of Incorporation, the
Undersigned hereby agrees to act in this capacity; and further, agrees to comply
with the provisions of all statutes relative to the proper and complete
discharge of his duties.
Dated the 14th day of June, 1996
/s/ Paul M. Galant
----------------------------
Paul M. Galant, Registered Agent
FL G453693411440
State of Florida, County of Orange) ss:
Before me, a Notary Public authorized in the State and County set forth above,
personally appeared Paul M. Galant, known to me and to me known to be the person
who, as Incorporator, executed the foregoing Articles of Incorporation of
CELEBRITY STEAKHOUSES INC.; and he acknowledged before me that he duly executed
those Articles of Incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal in
the State of Florida and County of Orange, this 14th day of June, 1996.
/s/ W.P. SCHMIDT
-----------------------------------
Notary Public, State of Florida
STATE OF FLORIDA
[GRAPHIC OMITTED]
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of Amendment,
filed on October 28, 1996, to the Articles of Incorporation for CELEBRITY
STEAKHOUSES INC. which changed its name to DEERFIELD FINANCIAL SERVICES INC., a
Florida corporation, as shown by the records of this office.
The document number of this corporation is P96000052403.
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Thirty-First day of October, 1996
[SEAL OMITTED]
/s/ Sandra B. Mortham
CR2EO22(1-95) ----------------------
Sandra B. Mortham
Secretary of State
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
CELEBRITY STEAKHOUSES INC.
--------------------------
Article I. The name under which this Corporation was formed is: CELEBRITY
STEAKHOUSES INC.
Article II. The Articles of Incorporation of the Corporation were filed on the
18th day of June, 1996 by the Florida Secretary of State.
Article III. The first Amendment to the Articles of Incorporation of the
Corporation were filed on July 12, 1996 by the Florida Secretary of State.
Article IV. Articles I, V and VI of the Articles Of Incorporation are hereby
deleted in their entirety and respectively, replaced by the following:
Article I. The name of this Corporation is:
DEERFIELD FINANCIAL SERVICES INC.
---------------------------------
Article V. The name and address of the Registered Agent is: Paul M.
Galant, 21218 St. Andrews Blvd., Suite 226, Boca Raton,
Florida 33486.
Article VI. The address of the Corporation is:
21218 St. Andrews Blvd., Suite 226, Boca Raton,
Florida 33486.
Article V. This second Amendment To The Articles of Incorporation shall take
effect immediately, and has been duly adopted by the undersigned as the sole
stockholder and director of the corporation.
IN WITNESS WHEREOF, the undersigned under the penalty of perjury has executed
this Amendment To The Articles Of Incorporation this 26th day of October, 1996.
/s/ Paul Galant
---------------------------------------------
Paul M. Galant, Sole Stockholder and Director
<PAGE>
[GRAPHIC OMITTED]
FLORIDA DEPARTMENT OF STATE
Sandra B. Mortham
Secretary of State
July 18, 1996
PAUL M. GALANT
4630 S. KIRKMAN RD., STE. 437
ORLANDO, FL 32811
Re: Document Number P96000052403
The Articles of Amendment to the Articles of Incorporation for
CELEBRITY STEAKHOUSES INC., a Florida corporation, were filed on July
12, 1996.
The certification requested is enclosed.
Should you have any question regarding this matter, please
telephone (904) 487-6050, the Amendment Filing Section.
Velma Shepard
Corporate Specialist
Division of Corporations Letter Number: 196A00034758
Division of Corporations - P.O. BOX 6327 -Tallahassee, Florida 32314
STATE OF FLORIDA
[GRAPHIC OMITTED]
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of Amendment,
filed on June 26, 1998, to Articles of Incorporation for DEERFIELD FINANCIAL
SERVICES INC. which changed its name to OPTICAL CONCEPTS OF AMERICA, INC., a
Florida corporation, as shown by the records of this office.
I further certify the document was electronically received under FAX audit
number H98000011219. This certificate is issued in accordance with section
15.16, Florida Statutes, and authenticated by the code noted below.
The document number of this corporation is P96000052403.
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Twenty-ninth day of June, 1998
Authentication Code: 298A00035236-062998-P96000052403-1/1
[GRAPHIC OMITTED] /s/ Sandra B. Mortham
CR2EO22 (1-95) ---------------------
Sandra B. Mortham
Secretary of State
<PAGE>
ARTICLES OF AMENDMENT
---------------------
TO THE
------
ARTICLES OF INCORPORATION
-------------------------
OF
--
DEERFIELD FINANCIAL SERVICES INC.
---------------------------------
Pursuant to Section 607.1006 of the Business Corporation Act of the
State of Florida, the undersigned Sole Director and Majority Shareholder of
Deerfield Financial Services Inc. ("Corporation"), a corporation organized and
existing under and by virtue of the Business Corporation Act of the State of
Florida, bearing Document #P96000052403 does hereby certify:
First: That pursuant to Written Consent of the Board of Directors and
Majority Shareholders of said Corporation dated June 11, 1998, the Shareholders
and Directors, approved the amendment to the Corporation's Articles of
Incorporation as follows:
The Articles of Incorporation of this Corporation are amended to read
in their entirety as follows:
ARTICLE I
CORPORATE NAME
--------------
The name of the company is "Optical Concepts of America, Inc."
ARTICLE II
PRINCIPAL OFFICE AND MAILING ADDRESS
------------------------------------
The principal office and mailing address of the Corporation is 5605
N.W. 29th Street, Margate, Florida 33063.
ARTICLE III
NATURE OF CORPORATE BUSINESS AND POWERS
---------------------------------------
The general nature of the business to be transacted by this Corporation
shall be to engage in any and all lawful business permitted under the laws of
the United States and the State of Florida.
Robert J. Burnett, Esq., Florida Bar No. 0117978
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Blvd., Suite 1900
Fort Lauderdale, Florida 33301
(954)763-1200
1
<PAGE>
ARTICLE IV
CAPITAL STOCK
-------------
The maximum number of shares that this Corporation shall be authorized
to issue and have outstanding at any one time shall be 50,000,000 shares of
common stock, par value $.00l per share and 5,000,000 shares of Preferred Stock,
par value $.001 per share. Series of the Preferred Stock may be created and
issued from time to time, with such designations, preferences, conversion
rights, cumulative, relative, participating, optional or other rights, including
voting rights, qualifications, limitations or restrictions thereof as shall be
stated and expressed in the resolution or resolutions providing for the creation
and issuance of such series of Preferred Stock as adopted by the Board of
Directors pursuant to the authority in this paragraph given.
ARTICLE V
TERM OF EXISTENCE
-----------------
This Corporation shall have perpetual existence.
ARTICLE VI
REGISTERED AGENT AND
REGISTERED OFFICE IN FLORIDA
----------------------------
The Registered Agent and the street address of the initial Registered
Office of this Corporation in the State of Florida shall be:
South Florida Registered Agents, Inc.
200 East Las Olas Blvd., Suite 1900
Fort Lauderdale, Florida 33301
ARTICLE VII
BOARD OF DIRECTORS
------------------
This Corporation shall have the number of directors set forth in the by
laws of the corporation and the terms under which such directors will serve
shall be set forth in the by laws of the Corporation.
2
<PAGE>
ARTICLE VIII
INDEMNIFICATION
---------------
This Corporation may indemnify any director, officer, employee or agent
of the Corporation to the fullest extent permitted by Florida law.
ARTICLE IX
AFFILIATED TRANSACTIONS
-----------------------
This Corporation expressly elects not to be governed by Section
607.0901 of the Florida Business Corporation Act, as amended from time to time,
relating to affiliated transactions.
3
<PAGE>
The foregoing amendment was adopted by the Board of Directors and Majority
Shareholders of the Corporation pursuant to Written Consent of the Board of
Directors and Majority Shareholders of the Corporation dated June 12, 1998 in
accordance with Sections 607.0704 and 607.0821 of the Florida Business
Corporation Act. Therefore, the number of votes cast for the amendment to the
Corporation's Certificate of Incorporation was sufficient for approval.
IN WITNESS WHEREOF, the undersigned, being the President and Secretary
of this Corporation, has executed these Articles of Amendment as of June 12,
1998.
DEERFIELD FINANCIAL SERVICES INC.
now known as
OPTICAL CONCEPTS OF AMERICA, INC.
