<PAGE> 1
Preliminary Information Statement
Dated: April 12, 1999
REXFORD, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 1999
TO THE SHAREHOLDERS OF REXFORD, INC.:
A special meeting of the shareholders (the "Special Meeting") of Rexford,
Inc., the ("Company"), will be held at 3090 East 3300 South, Suite 400, Salt
Lake City, Utah 84109, at 10:00 a.m., Mountain Time, to ratify and approve the
Agreement and Plan of Reorganization (the "Acquisition Proposal")entered into
between the Company and Chicago Map Corporation ("CMC") that provides for
(A) the implementation of a 1-for-70 reverse split of all of the
Company's issued and outstanding shares of common stock;
(B) the issuance of 10,500,000 shares of the Company's post-reverse split
common stock to the CMC shareholders in exchange for all of the CMC common
stock;
(C) changing the name of the Company to "Lexon Technologies, Inc."; and
(D) electing Steven J. Peskaitis, Mike Barnett, Paris Karahalios, and
Thomas W. Rieck, all nominees of CMC, as directors of the Company, to serve
until the next annual meeting of shareholders or until their successors are
duly elected and qualified.
The approval of the Acquisition Proposal by the shareholders will
constitute approval of each of the foregoing.
At the Special Meeting the shareholders will also transact such other
business as may properly come before the Special Meeting or any adjournment
thereof.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ACQUISITION
PROPOSAL WHICH IS DESCRIBED IN MORE DETAIL IN THE ACCOMPANYING INFORMATION
STATEMENT.
ONLY SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MARCH 26, 1999 (THE
"RECORD DATE"), ARE ENTITLED TO NOTICE OF AND TO VOTE AT THE SPECIAL MEETING.
MEMBERS OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS WHO, COLLECTIVELY HOLD IN
EXCESS OF 50% OF THE COMPANY'S ISSUED AND OUTSTANDING SHARES, HAVE INDICATED
THEIR INTENTION TO VOTE IN FAVOR OF THE ACQUISITION PROPOSAL. AS A RESULT,
THE ACQUISITION PROPOSAL WILL BE APPROVED WITHOUT THE AFFIRMATIVE VOTE OF ANY
OTHER SHAREHOLDERS. ALTHOUGH MANAGEMENT IS NOT ASKING FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY, SHAREHOLDERS MAY BE PRESENT AT THE SPECIAL
MEETING AND VOTE THEIR SHARES IN PERSON OR BY PROXY. MANAGEMENT DOES,
HOWEVER, ENCOURAGE ALL SHAREHOLDERS TO ATTEND THE SPECIAL MEETING IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
/S/Dennis Blomquist, President
Scottsdale, Arizona
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REXFORD, INC.
INFORMATION STATEMENT
This Information Statement is furnished to the shareholders of the
Company in connection with a Special Meeting to be held on May 3, 1999,
at 10:00 a.m., Mountain Time, at 3090 East 3300 South, Suite 400, Salt Lake
City, Utah 84109, and at any adjournment(s) thereof.
At the Special Meeting, the shareholders will consider and vote on the
Acquisition Proposal and ratify and approve the Agreement and Plan of
Reorganization entered into between the Company and Chicago Map Corporation
("CMC") that provides for:
(A) the implementation of a 1-for-70 reverse split of all of the
Company's issued and outstanding shares of common stock;
(B) the issuance of 10,500,000 shares of the Company's post-reverse split
common stock to the CMC shareholders in exchange for all of the CMC common
stock;
(C) changing the name of the Company to "Lexon Technologies, Inc."; and
(D) electing Steven J. Peskaitis, Mike Barnett, Paris Karahalios, and
Thomas W. Rieck, all nominees of CMC, as directors of the Company, to serve
until the next annual meeting of shareholders and until their successors are
duly elected and qualified.
Approval of the Acquisition Proposal by the shareholders will constitute
approval of each of the foregoing. At the Special Meeting the Shareholders
will also transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
MANAGEMENT IS NOT ASKING FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY, HOWEVER SHAREHOLDERS MAY BE PRESENT AT THE SPECIAL MEETING AND VOTE
THEIR SHARES IN PERSON OR BY PROXY. MANAGEMENT ENCOURAGE ALL SHAREHOLDERS TO
ATTEND THE SPECIAL MEETING IN PERSON.
THIS INFORMATION STATEMENT IS BEING MAILED ON OR ABOUT APRIL 23, 1999 TO ALL
SHAREHOLDERS ENTITLED TO VOTE AT THE SPECIAL MEETING.
Only holders of record of the 70,000,000 shares of Common Stock of the
Company outstanding as of March 26, 1999 (the "Record Date"), are entitled to
vote at the Special Meeting. Each shareholder has the right to one vote for
each share of the Company's common stock owned. Cumulative voting is not
provided for. Holders of more than 50% of the 70,000,000 shares issued and
outstanding must be represented at the Special Meeting to constitute a quorum
for conducting business. Approval of the proposals discussed above requires
the affirmative vote of a majority of the Company's issued and outstanding
shares of Common Stock.
The Company's officers, directors, and principal shareholders owning or
controlling, in the aggregate, greater than 50% of the issued and outstanding
shares of Common Stock on the Record Date have indicated their intention to
vote in favor of the Acquisition Proposal. Accordingly, the Acquisition
Proposal will be approved without the affirmative vote of any other shares.
<PAGE> 3
THE ACQUISITION PROPOSAL: APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION
Terms of the Acquisition
- ------------------------
On March 26, 1999, the Company and CMC entered into an Agreement and Plan
of Reorganization, a copy of which is attached as Exhibit A to this
Information Statement (the "Acquisition Agreement"). The following discussion
regarding the terms of the Acquisition Agreement is subject to, and qualified
in its entirety by, the detailed provisions of the Acquisition Agreement and
the any exhibits thereto.
The Acquisition Agreement provides that the 15,000 shares of CMC Common
Stock held by the CMC Shareholders will be exchanged for 10,500,000 shares of
the Company's Common Stock. No fractional shares will be issued to the CMC
Shareholders and the Company will round the number of shares of the Company's
Common Stock to be issued to such stockholder to the nearest whole share.
As a condition to the Acquisition Agreement, the Company will effect a 1-
for-70 reverse stock split (the "Reverse Split") of the Company's Common
Stock, so that shareholders of the Company prior to such Reverse Split will
receive 1 share of the Company's Common Stock for each 70 shares of Common
Stock held on the Record Date for the Reverse Split, rounded downward to the
nearest whole share. This Reverse Split would reduce the Company's issued and
outstanding stock from 70,000,000 to 1,000,000 shares. After giving effect to
the Reverse Split and the issuance of 10,500,000 shares of Common Stock issued
to the CMC Shareholders in exchange for the 15,000 of CMC Common Stock, the
Company will have 11,500,000 shares issued and outstanding.
The Reverse Split will not change the par value or authorized
capitalization of the Company. The rights of existing shareholders will not be
altered and no shareholders will be eliminated as a result of the Reverse
Split. The Reverse Split will have no effect on the stockholders' equity of
the Company, other than the transfer of approximately $56,106 in stated
capital to additional paid-in capital.
If, as a result of implementation of the Reverse Split, any shareholder
would be entitled to receive a fractional share, the Company will not issue
any fractional shares. Instead, shares will be rounded downward to the
nearest whole number. All shares turned in to the Company as a result of the
Reverse Split will be canceled and returned to the status of authorized but
unissued shares. Therefore, after the Reverse Split is implemented, the
Company will still have an authorized capitalization of 100,000,000 shares of
Common Stock, of which 1,000,000 shares will be issued and outstanding and
after giving effect to the issuance of 10,500,000 shares under the terms of
the Acquisition Agreement, 11,500,000 shares will be issued and outstanding.
Following the implementation of the Reverse Split and approval of the
Acquisition Proposal, each holder of shares of the Company's Common Stock
shall, upon the surrender of the certificate or certificates representing such
shares to the Company's registrar and transfer agent, be entitled to receive a
certificate or certificates evidencing shares of the Company's Common Stock,
reflecting the new shares and name change of the Company.
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As a condition precedent to the consummation of the transactions
contemplated by the Acquisition Agreement, the shareholders of the Company are
to adopt and approve all required or necessary resolutions to adopt an
amendment to the Company's certificate of incorporation that provides for
changing the name of the Company to "Lexon Technologies, Inc," and elect
Steven J. Peskaitis, Mike Barnett, Paris Karahalios, and Thomas W. Rieck, the
nominees of CMC to the Company's Board of Directors, to replace the Company's
current Board of Directors.
As soon as practicable following approval of the Acquisition Proposal by
the Company's shareholders, a Certificate of Amendment and such other
documents as are required by the provisions of the corporate statutes of the
states of Delaware and Illinois to complete the acquisition of CMC are to be
filed with the Secretary of State of States of the state of Delaware and
Illinois. The "Effective Date" of the acquisition shall be the date the
filing of such documents shall become effective.
A. Name Change
-----------
In connection with the acquisition of CMC, the Company desires to change
the name of the Company to Lexon Technologies, Inc. or such derivation
thereof, as may be acceptable to the Board of Directors and available for use
in the state of Delaware and the jurisdictions in which the activities of the
Company would require the Company to qualify to do business in those
jurisdictions. Management of the Company believes that the new name will be
more reflective of the Company's diverse activities following the acquisition.
B. Election of Board of Directors
------------------------------
The names of the Company's current executive officers and directors and
the positions held by each of them are set forth below:
Position with Director and/or
Name Age the Company Officer Since
- -------------------- --- --------------------- ------------------
Dennis Blomquist 47 President and Chairman 1992
Ron Featherstone 48 Vice President and Director 1992
Mark A. Scharmann 40 Treasurer and Director 1992
Tom Sollami 48 Secretary and Director 1992
The Company's officers and directors have served in such positions since
the dates indicated above. Such persons will not stand for re-election at the
Special Meeting. In connection with the proposed acquisition of CMC, Steven
J. Peskaitis, Mike Barnett, Paris Karahalios, and Thomas W. Rieck, the
nominees of CMC, have been nominated for election as directors of the Company.
Certain biographical information with respect to each of such persons is set
forth herein below. Each director, if elected by the shareholders, will serve
until the next annual meeting and until his successor is duly elected and
qualified.
Set forth on the following page is certain information relating to the
business experience of each of CMC's nominees for directors of the Company for
the past five years.
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Steven J. Peskaitis, age 24, is a co-founder of CMC and has been its
President since its inception in 1990. Mr. Peskaitis has been influential in
all phases of the Company's operations.
Mike Barnett, age 41, has served as the director of corporate licensing
for CMC since 1996. From 1994 through 1996, Mr. Barnett was the director of
sales and marketing from American Technologies, Fond du Lac, Wisconsin, a
manufacturer of software for satellite communications and vehicle monitoring
products for the over-the-road trucking market. Mr. Barnett received a B.S. in
Management from Oregon State University, Salem, Oregon in _____.
Paris Karahalios, age 44, is a co-founder of TRIUS, Inc. and has served
and the president and C.E.O. since its inception in August 1990. TRIUS, Inc.,
located in North Andover, Massachusetts, is a developer of mapping technology.
CMC acquired the assets of TRIUS, Inc. in March 1999. Mr. Karahalios was a
M.S. in Nuclear Engineering/Fusion and a B.S. in Nuclear Engineering from the
University of Lowell, Lowell, Massachusetts, in 1977 and 1981, respectively,
and has been published in various software and scientific magazines.
Thomas W. Rieck, age 53, has since 1980 been the president of the law
firm Rieck and Crotty, P.C., Chicago, Illinois, legal counsel to CMC. Since
1992, Mr. Rieck has served as a board member of SigmaTron International, Inc.
(NASDAQ: SGMA), Elk Grove Village, Illinois, a electronics contract assembly
manufacturer. Since 1987, Mr. Rieck has served as a board member for Circuit
Systems, Inc. (NASDAQ: CSYI), Elk Grove Village, Illinois, a manufacturer of
printed circuit boards. Mr. Rieck is a member of both the Chicago and
American Bar Associations.
Set forth below is biographical information on each of the current directors
of the Company.
Dennis Blomquist has served as an officer and director of the Company
since 1992. For the past five years, Mr. Blomquist has been a self-employed
business consultant providing data base administration, development and
computer related services. From June 1996 to December 1997, Mr. Blomquist
worked for Parami Productions, Inc., Studio City, California, a film and
television development company as director of development.
Ron A. Featherstone has served as an officer and director of the Company
since 1992. Since July 1995, Mr. Featherstone has been the executive vice
president for Investors First Ventures, Ltd, Scottsdale, Arizona, a financial
consulting firm. From 1993 through June 1995, Mr. Featherstone was the area
sales manager for Clarke Publications, Irwindale, California.
Tom Sollami has served as an officer and director of the Company since
1992. Mr. Sollami has been employed as the Security Coordinator of the
Doubletree Hotel, Salt Lake City, Utah, since February 1998.
Mark A. Scharmann has been vice-president and a director of the Company
since February 1997. Since 1979, Mr. Scharmann has been the principal owner
of Troika Capital, Inc., Ogden, Utah, a financial consulting company.
<PAGE>
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Recommendation of Management
- ----------------------------
THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE TRANSACTIONS
CONTEMPLATED BY THE ACQUISITION AGREEMENT ARE DESIRABLE AND IN THE BEST
INTERESTS OF THE COMPANY'S SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" THE ACQUISITION PROPOSAL. MANAGEMENT BELIEVES THAT
ITS SHAREHOLDERS WILL BENEFIT THROUGH THE STRENGTH, EXPERIENCE AND KNOWLEDGE
OF CMC'S SENIOR EXECUTIVE MANAGEMENT IN THE ONGOING DEVELOPMENT OF THE
BUSINESS OF THE COMPANY. (SEE "BUSINESS OF CMC.")
