<PAGE>2
As filed with the Securities and Exchange Commission on September 10, 1998
Commission File Number
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
Amendment 1
REGISTRATION STATEMENT
Under The Securities Act of 1933
Makepeace Capital Corp.
Texas 6148 84-1472120
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdictions Classification Code Number) Identification number)
of incorporation
or organization
1660 South Albion Street, #723
Denver, Colorado 80222
Telephone: 303-753-6512
(Address and telephone number of registrant's principal executive
offices and principal place of business.)
John K. Anderson
5200 Meadowcreek Drive, Number 2105
Dallas, Texas 75248
(Name, address and telephone number of agent for service.)
with copies to:
Jody M. Walker
Attorney At Law
7841 South Garfield Way
Littleton, Colorado 80122
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box: | x |
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of each Proposed Proposed Amount of
class of Amount to be offering aggregate registration
securities registered price offering price fee
<S> <C> <C> <C> <C>
Common Stock
$.001 par value 500,000 $5.00 $2,500,000 $781.25
A Warrants 500,000 $.10(3) $ 50,000 $15.63
Common Stock(1) 500,000 $5.00 $2,500,000 $781.25
Common Stock(2) 136,204 $5.00 $682,140 $213.17
A Warrants 953,428 $.10(3) $95,343 $29.79
Common Stock(4) 953,428 $5.00 $4,767,140 $1,489.73
Common Stock(5) 110,000 $5.00 $550,000 171.88
Common Stock(6) 75,000 $5.00 $375,000 117.19
3,728,060 $11,519,623 $3,599.89
</TABLE>
(1)Represents Common Stock underlying the A Warrants comprised in the B Units
being sold in this offering.
(2)Represents Common Stock to be registered for distribution to shareholders
of Lorain Capital Corp. and American Prepaid Legal Services as of June 30,
1998.
(3)Arbitrary value solely for purposes of computing the registration fee
(4)Represents Common Stock underlying the A Warrants being distributed to
shareholders of Lorain Capital Corp. and American Prepaid Legal Services as
of June 30, 1998.
(5)Represents Common Stock to be registered on behalf of selling
shareholders.
(6)Represents Common Stock underlying A Warrants to be registered on behalf
of selling shareholders.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>3
PRELIMINARY PROSPECTUS DATED September 10, 1998
SUBJECT TO COMPLETION
Up to a Maximum of 500,000 B Units (Comprised
of an aggregate of 500,000 Common Shares
and 500,000 A Warrants)
500,000 Common Shares
underlying the A Warrants
136,204 Common Shares, 953,428 A Warrants,
and 953,428 Common Shares underlying the A
Warrants to be distributed to Shareholders of
Lorain Capital Corp. and American Prepaid Legal Services, Inc.
110,000 Common Shares and 75,000 Common shares underlying A Warrants
being registered on behalf of selling shareholders
Makepeace Capital Corp.
The Company is offering up to a maximum of 500,000 B Units at the purchase
price of $5.00 per B Unit. Each B Unit is comprised of One Common Share and
One A Warrant. Each A Warrant is exercisable into one Common Share of the
Company at the purchase price of $5.00. The A Warrants shall be exercisable
for a period of four years upon registration with the Securities and Exchange
Commission and shall be redeemable by the Company at $.001 per A Warrant upon
thirty days notice. There is no minimum investment and no minimum offering
amount.
As more fully set forth herein, Lorain Capital Corp., a Nevada
corporation ("Lorain") proposes to distribute (the "Distribution") as soon as
practicable after the effective date of this registration statement
as a dividend to its shareholders of record at the close of business on
June 30, 1998 (the "Record Date"), one Common Share of American/National
Trucking, Inc. a Texas corporation (the "Company") and seven A Warrants for
each one share of Lorain common stock, par value $.001 per share (the "Lorain
Common Stock"), held by each Lorain shareholder on the Record Date. Lorain
will distribute 85,348 Common Shares and 597,436 A Warrants of the Company
owned by Lorain, which represents 2.39% of the Company's outstanding common
shares on the Record Date. The Distribution will be made by Lorain without
the payment of any consideration by its shareholders. See "The
Distribution." The expenses of the Distribution (along with the
distribution below) are estimated to be $9,573 and are to be paid by the
Company.