By:/s/ Jan Kaplan
------------------------------------------
Jan Kaplan, President & Secretary
4
<PAGE>
CERTIFICATE DESIGNATING REGISTERED AGENT
AND OFFICE FOR SERVICE OF PROCESS
Optical Concepts of America, Inc., a corporation existing under the
laws of the State of Florida with its principal office and mailing address at
5605 N.W. 29th Street, Margate, Florida 33063 has named South Florida Registered
Agents, Inc. whose address is 200 East Las Olas Blvd., Suite 1900, Fort
Lauderdale, Florida 33301 as its agent to accept service of process within the
State of Florida.
ACCEPTANCE:
-----------
Having been named to accept service of process for the above named
Corporation, at the place designated in this Certificate, I hereby accept the
appointment as Registered Agent, and agree to comply with all applicable
provisions of law. In addition, I hereby am familiar with and accept the duties
and responsibilities as Registered Agent for said Corporation.
SOUTH FLORIDA REGISTERED AGENTS, INC.
(a Florida Corporation)
By: /s/ Beverly F. Bryan
----------------------------------
Beverly F. Bryan, President
5
STATE OF FLORIDA
(GRAPHIC OMITTED)
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of Amendment,
filed on September 2, 1998, effective September 12, 1998, to Articles of
Incorporation for OPTICAL CONCEPTS OF AMERICA, INC., a Florida corporation, as
shown by the records of this office.
I further certify the document was electronically received under FAX audit
number H98000016250. This certificate is issued in accordance with section
15.16, Florida Statutes, and authenticated by the code noted below.
The document number of this corporation is P96000052403.
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Fourth day of September, 1998
Authentication Code: 198A00045303-090498-P96000052403-1/1
(GRAPHIC OMITTED) /s/ Sandra B. Mortham
CR2EO22 (1-95) ---------------------
Sandra B. Mortham
Secretary of State
<PAGE>
ARTICLES OF AMENDMENT
---------------------
TO THE ARTICLES OF INCORPORATION OF
-----------------------------------
OPTICAL CONCEPTS OF AMERICAS, INC.
----------------------------------
Pursuant to Section 607. 10025 of the Business Corporation Act of the
State of Florida, the undersigned President of Optical Concepts of America,
Inc. ("Corporation"), a corporation. organized and existing under and by virtue
of the Business Corporation Act of the State of Florida adopts the following
Certificate of Amendment to its Articles of Incorporation.
1. The name of the corporation is OPTICAL CONCEPTS OF AMERICA, INC.,
Charter P96000052403, filed on June 18, 1996.
2. The following Amendments to the Articles of Incorporation were
adopted by all of the directors, acting unanimously, and majority shareholder of
the Corporation by written consent effective as of August 31, 1998 in the
manner prescribed by the Florida Business Corporation Act.
The First paragraph of Article IV of the Corporation's Articles of
Incorporation shall be and hereby is amended and restated to read in its
entirety as follows:
ARTICLE IV
The maximum number of shares that this Corporation shall be authorized
to issue and have outstanding at any one time shall be 50,000,000 shares of
common stock, par value $.001 per share and 5,000,000 shares of Preferred
Stock, par value $.0O1 per share. Series of the Preferred Stock may be created
and issued from time to time, with such designations, preferences, conversion
rights, cumulative, relative, participating, optional or other rights, including
voting rights, qualifications, limitations or restrictions thereof as shall be
stated and expressed in the resolution or resolutions providing for the creation
and issuance of such series of Preferred Stock as adopted by the Board of
Directors pursuant to the authority in this paragraph given. On the date of
filing of these Articles of Amendment which the Secretary of State of the State
of Florida, every ten (10) issued and outstanding share of the Corporation's
previously authorized common stock, par value $0.001 per share (the "Old Common
Stock") shall thereby and thereupon be reclassified and converted into one (1)
validly issued, fully paid and nonassessable share of Common Stock (the "New
Common Stock"). Each certificate that theretofore represented shares of Old
Common Stock shall thereafter represent the number of shares of New Common Stock
into which the shares of Old Common Stock represented by such certificate were
reclassified and converted hereby; provided, however, that each person holding
of record a stock certificate or certificates that represented shares of Old
Common Stock shall receive, upon surrender of stock certificate or certificates,
a new certificate or certificates evidencing and representing the number of
shares of New Common Stock to which such person is entitled, except that no
fractional shares resulting from the combination shall be issued, any
Prepared by:
Robert J. Burnett, Esq., FL Bar #0117978
Atlas, Pearlman, Tropp & Borkson, P.A.
200 E. Las Olas Blvd., #1900
Ft. Lauderdale, FL 33301
(954) 783-1200
<PAGE>
H980000162506
such fractional share to be converted to the right of the holder thereof to
receive one share of New Common Stock.
3. The foregoing amendment was adopted by the Board of Directors and
Majority Shareholders of the Corporation pursuant to Written Consent of the
Board of Directors and Majority Shareholders of the Corporation dated August 31,
1998 acting unanimously by Written Consent pursuant to Sections 607.0704 and
607.0821 of the Florida Business Corporation Act. Therefore, the number of votes
cast for the amendment to the Corporation's Articles of Incorporation was
sufficient for approval.
4. This Certificate of Amendment shall be effective as of 7:00 a.m.,
Miami, Florida, time, on September 12, 1998.
IN WITNESS WHEREOF. the undersigned, being the President and Director
of the Corporation, has executed these Articles of Amendment to the Articles of
Incorporation of Optical Concepts of America, Inc., as of the 31st day of
August, 1998.
OPTICAL CONCEPTS OF AMERICA INC.
a Florida Corporation
By: /s/ Jan Kaplan
---------------------------
Jan Kaplan, President
<PAGE>
C U S I P S E R V I C E B U R E A U X P R E S S S E R V I C E
- ---------------------------------------------------------------------
STANDARD & POORS, a division of The McGraw-Hill Companies, Inc.
25 Broadway, New York, NY 10004
09/04/1998
Ms. JANINE COX
ATLAS PEARLMAN TROP AND BORKSON
200 EAST LAS OLAS BLVD
FT. LAUDERDALE, FL 33301
Ms. JANINE COX:
This is in response to your request for the assignment of a Corporate CUSIP
Number to:
OPTICAL CONCEPTS AMER INC
CUSIP DESCRIPTION RATE MATURITY
68382Q 2 0 6 COM NEW
Please call we at (212} 208-8341 with any questions.
Sincerely yours,
Gerard Faulkner
Manager
CUSIP Service Bureau
The assignment of a CUSIP number to a particular security by Standard & Poor's
is not intended by Standard & Poor's to be, and should not be continued as
an amendment of such security, a recommendation to illegible, sell or hold cash
security or an opinion as to the legal validity of such security.
CUSIP trademark of the Committee on Uniform Security Identification Procedures.
The American Bankers Association.
CORPORATE BY-LAWS
OF
OPTICAL CONCEPTS OF AMERICA, INC
--------------------------------
ARTICLE ONE - OFFICES
---------------------
The principal office of the corporation shall be established and maintained in
Margate, Broward County, State of Florida; or such other place within or without
the State of Florida as the Board by resolution may, from time to time,
establish.
ARTICLE TWO - STOCKHOLDERS
--------------------------
(Unless otherwise implied by specific text, all references are to
holders of Common Stock)
2.1 PLACE OF MEETINGS. Stockholder's meetings shall be held at the principal
office of the corporation, or at such other place, within or without the State
of Florida, as the Board shall authorize.
2.2 ANNUAL MEETINGS. The annual meeting of Stockholders shall be held on the
1oth day of May at 2:00 P.M. in each year, however, if such date falls on a
Sunday or a legal holiday, then such meeting shall be held on the next business
day following, at the same time, whereby the stockholders shall transact any and
all business properly brought before said meeting.
2.3 SPECIAL MEETINGS. Special meetings of the Stockholders may be called by the
Board or by the president, or at the written request of the stockholders owning
a majority of the stock entitled to vote at such meeting. A meeting requested by
the Stockholders shall be called for a date not less than ten nor more than
sixty days after such request is made. The secretary shall issue the call for
the meeting unless the president, the Board or the Stockholders shall designate
another to make said call.
2.4 NOTICE OF MEETINGS. All Notices for Stockholder meetings and any adjournment
therefor, shall be in writing and state the purposes, time and place for the
meeting. Notice shall be mailed to each Stockholder having the right and being
entitled to vote at such meetings, at the last address appearing for said
Stockholder upon the records-of the corporation, not less than ten nor more than
sixty days prior to the date set for such meeting. In the case of stock
transfers occurring after such notice, no notice to the transferees shall be
required. A Waiver of Notice may be made by any Stockholder, in writing, either
before, during or after the meeting.