CMC's management has presented the Company's management with a business
plan that is focused on emerging opportunities in the business of designing,
developing, producing, licensing and marketing geographical digital map
technology, including Global Positioning System (GPS) products and navigation
systems, Web/Intranet/Internet map displays, digital data integration and
referencing, country-wide digital map sets, professional software and mobile
asset monitoring/tracking systems. CMC's management intends to aggressively
pursue its current business strategy and therefore the Company's shareholders
may be able to benefit from any related increased market activity in the
Company's Common Stock. There are, however, no assurances that CMC's
management will be able to conduct profitable operations or that the Company's
shareholders will benefit from increased market activity in the Company's
Common Stock. The Board of Directors of the Company has not obtained an
independent opinion or other evaluation regarding the fairness of the terms of
the Agreement due to the substantial costs in obtaining such an opinion or
evaluation.
Accounting Treatment
- --------------------
The proposed acquisition of CMC by the Company will be accounted for
as a recapitalization of CMC because the shareholders of CMC will control the
Company after the acquisition. Therefore, CMC will be treated as the
acquiring entity. There will be no adjustment to the carrying value of the
assets or liabilities of CMC in the share exchange. The Company will be the
acquiring entity for legal purposes and CMC will be the surviving entity for
accounting purposes.
No Legal Opinions or Tax Rulings
- --------------------------------
The proposed acquisition of CMC by the Company is intended to qualify
as a tax-free reorganization under the Internal Revenue Code of 1986. If the
acquisition qualifies as a tax-free reorganization, no gain or loss will be
recognized for income tax purposes by either the Company or CMC as a result
of the acquisition. However, neither the Company nor CMC has requested a
tax ruling from the Internal Revenue Service or an opinion of legal counsel
with respect to the acquisition. Accordingly, no assurance can be given that
the acquisition will qualify as a tax-free reorganization.
The shares of the Company's Common Stock to be issued to the CMC
shareholders will not be registered under the Securities Act of 1933, as
amended (the "Act") in reliance on the exemptions from such registration
requirements provided by Sections 3(b) and 4(2) of the Act for certain small
offerings and for transactions not involving any public offering. In order to
claim the availability of such exemptions, the CMC shareholders will be
required to make representations to the Company with respect to their
<PAGE> 7
acquisition of the Company's shares, such shares will be restricted
securities, and the certificates will bear legends restricting their
subsequent resale in the absence of registration under the Securities Act or
the availability of an exemption therefrom.
Vote Required
- -------------
The vote of a majority of the issued and outstanding shares of Common
Stock represented in person or by proxy at the Special Meeting is required to
approve the Acquisition Proposal. Members of management and other principal
shareholders holding or controlling the vote of in excess of fifty percent
(50%) of the issued and outstanding stock entitled to vote at the Special
Meeting have indicated their intention to vote in favor of the Acquisition
Proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THE AQUISITION PROPOSAL.
Business of the Company
- -----------------------
The Company was incorporated on February 14, 1983, in the state of Utah
under the name Chelsea Energy Corporation (hereinafter the "Registrant" or the
"Company"). In connection with its formation, a total of 1,047,000 shares of
its common stock were issued to the founders of the Company. In March 1985,
the Company sold 3,000,000 shares of its common stock in connection with a
public offering at a price of $0.01 per share. The public offering was
registered with the Utah Securities Division pursuant to Section 61-1-10, Utah
Code Annotated, as amended. The offering was exempt from federal registration
pursuant to Regulation D, Rule 504, promulgated under the Securities Act of
1933, as amended. The Company was initially formed to provide professional
consulting services to local government units.
In April 1989, the Company formed California Cola Distributing Company,
Inc. ("CCDCI")under the laws of the state of Delaware as a wholly-owned
subsidiary. In May 1989, the Company merged into its subsidiary, CCDCI, in
connection with a reincorporation merger. As a result of the reincorporation
merger, the Company changed its domicile to the state of Delaware from the
state of Utah and changed its name from Chelsea Energy Corporation to
California Cola Distributing Company, Inc. In October 1992, the Company
effected a sale of its wholly-owned subsidiary, CCDCI to California Cola Group
Incorporated, a principal shareholder of the Company and changed the its name
to Rexford, Inc.
Current Business Activities
- ----------------------------
Since divesting itself of CCDCI, the Company has had no operations and
has been seeking potential business acquisitions or opportunities in an effort
to commence business operations. The Acquisition Proposal now being presented
to the Company's shareholders has been evaluated by the Company as a viable
business opportunity based on management's business judgment. Because of the
Company's current status having no assets and no recent operating history, the
Company has voluntarily filed a registration statement on Form 10SB with the
U.S. Securities and Exchange Commission in order to make information
concerning itself more readily available to the public. The Company is
obligated to file with the Commission certain interim and periodic reports
including an annual report containing audited financial statements.
<PAGE> 8
The Company is considered a development stage company with no assets or
capital and with no operations or income since approximately 1992. The costs
and expenses associated with the preparation and filing of this information
statement and other operations of the Company have been paid for by
shareholders of the Company, specifically Mark A. Scharmann (see Security
Ownership of Certain Beneficial Owners and Management). The Company has not
received a formal commitment from its shareholders and officers or directors
to continue to finance the Company's expenses and unless the Acquisition
Proposal is approved or the Company is able to obtain significant outside
financing, there is substantial doubt about the Company's ability to
continue as a going concern.
Selected Financial Data of the Company
- --------------------------------------
The year end financial data included in the table has been selected by
the Company and has been derived from the Company's financial statements
included in the Company's Annual Report on Form 10KSB for its fiscal year
ended September 30, 1998. All financial information for the fiscal years
ended September 30, 1998 and 1997 have been examined by Tanner + Co.,
certified public accountants. The three-month unaudited financial data has
been derived from the Company's financial statements included in the Company's
Quarterly Report on Form 10QSB for the period ended December 31, 1998 and has
been provided by the Company.
Three
Months Ended
December 31,
Year Ended September 30, 1998
1998 1997 (Unaudited)
---- ---- ---------
Statement of
Operations Data:
Revenues $ - $ - $ -
Cost of Sales $ - $ - $ -
Operating Expenses $ 46,350 $ 42,795 $ 6,606
Net (loss) $ (46,350) $ (42,795) $ (6,606)
Net (loss)
per common share $ (0.00) $ (0.01) $ (0.00)
Weighted Average
Shares Outstanding 43,767,000 16,360,000 57,106,420
At
December 31,
Year Ended September 30, 1998
1998 1997 (Unaudited)
---- ---- ---------
Balance Sheet Data:
Current Assets $ 226 $ 540 $ -
Current Liabilities $ 11,056 $ 590 $ 17,436
Work Capital(Deficit) $ (10,830) $ (50) $ (17,436)
Property &
Equipment (net) $ - $ - $ -
Total Assets $ 226 $ 540 $ -
Long Term Liabilities $ - $ - $ -
Shareholders' Equity (Deficit)$ (10,830) $ (50) $ (17,436)
<PAGE> 9
Business of CMC
- ---------------
All information with respect to CMC's business activities has been
provided by the management of CMC and is presented herein without independent
verification. CMC has represented that the information is accurate and
complete in all material respects. Financial information regarding CMC has
been provided in this Information Statement in the section titled
"Selected Financial Data" below.
CMC was incorporated in July 1992 in the state of Illinois under the name
S&S Publishing, Inc. In March 1994, an amendment was filed to change its name
to Just Softworks, Inc. In July 1995, another amendment was filed to change
its name to Chicago Map Corporation.
CMC's core competency is the development, production, licensing and
marketing of geographical digital map technology. Use of these technologies
are found in products and services such as; consumer-oriented mapping
products, GPS (Global Positioning System) navigation systems,
Web/Internet/Intranet map displays, digital data integration and referencing,
country-wide digital map sets, professional software development, and mobile
asset monitoring/tracking. These application solutions operate in various
Windows(TM) environments, allowing customers to apply and utilize CMC
technologies across a broad range of markets and throughout various countries.
CMC's versatile mapping technologies make use of numerous detailed and
comprehensive geographical databases that include street addresses, road
networks, highways, major geographical landmarks, hydrographic features,
topographical relief tables and satellite/aerial photography. These full
featured displays are complete, flexible and comprehensive enough to meet the
mapping needs of individual, corporate, and government users and essentially
eliminate the need for standard paper maps.
Historically, CMC's primary focus has been on the creation of a base line
of technologies that can be easily and cost-effectively integrated within a
wide range of applications. This allows CMC and its professional staff to
directly and indirectly support the development of custom mapping software
designed around a base framework of quality data and integration tools. This
design model works efficiently for both limited distribution and large
volumes. CMC takes advantage of modern programming languages and simplifies
and speeds system development via its own proprietary tools, class libraries
and professional support.
Strategic Plan
- --------------
Mapping is the representation of the Earth's surface drawn to scale. The
history of mapping can be traced to the beginning of time and have long aided
in the exploration, discovery and understanding of the world in which we live.
The process of creating maps is known as Cartography.
Cartography is considered both a science and an art. Intertwined with
geography, it is intended to present images of our communities, nation or the
world. This effort, especially in its infancy, required the creative
adaptation of roads, town labeling and landmarks to better aid in referencing
these man-made or geographic points of interest. However, the complex and
technically oriented world in which business, government and people now
operate, has all but eliminated the artistic contribution.
<PAGE> 10
Today's cartographic community is made up primarily of data gathers and
surveyors using sophisticated equipment; such as satellite-aided instruments
and computers to map their world. Paper maps are being replaced with or are
being generated by advanced software programs. This shift in technology has
allowed companies with database manipulation and software expertise, such as
CMC, to step forward and help influence and lead this shift in cartography.
CMC and its partners continue to maintain a solid background in map software
development, CAD (computer aided drafting), GPS transportation movement
monitoring and wireless communications. These disciplines have resulted in
the creation of a broad range of product and service solutions necessary for
the shifting and emerging markets, which demand absolute precision and
accuracy in their maps.
Products
- --------
CMC offers the following categories of products:
PROFESSIONAL DEVELOPMENT TOOLS - CMC has created a range of countrywide and
worldwide development tools. These tools allow software programmers to
integrate quality map displays into third-party applications. The map-imaging
tool can represent a significant portion of the application or an isolated
feature. Prior to any internal or external distribution of customized
applications, a company must first establish a distribution licensing
arrangement with CMC. The following products are marketed as part of the
CMC's Professional Development Tool product line:
MapOCX (USA): Full-featured map display tool that includes a detailed street-
level map database of the entire United States.
MapOCX Pro (USA): Advanced development tools that include a detailed street-
level map database of the entire United States. Capabilities of the MapOCX
(USA) are also accessible within the Pro product.
MapOCX (Canada): Integration of street-level map data for all of Canada
within an independent development tool. First software effort to market a
national map database and display engine into the Canadian market.
MapOCX (South Africa): Integration of street-level map data for select major
metropolitan cities and major road networks of South Africa. First
development tool released into the South African market that includes detailed
map data and display engine.
MapOCX (World): Low resolution map display of the entire world. Data
includes country-level highway networks, population centers, political
boundaries and much more. Raster image integration provides enhanced
detailing.
MapOCX (Geocoder - USA): CMC provides a tool to accurately assign X,Y
coordinates to geographically reference US data sets. Referencing is based on
existing postal routes.
TECHNOLOGY LICENSING - CMC actively licenses its technologies and map display
engines throughout the world. This wide spread distribution of applications
and development tools has allowed CMC to achieve market dominance in many key
markets. Research has shown that the current number of active accounts
represents a very small portion of the overall market opportunity. Most of
this opportunity remains uncommitted due to a lack of awareness within the
marketplace.
<PAGE> 11
PROGRAMMING AND CUSTOMER DEVELOPMENT SERVICES - These services include:
CUSTOM PROGRAMMING: CMC provides programming services for creating,
customizing and altering software applications. Programming languages include
all major Windows(TM) visual development languages. Specialization includes
GPS, wireless communication, geocoding, fleet tracking and other
transportation and geographical referencing applications.
TECHNICAL CONSULTING: Assisting companies in the design and development phase
of third-party applications. Often, companies find that they lack some of the
background and knowledge base requirements demanded in geographic map
development. Involvement is limited by the needs of the customer.
TECHNICAL WRITING: CMC participates in a variety of technical writing tasks.
These tasks include Help files creation and the drafting of programming
specifications.
GOVERNMENT CONTRACTS - CMC was recently awarded a key development project with
the United States Geological Survey (USGS). Acquiring this contract will
allow CMC to influence the distribution and availability of existing and
future government collected geographic data. This effort has been reborn
after years of inactivity, and is poised to leverage new technologies into one
of the greatest data transfers involving the US government.
The National Atlas of the United States of America: The primary purpose of
this effort is to design, develop, distribute and maintain a new version of
The National Atlas of the United States of America(TM) for the American
people. New technologies make it possible to broaden the scope and coverage
of the National Atlas as a major reference resource for the American people.
By extending the National Atlas beyond that of static print publication, CMC
envisions interactive multi-media, multi-formatted electronic platform for the
use and integration of Government data. This allows access to the vast
library of geo-referenced data sources to be contained within the same
application.
CMC's participation in the National Atlas program is intended to result in the
creation of products and services that can and will be marketed by CMC and its
licensees, to both the private and public sector. Design of these products
will be based principally upon market research looking into the interests and
desires of the buying sector.