As more fully set forth herein, American Prepaid Legal Services, a Colorado
corporation ("Prepaid") proposes to distribute (the "Distribution") as soon
as practicable after the effective date of this registration statement
as a dividend to its shareholders of record at the close of business on
June 30, 1998 (the "Record Date"), one Common share and seven A Warrants for
each 19.6 shares of Prepaid common stock, par value $.001 per share (the
"Prepaid Common Stock"), held by each Prepaid shareholder on the Record
Date. Prepaid will distribute 50,856 Common Shares and 355,992 A Warrants
of the Company owned by Lorain, which represents 1.42% of the Company's
outstanding common shares on the Record Date. The Distribution will be made
by Prepaid without the payment of any consideration by its shareholders.
See "The Distribution." The expenses of the Distribution (along with the
distribution to Lorain) are estimated to be $9,573 and are to be paid by the
Company.
On behalf of Selling Security holders, the Company is also registering
110,000 Common Shares and 75,000 Common Shares underlying A Warrants.
Prior to the date hereof, there has been no trading market for the Common
Stock of the company. There can be no assurance, however, that the Common
Stock will be quoted, that an active trading and/or a liquid market will
develop or, if developed, that it will be maintained.
THERE ARE MATERIAL RISKS IN CONNECTION WITH THE PURCHASE OF THE SECURITIES.
SEE RISK FACTORS, PAGE 9. THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sales of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any state.
<PAGE>4
The Company is engaged in the generation of prime and sub-prime home
improvement contract mortgages, construction of home improvement contracts
and the generation of commercial contracts for which the Company derives
consulting fees from material suppliers and contractors as well as profits
from the construction and sale of the property.
<TABLE>
<CAPTION>
Price to Proceeds to
Public Commissions Company
<S> <C> <C> <C>
Per B Unit $5.00 $ .50 $ 4.50
Maximum Offering(1)(2) $2,500,000 $250,000 $2,250,000
</TABLE>
(Footnotes on following page)
The date of the Prospectus is September 10, 1998
<PAGE>5
1The Common Shares are being offered on a "best efforts" basis by the Company
(employees, officers and directors) and possibly selected broker-dealers. No
sales commission will be paid for Common Shares sold by the Company. Selected
broker- dealers shall receive a sales commission of up to 10% for any Common
Shares sold by them. The Company reserves the right to withdraw, cancel or
reject an offer in whole or in part. See "TERMS OF THE OFFERING - Plan of
Distribution and Offering Period."
This Offering will terminate on or before June 30, 1999. In the Company's
sole discretion, the offering of Common Shares may be extended for up to
three Thirty day periods, but in no event later than September 30, 1999.
There is no minimum offering amount and no escrow account. Proceeds of this
Offering are to be deposited directly into the operating account of the
Company. See "TERMS OF THE OFFERING - Plan of Distribution."
2The amount as shown in the preceding table does not reflect the deductions
of (1) general expenses payable by the Company; and (2) fees payable in
connection with legal and accounting expenses incurred in this Offering.
These expenses are estimated to be $43,701.45 if the total offering amount is
obtained.
REPORTS TO SECURITY HOLDERS
The Company shall become subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith will
file reports and other information with the Securities and Exchange
Commission. The Company has not yet filed any reports with the Securities
and Exchange Commission. The reports and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission in Washington, D.C. and at the Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and the New York Regional Office, 7 World Trade Center,
New York, New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission, Washington, D.C. 20549 at
prescribed rates.
The Company will furnish to shareholders: (i) an annual report containing
financial information examined and reported upon by its certified public
accountants; (ii) unaudited financial statements for each of the first three
quarters of the fiscal year; and (iii) additional information concerning the
business and operations of the Company deemed appropriate by the Board of
Directors.
DOCUMENTS INCORPORATED BY REFERENCE
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (together with all amendments and
exhibits thereto, the "Registration Statement") under the Act with respect to
the securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the Rules and Regulations of the Commission.