2.5 RECORD DATE. The Board may fix a record date not more than forty days prior
to the date set for a meeting of Stockholders as the date as of which the
Stockholders of record who have the right to and are entitled to notice of and
to vote at such meeting and any adjournment thereof shall be determined. Notice
that such date has been fixed may be published in the city, town or county where
the principal office of the corporation is located and in each city or town
where a transfer agent of the stock of the corporation is located.
1
<PAGE>
2.6 VOTING. Every Stockholder shall be entitled at each meeting, and upon each
proposal presented thereat, to one vote for each share of voting stock recorded
in said Stockholder's name on the books of the corporation on the record date as
fixed by the Board. If no record date was fixed, on the date of the meeting the
Stockholder Record books shall be produced at the meeting upon the request of
any Stockholder. Upon demand of any Stockholder, the vote for Directors and the
vote upon any question before the meeting, shall be by written ballot. All
elections for Directors shall be decided by plurality vote of the holders of the
Common Stock; all other questions shall be decided by majority vote. Unless
otherwise designated by the Board of Directors on their issuance, Preferred
Stockholders shall not have voting rights.
2.7 QUORUM. The presence, in person or by proxy, of Stockholders holding a
majority
of the stock of the corporation entitled to vote shall constitute a quorum at
all meetings of the Stockholders. In case a quorum shall not be present at any
meeting, a majority in interest of the Stockholders entitled to vote thereat
present in person or by proxy, shall have power to adjourn the meeting from time
to time, without notice other than by announcement at the meeting, until the
requisite number of shares entitled to vote shall be represented in person or by
proxy. At any such adjourned meeting at which the requisite number of shares
entitled to vote is represented, any business may be transacted which might have
been transacted at the meeting as originally noticed; but only those
Stockholders entitled to vote at the meeting as originally noticed shall be
entitled to vote at any adjournment or adjournments thereof.
2.8 PROXIES. At any Stockholders' meeting, or any adjournment thereof, any
Stockholder of record having the right to and entitled to vote thereat may be
represented and vote by proxy appointed in a written instrument. No such proxy
shall be voted after three years from the date of the instrument unless the
instrument provides for a longer period. In the event that any such instrument
provides for two or more persons to act as proxies, a majority of such persons
present at the meeting, or if only one be present, that one shall have all the
powers conferred by the proxy instrument upon all persons so designated unless
the instrument shall provide otherwise.
2.9 STOCKHOLDER LIST. After fixing a record date for a meeting, the corporation
shall prepare an alphabetical list of the names of all of its Stockholders who
are entitled to notice of a Stockholders meeting. Such list shall be arranged by
voting group with the names and addresses, number and class, and series if any,
of shares held by each. This list shall be available for inspection by any
Stockholder for a period of ten days prior to the meeting.
ARTICLE THREE - DIRECTORS
-------------------------
3.1 BOARD OF DIRECTORS. The business of the corporation shall be managed and its
corporate powers exercised by a Board of at least One and no more than Nine
Directors, each of whom shall be of full age. It shall not be necessary for
Directors to be Stockholders.
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3.2 ELECTION AND TERM OF DIRECTORS. Directors shall be elected at the annual
meeting of Stockholders and each Director shall hold office until his successor
has been elected and qualified, or until the Director's prior resignation or
removal.
3.3 VACANCIES. If the office of any Director, member of a committee or other
office becomes vacant the remaining Directors may, by a majority vote, appoint
any qualified person to fill such vacancy for the unexpired term and until a
successor shall be duly chosen or elected and qualified.
3.4 REMOVAL OF DIRECTORS. Any and all of the Directors may be removed with or
without cause by vote of the holders of a majority of the stock entitled to vote
at a special meeting of Stockholders called for that purpose, or the majority
vote of the remaining Directors.
3.5 NEWLY CREATED DIRECTORSHIPS. The number of Directors may be increased from
time to time by amendment of these By-Laws adopted pursuant to Article Eight
hereof.
3.6 RESIGNATION. A Director may resign at any time by giving written notice to
the Board, the president or the secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt thereof
by the Board or such corporate officer, and the acceptance of the resignation
shall not be necessary to make it effective.
3.7 QUORUM. A majority of the Directors shall constitute a quorum for the
transaction of business. If at any meeting of the Board there shall be less than
a quorum present, a majority of those present may adjourn the meeting until a
quorum is obtained and no further notice thereof need be given other than by
announcement at the meeting which shall be so adjourned.
3.8 PLACE AND TIME OF BOARD MEETINGS. The Board may hold its meetings at the
office of the corporation or at such other places, within or without the State
of Fiorida as it may from time to time determine.
3.9 REGULAR ANNUAL MEETING. The regular annual meeting of the Board shall be
held immediately following the annual meeting of the Stockholders at the place
of such annual Stockholders meeting.
3.10 NOTICE OF MEETINGS OF THE BOARD. Regular meetings of the Board may be held
without notice at such time and place as the Board shall from time to time
determine. Special meetings of the Board shall be held upon notice to the
Directors and may be called by the president upon three days notice delivered to
each Director either personally or by mail, telephone, or telegram. Upon-the
written request of at least two directors, special meetings shall be called by
the president or by the secretary in like manner. Notice of a meeting need not
be given to any Director who submits a written Waiver of Notice, whether before,
during or after the meeting; nor to a Director who attends and participates in
the meeting without protesting the lack of notice prior to or upon the
commencement of such meeting.
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3.11 EXECUTIVE AND OTHER COMMITTEES. The Board may, by appropriate resolution,
designate two or more of their number to one or more committees, which to the
extent provided in said resolution or these By-Laws, may exercise the powers of
the Board in the management of the business of the corporation.
3.12 COMPENSATION. The Board may provide for compensation to be paid to outside
(i.e., not otherwise employed by the Corporation) Directors for their services
as such. Alternatively the Board may provide each director with a fixed sum plus
reimbursement of necessary expenses actually incurred for their actual
attendance at the annual, regular and special meetings of the Board.
3.13 DUAL CAPACITY. Directors shall not be precluded from simultaneously serving
the corporation in any other capacity nor from receiving compensation from the
corporation for such services.
ARTICLE FOUR - OFFICERS
-----------------------
4.1 OFFICERS, ELECTION AND TERM.
A. The Board may elect or appoint a chairman, a chief executive
officer, a president, a chief financial officer, one or more vice presidents, a
secretary, an assistant secretary, a treasurer and an assistant treasurer and
such other officers as it may determine who shall have duties and powers as
hereinafter provided.
B. All officers shall be elected or appointed to hold office until the
next Regular Annual Meeting of the Board and until their successors have been
elected or appointed and qualified.
4.2 REMOVAL, RESIGNATION, COMPENSATION, ETC.
A. Any officer may be removed by the Board with or without cause.
B. In the event of the death, resignation or removal of an officer, the
Board may in its discretion, elect or appoint a successor to fill the
unexpired term.
C. Any two or more offices may be held by the same person.
D. The Board shall determine the compensation for all officers.
E. The Directors may require that any officer give security for the
faithful performance of the duties of such office.
4.3 CHAIRMAN. The Chairman of the Board, if vie be elected, shall preside at all
meetings of the Board and shall have and perform such other duties from time to
time as may be assigned by the Board or the Executive Committee.
4.4 PRESIDENT.- Unless otherwise determined by the Board, the president shall be
the chief executive officer of the corporation and shall have the general powers
and duties of supervision, management and control of the business of the
corporation as is usually vested in the office of the president of a
corporation, including presiding at all meetings of the Stockholders, and
presiding at board meetings in the absence of the Chairman. Unless the Board
provides otherwise, the president shall execute bonds, mortgages and other
contracts in behalf of the corporation, and shall cause the seal to be affixed
any instrument when so required.
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4.5 CHIEF EXECUTIVE OFFICER. From time to time the Board may elect either the
Chairman, the President or another individual to serve the Corporation as the
Chief Executive Officer, with full responsibilities as the highest elected
officer for the conduct of the business operations of the Corporation.
4.6 CHIEF FINANCIAL OFFICER. From time to time the Board may elect an
individual, who may or may not be the Treasurer, to serve the Corporation as the
Chief Financial Officer, with full responsibilities to conduct the financial
operations of the Corporation In the absence of such appointment, the Treasurer
shall assume such responsibilities.