The future opportunity and potential of this project is both difficult and
challenging to fully define at this point. It is without question that with
proper and well-conceived planning this project will certainly extend beyond
the limits of a single retail CD-ROM application or any single Web-site.
INTERNATIONAL MAP DATA - CMC has determined that there is an untapped demand
for international digital maps and that there are few companies that offer
adequate solutions. CMC will continue to obtain key licenses to resell or
license countrywide data for countries where adequate market opportunity
exists. The following countries have been identified for expansion in the
next twelve months:
Canada
Mexico (Under development)
South Africa (Under development)
North America (Under development)
South America
Western Europe
World data (Under development)
<PAGE> 12
CONSUMER RETAIL - Historically, CMC has been actively involved in the
distribution of its map technology to the Consumer Retail market. Products
have been sold through software distribution channels to major software
retailers. Over the past few years, additional distribution has included
direct and mail-order sales. CMC will continue to pursue these distribution
efforts in addition to the newly developing E (electronic)-commerce over the
Internet. CMC will develop products to satisfy the demands for quality map
products. Current products distributed by CMC include:
Precision Mapping Streets: This is the first mass-market product developed by
CMC. It includes features that allow the user to locate specific locations on
the map, create custom images and print an endless variety of maps.
Precision Mapping Traveler: Integrating CMC's new routing technology, this
software will help anyone in getting between any two points within the US.
Additional features make it possible to interface GPS data showing the user's
current location. Create and maintain a detailed database of destinations and
beginning points.
Precision Mapping Quick-Finder: Distributed through a number of strategic
licensing relations, Quick-Finder is the most widely distributed mapping
application in the US. It is a simplified version of the Precision Mapping
Streets program.
Precision Mapping Quick-Router: Similar to the Quick-Finder, Quick-Router is a
budget software program. Using CMC's routing technology, the program will
quickly generate a series of routes between any two US cities.
PROFESSIONAL RETAIL - Products within this category are considered advanced
mapping applications designed for specific markets or industries. At this
time only one product falls within this product line. Others are under
consideration at this time.
LAND ANALYSIS: A multi-layered application designed for the real estate
industry. It allows anyone involved in the sale, lease or transfer of
property or land to determine key conditions that may negatively impact future
values. These include floodwater determination, topographic relief, toxic
waste sites, road locations and more.
INTERNET MAPPING - With the rapid growth and expansion of the Internet, CMC
has taken major efforts to develop a mapping product line specifically for the
Web. The products listed below represent a sampling of current applications:
MapMania: CMC's first effort in developing a Web-based mapping application.
Used by companies to help guide customers to key locations or for searching
addresses and cities throughout the US. Based on CMC's US data set, nothing
has been sacrificed to ensure quality images.
Internet MapOCX (USA): CMC has recently created a Web development tool
specifically to meet the needs of programmers needing map images on their Web
sites. This product includes a complete street-level database of the US.
Internet MapOCX (Canada): Expanding its presence in Canada, CMC offers a Web
development tool that includes a street-level database of the country. The
application is used primarily on select Intranet sites at this time due to
licensing restrictions.
Internet MapOCX (World): A Web development tool for displaying worldwide
geographic maps. Using the highest quality data available, the product is
designed to interface third-party data with low-resolution country data.
<PAGE> 13
Markets
- -------
Computerized-mapping technologies can contain a limitless amount of
geographic information and geographically referenced content. This
facilitates and encourages the use of this electronic medium into a broad
range of industries and markets. After carefully researching the broad demand
for electronic mapping technology, CMC has positioned itself to service a
variety of companies and organizations. Furthermore, considering the diverse
nature of CMC's products and their utility when matched with generalized
third-party data, CMC is well positioned to be influential in the US and
numerous international marketplaces to meet this growing demand.
At this time, CMC's technologies are being used across a wide variety of
markets and industries including the following:
Aerial/Satellite Imagery Consumer Retail
Consumer Vehicle Tracking and Recovery Delivery Systems
Demographic Analysis Direct Mail
Emergency Response Entertainment
Fleet Vehicle Tracking Flood Water Analysis
Geo-Science Research Hazardous Waste Management
Insurance Planning & Adjustments Integrated Phone Information
Marine (Inland and Coastal Waterways) Marketing Analysis and Research
Mobile Asset Management Motivational Marketing
OEM GPS Manufacturers Oil and Gas Research
In-Vehicle Navigation Pipeline Management
Portable Navigation Devices Public Safety
Presentation Maps Real Estate Property Analysis
Surveying Telecommunications
Thematic Mapping Topographic Determination
Transportation Utility Management
Weather Maps Web/Internet/Intranet Applications
Although CMC has historically targeted the US marketplace, there is a
significant shift to incorporate sales into other countries. The strategic
licensing and acquisition of global and international data sets has enabled
CMC to develop products that effectively support non-US mapping software
markets. In 1997, approximately 99% of CMC's revenues were generated within
the United States while the remaining 1% was generated in international
markets. CMC is one of the few that are capable of integrating international
map data sets and a map viewing engine that is appropriate for both consumer
and professional products. Recent developments include a data set for the
World, Canada, Mexico, South Africa and South America. These will continue to
improve CMC's international presence and diversify its product and customer
mix.
Competition
- -----------
CMC's products, services, and innovative map technologies are well
received in the many markets it supports. The mapping industry recognizes the
CMC's strong position as its clients, strategic partners, and competitors
acknowledge their superior product capabilities, broad industry appeal, and
solution-oriented focus. CMC delivers practical cost-effective results to
fulfill its customer's varied needs. This is achieved through flexible (CMC
provides custom programming services and applications), comprehensive (CMC
<PAGE> 14
offers a variety of solutions for both broad range and vertical niches within
the worldwide digital mapping industry) and cost-effective (CMC's products are
appropriate for large quantity and limited distribution) products and
services. For the past six years extensive development efforts have been put
in place that now allow CMC to establish strategic relationships and release
numerous products and services that can efficiently support a number of
divergent and varied markets both within and outside of the US. At this time,
CMC does not recognize any direct competitor that offers similar capabilities
as those supported by CMC.
Sales and Marketing
- -------------------
CMC has developed an overall marketing strategy that has allowed CMC to
carve out a solid niche for itself in the emerging map software industry.
With a product line that ranges from various consumer software applications to
professional development tools and beyond, the sales force is afforded
numerous applications and options to offer each customer. It is typical for
many customers to "grow" into a more advanced product. Initial introduction
often begins with a basic retail application and later blossomed into
customized applications adjusted to meet the specific needs of the customer.
The retail, mail order and direct sales efforts by CMC have proven to be
a positive way to educate companies and end user on the capabilities and
quality of CMC's technologies. CMC has also promoted its products and
corporate image through advertising in industry publications and
attendance/exhibiting at numerous trade shows and seminars. CMC personnel are
often sought after for appearance at industry specific events that require a
well-proven knowledge of the market place. These strategies have resulted in
numerous referrals and more business than CMC can handle with its existing
staff. CMC's competitive position in the marketplace is well positioned due
to flexibility in delivering cost-effective solutions and broad product
offerings.
As the sales cycle is a high-level process, a team is required to make
sales presentations as needed when pursuing leads and referrals. The entire
staff is, however, responsible for developing client contacts and maintaining
CMC's excellent reputation.
Customer Dependence
- -------------------
Due to the nature of CMC's marketing practices and the diverse markets it
serves, clients rarely represent a large percentage of CMC's sales on an
ongoing basis. At this time no company or individual account represents more
than 5% of annual sales.
Patents, Copyrights and Trademarks
- ----------------------------------
CMC owns or has properly filed for all of the necessary patents,
copyrights and trademarks for its applications, development tools and
proprietary map databases. Unlike most software development companies that
use components created by third-party developers, CMC has chosen to create all
necessary programming tools for its products. This eliminates any reliance on
other companies for updates, maintenance as well as eliminating any licensing
or royalty requirements. The only exception has been the licensing of map
data used in the Canadian, South African and World Atlas products. These
databases are licensed from well-established companies through long-term
agreements, which are beneficial to CMC.
<PAGE> 15
Selected Financial Data of CMC
- ------------------------------
The year end financial data included in the table has been selected by
CMC and has been derived from the CMC's balance sheets at December 31, 1998
and 1997 and statements of operations for its fiscal years ended December 31,
1998, 1997 and 1996. All financial information has been examined by Hutton
Nelson & McDonald LLP, certified public accountants.
Year Ended December 31,
1998 1997 1996
---- ---- ----
Statement of
Operations Data:
Revenues $1,175,295 $1,934,433 $1,597,616
Cost of Sales $ 333,357 $ 890,586 $ 759,662
Operating Expenses $ 765,202 $1,081,036 $ 708,002
Net income(loss) $ 63,636 $ (38,116) $ 128,086
Net earnings (loss)
per common share $ 6.36 $ (3.81) $ 12.81
Weighted Average
Shares Outstanding 10,000 10,000 10,000
At December 31,
1998 1997
---- ----
Balance Sheet Data:
Current Assets $ 177,714 $ 188,679
Current Liabilities $ 13,471 $ 14,550
Work Capital $ 164,243 $ 174,138
Property & Equipment (net) $ 32,132 $ 51,705
Total Assets $ 264,696 $ 262,414
Long Term Liabilities $ - $ -
Shareholders' Equity $ 251,225 $ 247,864
<PAGE>
<PAGE> 16
Market Price of the Company's Common Stock
- ------------------------------------------
The following table sets forth, for the respective periods indicated,
the prices of the Company's Common Stock in the over the counter market as
reported by a market maker on the NASD'S OTC Bulletin Board. Such over the
counter market quotations are based on inter-dealer bid prices, without
markup, markdown or commission, and may not necessarily represent actual
transactions. At April 9, 1999, the bid and ask quotations for the
Company's Common Stock as quoted on the OTC Bulletin Board were $0.02 and
$0.10 respectively.
Bid Quotation
-------------
Fiscal Year 1999 High Bid* Low Bid*
- ---------------- -------- -------
Quarter ended 12/31/98 $0.10 $0.02
Quarter ended 3/31/99 $0.10 $0.02
Fiscal Year 1998 High Bid Low Bid
- ---------------- -------- -------
Quarter ended 12/31/97 $ N/A $ N/A
Quarter ended 3/31/98 $ N/A $ N/A
Quarter ended 6/30/98 $ N/A $ N/A
Quarter ended 9/30/98 $ N/A $ N/A
Fiscal Year 1997 High Bid Low Bid
- ---------------- -------- -------
Quarter ended 12/31/96 $ N/A $ N/A
Quarter ended 3/31/97 $ N/A $ N/A
Quarter ended 6/30/97 $ N/A $ N/A
Quarter ended 9/30/97 $ N/A $ N/A
To the best knowledge of management of the Company, prior to September
30, 1998, there was no reported bid or ask prices for the Company's Common
Stock and there was no trading of the Company's Common Stock during is fiscal
years ended September 30, 1998 and September 30, 1997.
The number of shareholders of record of the Company's Common Stock as of
March 26, 1999, was approximately 75.
The Company has not paid any cash dividends to date and does not
anticipate paying dividends in the foreseeable future.
<PAGE>
<PAGE> 17
Proforma Combined Financial Data
- --------------------------------
REXFORD, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------
HISTORICAL ACQUISITION(S) OTHER PRO FORMA
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash $ - $ 71,526 $ (62,300)(c) $ 9,226
Accounts receivable - 98,175 98,175
Inventories - 8,013 8,013
------------ ------------ ----------- ------------
Total Current Assets - 177,714 (62,300) 115,414
------------ ----------- ------------
Property and equipment - 111,762 12,300 (c) 124,062
Accumulated depreciation - 79,625 879 (c) 80,504
------------ ------------ ----------- ------------
- 32,137 11,421 43,558
------------ ------------ ----------- ------------
Other assets - 54,845 48,546 (c) 103,391
------------ ------------ ----------- ------------
Total Assets $ - $ 264,696 $ (2,333) $ 262,363
============ ============ =========== ============
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Bank overdraft $ 3,765 $ - $ - $ 3,765
Accounts payable 1,750 5,740 - 7,490
Accrued liabilities - 7,731 209,774 (b) 217,505
Advance from related party 11,921 - - 11,921
------------ ------------ ----------- ------------
Total current liabilities 17,436 13,471 209,774 240,681
------------ ------------ ----------- ------------
Stockholders' equity (deficit)
Common Stock 57,106 (45,106) 500(c)(d) 11,500
Additional paid-in capital 130,821 84,724 - 215,545
Retained earnings (205,363) 212,607 (212,607)(b)(c) (205,363)
------------ ------------ ----------- ------------
Total stockholders' equity (deficit) (17,436) 251,225 (212,107) 21,682
------------ ------------ ----------- ------------
Total liabilities and
stockholders' equity (deficit) $ - $ 264,696 $ (2,333) $ 262,363
============ ============ =========== ============
<FN>
(a) To reflect the acquisition of all of the issued and outstanding shares of common stock of
Chicago Map Corporation through an exchange of common stock subsequent to a 1 for 70 reverse
stock split by Rexford, Inc.
(b) To reflect the declaration by the board of directors of Chicago Map Corporation of a cash
dividend of $209,774 on all outstanding shares of common stock as of January 4, 1999.
(c) To reflect the purchase of certain assets of TRIUS, Inc. on March 12, 1999 for $62,300 in
cash and the issuance of 2,198 shares of common stock of Chicago Map Corporation.
(d) To reflect the issuance of 2,802 shares of common stock of Chicago Map Corporation in
connection with stock bonus to an officer and an employee of the Company.