For further information with respect to the Company and the securities
offered hereby, reference is made to the Registration Statement. Copies of
such materials may be examined without charge at, or obtained upon payment
of prescribed fees from, the Public Reference Section of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, at
the Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and the New York Regional Office, 7 World
Trade Center, New York, New York 10048.
The Company will voluntarily file periodic reports in the event its
obligation to file such reports is suspended under Section 15(d) of the
Exchange Act.
The Company will provide without charge to each person who receives a
prospectus, upon written or oral request of such person, a copy of any of the
information that was incorporated by reference in the prospectus (not
including exhibits to the information that is incorporated by reference
unless the exhibits are themselves specifically incorporated by reference).
Requests for copies of said documents should be directed to W. Ross C.
Corace, 1660 South Albion Street, #723 Denver, Colorado 80222.
The Commission maintains a Web site -- //www.sec.gov -- that contains
reports, proxy and information statements and other information regarding
issuers that file electronically with the Commission.
UNTIL _____ , 1999 (90 DAYS AFTER THE DATE OF THE PROSPECTUS), ALL
PERSONS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THE OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS
IS IN ADDITION TO THE OBLIGATION OF SUCH PERSONS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
NO DEALER, SALESMAN, AGENT OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, OR THE
UNDERWRITER, IF AN UNDERWRITER ASSISTS IN THE SALE OF THE SECURITIES.
<PAGE>6
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE TO
ANY PERSON IN ANY STATE, TERRITORY OR POSSESSION OF THE UNITED STATES IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED BY THE LAWS THEREOF, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY
CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
<PAGE>7
<TABLE>
TABLE OF CONTENTS
<S> <C>
PROSPECTUS SUMMARY 8
RISK FACTORS 9
SELLING SECURITY HOLDERS 12
THE DISTRIBUTIONS 12
SOURCE AND USE OF PROCEEDS 14
DILUTION 14
THE COMPANY 14
BUSINESS ACTIVITIES 15
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION 16
Trends and Uncertainties
Capital and Source of Liquidity
Results of Operations
MANAGEMENT 18
Officers and Directors
Remuneration
Indemnification
CERTAIN TRANSACTIONS 18
PRINCIPAL SHAREHOLDERS 19
SHARES ELIGIBLE FOR FUTURE SALE 21
MARKET FOR REGISTRANT'S COMMON EQUITY 22
TERMS OF THE OFFERING 22
DESCRIPTION OF SECURITIES 23
LEGAL MATTERS 24
LEGAL PROCEEDINGS 24
EXPERTS 24
INTERESTS OF NAMED EXPERTS AND COUNSEL 24
</TABLE>
<PAGE>8
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information, financial statements and notes to the financial statements
including the notes thereto appearing elsewhere in this Prospectus.
The Company. The Company was incorporated in the state of Texas on March
18, 1994 under the name of American/National Trucking, Inc. On August 28,
1998, RC Capital, Inc., a Colorado corporation was merged into the Company.
Pursuant to the Articles of Merger, the name of the Company was changed to
Makepeace Capital Corp. (the "Company"). Prior to this acquisition, the
Company had no significant business activity. The Company is currently
engaged in the generation of prime and sub-prime home improvement contract
mortgages, construction of home improvement contracts and the generation of
commercial contracts for which the Company derives consulting fees from
material suppliers and contractors as well as profits from the construction
and sale of the property.
The Company is authorized to issue a total of 100,000,000 shares of its
capital stock (Common Shares), par value per share of $.001, 10,000,000
Series A Preferred Shares, 9,990,000 Series B Preferred Shares and 10,000
Series C Preferred Shares.
The Company's principal offices are located at 1660 South Albion Street,
#723, Denver, Colorado 80222. Its telephone number at such address is (303)
753-6512.
<TABLE>
<S> <C>
The Offering. The Company hereby offers
up to 500,000 B Units
at $5.00 per B Unit.
Common Shares outstanding
prior to Public Offering 3,575,000
Common Shares to be outstanding
after Offering<F1> 4,075,000
Percent of Common Shares owned by
current shareholders after Maximum
Offering 87.73%
Gross Proceeds After Maximum Offering $2,500,000
Securities Being Distributed 136,204 of the Company's
Common Shares and 953,428 A
Warrants.