4.7 VICE-PRESIDENT. The vice-president shall perform such duties as from time to
time the Board shall prescribe or the president shall assign. During the absence
or disability of the president, the vice-president, or if there be more than
one, the senior executive vice-president, shall have all the powers and
functions of the president.
4.8 SECRETARY. The secretary shall: attend all Stockholder and Board meetings;
record all votes and minutes of all corporate proceedings; give or cause to be
given notice of all Stockholder and Directors meetings; maintain custody and
control of the corporate seal, affixing it upon instruments when required and
authorized to do so by the Board or the president; prepare or cause to be
prepared a certified list of Stockholders, in alphabetical order indicating the
number of shares of each respective class held by each such Stockholder; keep
all documents and corporate records as required by law and in a proper and safe
manner; and to perform such other duties as may be prescribed by the Board or
assigned by the president.
4.9 ASSISTANT SECRETARY. The assistant-secretary shall perform such duties and
functions as may be assigned by the secretary. During the absence or disability
of the secretary, the assistant-secretary, or if there are more than one, the
one so designated by the secretary or by the Board, shall have all of the powers
and functions of the secretary.
4.10 TREASURER. The treasurer shall: have the custody and control of the
corporate funds and securities; keep full and accurate books of account,
including the receipts and disbursements in the corporate accounts; record and
deposit all money and other valuables in the name and to the credit of the
corporation in such depositories as designated by the Board; disburse the funds
of the corporation as ordered or authorized by the Board, preserving proper
vouchers therefor; render full statements of the books and records, including
income, profit and loss, and the financial condition of the corporation to the
president and at the regular meetings of the Board. The treasurer shall render a
full and accurate financial report at the annual meeting of the Stockholders. To
ensure the accuracy of the reports which the treasurer is responsible for
preparing, all other officers of the corporation shall provide the treasurer
with such reports and statements as may be requested from time to time. The
treasurer shall perform such other duties as may be required from time to time
by the Board or as assigned by the president.
4.11 ASSISTANT-TREASURER. The assistant-treasurer shall perform such duties and
functions as may be assigned by the treasurer. During the absence or disability
of the treasurer, the assistant-treasurer, or if there are more than one, the
one so designated by the treasurer or by the Board, shall have all of the powers
and functions of the treasurer.
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4.12 SURETIES AND BOND. The Board may require any officer or agent of the
corporation to provide the corporation with a surety bond in such sum and with
such surety as the Board may direct, to assure the faithful performance to the
corporation, including responsibility for negligence and for the accounting for
all assets and property of the corporation for which such officer or agent may
have responsibility.
4.13 INDEMNIFICATION. The Company is authorized in its By-laws to indemnify its
officers and directors to the fullest extent allowed under the provisions of the
State of Florida Corporation Laws for claims brought against such persons in
their capacity as officers and or directors.
ARTICLE FIVE - CERTlFICATES FOR SHARES
--------------------------------------
5.1 CERTIFICATES. The shares of capital stock for which the corporation is
authorized to issue shall be represented by certificates' which shall be
numbered and recorded in the Stockholders Record and Transfer books upon their
issuance. Each certificate shall: exhibit the holder's name; the number of
shares owned; be duly signed by the president and secretary or treasurer; and
bear the seal of the corporation. By resolution of the Board, facsimile
signatures of such officers may be used. In the event that the corporation
appoints a transfer agent and or registrar, each certificate shall exhibit the
endorsed authorized signature of such agent.
5.2 LOST OR DESTROYED CERTIFICATES. The Board may direct that a new
certificate(s) be issued in place of previously issued but lost or destroyed
certificates upon the provision to the corporation of an affidavit by the
Stockholder(s) setting forth the facts surrounding the lost or destroyed
certificates. The Board may in its discretion and as a condition precedent to
the issuance of a replacement certificate, require that the Stockholder provide
a bond or other security, to indemnify the corporation in the event of a future
claim with respect to the certificate alleged to have been lost or destroyed.
5.3 TRANSFER OF SHARES. Upon surrender to the corporation (or its transfer
agent) of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person(s) entitled
thereto, and the old certificate shall be canceled upon the Stock Transfer books
and records of the corporation, which shall be kept at its principal office.
Transfers made as collateral security, and not absolutely, shall be so indicated
upon the transfer ledger. No transfer shall be made during the ten days
immediately prior to the annual meeting of the Stockholders.
5.4 APPOINTMENT OF TRANSFER AGENT. The Board shall have the power and authority
to appoint a duly licensed and qualified stock transfer agency to provide stock
transfer and warrant agency services to the corporation.
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5.5 CLOSING TRANSFER BOOKS. The Board shall have the power to close the share
transfer books of the corporation for a period of not more than ten days during
the thirty day period immediately preceding: a) any Stockholders meeting; or b)
any date upon which Stockholders shall be called upon to or have a right to take
action without a meeting; or c) any date fixed for the payment of a dividend or
any other form of distribution.
Only those Stockholders of record at the time the transfer books are closed,
shall be recognized as such for the purposes of: receiving meeting notices,
voting at meetings, taking action without a meeting, or receiving dividends or
other distributions.
ARTICLE SIX- DIVIDENDS
----------------------
Out of funds which are legally available, the Board may at any regular or
special meeting, declare cash dividends payable upon the capital stock of the
corporation. Before declaring any such dividend there may be set apart out of
any funds so available, such sum or sums as the Board from time to time deems
proper for working capital, or as a reserve fund to meet contingencies, or for
equalizing dividends, or for such other purposes as the Board shall deem in the
best interests of the corporation.
ARTICLE SEVEN - CORPORATE SEAL
------------------------------
7.1 DESCRIPTION AND USE. The seal of the corporation shall be circular in form,
and shall bear the name of the corporation, the year of its organization, and
the words, "Corporate Seal, Florida". The seal may be used by causing it to be
impressed directly upon the instrument or writing to be sealed, or upon an
adhesive substance to be affixed thereto. The seal on the Certificates for
shares, or on any corporate obligation for the payment of money, may be
facsimile, engraved, or printed.
7.2 CONTROL AND CUSTODY. Except as otherwise directed by the Board, the
president of the corporation shall cause the seal to be affixed to any corporate
instruments, including bonds, mortgages and other contracts, in behalf of the
corporation. When so affixed' the secretary or treasurer of the corporation
shall attest thereto. The secretary of the corporation shall bear primary
responsibility for maintaining custody and control of the seal at all times.
ARTICLE EIGHT - EXECUTION OF INSTRUMENTS
----------------------------------------
All corporate instruments and documents shall be signed or countersigned,
executed, verified or acknowledged by such officer or officers or other
person(s) as the Board may from time to time designate. All checks, drafts or
other orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation
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shall be signed by such officer or officers, or agents of the corporation, and
in such manner as shall be determined from time to time by the Board.
ARTICLE NINE - FISCAL YEAR
--------------------------
The corporation's fiscal year shall be December 31st of each year.
ARTICLE TEN - NOTICE AND WAIVER OF NOTICE
-----------------------------------------
Unless otherwise specifically provided to the contrary, all notices required by
these By-Laws shall be made, in writing and delivered by depositing same in the
United States postal service mail depository, in a sealed postage-paid wrapper,
properly addressed to the person entitled to notice, at the last known address
of such person. Such notice shall be deemed to have been given on the day of
such mailing. Stockholders not entitled to vote shall not be entitled to receive
any notice of any meetings except as otherwise provided by Statute.
Before, during or after an event to which a Stockholder is entitled to notice,
any Stockholder may execute a written waiver of such notice, whether required by
these By-Laws, the Articles of Incorporation or any applicable statutes.
ARTICLE ELEVEN - CONSTRUCTION
-----------------------------
Whenever a conflict arises between the language of these By-Laws and the
Articles of Incorporation, the Articles of Incorporation shall take precedence.
ARTICLE TWELVE - ACTION BY CONSENT
----------------------------------
Any action taken by the Stockholders, the Directors or a Committee of the Board
may be taken upon written consent, without a meeting, pursuant to the applicable
provisions of the Florida Statutes
ARTICLE THIRTEEN - AMENDMENTS
-----------------------------
These By-Laws may be altered, changed, amended or repealed by the affirmative
vote of a majority of the stock issued and outstanding and entitled to vote
thereon, or the affirmative vote of a majority of the Board, at any meeting duly
called, and for which
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proper notice of the meeting and its purpose was given to the Stockholders or
the members of the Board, respectively.