</FN>
/TABLE
<PAGE>
<PAGE> 18
REXFORD, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
YEAR ENDED SEPTEMBER 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------
HISTORICAL ACQUISITION(S) OTHER PRO FORMA
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ - $ 1,175,295 $ - $ 1,175,295
Cost of sales - 333,357 - 333,357
------------ ------------ ------------ ------------
Gross profit - 841,938 - 841,938
Administrative expense 46,350 765,202 2,833(b)(c) 814,385
------------ ------------ ------------ ------------
Income (loss) from operations (46,350) 76,736 (2,833) 27,553
Other expense
Loss on disposition of assets - (13,100) - (13,100)
------------ ------------ ------------ ------------
Net income (loss) $ (46,350) $ 63,636 $ (2,833) $ 14,453
============ ============ ============ ============
Average common shares outstanding 43,767,000 (32,267,000) - 11,500,000
============ ============ ============ ============
Earnings (loss) per common share $ (0.00) $ 0.00
============ ============
<FN>
(a) To reflect the acquisition of all of the issued and outstanding shares of common stock of
Chicago Map Corporation as if the transaction had been completed at the beginning of the period.
(b) To reflect the depreciation and amortization in connection with the acquisition of certain
assets of Tirus, Inc. by Chicago Map Corporation as if the transaction had been completed at the
beginning of the period.
(c) To reflect stock bonus to an officer and an employee of Chicago Map Corporation as if the
transaction had been completed at the beginning of the period.
</FN>
</TABLE>
<PAGE>
<PAGE> 19
REXFORD, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
THREE MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------
HISTORICAL ACQUISITION(S) OTHER PRO FORMA
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ - $ 323,010 $ - $ 323,010
Cost of sales - 98,765 - 98,765
------------ ------------ ------------ ------------
Gross profit - 224,245 - 224,245
Administrative expense 6,606 195,753 918(b)(c) 203,277
------------ ------------ ------------ ------------
Net income (loss) $ (6,606) $ 28,492 $ (918) $ 20,968
============ ============ ============ ============
Average common shares outstanding 43,767,000 (32,267,000) - 11,500,000
============ ============ ============ ============
Earnings (loss) per common share $ (0.00) $ 0.00
============ ============
<FN>
(a) To reflect the acquisition of all of the issued and outstanding shares of common stock of
Chicago Map Corporation as if the transaction had been commpleted at the beginning of the period.
(b) To reflect the depreciation and amortization in connection with the acquisition of certain
assets of Tirus, Inc. by Chicago Map Corporation as if the transaction had been completed at the
beginning of the period.
(c) To reflect stock bonus to an officer and an employee of Chicago Map Corporation as if the
transaction had been completed at the beginning of the period.
</FN>
</TABLE>
The unaudited pro forma condensed consolidated financial statements have
been prepared by management based upon assumptions deemed proper by it. The
unaudited pro forma condensed consolidated financial statements presented
above are shown for illustrative purposes only and are not necessarily
indicative of the future financial position or future financial results of
operations or of the financial position or results of operations that would
have actually occurred had the transaction between the Company and CMC been in
effect as of the date or for the periods presented. In addition, it should be
noted that the Company's financial statements will reflect the acquisition
only from the closing date of the acquisition.
The unaudited pro forma condensed consolidated financial statements
should be read in conjunction with the historical financial statements and
related notes of the Company and Chicago Map Corporation.
<PAGE>
<PAGE> 20
EXECUTIVE COMPENSATION
The Company has not had a bonus, profit sharing, or deferred compensation
plan for the benefit of its employees, officers or directors. The Company has
not paid any salaries or other compensation to its officers, directors or
employees for the years ended September 30, 1998, 1997 and 1996, nor at any
time during 1998, 1997 or 1996. Further, the Company has not entered into an
employment agreement with any of its officers, directors or any other persons.
As of the date hereof, no such persons have accrued any compensation from the
Company.
Summary Compensation Table
- --------------------------
The following tables set forth certain summary information concerning
the compensation paid or accrued for each of the Company's last three
completed fiscal years to the Company's chief executive officer and each of
its other executive officers that received compensation in excess of $100,000
during such period (as determined at September 30, 1998) the end of the
Company's last completed fiscal year:
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Name and Principal Restricted
Position Bonus Other Annual Stock Options/ LTIP All Other
- ------------------ Year Salary ($) Compensation Awards SARs Payout Compensation
---- ------ ----- ------------ ---------- ------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dennis Blomquist,
President & C.E.O. 1998 $-0- $-0- $ -0- $-0- $-0- $-0- $-0-
1997 $-0- $-0- $ -0- $-0- $-0- $-0- $-0-
1996 $-0- $-0- $ -0- $-0- $-0- $-0- $-0-
</TABLE>
<PAGE>
<PAGE> 21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table set forth as of March 26, 1999, the name and address
and number of shares of the Company's Common Stock held of record or
beneficially by each person who held of record, or was known by the Company to
own beneficially, more than 5% of the 70,000,000 shares of Common Stock issued
and outstanding, and the name and shareholdings of each director and of all
officers and directors as a group. The table also indicates the number of
shares and percent of class to be held following the acquisition by each
person nominated for election as a director of the Company. All such persons
are directors of CMC.
Prior to Reorganization After Reorganization (2)
----------------------- ------------------------
Number of Percent Number of Percent
Name and Address Shares (1) of Class Shares Owned of Class
- ---------------- ------------ -------- -------------- --------
Principal Shareholders:
Dennis Blomquist 9,644,212 13.78 137,774 1.20
777 East Main St. #210
Scottsdale, AZ 85251
Mark A. Scharmann 55,109,000 (3) 78.72 787,271 6.84
1661 Lakeview Circle
Ogden, UT 84403
Current Officers and Directors:
Dennis Blomquist --------See Table Above--------
Ron A. Featherstone 150,000 .21 2,143 .02
Mark A. Scharmann --------See Table Above--------
Tom Sollami 150,000 .21 2,143 .01
---------- ----- ------- ----
All Officers and Directors
as a Group (4 Persons) 65,053,212 92.93 929,331 8.08
========== ===== ======= ====
Nominees of Election of Directors:
Steven J. Peskaitis - - 7,235,970 62.92
Mike Barnett - - 448,700 3.90
Paris Karahalios - - 730,000 6.35
Thomas W. Rieck - - - -
---------- ----- ---------- -----
All Nominees for Election
as a Group (4 Persons) - - 8,414,670 73.17
========== ===== ========== =====
- --------------------------------
(1) All shares are owned directly or indirectly, beneficially and of record
and the shareholder has sole voting, investment and dispositive power.
(2) Gives effect to the 1-for-70 Reverse Split.
(3) Includes 10,000 shares of Common Stock beneficially held of record by
Troika Capital Investment, of which Mr. Scharmann is the principal owner and
shareholder and 50,000 shares beneficially held of record by Rachel Leslie,
the spouse of Mr. Scharmann, and which Mr. Scharmann disclaims beneficial
ownership.
<PAGE> 22
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Compliance with Section 16(a) of the Securities Exchange Act of 1934
- --------------------------------------------------------------------
The Company's Common Stock was recently registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in connection therewith, directors, officers, and beneficial owners of
more than 10% of the Company's Common Stock are required to file on a timely
basis certain reports under Section 16 of the Exchange Act as to their
beneficial ownership of the Company's Common Stock. The following table sets
forth as of April 9, 1999, the name and position of each person that
failed to file on a timely basis any reports required pursuant to Section 16
of the Exchange Act.
Report to
Name of Person Position be Filed
- -------------- -------- ------------
None N/A N/A
Shareholder Advances and Debt Conversion
- ----------------------------------------
Mark A. Scharmann, an officer and director of the Company, has
periodically advanced money to the Company during the years ended September
30, 1998 and 1997 and the six-month period ended December 31, 1998. Any
outstanding advances made by Mr. Scharmann bear interest at a rate of 10% and
have no maturity date. At September 30, 1997, the Company issued 23,024,015
shares of Common Stock, valued at approximately $0.002 per share, to Mark A.
Scharmann, in exchange for the conversion of $46,048 of advances and accrued
interest payable by the Company. On June 29, 1998, the Company issued an
additional 17,785,406 shares of its Common Stock, valued at approximately
$0.002 per share, to Mr. Scharmann, in exchange for the conversion of
approximately $35,571 of advances and accrued interest payable by the Company.
At December 31, 1998, the advances made by Mr. Scharmann totaled $11,921.
Subsequent to September 30, 1998, the Company issued 12,893,580 shares of
Common Stock to Mr. Scharmann in exchange for the conversion of all advances
and accrued interest payable by the Company.
The securities issued in the foregoing transactions were issued in
reliance on the exemption from registration and the prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
set forth in section 3(b) and/or section 4(2) of the Securities Act and the
regulations promulgated thereunder. The individual receiving the shares is an
officer and director of the Registrant and is deemed to be an "accredited
investor" as that term is defined under Rule 501 of the Regulation D of the
Securities Act.
<PAGE>
<PAGE> 23
SHAREHOLDER PROPOSALS
No proposals have been submitted by shareholders of the Company for
consideration at the Special Meeting. It is anticipated that the next annual
meeting of shareholders will be held during March 2000. Shareholders may
present proposals for inclusion in the Information Statement to be mailed in
connection with the next annual meeting of shareholders of the Company,
provided such proposals are received by the Company no later than 90 days
prior to such meeting, and are otherwise in compliance with applicable laws
and regulations and the governing provisions of the articles of incorporation
and bylaws of the Company.
OTHER MATTERS
Management does not know of any business other than referred to in the
Notice which may be considered at the meeting. If any other matters should
properly come before the Special Meeting, such matters will be properly
addressed and resolved and those in attendance will vote on such matters in
accordance with their best judgment.
REXFORD, INC.
By order of the Board of Directors
/S/ Dennis Blomquist, President
Salt Lake City, Utah
April __, 1999
<PAGE>
<PAGE> 24
CHICAGO MAP CORPORATION
REPORT ON EXAMINATION
YEARS ENDED DECEMBER 31, 1998 AND 1997 <PAGE>
<PAGE> 25
Hutton Nelson & McDonald LLP
Certified Public Accountants
1815 South Meyers Road Suite 550
Oakbrook Terrace, Illinois 60181-5230
630/495-5400 FAX 630/495-0561
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Chicago Map Corporation
We have audited the accompanying balance sheets of Chicago Map
Corporation as of December 31, 1998 and 1997, and the related statements of
income (loss), changes in shareholders' equity, and cash flows for each of the
three years ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statement based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Chicago Map
Corporation as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for each of the three years ended December 31,
1998, in conformity with generally accepted accounting principles.
/S/Hutton, Nelson & McDonald LLP
Oakbrook Terrace, Illinois
March 17, 1999<PAGE>
<PAGE> 26
CHICAGO MAP CORPORATION
BALANCE SHEETS
ASSETS
December 31,
1998 1997
------- -------
Current assets
Cash $ 71,526 $ 76,091
Accounts receivable, less allowance for
doubtful accounts of $25,000 and $100,000 98,175 89,501
Inventories 8,013 19,287
Prepaid expenses - 3,800
------ ------
Total current assets 177,714 188,679
======= =======
Property and equipment
Leasehold improvements 3,971 16,072
Furniture and equipment 107,791 102,604
------- -------
Accumulated depreciation 32,137 51,705
------ ------
Other asset
Computer software costs, net of accumulated
amortization of $16,343 in 1998 54,845 22,030
------ ------
$264,696 $262,414
======= =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 27
CHICAGO MAP CORPORATION
BALANCE SHEETS
(continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31,
1998 1997
------- -------
Current liabilities
Accounts payable $ 5,740 $ 2,123
Accrued liabilities
Payroll taxes 7,731 11,500
Income taxes - 927
----- ------
Total current liabilities 13,471 14,550
------ ------
Shareholders' equity
Common stock, no par value; authorized
100,000 shares; issued and outstanding
10,000 shares 1,000 1,000
Retained earnings 250,225 246,864
------- -------
251,225 247,864
------- -------
$264,696 $262,414
======= =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 28
CHICAGO MAP CORPORATION
STATEMENTS OF INCOME (LOSS)
Year Ended December 31
1998 1997 1996
--------- --------- ---------
Sales $1,175,295 $1,934,433 $1,597,616
Cost of sales 333,357 890,586 759,662
--------- --------- ---------
Gross profit 841,938 1,043,847 837,954
Administrative expense 765,202 1,081,036 708,002
------- --------- -------
Income (loss) from operations 76,736 (37,189) 129,952
Other expense
Interest Expense - - (138)
Loss on disposition of assets (13,100) - -
------ ------ -------
Income (loss) before income taxes 63,636 (37,189) 129,814
Income taxes - 927 1,728
------ ------ -------
Net income (loss) $ 63,636 $ (38,116) $ 128,086
====== ====== =======
Average common shares outstanding 10,000 10,000 10,000
====== ====== ======
Earnings (loss) per common share $ 6.36 $(3.81) $12.81
====== ====== ======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 29
CHICAGO MAP CORPORATION
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Common Stock Retained
Shares Amount Earnings
------ ------ --------
Balance, January 1, 1996 10,000 $1,000 $287,949
Net income 128,086
Cash distributions (68,635)
------ ----- -------
Balance, December 31, 1996 10,000 $1,000 347,400
Net income (38,116)
Cash distributions (62,420)
------ ----- -------
Balance, December 31, 1997 10,000 $1,000 246,864
Net income 63,636
Cash distributions (60,275)
------ ----- -------
Balance, December 31, 1998 10,000 $1,000 $250,225
====== ===== =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 30
CHICAGO MAP CORPORATION
STATEMENTS OF CASH FLOWS
Year Ended December 31
1998 1997 1996
--------- --------- ---------
Cash flows from operating activities:
Cash received from customers $1,141,761 $1,775,213 $1,748,237
Cash paid to suppliers and employees (1,028,544) (1,859,751) (1,389,739)
Interest paid - - (138)
Income taxes paid (927) (1,728) (2,613)
--------- --------- ---------
Net cash provided by (used in)
operating activities 112,290 (86,266) 355,747
------- ------ -------
Cash flows from investing activities:
Proceeds from sale of equipment 425 - -
Capital expenditures (7,847) (17,880) (47,958)
Payment of computer software costs (49,158) (22,030) -
------ ------ ------
Net cash used in investing
activities (56,580) (39,910) (47,958)
------ ------ ------
Cash flows from financing activities:
Payments on loan from shareholder - - (6,827)
Cash distributions paid to shareholders (60,275) (62,420) (68,635)
------ ------ ------
Net cash used in financing
activities (60,275) (62,420) (75,462)
------ ------ ------
Net increase (decrease) in cash (4,565) (188,596) 232,327
Cash at beginning of year 76,091 264,687 32,360
------ ------- -------
Cash at end of year $ 71,526 $ 76,091 $264,687
====== ====== =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 31
CHICAGO MAP CORPORATION
STATEMENTS OF CASH FLOWS
(continued)
Year Ended December 31
1998 1997 1996
--------- --------- ---------
Reconciliation of net income (loss)
to net cash provided by (used in)
operating activities:
Net income (loss) $ 63,636 $(38,116) $ 128,086
------ ------ -------
Adjustment to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation 13,890 13,222 5,893
Amortization of computer software costs 16,343 - -
Amortization of organization costs - 17 25
Loss on disposition of assets 13,100 - -
Change in assets (increase) decrease:
Accounts receivable (8,674) (36,550) 281,423
Inventories 11,274 12,812 (7,638)
Prepaid expenses 3,800 - (3,800)
Changes in liabilities increase
(decrease):
Accounts payable 3,617 (38,732) (52,006)
Accrued liabilities (4,696) 1,081 3,764
------ ------ ------
Total adjustments 48,654 (48,150) 227,661
------ ------ -------
Net cash provided by (used in)
operating activities $112,290 $(86,266) $355,747
======= ====== =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 32
CHICAGO MAP CORPORATION
NOTES TO FINANCIAL STATEMENTS
NATURE OF OPERATIONS
The Company creates technologies and software tools which provide for the
design and development of mapping and geographic products sold to customers
located throughout the world.