Purpose of Distribution To enhance the Company's
ability to raise additional
capital, if necessary,
in the future.
Distributing Corporations Lorain Capital Corp., a
Nevada corporation.
American Prepaid Legal Services,
Inc., a Colorado corporation
Distribution Ratio One Common Share and seven A
Warrants for approximately
every one share of Lorain
Common Stock owned of record on
June 30, 1998, (the "Record
Date").
One Common Share and seven A
Warrants for approximately
every 19.6 shares of Prepaid
Common Stock owned of
record on June 30, 1998,
(the "Record Date").
Use of Proceeds. The Company intends to utilize
the sale of its B Units for
working capital. See Source and
Use of Proceeds."
The securities to which this
Prospectus relates are being
distributed to holders of Lorain
Common Stock as a dividend
and neither the Company nor
Lorain will receive any cash or
other proceeds in connection
with the Distribution.
<PAGE>9
The securities to which this
Prospectus relates are being
distributed to holders of
Prepaid Common Stock as a
dividend and neither the
Company nor Prepaid will
receive any cash or other
proceeds in connection with the
Distribution.
MARKET FOR COMMON STOCK
AND WARRANTS. Prior to the date hereof, there
has been no trading market for
the Common Stock or Warrants of
the Company. The Company has
agreed to use its best efforts
to apply for the quotation of
its Common Stock on the NASD
Electronic Bulletin Board.
There can be no assurance that
the Common Stock will be quoted,
that an active trading and/or a
liquid market will develop or,
if developed, that it will be
maintained. See "Risk Factors"
and "Market Listing."
RISK FACTORS There are material risks, such as
uncertainty of future financial
results, liquidity dependent on
additional capital and debt
financing and risks related to
the Company's operations, in
connection with the purchase of
the securities. See "Risk
Factors."
Absence of Dividends; Dividend Policy The Company does not currently
intend to pay regular cash
dividends on its Common Stock;
such policy will be reviewed by
the Company's Board of Directors
from time to time in light of,
among other things, the Company's
earnings and financial position.
The Company does not anticipate
paying dividends on its Common
Stock in the foreseeable future.
See "Risk Factors."
Transfer Agent Signature Stock Transfer, Inc. is
the Transfer Agent for the
Company's securities.
</TABLE>
- ----------------------------------------------------------
RISK FACTORS
- ----------------------------------------------------------
In analyzing this offering, prospective investors should read this entire
Prospectus and carefully consider, among other things, the following Risk
Factors:
No Established Business/No Independent Market Research of Potential Demand
for Current Operations. The Company is in the development stage. No
independent organization has conducted market research providing management
with independent assurance from which to estimate potential demand for the
Company's business operations. Even in the event a market demand is
independently identified, there is no assurance the Company will be
successful. See "BUSINESS ACTIVITIES."
Lack of Operating Results. The Company was formed on March 18, 1994, and
until the recent acquisition of RC Capital, Inc., its activities have been
limited. The Company is still in the development stage. Higher than normal
operating expenses will in all likelihood be incurred during initial
operations.
Additional Financing May be Required. Even if all of the 500,000 B Units
offered hereby are sold, the funds available to the Company may not be
adequate for its business activities. Accordingly, the ultimate success of
the Company may depend upon its ability to raise additional capital or to
have other parties bear a portion of the required costs to further develop or
exploit its business activities. There can be no assurance that any
additional financing can be obtained (See "USE OF PROCEEDS" AND "BUSINESS
ACTIVITIES.").
<PAGE>10
Future Sales of and Market for the Common Shares. Upon completion of the
offering there shall be 4,075,000 Common Shares outstanding. This does not
include any Common Shares which shall be issued upon conversion of the A
Warrants being registered in this offering. If the maximum number of B
Units are sold, 3,163,796 of the Common Shares to be outstanding will be
considered "restricted securities" as that term is defined in Rule 144
adopted under the United States Securities Act of 1933, as amended and in the
future may be sold only in compliance with the resale provisions set forth
therein. Rule 144 provides, in essence, that persons holding restricted
securities for a period of two years may sell in brokerage transactions an
amount equal to one percent of the Company's securities or outstanding Common
Shares every three months. Hence, the possibility of sale under Rule 144 may
in the future have a depressive effect on the price of the Company's Common
Shares in any market which may develop.