ARTICLE FOURTEEN - EMERGENCY BY-LAWS
------------------------------------
Pursuant to the provisions of Florida Statutes 607.0207, in the event that a
quorum of the Directors cannot be readily assembled because of a catastrophic
event, any member of the Board may call an emergency meeting and notify all
other Directors using any means of communication available.
In the event of and solely during a catastrophic event any one member of the
Board shall constitute a quorum for the transaction of the corporation's
business. Any action taken in good faith and acted upon in accordance with these
By-Laws shall bind the corporation; and the corporation shall hold harmless any
Director, officer, employee or agent who undertakes an action pursuant to these
By-Laws.
9
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is entered into this
30th day of January, 1998 between Deerfield Financial Services, Inc., a Florida
Corporation (the ("DFFS"), whose mailing address is 5605 Northwest 29th Street,
Margate, Florida 33063, and Optical Concepts of America, Inc, a Delaware
Corporation (the "OCA"), whose mailing address is also 5605 Northwest 29th
Street, Margate, Florida 33063 (collectively, the "Parties").
WITNESSETH:
WHEREAS, Deerfield Financial Services, Inc. is authorized to
issue 5,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock;
and,
WHEREAS, Optical Concepts of America, Inc. is authorized to issue
20,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock; and,
WHEREAS, OCA is willing to be acquired by DFFS, and DFFS is willing to
acquire OCA, by virtue of an exchange of Stock of the parties whereby OCA shall
exchange 100% of its issued and outstanding shares (the "OCA Shares") in
exchange for a total of 750,000 shares of DFFS Common Stock.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, and other good and valuable consideration, the
receipt of which is hereby acknowledged, the Parties hereby agree as follows:
1. Incorporation by reference. The above recitals are true and correct
and are incorporated by reference herein.
2. Purchase and Sale. Subject to and upon the terms and conditions
contained herein, on the Closing Date (as defined herein), OCA shall sell,
transfer, assign, convey and deliver to DFFS, free and clear of all adverse
claims, security interests, liens, claims and encumbrances (other than
restrictions under state and federal securities laws) and DFFS shall purchase,
accept and acquire from OCA, the OCA Shares. In exchange for the OCA Shares,
DFFS shall sell, transfer, assign, convey and deliver to OCA, free and clear of
all adverse claims, security interests, liens, claims and encumbrances (other
than restrictions under state and federal securities laws) and OCA shall accept
and acquire from DFFS, a total of 750,000 shares of DFFS Common Stock. These
750,000 shares of DFFS Common Stock shall be distributed to all of the current
shareholders of OCA on a pro-rata basis determined by their percentage ownership
of OCA at the time of closing of this transaction.
3. Closing! Subject to the conditions precedent set forth herein, the
purchase of the Company Shares shall take place at the offices of OCA in
Margate, Florida, or such other location of OCA's choosing, on or before January
31, 1998. Such date is herein referred to as the "Closing Date".
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4. Obligations of OCA. OCA shall deliver to DFFS stock certificates
representing exactly 100% of the issued and outstanding shares of the Company
pursuant to the terms of this Agreement.
5. Obligations of DFFS. DFFS shall have delivered to OCA the amount
of Shares of DFFS Common Stock listed pursuant to the terms of Section 2 of this
Agreement.
6. Representations and Warranties of OCA. OCA represents and
warrants that the following are true and correct as of the date hereof and will
be true and correct through the Closing Date as if made on that date:
A. Authorization and Validity. This Agreement has been duly
executed and delivered by OCA and constitutes legal, valid and binding
obligations of OCA, enforceable against OCA in accordance with its respective
terms, except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally or the availability of equitable
remedies.
B. Consents/Approvals/Conflict. Except for compliance with
applicable federal and state securities laws, to the best of Seller's knowledge,
no consent, approval, authorization or order of any court or governmental agency
or other body is required for OCA to consummate the sale of the Company Shares.
Neither the execution, delivery, consummation or performance of this Agreement
shall conflict with or constitute a breach of any agreement to which OCA is a
party or by which he is bound nor, to the best of OCA's knowledge and belief,
any existing law, rule, regulation, or any decree of any court or governmental
department, agency, commission, board or bureau, domestic or foreign, having
jurisdiction over OCA, nor result in the creation of any lien or other
encumbrance upon the Company Shares.
7. Representations and Warranties of DFFS. DFFS hereby represents
and warrants that the following are true and correct as of the date hereof and
will be true and correct through the Closing Date as if made on that date:
A. Authorization and Validity. This Agreement has been duly
executed and delivered by DFFS and constitutes legal, valid and binding
obligations of DFFS, enforceable against DFFS in accordance with its respective
terms, except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally or the availability of equitable
remedies.
B. Consents/Approvals/Conflict. Except for compliance with
applicable federal and state securities laws, no consent, approval,
authorization or order of any court or governmental agency or other body is
required for DFFS to consummate the acquisition of OCA. Neither the execution,
delivery, consummation or performance of this Agreement shall conflict with or
constitute a breach of any agreement to which DFFS is a party or by which it is
bound nor, to the best of DFFS's knowledge and belief, any existing law, rule,
regulation, or any decree of any court or, governmental department, agency,
commission, board or bureau, domestic or foreign, having jurisdiction over
DFFS.
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8.Miscellaneous.
(a) Assignment. This Agreement and the rights granted
hereunder may not be assigned in whole or in part by any of the parties without
prior written consent of the other parties.
(b) Further Assurances. All parties hereto shall execute and
deliver such other instruments and do such other acts as may be necessary to
carry out the intent and purposes of this Agreement.
(c) Gender. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms
and the singular form of nouns and pronouns shall include the plural and vice
versa.
(d) Captions. The captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit, extend or
prescribe the scope of this Agreement car the intent of any of the provisions
hereof.
(e) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
It supersedes all prior negotiations, letters and understandings relating to the
subject matter hereof.
(f) Amendment. This Agreement may not be amended,
supplemented or modified in whole or in part except by an instrument in writing
signed by the party or parties against whom enforcement of any such amendment,
supplement or modification is sought.
(g) Effect of Waiver. The failure of any party at any time
or times to require performance of any provision of this Agreement will in no
manner affect the right to enforce the same. The waiver by any party of any
breach of any provision of this Agreement will not be construed to be a waiver
by any such party of any succeeding breach of that provision or a waiver by such
party of any breach of any other provision.
(h) Construction. This Agreement shall be construed within
the fair meaning of each of its terms and not against the party drafting the
document.
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IN WITNESS WHEREOF, the parties have respectively caused this
Agreement to be executed and effective as of January 30, 1998.
As to OCA: Optical Concepts of America, Inc.
By: Jan Kaplan, President and Director
Authorized Signature for OCA: /S/ Jan Kaplan, President and Director
--------------------------------------
As to DFFS: Deerfield Financial Services, Inc.
By: Jan Kaplan, President and Director
Authorized Signature for DFFS: /S/ Jan Kaplan, President and Director
--------------------------------------
4
Business Lease
This agreement, entered into this 31 day of January 1997 between John A.
Roschman, hereinafter called the lessor, party of the first part, and Optical
Concepts of America located at 2898 N. University Drive Suite 48 Coral Springs,
FL 33065 of the County of Broward and State of Florida hereinafter called the
lessee or tenant, party of the second part:
Witnesseth. That said lessor does this day lease unto said lessee, and said
lessee does hereby hire and take as tenant under said lessor Space Number 5667
NW 29th AVENUE situated in Margate, Florida, to be used and occupied by the
lessee as office and storage space, optical laboratory and distribution of eye
related products and for no other purposes or uses for the term of Sixty Three
months beginning on the (SEE ADDENDUM) day of, 1997, and payable as follows:
(SEE ADDENDUM)
all payments to be made to the lessor on the first day of each and every month
in advance without demand at the office of Roschman Enterprises in the city of
Margate, or at such other place and to such other person, as the lessor may from
time to time designate in writing.
The following express stipulations and conditions are made a part of the lease
and are hereby assented to by the lessee:
FIRST: The lessee shall not assign this lease, nor sub-let the premises, or any
part thereof nor use the same, or any part thereof, nor permit the same, or any
part thereof, to be used for any other purpose than as above stipulated, nor
make any alterations therein, and all additions thereto, without the written
consent of the lessor, which shall not be unreasonably withheld, and all
additions, fixtures or improvements which may be made be lessee, except moveable
office furniture, shall become the property of the lessor and remain upon the
premises as a part thereof, and be surrendered with the premises at the
termination of this lease.