SUMMARY OF ACCOUNTING POLICIES
Revenue Recognition - The Company records sales and related profits as
product is shipped and services are rendered.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Inventories - Inventories are priced at the lower of cost, determined by
the first-in, first-out method, or market.
Property and Equipment - Property and equipment are recorded at cost.
Expenditures for renewals and betterments which extend the life of such assets
are capitalized. Maintenance and repairs are charged to expense as incurred.
Differences between amounts received and net carrying value of assets retired
or disposed of are charged or credited to income.
Depreciation - Depreciation is charged to income using straight-line and
accelerated methods based on the estimated useful lives of the assets.
Computer Software Costs - Costs related to the purchase and development
of computer software are amortized on a straight-line basis over twenty-four
months. Amortization expense charged to income was $16,343 in 1998. No
amortization was charged to income in 1997 and 1996.
Income Taxes - The Company has elected S corporation status for income
tax purposes. Under this election, the Company is not liable for federal
income taxes, but is liable for certain state income and replacement taxes.
Federal taxable income and tax credits flow through to the shareholders to be
reported on their individual income tax returns.
Earnings Per Common Share - Earnings (loss) per common share are computed
by dividing net income (loss) by the weighted average number of common shares
outstanding during the year.
CASH
During 1998 and 1997, the Company maintained an operating account with a
bank which at times exceeded the federally insured limit of $100,000. The
bank has a strong credit rating and management considers any risk to be
minimal.<PAGE>
<PAGE> 33
CHICAGO MAP CORPORATION
NOTES TO FINANCIAL STATEMENTS
(continued)
DEPRECIATION
Depreciation was charged to income, based on the estimated useful lives
of the assets, in the following amounts:
1998 1997 1996 Estimated Life-Years
---- ---- ---- --------------------
Leasehold improvements $ 260 $ 428 $ 194 31-39
Furniture and equipment 13,630 12,794 5,699 5-7
------ ------ -----
$13,890 $13,222 $ 5,893
====== ====== =====
TRANSACTION WITH RELATED PARTY
The Company leases office facilities on a month-to-month basis from a
shareholder at a monthly rental of $3,000. Rent expense charged to income
amounted to $36,000 in 1998, 1997 and 1996.
SUBSEQUENT EVENTS
On January 4, 1999, the Board of Directors declared a $240,000 cash
distribution to the shareholders provided such amount does not exceed the
Company's Accumulated Adjustment Account which is part of retained earnings as
shown on the Balance Sheets.
On March 12, 1999, the Company acquired certain assets of TRIUS, Inc. for
$62,300 in cash and 2,198 shares of common stock of Chicago Map Corporation.
The principal business of TRIUS, Inc. is the development of computer software
technologies. In connection therewith, the Board of Directors approved a
stock bonus of 2,802 shares to be issued to an officer and an employee of the
Company.
<PAGE> 1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization is entered into this 25th day
of March 1999, by and between Rexford, Inc., a Delaware corporation
("Acquiror"); Chicago Map Corporation, an Illinois corporation ("Acquiree");
and the persons listed in Exhibit "A" attached hereto and by this reference
made a part hereof, representing all of the stockholders of Acquiree (
"Stockholders").
RECITALS
Stockholders own all of the issued and outstanding capital stock of
Acquiree. Acquiror desires to acquire all of the issued and outstanding
shares of capital stock of Acquiree, making Acquiree a wholly-owned
subsidiary of Acquiror, and Stockholders desire to make a tax-free exchange of
their shares in Acquiree solely for shares of Acquiror's common stock, $0.001
par value, as described herein.
NOW, THEREFORE, for the mutual consideration set out herein and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
AGREEMENT
1. Plan of Reorganization. Stockholders of Acquiree are the owners of
all of the issued and outstanding shares of capital stock of Acquiree. It is
the intention of the parties hereto that all of the issued and outstanding
shares of capital stock of Acquiree shall be acquired by Acquiror in exchange
solely for Acquiror's voting common stock. It is the intention of the parties
hereto that this transaction qualify as a tax-free reorganization under
Section 368 (a) (1) (B) of the Internal Revenue Code of 1986, as amended, and
related sections thereunder.
2. Exchange of Shares. Acquiror and Stockholders agree that all of
the issued and outstanding shares of capital stock of Acquiree will consist,
at the Closing Date, of 15,000 shares of common stock, will be exchanged with
Acquiror for 10,500,000 shares of restricted common stock of Acquiror. As an
integral part of the stock-for-stock exchange agreed to herein, Acquiror shall
effect a 1 for 70 reverse split of its issued and outstanding shares of common
stock. The 10,500,000 shares of Acquiror's common stock to be issued to
Stockholders pursuant to this Agreement shall be issued subsequent to the date
on which such 1 for 70 reverse split is effected and shall represent at least
68.8% of all issued and outstanding shares of Acquiror's common stock
immediately following such split (and after giving effect to the private
placement of a maximum of 1,709,231 shares of the Acquiror's common stock).
The Acquiror shares will, on the Closing Date, as hereafter defined, be
delivered to the Stockholders in exchange for their shares in Acquiree.
Stockholders represent and warrant that they will hold such shares of common
stock of Acquiror for investment purposes and not for further public
distribution and agree that the shares shall be appropriately restricted.
3. Delivery of Shares. On or before the Closing Date, Stockholders
will deliver certificates representing all of the issued and outstanding
shares of Acquiree, duly endorsed so as to make Acquiror the sole holder
thereof, free and clear of all claims and encumbrances. Such shares of
Acquiree will be appropriately restricted as to transfer. On such Closing
Date, delivery of the Acquiror shares, which will be appropriately restricted
as to transfer, will be made to the Stockholders as set forth herein. The
transaction contemplated herein shall not close unless all of the issued and
outstanding shares of Acquiree are delivered at Closing and the owners thereof
execute this Agreement. A list of shares of Acquiree, the owner thereof and
<PAGE> 2
shares of Acquiror to be received by each Stockholder is attached hereto as
Exhibit "A". Each Stockholder shall sign Exhibit "B", attached hereto and by
this reference made a part hereof, evidencing his or her intent to be a party
to this Agreement and bound hereby.
4. Termination.
A. This Agreement may be terminated by action of the Board of
Directors of Acquiror, or by the Stockholders of Acquiree at any time prior to
the Closing Date if:
(1) There shall be any actual or threatened action or
proceeding by or before any court or any other
governmental body which shall seek to restrain,
prohibit, or invalidate the transactions contemplated
by this Agreement and which, in the judgment of such
Board of Directors made in good faith and based upon
the advice of legal counsel, makes it inadvisable to
proceed with the transactions contemplated by this
Agreement; or
(2) The Closing shall not have occurred prior to March 31,
1999, or such later date as shall have been approved by
parties hereto, other than for reasons set forth in
paragraph B or C below.
In the event of termination pursuant to this Section 4 (A) , no
obligation, right, or liability shall arise hereunder and each party shall
bear all of the expenses incurred by them in connection with the negotiation,
drafting, and execution of this Agreement and the consummation of the
transactions herein contemplated.
B. This Agreement may be terminated at any time prior to the
Closing Date by action of Acquiror if:
(1) Acquiree or the Stockholders shall fail to comply in
any material respect with any of its or their covenants
or agreements contained in this Agreement or if any of
the representations or warranties of Acquiree or the
Stockholders contained herein shall be inaccurate in
any material respect; or
(2) There shall have been any material change after
December 31, 1998, in the assets, properties, business,
or financial condition of Acquiree taken as a whole
which could have a materially adverse effect on the
value of the business of Acquiree except any changes
disclosed in any exhibits or schedules attached hereto.
In the event this Agreement is terminated pursuant to this Section 4 (B),
this Agreement shall be of no further force or effect, no obligation, right,
or liability shall arise hereunder, and Acquiree shall bear its own costs as
well as the legal, accounting, printing, and other costs incurred by Acquiror
in connection with the negotiation, preparation, and execution of this
Agreement and the transactions herein contemplated.
C. This Agreement may be terminated at any time prior to the
Closing Date by action of the Board of Directors of Acquiree or by the
Stockholders of Acquiree if:
(1) Acquiror shall fail to comply in any material respect
with any of its covenants or agreements contained in this Agreement or if any
<PAGE> 3
of the representations or warranties of Acquiror contained herein shall be
inaccurate in any material respect; or
(2) There shall have been any material adverse change
after December 31, 1998, in the assets, properties, business, or financial
condition of Acquiror as a whole which could have a materially adverse effect
on the value of the business of Acquiror taken as a whole except any changes
disclosed in any exhibit or schedule attached hereto.
In the event this Agreement is terminated pursuant to this Section 4 (C),
this Agreement shall be of no further force or effect, no obligation, right,
or liability shall arise hereunder, and Acquiror shall bear its own costs as
well as the legal, accounting, printing, and other costs incurred by Acquiree
and the Stockholders in connection with negotiation, preparation, and
execution of this Agreement and the transactions herein contemplated.
5. Representations and Warranties of Stockholders and Acquiree.
A. The Stockholders and Acquiree hereby represent and warrant
that, effective this date and the Closing Date, the representations and
warranties listed below are true and correct.
(1) Stockholders of Acquiree. The Stockholders are the
owners of all of the issued and outstanding shares of the capital stock of
Acquiree; such shares are free from claims, liens, or other encumbrances; and
Stockholders have the unqualified right to sell, transfer, and dispose of such
shares subject to the laws of bankruptcy, insolvency, and general creditors'
rights. Each Stockholder represents and warrants, that in regards to his or
her shares of Acquiree, such Stockholder has the full right and authority to
execute this Agreement and to transfer his or her shares of Acquiree to
Acquiror.
(2) Restricted Shares to be Issued. The Stockholders
understand and are aware that the issuance of Acquiror's shares hereunder is
being made without registration under the Securities Act of 1933, as amended
(the "Act"), or any state securities laws and that the shares so issued may
not be sold or transferred without registration under the Act and under
applicable state, securities laws, or unless an exemption from such
registration is available. The Stockholders understand that the investment in
the shares of Acquiror is speculative and may remain so for an indefinite
period and acknowledge that the Stockholders are able to bear the economic
risk of their investment in the shares of Acquiror. All certificates
evidencing Acquiror's common stock to be issued to Stockholders shall bear
appropriate restrictive legends.
B. The Principal Stockholders of Acquiree (defined for purposes
of this Agreement as owners of 2% or more of Acquiree Shares) and Acquiree
hereby represent and warrant that, effective this date and the Closing
Date, the representations and warranties listed below are true and correct.
(1) Corporate Authority. Acquiree has the full corporate
power and authority to enter into this Agreement and (subject to any
requisite approval by the holders of Acquiree common shares) to carry out the
transactions contemplated by this Agreement. The Board of Directors of
Acquiree has duly authorized the execution, delivery, and performance of
this Agreement.
(2) Financial Statements.