Conflicts of Interest. Some of the directors of the Company are currently
principals of other businesses. As a result, conflicts of interest may
arise. The directors shall immediately notify the other directors of any
possible conflict which may arise due to their involvement with other
businesses. The interested directors in any conflict shall refrain from
voting on any matter in which a conflict of interest has arisen. The
Company has adopted a policy that any transactions with directors, officers
or entities of which they are also officers or directors or in which they
have a financial interest, will only be on terms which are fair and
reasonable to the Company and approved by a majority of the disinterested
directors of the Company's Board of Directors. For further discussion see
"Management - Conflicts of Interest Policy." There can be no assurance that
such other activities will not interfere with the officers' and directors'
ability to discharge their obligation herein.
Benefit to Management. The Company may, in the future, compensate the
Company's management with substantial salaries and other benefits. The
payment of future larger salaries, commissions and the costs of these
benefits may be a burden on the Company and may be a factor in limiting or
preventing the Company from achieving profitable operations in the future.
However, the Company would not continue to compensate management with such
substantial salaries and other benefits under circumstances where to do so
would have a material negative effect on the Company's financial condition.
See "MANAGEMENT - Remuneration."
No Diversification. The Company is engaged in the generation of prime and
sub-prime home improvement contract mortgages, construction of home
improvement contracts and the generation of commercial contracts for which
the Company derives consulting fees from material suppliers and contractors
as well as profits from the construction and sale of the property.
Therefore, the Company's financial viability will depend almost exclusively
on its ability to generate revenues from its operations and the Company will
not have the benefit of reducing its financial risks by relying on revenues
derived from other operations.
Dilution. Common Shares comprised in the B Units offered hereby will incur
immediate dilution of $4.45 (89.5%)in the net tangible book value of their
investment. This does not include any of the Common Shares to be issued
upon exercise of the A Warrants. The Company may issue additional shares in
private business transactions and may pursue a public offering in the future
to complete its business plan. As a result, the investors in this Offering
may experience substantial dilution. See "DILUTION" and
"CAPITALIZATION."
Investors May Bear Risk of Loss. The capital required by the Company to
acquire assets needed for its proposed operations is being sought from the
proceeds of this Offering. Therefore, investors of this Offering may bear
most of the risk of the Company's expansion of operations. Conversely,
management stands to realize benefits from the payment of salaries, expenses
and receipt of stock options regardless of the profitability of the Company.
Financial Condition. Although the officers of the Company anticipate that
the Company will have adequate funds to pay all of its operating expenses
assuming the expansion and promotion of the Company's operations, there can
be no assurance that this will in fact occur or that the Company can be
operated in a profitable manner. Profitability depends upon many factors,
including the success of this Offering and the success of the Company's
operations.
Competition. There is significant competition in the mortgages industry.
The Company competes with established companies and other entities (many of
which possess substantially greater resources than the Company). Almost all
of the companies with which the Company competes are substantially larger,
have more substantial histories, backgrounds, experience and records of
successful operations, greater financial, technical, marketing and other
resources, more employees and more extensive facilities than the Company now
has, or will have in the foreseeable future. It is also likely that other
competitors will emerge in the near future. There is no assurance that the
Company will continue to compete successfully with other established mortgage
companies. The Company shall compete on the basis of price. Inability to
compete successfully might result in increased costs, reduced yields and
additional risks to the investors herein. See "The Company - Competition."
<PAGE>11
Arbitrary Offering Price. The initial offering price of $5.00 per B Unit has
been arbitrarily determined by the Company based upon such factors
as the objectives of the Company, the proceeds to be raised by the Offering
and the percentage of ownership to be held by the purchasers thereof. Having
established that the total gross proceeds of the maximum offering would be
$2,500,000, the actual price of $5.00 per Unit was thereupon determined
by the Company and accordingly bears no relationship whatsoever to assets,
earnings, book value or any other objective standard of worth. See
"DILUTION."