SECOND: All personal property placed or moved in the premises above described
shall be at the risk of the lessee or owner thereof, and lessor shall not be
liable for any damage to said personnel property, or to the lessee arising from
the bursting or leaking of water pipes, or from any act of negligence of any
co-tenant of occupants of the building or of any other person whomsoever.
THIRD: That the tenant shall promptly execute and comply with all statutes,
ordinances, rules, orders, regulations and requirements of the Federal, State
and City Government and of any and all their Departments and Bureaus applicable
to said premises, for the prevention and abatement of nuisances or other
grievances, in upon, or connected with said premises during said term; and shall
also promptly comply with all rules, orders and regulations of the Southeastern
Underwriters Association for the prevention of fires. Landlord stipulates that
the premises are suitable and zoned for the purposes intended by the tenant:
Landlord further stipulates that there are no known defects, code violations or
violations of any local, county, state or federal law, act, ordinance or
regulation including but not limited to ADA and any hazardous waste or materials
law.
FOURTH: In the event the premises shall be destroyed or so damaged or injured by
fire or other casualty during the life of this agreement, whereby the same shall
be rendered untenantable, then the lessor shall have the right to render said
premises tenantable by repairs within ninety days therefrom. If said premises
are not rendered tenantable within said time, it shall be optional with either
party hereto to cancel this
<PAGE>
lease, and in the event of such cancellation the rent shall be paid only to the
date of such fire or casualty, the cancellation herein mentioned shall be
evidenced in writing.
FIFTH: The prompt payment of the rent for said premises upon the dates named,
and the faithful observance of the term and conditions of this lease.
SIXTH: If the lessee shall abandon or vacate said premises before the end of the
term of this lease, or shall suffer the rent to be in arrears and at least
fourteen (14) days after tenant's receipt of notification of arrears and demand
for payment, the lessor may, at his option, forthwith cancel this lease or he
may enter said premises as the agent of the lessee, by force or otherwise,
without being liable in any way therefor, and re-let the premises with or
without any furniture that may be therein, as the agent of the lessee, at such a
price and upon such terms and for such duration of time as the lessor may
determine, and receive the rent therefor, applying the same to the payment of
the rent due by these presents, and if the full rental herein provided shall not
be realized by the lessor over and above the expenses to lessor in such
re-letting, the said lessee shall pay any deficiency, and if more than the full
rental is realized lessor will pay over to said lessee the excess of demand.
SEVENTH: Lessee agrees to pay the cost of collection and ten per cent attorneys
fee on any part of said rental that may be collected by suit or by attorney,
after the same is past due.
EIGHTH: The lessee agrees that he will pay all charges for rent, gas,
electricity or other illumination, and for all water used on said premises, and
should said charges for rent, light or water herein provided for at any time
remain due and unpaid for the space for fourteen (14) days after the same shall
have become due, the lessor may at its option consider the said lessee at
sufferance and immediately re-enter upon said premises and the entire rent for
the rental period then next ensuing shall at once be due and payable and may
forthwith be collected by distress or otherwise. Landlord represents and
warrants that air-conditioning and heat is in good and proper working order and
is adequate for the needs of the tenant. Tenant shall pay the cost of hiring a
maintenance company to service the HVAC system. Landlord responsible any and all
repairs and replacements.
NINETH: In the event of a uncured event the said lessee hereby pledges and
assigns to lessor all the furniture, fixtures, goods and chattels of said
lessee, which shall or may be brought or put on said premises as security for
the payment of the rent herein reserved, and the lessee agrees that the said
lien may be enforced be distress foreclosure or otherwise at the execution of
the said lessor, and does hereby agree to pay attorneys fees of ten per cent of
the amount so collected or found to be due, together with all costs and charges
therefore incurred or paid by the lessor.
TENTH: The lessor, or any of his agents, shall have the might to enter said
premises during usual and customary business hours, providing tenant reasonable
notice, except in the event of a bonafide emergency, to examine the same to make
such repairs, additions or alterations as may be deemed necessary for the
safety, comfort, or preservation therefore, or of said building or to exhibit
said premises, and to put or keep upon the doors or windows thereof a notice
"FOR RENT' at any time within thirty (30) days before the expiration of this
lease. The right of entry shall likewise exist for the purpose of removing
placards, signs, fixtures, alterations, or additions, which do not conform to
this agreement of to the rules and regulations of the building.
ELEVENTH: Lessee hereby accepts the premises in the condition they are at the
beginning of this lease and agrees to maintain said premises in the same
condition, order and repair as they are at the commencement of said term,
excepting only reasonable wear and team arising from the use thereof under this
agreement, and to make good to said lessor immediately upon demand any damage to
water apparatus, or electric lights or any fixture, appliances or appurtenances
of said premises, or of the building, caused by any act or neglect of lessee, of
any person or persons in the employ or under the control of the lessee.
<PAGE>
building, caused by any act or neglect of lessee, of any person or persons in
the employ or under the control of the lessee.
TWELFTH: It is expressly agreed and understood by an between the parties to this
agreement, that the landlord shall not be liable for any damage or injury by
water, which may be sustained by the said tenant or other person or for any
other damage or injury resulting from the carelessness, negligence, or improper
conduct on the part of any other tenant or agents, or by reason of the breakage,
leakage, or obstruction of the water, sewer or other leakage in or about the
said building.
THIRTEENTH: COPY TO COME
FOURTEENTH: This contract shall bind the lessor and its assigns or successors,
and the heirs, assigns, administrators, legal representatives, executors or
successors as the ease may be, of the lessee.
FIFTHTEENTH: It is understood and agreed between the parties hereto that time is
of the essence of this contract and this applies to all terms and conditions
contained herein.
SIXTEENTH: It is understood and agreed between the parties hereto that written
notice mailed via certified mail, return receipt requested, or via Federal
Express or similar overnight mail delivery service with a signed and documented
evidence of receipt by the appropriate recipient, delivered to the premises
shall constitute sufficient notice to the lessee and written notice mailed or
delivered in a similar manner to the office of the lessor shall constitute
sufficient notice to the Lessor, to comply with the terms of this contract.
SEVENTEENTH: The rights of the lessor under the foregoing shall be cumulative,
and failure on the part of the lessor to exercise promptly any rights given
hereunder shall not operate to forfeit any of the said rights.
EIGHTEENTH: It is further understood an agreed between the parties hereto that
any charges against the lessee by the lessor for services or for work done on
the premises by order of the lessee or otherwise accruing under this contract
shall be considered as rent due and shall be included in any lien for rent due
and unpaid.
NINETEENTH: It is hereby understood and agreed that any signs or advertising to
be used, including awnings, in connection with the premises leased hereunder
shall be first submitted to the lessor for approval before installation.
TWENTETH: COVENANTS OF LESSEE:
The lessee, for and in consideration of this lease and the agreements, promises,
covenants of the Lessor as herein set forth and contained, promises and agrees
as follows:
(A) Insurance At its expense to procure and maintain in force during time full
term of this lease a policy of comprehensive general liability insurance in
a company acceptable to the lessor insuring against damages for the death
or personal injury of persons or damage or destruction of and to the
property of others, with $1,000,000 limit of liability, and the loss
payable clause of said policy so maintained by the lessee shall name both
the Lessor and the Lessee as their interests may appear.
<PAGE>
(B) PUBLIC LIABILITY The Lessee agrees that it will indemnify and save
harmless the lessor from and against any and all claims, suits, actions, and
damages for any personal injury, loss of life, or damage to property of
others specifically due to any action solely on the part of the tenant
sustained in, on, or about the demised premises; provided, however, that
this provision shall not prevent the Lessee from legitimately defending any
suit or claim which may be brought against the Lessee or the Lessor or both.
(C) At the termination of the term of this lease, or in the event this lease is
terminated for any other reason than the lapse of time, the Lessee shall
surrender and deliver up to the Lessor the demised premises in good repair
and condition, damage by fire or other casualty and reasonable wear and tear
and natural deterioration excepted.
(D) The Lessee shall not suffer or permit any mechanics lien or other
encumbrance to be filed against the Lessor's fee simple title to the
demised premises nor against the Lessee's leasehold interest in said
premises.
(E) The Lessee shall not permit the use of the demised premises of any
portion of the common area in any manner which shall constitute a
nuisance or a hazard. Lessee shall at all times keep the demised
premises and adjoining areas subject to Lessee's control in a clean
and neat condition, free of any trash, garbage, rubbish and vermin.