(a) The audited balance sheet of Acquiree as of
December 31, 1998 and 1997 and the related
statements of income (loss), changes in
<PAGE> 4
shareholders' equity and, cash flows, and
stockholders' equity for the three years ended
December 31, 1998, 1997 and 1996, including the
notes thereto, and the accompanying report of
Hutton Nelson & McDonald, LLP, certified public
accountants, have been delivered to Acquiror
("Acquiree Financial Statements"). To the best
knowledge of Acquiree and Principal
Stockholders, except as set forth in Acquiree's
Schedules, such financial statements contain all
adjustments (all of which are normal recurring
adjustments) necessary to present fairly the
results of operations and financial position for
the periods and as of the dates indicated.
(b) The audited financial statements delivered
pursuant to subparagraph (a) have been prepared
in accordance with United States generally
accepted accounting principles consistently
applied throughout the periods involved and,
when required to be audited, have been audited
by a certified public accountants licensed to
practice in the United States and before the
Securities and Exchange Commission. The audited
financial statements have been presented in
accordance with the requirements of Regulation
S-X promulgated by the SEC regarding the form
and content of and requirements for financial
statements to be filed with the SEC. The
Acquiree Financial Statements present fairly,
the financial position of Acquiree. Acquiree
did not have, as of the date of the Acquiree
Financial Statements, except as and to the
extent reflected or reserved against therein,
any liabilities or obligations (absolute or
contingent) which should be reflected in any
financial statements or the notes thereto
prepared in accordance with generally accepted
accounting principles, and all assets reflected
therein present fairly the assets of Acquiree,
in accordance with generally accepted accounting
principles. The statements of revenue and
expenses and cash flows present fairly the
financial position and result of operations of
Acquiree as of their respective dates and for
the respective periods covered thereby.
(c) The books and records, financial and otherwise,
of Acquiree are in all material respects
complete and correct and have been maintained in
accordance with sound business and bookkeeping
practices so as to accurately and fairly
reflect, in reasonable detail, the transactions
and dispositions of the assets of Acquiree.
(d) Proper and accurate amounts of taxes have been
withheld by or on behalf of Acquiree with
respect to all material compensation paid to
employees of Acquiree for all periods ending on
or before the date hereof, and all deposits
required with respect to compensation paid to
such employees have been made, in complete
<PAGE> 5
compliance with the provisions of all material
accrual or material arrangement for or payment
of bonuses or special compensation applicable
under tax and other laws. There are no tax liens
upon any of the assets of Acquiree.
(3) Absence of Certain Changes or Events. Except as set
forth in this Agreement or the Acquiree Schedules attached hereto, since
December 31, 1998, the date of the Acquiree Financial Statements,:
(a) There has not been (1) any material adverse
change in the business, operations,
properties, level of inventory, assets,
or financial condition of Acquiree taken as a
whole; or (2) any damage, destruction, or loss
to Acquiree (whether or not covered by
insurance) materially and adversely affecting
the business, operations, properties, assets,
or conditions of Acquiree;
(b) Acquiree has not (1) amended its Articles of
Incorporation or Bylaws; (2) declared or made,
or agreed to declare to make, any payment of
dividends or distributions of any assets of
any kind whatsoever to Stockholders or
purchased or redeemed, or agreed to purchase
or redeem, any of their capital stock; (3)
waived any rights of value which in the
aggregate are extraordinary or material
considering the business of Acquiree; (4) made
any material change in its method of
management, operation, or accounting; (5)
entered into any other material transactions
not in the ordinary course of business except
as otherwise contemplated by this Agreement
including, but not limited to, Acquiree's
acquisition of certain assets of Trius, Inc.
and the issuance of common stock of Acquiree
related thereto; (6) made any accrual or
arrangement for or payment of bonuses or
special compensation of any kind or any
severance or termination pay to any present or
former officer or employee; (7) increased the
rate of compensation payable or to become
payable by it to any of its officers or
directors or any of its employees whose
monthly compensation exceeds $5,000; or (8)
made any increase in any profit sharing,
bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit
plan, payment, or arrangement made to, for,
or with its officers, directors, or employees;
(c) Acquiree has not (1) granted or agreed to
grant any options, warrants, or other rights
for its stocks, bonds, or other corporate
securities calling for the issuance
thereof except as described in the Schedules
attached hereto; (2) borrowed or agreed to
borrow any funds or incurred, or become
subject to, any material obligation or
liability (absolute or contingent) except
<PAGE> 6
liabilities incurred in the ordinary course of
business; (3) paid any material obligation
or liability (absolute or contingent) other
than current liabilities reflected in or shown
on the balance sheet contained in the Acquiree
Financial Statement and current liabilities
incurred since that date in the ordinary
course of business; (4) sold or transferred,
or agreed to sell or transfer, any of its
assets, property, or rights (except assets,
property, or rights held as inventory or
canceled or agreed to cancel, any debts or
claims (except debts or claims which in the
aggregate are of a value of less than
$25,000); (5) made or permitted any amendment
or termination of any contract, agreement, or
license to which it is a party if such
amendment or termination is material,
considering the business of Acquiree taken as
a whole; or (6) issued, delivered, or agreed
to issue or deliver any stock, bonds, or other
corporate securities including debentures
(whether authorized and unissued or held as
treasury stock) except for the shares of
common stock in Acquiree issued in connection
with Acquiree's acquisition of certain assets
of Trius, Inc.; and
(d) To the best knowledge of Acquiree, it has not
become subject to any law or regulation which
materially and adversely affects, or in the
future may adversely affect, its business,
operations, properties, assets, or condition.
(4) Litigation and Proceedings. Acquiree is not
involved in any pending litigation or governmental investigation or proceeding
not reflected in such financial statements, or otherwise disclosed in the
Acquiree Schedules and, to the best knowledge of Acquiree and Principal
Stockholders, no litigation, claims, assessments, or governmental
investigation or proceeding is threatened against Acquiree, its Principal
Stockholders, or properties.
(5) Organization.
(a) As of the Closing Date, Acquiree will be in good
standing in its state of incorporation, and will
be in good standing and duly qualified to do
business in each state and jurisdiction where
the failure to qualify would have a material
adverse effect on Acquiree.
(b) To the best knowledge of Acquiree and Principal
Stockholders, Acquiree has complied with all
state, federal, and local laws in connection
with its formation, issuance of securities,
capitalization, and operations, and no
contingent liabilities have been threatened or
claims made, and no basis for the same exists
with respect to said operations, formation, or
capitalization, including claims for violation
of any state or federal securities laws except
where any noncompliance would not materially
<PAGE> 7
affect the business or property of the Acquiree.
(6) Compliance with Laws, Rules and Regulations.
Acquiree and Principal Stockholders represent and warrant that Acquiree
complies with all applicable federal laws, rules and regulations; and all
applicable State laws, rules and regulations relating to the operation of its
business and the sale of Acquiree's products except to the extent that non-
compliance would not materially and adversely affect the business, operations,
properties, assets, or condition of Acquiree or except to the extent that non-
compliance would not result in the incurrence of any material liability for
Acquiree.
(7) Tax Returns. Acquiree has filed all federal, state,
county, and local income, excise, property, sales, and other tax returns,
forms, or reports, which are due or required to be filed by it prior to the
date hereof and have paid or made adequate provisions for the payment of all
taxes, penalty fees, or assessments which have or may become due pursuant to
such returns or pursuant to any assessments received.
(8) Subsidiaries. Acquiree has no subsidiaries and does
not own any capital stock, security, partnership interest, or other
interest of any kind in any corporation, partnership, joint venture,
association, or other entity.
(9) No Conflict With Other Instruments. The execution
of this Agreement will not violate or breach any document, instrument,
agreement, contract, or commitment material to the business of Acquiree to
which Acquiree or Principal Stockholders are a party and has been duly
authorized by all appropriate and necessary action.
(10) Capitalization. The authorized capital stock of
Acquiree consists of 100,000 shares of common stock having no par value, of
which 15,000 shares have been validly issued and are now outstanding, and of
which 15,000 will be outstanding at the Closing Date. There are no outstanding
convertible securities, warrants, options, or commitments of any nature which
may cause authorized but unissued shares to be issued to any person, except as
described in the schedules attached hereto. All issued and outstanding shares
are legally issued, fully paid, and non-assessable, and are not issued in
violation of the pre-emptive or other right of any person.
(11) Title and Related Matters. Acquiree has good and
marketable title to all of its licenses, copyrights, trademarks, trade
secrets, patents, patents pending, properties, inventory, interests in
properties, and other assets, real and personal, which are reflected in the
Acquiree Financial Statements, or acquired after that date (except properties,
interest in properties, and assets sold or otherwise disposed of since such
date in the ordinary course of business), free and clear of all mortgages,
liens, pledges, charges, or encumbrances except (i) statutory liens or
claims not yet delinquent; (ii) such imperfections of title and easements as
do not and will not materially detract from or interfere with the present or
proposed use of the assets or properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties or in connection with such assets; and (iii) as described in
Acquiree Financial Statements or in the Acquiree Schedules. Acquiree owns,
free and clear of any liens, claims, encumbrances, royalty interests, or other
restrictions or limitations of any nature whatsoever, any and all procedures,
techniques, business plans, methods of management, or other information
utilized in the conduct of its business or operations, whether or not the
value thereof is reflected in the most recent balance sheet included in the
Acquiree Schedules. The assets and equipment of Acquiree that are necessary
or used in the operations of its business are in good operating condition and
repair, normal wear and tear excepted.
<PAGE> 8
(12) Contracts.
(a) Except as included or described in the Acquiree
Schedules, there are no material contracts,
agreements, franchises, license agreements, or
other commitments to which Acquiree is a party
or by which it or any of its properties or
assets are bound.
(b) Subject to the laws of bankruptcy,
insolvency, general creditor's rights, and
equitable principles, all contracts, agreements,
franchises, license agreements, and other
commitments to which Acquiree is a party or by
which its properties or assets are bound and
which are material to its operations taken as a
whole, are valid and enforceable in all
respects.
(c) Acquiree is not a party to or bound by, and the
assets of Acquiree are not subject to, any
contract, agreement, other commitment or
instrument; any charter or other corporate
restriction; or any judgment, order, writ,
injunction, or decree which materially and
adversely affects, or in the future may (as far
as Acquiree can now foresee), materially and
adversely affect, the business, operations,
properties, assets, or condition of Acquiree.
(d) Except as included or described in the Acquiree
Schedules or reflected in the most recent
Acquiree Financial Statements, Acquiree is not
a party to any oral or written (a) contract for
employment of any officer or employee which is
not terminable on 30 days (or less) notice; (b)
profit sharing, bonus, deferred compensation,
stock option, severance pay, pension benefit,
or retirement plan, agreement, or arrangement
covered by Title IV of the Employee Retirement
Income Security Act, as amended; (c) agreement,
contract, or indenture relating to the borrowing
of money exceeding $50,000; (d) guaranty of any
obligation, other than one on which Acquiree is
a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for
collection and other guarantees of obligations,
which, in the aggregate do not exceed $50,000;
(e) consulting or other similar contract with an
unexpired term of more than one year of
providing for payment in excess of $50,000 in
the aggregate; (f) collective bargaining
agreement, (g) agreement with any present or
former officer or director of Acquiree or its
subsidiaries; or (h) contract, agreement, or
other commitment involving payments by it of
more than $50,000 in the aggregate.
(13) Material Contract Defaults. To the best knowledge
of Acquiree and Principal Stockholders, Acquiree is not in default in any
material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition of Acquiree, and there is no event of default
<PAGE> 9
or other event which, with notice or lapse of time or both, would constitute a
default in any material respect under any such contract, agreement, lease, or
other commitment in respect of which Acquiree has not taken adequate steps to
prevent such a default from occurring.
(14) Acquiree Schedules. Acquiree has delivered to
Acquiror the following schedules which are collectively referred to as the
"Acquiree Schedules" and which consist of separate schedules dated as of the
date of execution of this Agreement and instruments and data as of such date,
all certified by the chief executive officer of Acquiree and the Principal
Stockholders, as complete, true, and correct:
(a) A schedule containing complete and correct
copies of the Articles of Incorporation and
Bylaws of Acquiree in effect as of the date of
this Agreement;
(b) A schedule including the financial statements
of Acquiree identified in paragraph 5(b) (2).
(c) A schedule containing a complete and correct copy
of the stock ledger of Acquiree;
(d) A schedule containing a description of all real
property owned or leased by Acquiree together
with a description of every mortgage, deed of
trust, pledge, lien, agreement, encumbrance,
claim, or equity interest of any nature
whatsoever in such real property with copies of
the underlying documentation;
(e) A schedule containing copies of all material
contracts, promissory notes, profit sharing
arrangements, options, warrants, employment
agreements, licenses, agreements, or other
instruments to which Acquiree is a party or by
which it or its properties or assets are bound;
(f) A schedule describing all governmental licenses,
permits, and other governmental authorizations
(or requests or applications therefor) pursuant
to which Acquiree carries on or propose to carry
on its business (except those which, in the
aggregate, are immaterial to the present or
proposed business of Acquiree;
(g) A schedule setting forth a description of any
material adverse change in the business,
operations, property, inventory, assets, or
condition of Acquiree since the date of the
Acquiree Financial Statements;
(h) A schedule of all litigation or governmental
investigation or proceeding which is pending or
which, to the best knowledge of management,
is threatened or contemplated;
(i) A schedule of all other documents,
disclosures, or representations required to be
disclosed by this Agreement or required to be
disclosed in order to set forth all material
facts regarding Acquiree.
<PAGE> 10
(15) Information. The information concerning
Acquiree set forth in this Agreement and in the Acquiree Schedules is complete
and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to make
the statements made in light of the circumstances under which they were made
not misleading.
(16) Compliance With Blue Sky Laws. Acquiree shall
prepare and caused to be filed, all required notices, forms, reports, filing
fees and other documents in order to comply with all applicable blue sky law,
rule or regulation in connection with the stock-for-stock exchange
contemplated herein. Acquiror shall provide Acquiree such information and sign
such documents as may be necessary to permit Acquiree to complete its
obligations under this paragraph 16.
6. Representations and Warranties of Acquiror. Acquiror hereby
represents and warrants that effective this date and the Closing Date, the
following representations are true and correct:
A. Issuance of Shares. As of the Closing Date, the Acquiror
shares to be delivered to the Stockholders, will constitute valid and legally
issued shares of Acquiror, fully-paid and non-assessable, and will be legally
equivalent in all respects to the common stock of Acquiror issued and
outstanding as of the date hereof.
B. Authorization. The officers of Acquiror are duly authorized
to execute this Agreement and have taken all action required by law and
agreements, charters, Bylaws, etc., to properly and legally execute this
Agreement.
C. Financial Statements.
(1) The audited balance sheets of Acquiror as of September
30, 1998 and 1997, and the related statements of
operations, cash flows, and stockholders' equity for
the years ended December 31, 1998 and 1997, and the
cumulative amounts since October 1, 1992 (date of
commencement of development stage), including the notes
thereto, and the accompanying Independent Auditor's
Report of Tanner + Co., have been delivered to
Acquiror. Further, the unaudited balance sheet of
Acquiror as of December 31, 1998, and the related
statements of operations and cash flows for the three
months ended December 31, 1998 and 1997 and the
cumulative amounts from commencement of development
stage, including the notes thereto ("Acquiror Financial
Statements"). To the best knowledge of Acquiror,
except as set forth in Acquiror's Schedules, such
financial statements contain all adjustments (all of
which are normal recurring adjustments) necessary to
present fairly the results of operations and financial
position for the periods and as of the dates indicated.
(2) The audited financial statements delivered pursuant to
subparagraph (1) have been prepared in accordance with
United States generally accepted accounting principles
consistently applied throughout the periods involved
and, when required to be audited, have been audited by
a certified public accountants licensed to practice in
the United States and before the Securities and
Exchange Commission. The audited financial statements
have been presented in accordance with the requirements
of Regulation S-X promulgated by the SEC regarding the
<PAGE> 11
form and content of and requirements for financial
statements to be filed with the SEC. The Acquiror
Financial Statements present fairly the financial
position of Acquiror. Acquiror did not have, as of the
date of the Acquiror Financial Statements, except as
and to the extent reflected or reserved against
therein, any liabilities or obligations (absolute or
contingent) which should be reflected in any financial
statements or the notes thereto prepared in accordance
with generally accepted accounting principles, and all
assets reflected therein present fairly the assets of
Acquiror, in accordance with generally accepted
accounting principles. The statements of revenue and
expenses and cash flows present fairly the financial
position and result of operations of Acquiror as of
their respective dates and for the respective periods
covered thereby.
(3) The books and records, financial and otherwise, of
Acquiror are in all material respects complete and
correct and have been maintained in accordance with
sound business and bookkeeping practices so as to
accurately and fairly reflect, in reasonable detail,
the transactions and dispositions of the assets of
Acquiror.
(4) Proper and accurate amounts of taxes have been withheld
by or on behalf of Acquiror with respect to all
material compensation paid to employees of Acquiror for
all periods ending on or before the date hereof, and
all deposits required with respect to compensation paid
to such employees have been made, in complete
compliance with the provisions of all material accrual
or material arrangement for or payment of bonuses or
special compensation applicable under tax and other
laws. There are no tax liens upon any of the assets of
Acquiror.
D. Absence of Certain Changes or Events. Except as set forth
in this Agreement or the Acquiror Schedules, since December 31, 1998:
(1) There has not been (a) any material adverse change in
the business, operations, properties, assets, or
financial condition of Acquiror (whether or not
covered by insurance) materially and adversely
affecting the business, operations, properties,
assets, or conditions of Acquiror;
(2) Acquiror has not (a) amended its Articles of
Incorporation or Bylaws; (b) declared or made, or
agreed to declare or make, any payment of
dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed, or
agreed to purchase or redeem any of its capital stock;
(c) waived any rights or value which in the
aggregate are extraordinary or material considering
the business of Acquiror; (d) made any material change
in its method of management, operation, or accounting;
(e) entered into any other material transactions; (f)
made any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any
severance or termination pay to any present or former
officer or employees (g) increased the rate of
<PAGE> 12
compensation payable or to become payable by it to any
of its officers or directors of any of its employees;
or (h) established or made any increase in any profit
sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan,
payment, or arrangement made to, for, or with its
officers, directors, or employees;
(3) Acquiror has not (a) granted or agreed to grant any
options, warrants, or other rights for its stocks,
bonds, or other corporate securities calling for the
issuance thereof; (b) borrowed or agreed to borrow any
funds or incurred, or become subject to, any material
obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of
business; (c) paid any material obligation or liability
(absolute or contingent) other than current liabilities
reflected in or shown on the Acquiror balance sheet as
of September 30, 1998, and current liabilities incurred
since that date in the ordinary course of business; (d)
sold or transferred, or agreed to sell or transfer, any
of its assets, property, or rights, (e) made or
permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such
amendment or termination is material, considering the
business of Acquiror; or (f) issued, delivered, or
agreed to issue or deliver any stock, bonds, or other
corporate securities including debentures (whether
authorized and unissued or held as treasury stock); and
(4) To the best knowledge of Acquiror, it has not become
subject to any law or regulation which materially and
adversely affects, or in the future may adversely
affect, the business, operations, properties, assets,
or condition of Acquiror.
E. Litigation and Proceedings. To the best knowledge of
Acquiror it is not involved in any pending litigation, claims, or
governmental investigation or proceeding not reflected in such financial
statements or otherwise disclosed in the Acquiror Schedules and there are no
lawsuits, claims, assessments, investigations, or similar matters, to the best
knowledge of management,. threatened or contemplated against Acquiror, its
management, or properties.
F. Organization. As of the Closing Date Acquiror shall be duly
organized, validly existing, and in good standing under the laws of the State
of Delaware; it has the corporate power to own its property and to carry on
its business as now being conducted and is duly qualified to do business in
any jurisdiction where the failure to qualify would have a material adverse
effect on Acquiror.
G. Tax Returns. Acquiror has filed all federal, state, county,
and local income, excise, property, and other tax returns, forms, or reports,
which are due or required to be filed by it prior to the date hereof.
Acquiror has paid or made adequate provisions for the payment of all taxes,
penalty fees, or assessments which have or may become due pursuant to such
filed returns or pursuant to any assessments received.
H. Contracts.
(1) Except as included or referred to in the Acquiror
Schedules, there are no material contracts, agreements,
franchises, license agreements, or other commitments to
<PAGE> 13
which Acquiror is a party or by which it or any of its
properties are bound.
(2) Subject to the laws of bankruptcy, insolvency, general
creditor's rights, and equitable principles, all
contracts, agreements, franchises, license agreements,
and other commitments to which Acquiror is a party or
by which it or its properties are bound, and which are
material to the operations of Acquiror, are valid and
enforceable by Acquiror in all respects.
(3) Acquiror is not a party to any contract, agreement,
commitment, or instrument or subject to any charter or
other corporate restriction or any judgment, order,
writ, injunction, decree, or aware which
materially and adversely affects, or in the future may
(as far as Acquiror can now foresee) materially and
adversely affect, the business, operations, properties,
assets, or condition of Acquiror.
(4) Except as included or referred to in the Acquiror
Schedules or reflected in the latest Acquiror balance
sheet, Acquiror is not a party to any material oral or
written (a) contract for the employment of any officer
or employee; (b) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension,
benefit, or retirement plan, agreement, or arrangement
covered by Title IV of the Employee Retirement Income
Security Act, as amended; (c) agreement, contract, or
indenture relating to the borrowing of money; (d)
guaranty of any obligation, other than one which
Acquiror is a primary obligor, for the borrowing of
money or otherwise, excluding endorsements made for
collection and other guarantees of obligations, which,
in the aggregate do not exceed $10,000; (e) consulting
or other similar contract with an unexpired term of
more than one year or providing for payments in excess
of $10,000 in the aggregate; (f) collective
bargaining agreement; (g) agreement with any present
or former officer or director of Acquiror; or (h)
contract, agreement or other commitment involving
payments by it of more than $10,000 in the aggregate.
I. Material Contract Defaults. To the best of its knowledge,
Acquiror has not materially breached, nor has it any knowledge of any pending
or threatened claims or any legal basis for a claim that Acquiror has
materially breached, any of the terms of conditions of any agreements,
contracts, or commitments to which it is a party or is bound and the execution
and performance hereof will not violate any provisions of applicable law of
any agreement to which Acquiror is subject.
J. Capitalization. The capitalization of Acquiror is, as of the
date hereof, comprised of 100,000,000 shares of authorized common stock, $.00l
par value, of which 70,000,000 shares are issued and outstanding. As an
integral part of the stock-for-stock exchange provided for herein, Acquiror
shall effect a 1 for 70 reverse split of its issued and outstanding shares
thereby reducing the number of such shares from 70,000,000 to 11,500,000
(including all shares to be issued to Acquiree and others in connection with
the transactions contemplated herein). All outstanding shares have been duly
authorized, validly issued, and fully-paid, and there are no outstanding or
presently authorized securities, warrants, options, or related
commitments of any nature not disclosed in the Acquiror's financial statements
or in the Acquiror's Prospectus, proxy statement or in the Acquiror Schedules
<PAGE> 14
attached hereto. All of the outstanding shares are non-assessable and free of
cumulative voting or pre-emptive rights.
K. Subsidiaries. Acquiror has no subsidiaries and does not own
any capital stock, security, partnership interest, or other interest of any
kind in any corporation, partnership, joint venture, association, or other
entity.
L. Corporate Records. The corporate financial records, minute
books, and other documents and records of Acquiror are to be available to
present management of Acquiree prior to the Closing Date and turned over to
new management in their entirety at Closing or as soon thereafter as
practicable.
M. No Conflict with Other Instrument. The execution of this
Agreement will not violate or breach any document, instrument, agreement,
contract, or commitment material to the business of Acquiror, to which
Acquiror is a party.
N. Securities Laws. Acquiror is a public company and represents
that to the best of its knowledge it has no existing or threatened
liabilities, claims, lawsuits, or basis for the same with respect to its
original stock issuance to its founders, its public offering, or any dealings
with its Stockholders, the public, brokers, the Securities and Exchange
Commission, state agencies, or other persons. Acquiror is required to file
Reports under Section 15(d) of the Securities Exchange Act of 1934, as
amended. Acquiror represents that all reports required to be filed pursuant
to Section 15(d) of the Securities Act of 1934 as of the date of closing have
been or will have been filed.
O. Compliance With Laws and Regulations. Acquiror has complied
with all applicable statutes and regulations of any federal, state, or other
applicable governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of Acquiror or except to the
extent that noncompliance would not result in the incurrence of any material
liability including, but not limited to, the Blue Sky regulations of this
proposed acquisition and issuance of Acquiror common stock.
P. Acquiror Schedules. Acquiror has delivered to Acquiree the
following schedules, which are collectively referred to as the "Acquiror
Schedules," which are dated the date of this Agreement, all certified by an
officer of Acquiror and the officers of Acquiror to be complete, true, and
accurate:
(1) A schedule containing complete and accurate copies of
the Articles of Incorporation and Bylaws of Acquiror as in effect as of the
date of this Agreement and copies of all Board of Directors and Shareholders
Resolutions, Minutes and Consents.
(2) A schedule containing copies of all financial
statements referred to in paragraph 6(c);
(3) A schedule containing the Prospectus of any previous
public offering of common stock of Acquiror;
(4) A schedule containing a list of the shareholders of
Acquiror as of March 1, 1999;
(5) A schedule describing all outstanding warrants to
purchase shares of Acquiror's common stock;
<PAGE> 15
(6) A schedule setting forth a description of any material
adverse change in the business, operations, property, inventory, assets, or
conditions of Acquiror since December 31, 1998;
(7) A schedule of all litigation or governmental
investigation or proceeding which is pending or which, to the best knowledge
of management, is threatened or contemplated;
(8) A schedule containing copies of all contracts to which
the Company is a party;
(9) A schedule containing all reports filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended;
(10) A schedule of all other documents, disclosures, or
representations required to be disclosed by this Agreement or required to be
disclosed in order to set forth all material facts regarding Acquiror.
R. Information. The information concerning Acquiror set forth
in this Agreement and in the Acquiror Schedules is complete and accurate in
all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact require to make the statements made, in
light of the circumstances under which they were made, not misleading.
7. Information Statement, Meeting of Rexford Shareholders. As
promptly as practicable after the execution of this Agreement, Acquiror shall
prepare and file with the Securities and Exchange Commission ("SEC"), a
preliminary information statement including a notice of special meeting of its
stockholders and related material (the "Information Statement") relating to
the approval of this Agreement and the transactions contemplated hereunder, as
promptly as practicable following receipt of the SEC's comments thereon (or,
should no SEC comments be forthcoming or the lapse of the period of time
during which SEC comments are required to be furnished, promptly following a
determination that no comments are forthcoming or the lapse of such period),
Acquiree shall file with the SEC and mail to its stockholders of record a
definitive Information Statement relating to such matters. The Information
Statement shall set a date of record for all shareholders entitled to vote on
this Agreement and shall include the recommendation of the Acquiree's board of
directors in favor of such matters.