IN WITNESS HEREOF, the parties hereto have hereunto executed this instrument for
the purpose herein expressed, the day and year above written,
Signed, Sealed and delivered
in the presence of: LESSOR
/s/ JOHN A. ROSCHMAN
--------------------
/s/ ILLEGIBLE JOHN A. ROSCHMAN
- --------------
AS TO LESSOR
/s/ ILLEGIBLE LESSEE
- --------------
AS TO LESSEE
/s/ Jan Kaplan
--------------------
Jan Kaplan, President
<PAGE>
ADDENDUM
I. LANDLORDS WORK-- Lessor shall construct "turnkey" premises in
specification with a plan which shall be mutually accepted and signed off
on by both parties, and be attached to and made a part of this lease
labeled: Exhibit "A". Landlord at its sole cost and expense shall provide
for the construction indicated on plan which shall include: Architectural
and working drawings, Full construction of premises and tenant finishes to
including painting and carpeting.
2. LEASE COMMENCEMENT--The Commencement of this lease agreement shall be within
one week of issuance of a Certificate of Occupancy by the city of Margate
after completion of "Landlords Work".
3. RENT SCHEDULE:
MONTHS 0-3 FREE
MONTHS 4-l2 $2,000.00 PER MONTH
MONTHS 13-24 $3,900.00 PER MONTH
MONTHS 25-36 $4,100.00 PER MONTH
MONTHS 37-48 $4,300.00 PER MONTH
MONTHS 49-63 $4,525.00 PER MONTH
4. OPTION TO RENEW--Landlord Grants Lessee Two (2) Five (5) Year Options to
renew this lease. The Rental Rate of each option period shall be The previous
periods rent increased by 5%. A 5% yearly escalation shall apply to each year
during the option period.
5. DEPOSIT--Upon execution of the lease agreement Lessee shall deposit
$10,711.38 which will represent 1st months rent, Last months rent and One (1)
months security. Tenant shall post security deposit with the understanding that
landlord shall provide an acceptable plan labeled Exhibit 'A' which will
illustrate the construction to take place in the premises. Should the Landlord
not provide the exhibit within 30 days of the lease signing tenant shall be
entitled to a full refund of the deposit within Two (2) working days, and this
lease agreement shall be null and void.
May28, 1999
Optical Concepts of America
2895 N. University Drive - Suite 48
Coral Springs, Florida 33065
Gentlemen:
Please be advised that as of today, Friday, May 28, 1999, the property in which
you are a tenant at Coral Gate Plaza has been sold to Pearl Gordon, Trustee.
From this date forward, please make your rent check payable to Grove Park
Warehouses, and mail it to: 222 South Military Trail, Deerfield Beach, Florida
33442.
Should you have any questions regarding your tenancy, please direct those
questions to Marty Gordon at beeper (954) 537-5948. Office # (954) 427-0312.
Yours very truly,
/s/ John A. Roschman
--------------------
John A. Roschman
JAR/
DEED OF LOAN
------------
This deed is made the 30th day of January 1998
BETWEEN Commercial Nominees of Australia Ltd of:
Level 1 140-152 Sussex Street
SYDNEY, NSW, AUSTRALIA
("the Lender")
AND Optical Concepts of America Inc. of:
5605 Northwest 29th Street
MARGATE, FLORIDA, USA
("the Borrower")
AND Jan H. Kaplan of:
5605 Northwest 29th Street
MARGATE, FLORIDA, USA
("the Guarantor")
WHEREAS (a) The Borrower sought a loan facility to be made
available to it.
(b) The lender in its capacity as representative of
National Mutual Trustees Limited as Custodian of the
Freedom of Choice Masterfund has advanced to the
Borrower the Principle Sum on the terms and
conditions contained in this Deed.
(c) The Guarantor has agreed to guarantee the repayment
of any amounts due by the Borrower to the Lender
under this Deed.
NOW THIS WITNESSETH AND IT IS HEREBY AGREED AS FOLLOWS.
1. INTERPRETATlON
"Principal Sum" means two hundred and fifty thousand US Dollars (US$250,000).
"Interest Rate" means eight per cent (8%) per annum.
"Date of Advance" means the 30th January, 1998.
2. INTEREST
The borrower shall pay to the Lender interest calculated at the Interest Rate on
the Principle Sum computed from the Date of Advance to the date of repayment
pursuant to clause 3 below.
3. REPAYMENT
Interest calculated in accordance until clause 2 above..
The Principle Sum together with any outstanding interest calculated in
accordance with clause 2 above will become payable no later than July 30, 1998.
4. DEFAULT
In the event of non repayment of monies called in by the Lender, interest at the
Interest Rate plus a penalty rate of five per cent (5%) per annum, will accrue
on the total amount payable and will be charged monthly for interest calculation
purposes for so long as the amounts owing to the Lender remain unpaid.
<PAGE>
5. GUARANTEE
The Guarantor unconditionally and irrevocably guarantees payment to the Lender
of any amounts due by the Borrower to the Lender under this deed.
The Guarantor waives any right he has of first requiring the Lender to procede
against or enforce any claim against the Borrower before claiming from the
Guarantor under this Guarantee and Indemnity.
6. NOTICES
Any notice required or permitted to be given hereunder shall be in writing and
to the parties as follows.
The Lender
- ----------
Mr. Anthony Hall
Level 1 140-152 Sussex Street
SYDNEY, NSW, AUSTRALIA
The Borrower and Guarantor
- --------------------------
Mr. Jan Kaplan
5605 Northwest 29th Street
MARGATE, FLORIDA, USA
Notices shall be deemed to have been given and received upon receipt if
personally delivered or 2 days after posting if sent by mail.
7. LAW AND JURISDICTION
This Deed shall be governed by and constructed in accordance with the laws of
the State of NSW, Australia.
THE COMMON SEAL OF COMMERCIAL )
NOMINEES OF AUSTRALIA LIMITED ) ---------------------
Was hereunto affixed in accordance with its )
Articles of Association ) ---------------------
SIGNED FOR AND ON BEHALF OF THE LENDER ---------------------
In the presence of ---------------------
SIGNED FOR AND ON BEHALF OF THE GUARANTOR ---------------------
In the presence of ---------------------
NON-NEGOTIABLE CONVERTIBLE PROMISSORY NOTE
------------------------------------------
$289,800.00 January 11, 2000
FOR VALUE RECEIVED, the undersigned Optical Concepts of America, Inc.,
a Florida corporation (the "Company"), promises to pay to Strategic Capital
Investment Ltd., an Australian corporation (the "Note Holder" or "Holder"), the
principle sum of Two Hundred Eighty Nine Thousand Eight Hundred Dollars
($289,800.00), together with interest thereon from the above date until
maturity, at an interest rate of eight percent (8%) per annum compound. This
Note is being issued by the Company to the Note Holder in accordance with the
Note Holder's acquisition and assumption of a previous note which was dated
January 30, 1998 (the "Deed of Loan") between the Company and Commercial
Nominees of Australia, Ltd. and further, as acknowledgement and confirmation of
the cancellation of any sums due between the Company and Commercial Nominees of
Australia, Ltd. As such, Strategic Capital Investment Ltd. hereby affirms and
warrants that (a) Holder has fully assumed and acquired all obligations under
such Deed of Loan; (b) such Deed of Loan has been canceled and is no longer a
valid claim against the Company; and (c) that Holder agrees to indemnify the
Company against any claims which may, at any time, be brought against any party
named in such Deed of Loan.
Interest shall accrue on the unpaid outstanding principal balance of the Note at
a rate of 8% per annum. The entire principal balance and any accrued interest
shall be due and payable on January 31, 2002 (the "Maturity Date"). This Note
may be prepaid in full at any time without penalty.
Option For Conversion By The Note Holder: Commencing on the date of the Note,
the Note Holder shall have the right prior to the date this Note is paid in full
or redeemed, in his sole discretion, to convert all or any part of the
outstanding and unpaid principal amount (including accrued and unpaid interest)
of the Note into fully paid and non-assessable shares of common stock of the
Company at a conversion price equal to 80% of the average Closing Price of the
Company's common stock for the 10 days immediately prior to the date of such
conversion, subject to equitable adjustment from time to time for stock splits,
stock dividends, combinations, capital reorganizations and similar events
relating to the common stock occurring on or after the date of issuance of this
Note.
Option For Conversion By The Company: Commencing on the date of this Note, if
the shares of the Company's common stock are quoted for trading on any
securities market (including the OTC Bulletin Board, NASDAQ, etc.), and any time
that the average Closing Price for the ten consecutive previous trading days
equals or exceeds $1.00 per share, then the Company shall have the option, in
its sole discretion, to require the conversion of the principal balance and any
accrued and unpaid interest on the Note into fully paid and non-assessable
shares of common stock of the Company at a conversion price equal
1
<PAGE>
to 80% of the average Closing Price of the Company's common stock for the 10
days immediately prior to the date of such conversion, subject to equitable
adjustment from time to time for stock splits, stock dividends, combinations,
capital reorganizations and similar events relating to the common stock
occurring on or after the date of issuance of this Note. Company agrees to grant
Note Holder demand registration rights in the event of such conversion. As used
herein, "Closing Price" on any date or dates means the closing bid price for one
share of the common stock on such date or dates, on either: (i) the national
securities exchange on which the shares of Common stock are listed which
constitutes the principal securities market for the Common stock; (ii) the
NASDAQ National Market if it constitutes the principal securities market for the
Common stock, (iii) the NASDAQ SmallCap Market if it constitutes the principal
securities market for the Common stock, or (iv) the OTC Bulletin Board if it
constitutes the principal securities market for the Common stock.
Redemption: The Company has the right to prepay the Notes, in whole or in part,
at any time.
Events of Default: If one or more of the following described "Events of Default"
shall occur:
(a) the Company shall default in the payment of principal or
interest on this Note and such default failure shall remain
uncured for a period of sixty (60) business days after
receipt of written notice from the Holder; or
(b) any of the representations or warranties made by the
Company herein shall be false or misleading in any material
respect at the time made and such failure shall remain
uncured for a period of sixty (60) business days after
receipt of written notice from the Holder; or
(c) the Company shall fail to perform or observe, in any
material respect, any other covenant, term, provision,
condition, agreement or obligation of the Company under this
Note and such failure shall continue uncured for a period of
sixty (60) business days after receiving notice from the
Holder of such failure; or
(d) if pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors, Company shall (i) commence a
voluntary case or proceeding; (ii) consent to the entry of an
order for relief against it in an involuntary case; (iii)
consent to the appointment of a trustee, receiver, assignee,
liquidator or similar official; or (iv) make an assignment
for the benefit of its creditors; or
2
<PAGE>
(e) if a court of competent jurisdiction enters an order or
decree under any state or federal law relating to insolvency
or relief of debtors that (i) is for relief against Company
in an involuntary case; (ii) appoints a trustee, receiver,
assignee, liquidator or similar official for Company or
substantially all of Company's properties, or (iii) orders
the liquidation of Company, and in each case the order or
decree is not dismissed within 120 days;
then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder at the option
of the Holder and in the Holders sole discretion, the Holder may consider this
Note immediately due and payable, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived, anything herein or other
instruments contained to the contrary notwithstanding, and the Holder may
immediately, and without expiration of any period of grace, enforce any and all
of the Holders rights and remedies provided herein or any other rights or
remedies afforded by law.
This Note shall be governed by and construed in accordance with the
laws of the State of Florida and shall be binding upon the successors and
assigns of the Company and inure to the benefit of the Holder, its successors,
endorsees, heirs, administrators and executors. If any term or provision of this
Note shall be invalid, illegal or unenforceable, the validity of all other terms
and provisions hereof shall in no way be affected thereby.
IN WITNESS WHEREOF, the Company and the Note Holder agree to the terms
and conditions set forth herein, and have caused this instrument to be duly
executed by an officer thereunto duly authorized.
Optical Concepts of America, Inc.
a Florida corporation (the Company)
By: /s/ Jan Kaplan
-------------------------------
Jan Kaplan, President
Strategic Capital Investment Ltd.
An Australian corporation (the Note
Holder)
By: /s/ John Holder
-------------------------------
John Holder, Director
NUMBER OPTICAL CONCEPTS OF SHARES
COMMON STOCK AMERICA, INC.
PAR VALUE $.001
CUSIP 68382Q 10 7
SEE REVERSE SIDE FOR CERTAIN DEFINITIONS
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
THIS CERTIFIES THAT
Is the owner of
Fully Paid and Non-Assessable Shares of Common Stock, of Optical Concepts
of America, Inc., transferable only on the books of the Corporation by
the holder hereof in person or by duly authorized attorney upon surrender
of this Certificate properly endorsed. This Certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Date (SEAL)
/s/ Jan Kaplan
--------------
President
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
WARRANTS
NUMBER DEERFIELD FINANCIAL SERVICES INC. WARRANTS
- ----------------- -----------------
W REDEEMABLE WARRANT TO PURCHASE SHARES
OF COMMON STOCK
- ----------------- -----------------
CUSIP 244340 113
VOID (UNLESS EXTENDED) AFTER 5:00 P.M.
EASTERN STANDARD TIME, AUGUST 29, 2000
This Certifies that, FOR VALUE RECEIVED
or registered assigns, is entitled to purchase from DEERFIELD FINANCIAL
SERVICES INC., a Florida Corporation (the Corporation), on or before the close
of business on August 29, 2000 (the Expiration Date) the number shown above of
full non-assessable shares of the Corporations Common Stock, par value of $0.01
per share (the Common Stock), by surrendering the Warrant Certificate with the
purchase form on the back hereof duly executed at the principal office of
Florida Atlantic Stock Transfer, Inc. (Warrant Agent) and by paying to the order
of the Corporation in full, in lawful money of the United States of America, the
purchase price for the shares as to which this Warrant Certificate is exercised.
Each Warrant is equal to one (1) share of Common Stock. One (1) Warrant is
necessary to acquire one (1) share of Common Stock at a price of $1.00 per share
(the "Exercise Price"). This Certificate may be exercised in whole or in par for
not less than one (1) full share of Common Stock, and upon any partial exercise
there will be issued to the holder, a new Warrant Certificated in respect of the
shares as to which this Warrant Certificate was not exercised. No fractional
shares will be issued upon the exercise of rights to purchase hereunder or upon
the automatic conversion hereof. As to any fraction of a share which a holder of
one or more Warrant Certificates would otherwise be entitled to receive upon
exercise, the Corporation shall pay the cash value thereof, determined as
provided in the Warrant described herein.
The Corporation agrees at all times to reserve or hold available a
sufficient number of Common shares to cover the number of shares issuable upon
exercise of this and all other Warrants of like tenor then outstanding.
In certain events, the Exercise Price and the number of shares of
Common Stock purchasable under this Warrant Certificate are subject to
adjustments, all as provided on the reverse hereof. In the event of such an
adjustment, notice will be sent to registered holders of Warrants.
All rights represented by this Warrant Certificate to purchase shares
of Common Stock shall cease at the close of business on the Expiration Date.
This Warrant Certificate is transferable on the books of the
Corporation by record holder hereof in person or by duly authorized attorney
upon surrender hereof, properly endorsed at the office of the Warrant Agent,
Florida Atlantic Stock Transfer, Inc. or at such other place designated by the
Corporation.
Subject to the foregoing limitations, every taker and holder of this
Warrant by taking and holding the same, consents and agrees that title to this
Warrant Certificate (together with all rights represented hereby) is
transferable with the same effect as in the case of a negotiable instrument if
endorsed to a specified person and if delivery is made to such person, and that
if endorsed in blank the holder hereof may be treated by the Corporation and all
other persons dealing with this Warrant Certificate as the absolute owner
hereof for any purpose, and as the person entitled to exercise this Warrant
Certificate or to the transfer thereof on said books, any notice to the contrary
notwithstanding, but will such transfer on such books, the Corporation may
treat the record holder as the owner hereof for the purpose of determining the
person entitled to any rights or any notice pursuant to the terms hereof or for
any other purpose.
This Warrant Certificate, when surrendered at the office of the Warrant
Agent (or that of its successor Warrant Agent) by the registered holder hereof
in person or by attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement for
another Warrant Certificate, or other Warrant Certificates of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of shares of Common Stock.
This Warrant Certificate shall not entitle the holder to any of the
rights of a stock holder in the Corporation, including without limitation, the
right to vote, to receive dividends and other distributions, to exercise any
preemptive right, or to receive any notice of or attend meetings of stock
holders or any other proceedings of the Corporation.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
DATED
Countersigned:
Florida Atlantic Stock Transfer, Inc.
5701 North Pine Island Road,
Tamarac, Florida 33321
Warrant Agent
(SEAL)
By Authorized Officer
/s/ Frank E. Lambrecht /s/ Paul Galant
---------------------- ---------------
Secretary President