8. Additional Financial Statements. To the extent required, Acquiree
and Acquiror shall utilize their best efforts and cooperate to provide the
financial information necessary to present the pro forma consolidated
financial statements, including a pro forma consolidated balance sheet, pro
forma consolidated income statements, for all periods required to be
presented, including the notes thereto, and in the form and manner required
for use in the Form 8-K and/or Information Statement or any other document
required to be filed with the SEC, requiring the presentation of the
Acquiror's financial statements under generally accepted accounting
principles.
9. Closing Date. The Closing Date herein referred to shall be upon
such date as the parties hereto may mutually agree upon, but is expected to be
on or about March 31, 1999, but not later than April 30, 1999. At the
Closing, Acquiror shall deliver and the Stockholders will be deemed to have
accepted delivery, the certificate of stock to be issued in his or her name,
and in connection therewith, will make delivery of his or her stock in
Acquiree to Acquiror. Certain opinions, exhibits, etc., may be delivered
subsequent to the Closing Date upon the mutual agreement of the parties
hereto.
10. Conditions Precedent to the Obligations of Acquiree and the
<PAGE> 16
Stockholders. All obligations of Acquiree and Stockholders under this
Agreement are subject to the fulfillment, by Acquiror, prior to or as of the
Closing Date, of each of the following conditions:
A. The representations and warranties by or on behalf of
Acquiror contained in this Agreement or in any certificate or documents
delivered to Acquiree pursuant to the provisions hereof shall be true in all
material respects at and as of the time of Closing as though such
representations and warranties were made at and as of such time.
B. Acquiror shall have performed and complied with all
covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing on the Closing
Date.
C. Acquiror shall take all corporation action necessary to
issue the shares to Stockholders pursuant to this Agreement.
D. The election or appointment of all of Acquiree's nominees
to the Board of Directors of Acquiror as directed by Acquiree and the
resignation of the existing officers and directors of Acquiror and the
transfer of the office of Registered Agent to such party as is designated by
Acquiree.
E. Stockholders of Acquiror approving this Agreement and
Acquiror's performance hereof;
F. Stockholders of Acquiror approving a 1 for 70 reverse split
of the Acquiror's issued and outstanding shares of common stock.
G. Stockholders of Acquiror approving a proposal to amend
Acquiror's Articles of Incorporation to change Acquiror's name to Lexon
Technologies, Inc.
H. All instruments and documents delivered to
Stockholders pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for Stockholders.
I. Acquiror shall have delivered to Stockholders and Acquiree
an opinion of its counsel dated the Closing Date to that effect that
(1) Acquiror is a corporation duly organized, validly
existing, and in good standing under the laws of the
State of Delaware;
(2) Acquiror has the corporate power to carry on its
business as now being conducted;
(3) This Agreement has been duly authorized, executed,
and delivered by Acquiror and is a valid and binding
obligation of Acquiror; and
(4) The shares to be issued to Stockholders hereunder
will, when issued, be duly and validly issued, fully
paid, and non-assessable.
11. Conditions Precedent to the Obligations of Acquiror. All
obligations of Acquiror under this Agreement are subject to the fulfillment,
by Acquiree and Stockholders, prior to or as of the Closing Date, of each of
the following conditions:
A. The representations and warranties by Acquiree and
<PAGE> 17
Stockholders contained in this Agreement or in any certificate or document
delivered to Acquiror pursuant to the provisions hereof shall be true at and
as of the time of Closing as though such representations and warranties were
made at and as of such time.
B. Acquiree and Stockholders shall have performed and complied
with all covenants, agreements, and conditions required by this Agreement to
be performed or complied with by it prior to or at the Closing; including the
delivery of all of the outstanding stock of Acquiree.
C. The acquisition and proposed issuance of Acquiror common
stock can be effected as a non-public offering pursuant to provisions of
applicable federal and state securities laws. Acquiree shall cause to be
prepared and filed all forms, notices, fees and reports necessary to comply
with any and all blue sky laws, rules and regulations relating to the stock-
for-stock exchange contemplated herein. Acquiror shall sign, as required, any
and all notices, forms, reports or other documents so prepared by Acquiree.
D. Stockholders shall deliver to Acquiror a letter commonly
known as an "investment letter" agreeing that the shares of stock in Acquiror
are being acquired for investment purposes, and not with a view to public
resale and that the materials, including current financial statements prepared
and delivered by Acquiror to Stockholders, have been read and understood by
Stockholders, that he is familiar with the business of Acquiror, that he is
acquiring the Acquiror shares under Section 4(2), commonly known as the
private offering exemption of the Securities Act of 1933, and that the shares
are restricted and may not be resold, except in reliance of an exemption under
the Act.
E. Acquiree shall have delivered to Acquiror an opinion of
counsel dated the Closing Date to the effect that:
(1) Acquiree is duly organized, validly existing and in
good standing under the laws of the State of Illinois;
(2) Acquiree has the corporate power to carry on its
business as now being conducted, and is duly
qualified to do business in the State of Illinois and
in any jurisdiction where so required where the non
qualification to do business in any jurisdiction would
not materially adversely affect the business and
properties of Acquiree; and
(3) This Agreement has been duly authorized, executed,
and delivered by Acquiree and Stockholders.
12. Indemnification. Within the period provided in paragraph 13
herein and in accordance with the terms of that paragraph, each party to this
Agreement shall indemnify and hold harmless each other party at all times
after the date of this Agreement against and in respect of any liability,
damage, or deficiency, all actions, suits, proceedings, demands,
assessments, judgments, costs, and expenses which exceed $10,000 including
attorney's fees incident to any of the foregoing, resulting from any
misrepresentations, breach of covenant, or warranty or nonfulfillment
of any agreement on the part of such party under this Agreement or from any
misrepresentation in or omission from any certificate furnished or to be
furnished to a party hereunder. Subject to the terms of this Agreement, the
defaulting party shall reimburse the other party or parties on demand, for any
reasonable payment made by said parties at any time after the Closing, in
respect of any liability of claim to which the foregoing indemnity relates, if
such payment is made after reasonable notice to the other party to defend or
satisfy the same and such party failed to defend or satisfy the same. No
<PAGE> 18
liability shall arise for party hereof regarding a settlement of any claim
unless such settlement was previously approved by such party.
13. Nature and Survival of Representations. All representations,
warranties, and covenants made by any party in this Agreement shall survive
the Closing hereunder and the consummation of the transactions contemplated
hereby for two years from the date hereof. All of the parties hereto are
executing and carrying out the provisions of this Agreement in reliance solely
on the representations, warranties, and covenants and agreements contained in
this Agreement or at the Closing of the transactions herein provided for and
not upon any investigation upon 'which it might have made or any
representations, warranty, agreement, promise, or information, written or
oral, made by the other party or any other person other than as specifically
set forth herein.
14. Documents at Closing. At the Closing the following transactions
shall occur, all of such transactions being deemed to occur simultaneously:
A. Stockholders will deliver, or cause to be delivered, to
Acquiror the following:
(1) Stock certificates for all of the issued and
outstanding stock of Acquiree being tendered and
duly endorsed;
(2) All corporate records of Acquiree, including
without limitation, corporate minute books
(which shall contain copies of the Articles of
Incorporation and Bylaws, as amended to the
Closing), stock ledgers, stock transfer books,
corporate seals, and other such corporate books
and records as may reasonably be requested for
review by Acquiror and its counsel;
(3) The opinion of counsel for Acquiree as set forth
herein;
(4) A certificate executed by the Principal
Stockholders to the effect that all
representations and warranties made by Acquiree
under this Agreement are true and correct as of
the Closing, the same as though originally given
to Acquiror on said date;
(5) A certificate from the Secretary of State of its
incorporation dated within 45 days of the
Closing Date to the effect that Acquiree is in
good standing under the laws of said state;
(6) An investment letter from the Stockholders
representing that they are acquiring shares of
Acquiror for investment purposes only and not
with a view to further distribution;
(7) Such other instruments, documents, and
certificates, if any, as are required to be
delivered pursuant to the provision of this
Agreement or which may be reasonably requested
in furtherance of the provisions of this
Agreement.
B. Acquiror will deliver or cause to be delivered to the
<PAGE> 19
Stockholders and Acquiree:
(1) Stock certificates for common stock to be issued
as part of the exchange as listed on Exhibit
"A";
(2) A certificate of the president and secretary of
Acquiror to the effect that all representations
and warranties of Acquiror made under this
Agreement are reaffirmed on the Closing Date,
the same as though originally given to
Stockholders on said date;
(3) The opinion of Acquiror's counsel set forth
herein;
(4) Certified copies of resolutions by Acquiror's
Board of Directors and Stockholders authorizing
this transaction;
(5) A certificate from the Secretary of State of
Acquiror's state of incorporation dated within
45 days of the Closing Date that Acquiror is in
good standing under the laws of said state;
(6) Such other instruments and documents as are
required to be delivered pursuant to the
provisions of this Agreement.
15. Additional Covenants. Between the date hereof and the Closing
Date, except with the prior written consent of the other party:
A. Acquiror and Acquiree shall conduct their business only in
the usual and ordinary course and the character of such business shall not be
changed nor any different business be undertaken.
B. No change shall be made in the Articles of
Incorporation or Bylaws of Acquiror or Acquiree, except as described in the
Acquiree Schedules attached hereto.
C. No change shall be made in the authorized or issued shares
of Acquiror or Acquiree.
D. Neither Acquiror nor Acquiree shall discharge or satisfy
any lien or encumbrance or obligation or liability, other than current
liabilities shown on the financial statements heretofore delivered and
current liabilities incurred since that date in the ordinary course of
business.
E. Neither Acquiror nor Acquiree shall make any payment or
distribution to their respective stockholders or purchase or redeem any shares
or capital stock.
F. Neither Acquiror nor Acquiree shall mortgage, pledge, or
subject to lien or encumbrance any of its assets, tangible or intangible.
G. Neither Acquiror nor Acquiree shall cancel any debts or
claims or waive any rights.
H. Present management of Acquiror agree that after the Closing
they will continue to furnish new management with such additional
documentation and information regarding Acquiror as is reasonably requested.
<PAGE> 20
16. Miscellaneous.
A. Further Assurances. At any time and from time to time,
after the effective date, each party will execute such additional instruments
and take such action as may be reasonably requested by the other party to
confirm or perfect title to any property transferred hereunder or otherwise to
carry out the intent and purposes of this Agreement.
B. Waiver. Any failure on the part of any party hereto to
comply with any of its obligations, agreements, or conditions hereunder may
be waived in writing by the party to whom such compliance is owed.
C. Payment of Expenses. Acquiror shall pay for all of its
own legal, accounting and other expenses associated with the consummation of
the transactions contemplated under this Agreement, including those costs
associated with the preparation, filing, and mailing of the Information
Statement to the Acquiror's stockholders and holding a special meeting of the
Acquiror's stockholders. Acquiree shall pay for all of its own legal,
accounting and other expenses associated with the consummation of the
transactions contemplated under this Agreement.
D. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first class registered or certified mail, return
receipt requested.
E. Headings. The section and subsection heading in this
Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
F. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
G. Facsimile Transmission. Facsimile transmission of any
signed original document, and retransmission of any signed facsimile
transmission, shall be the same as delivery of an original. At the request of
any party hereto, the parties will confirm facsimile transmitted signatures by
signing an original document.
H. Governing Law. This Agreement was negotiated and is being
contracted for in the State of Illinois, and shall be governed by the laws
of the State of Illinois, not withstanding any Illinois or other
conflict-of-law provision to the contrary, and the securities being issued
herein are being issued and delivered in the State of Illinois in accordance
with isolated transaction and non-public offering exemption.
I. Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their respective
heirs, administrators, executors, successors, and assigns.
J. Entire Agreement. This Agreement contains the entire
agreement between the parties hereto and supersedes any and all prior
agreements, arrangements, or under-standings between the parties relating to
the subject matter hereof. No oral understandings, statements, promises, or
inducements contrary to the terms of this Agreement exist. No
representations, warranties, covenants, or conditions, express or implied,
other than as set forth herein, have been made by any party.
[Signatures appear on the next page following].<PAGE>
<PAGE> 21
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
ATTEST: Rexford, Inc.,
a Delaware corporation
By /s/ Tom Sollami, By /s/ Dennis Blomquist
-------------------------------- -----------------------------------
Secretary President
ATTEST: Chicago Map Corporation,
an Illinois corporation
By /s/ Mike Barnett By /s/ Steven J. Peskaitis
-------------------------------- ----------------------------------
Secretary President
STOCKHOLDERS
(See Exhibit "B" attached hereto in counterparts.)
<PAGE>
<PAGE> 22
Exhibit A
CHICAGO MAP CORPORATION
List of Stockholders
Number of Shares of Number of Rexford, Inc.
Chicago Map Shares to be Received
Name of Shareholder Corporation Percent in Exchange
- ------------------- ----------- ------- -----------
Steven J. Peskaitis 10,337 66.767 7,235,970
Stanley Peskaitis 1,824 12.160 1,276,800
Mike Barnett 641 4.273 448,700
David A. Schulz 1,044 6.960 730,800
David A. Leonard 110 .733 77,000
Paris Karahalios 1,044 6.960 730,800
------ ------ -----------
Total Percentage/Shares 15,000 100.00 10,500,000
====== ====== ==========
<PAGE>
<PAGE> 23
Exhibit B
CHICAGO MAP CORPORATION
Stockholders
Counterpart Signature Page
Date: Signature:
3/23/99 /s/ Steven J. Peskaitis
3/23/99 /s/ Stanley Peskaitis
3/23/99 /s/ Mike Barnett