Arbitrarily Determined Warrant Exercise Price. The exercise price of the A
Warrants being registered was established arbitrarily by the Company with no
direct relationship to the original offering price or the Company's assets,
book value, shareholder's equity or any other recognized criterion of value.
Accordingly, the A Warrants can be considered to have little or no value at
the present time.
Lack of Dividends. There can be no assurance that the operations of the
Company will become profitable. At the present time, the Company intends to
use any earnings which may be generated to finance the growth of the
Company's business. See "DESCRIPTION OF SECURITIES".
Dependence on Key Individuals. The future success of the Company is highly
dependent upon the management skills of its key employees and the Company's
ability to attract and retain qualified key employees. The inability to
obtain and employ these individuals would have a serious effect upon the
business of the Company. The Company has not yet entered into definitive
employment agreements with such individuals. There can be no assurance that
the Company will be successful in retaining its key employees or that it can
attract or retain additional skill personnel required. See "COMPANY -
Employees" and "MANAGEMENT."
Vulnerability to Fluctuations in the Economy. Demand for the Company's
products is dependent on, among other things, general economic conditions
which are cyclical in nature. Prolonged recessionary periods may be damaging
to the Company.
"Penny" Stock Regulation of Broker-Dealer Sales of Company Securities. The
Company intends to list its Common Shares on the NASD Electronic Bulletin
Board and then NASDAQ upon meeting the requirements for a NASDAQ listing, if
ever. Upon completion of this offering, the Company will not meet the
requirements for a NASDAQ listing. Until the Company obtains a listing on
NASDAQ, if ever, the Company's securities may be covered by a Rule 15g-9
under the Securities Exchange Act of 1934 that imposes additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and institutional accredited investors
(generally institutions with assets in excess of $5,000,000 or individuals
with net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse). For transactions covered by the rule,
the broker-dealer must furnish to all investors in penny stocks, a risk
disclosure document required by Rule 15g-9 of the Securities Exchange Act of
1934, make a special suitability determination of the purchaser and have
received the purchaser's written agreement to the transaction prior to the
sale. In order to approve a person's account for transactions in penny
stock, the broker or dealer must (i) obtain information concerning the
person's financial situation, investment experience and investment
objectives; (ii) reasonably determine, based on the information required by
paragraph (i) that transactions in penny stock are suitable for the person
and that the person has sufficient knowledge and experience in financial
matters that the person reasonably may be expected to be capable of
evaluating the rights of transactions in penny stock; and (iii) deliver to
the person a written statement setting forth the basis on which the broker or
dealer made the determination required by paragraph (ii) in this section,
stating in a highlighted format that it is unlawful for the broker or dealer
to effect a transaction in a designated security subject to the provisions of
paragraph (ii) of this section unless the broker or dealer has received,
prior to the transaction, a written agreement to the transaction from the
person; and stating in a highlighted format immediately preceding the
customer signature line that the broker or dealer is required to provide the
person with the written statement and the person should not sign and return
the written statement to the broker or dealer if it does not accurately
reflect the person's financial situation, investment experience and
investment objectives and obtain from the person a manually signed and dated
copy of the written statement. A penny stock means any equity security
other than a security (i) registered, or approved for registration upon
notice of issuance on a national securities exchange that makes transaction
reports available pursuant to 17 CFR 11Aa3-1 (ii) authorized or approved for
authorization upon notice of issuance, for quotation in the NASDAQ system;
(iii) that has a price of five dollars or more or . . . . (iv) whose issuer
has net tangible assets in excess of $2,000,000 demonstrated by financial
statements dated less than fifteen months previously that the broker or
dealer has reviewed and has a reasonable basis to believe are true and
complete in relation to the date of the transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell the
Company's securities and also may affect the ability of purchasers in this
Offering to sell their shares in the secondary market. See "Market for
Registrant's Common Equity and Related Stockholder Matters - Broker-Dealer
Sales of Company's Securities."
<PAGE>12
- -------------------------------
SELLING SECURITY HOLDERS
- --------------------------------------
The Company shall register pursuant to this prospectus 110,000 Common
Shares currently outstanding and 75,000 Common Shares underlying A Warrants
for the account of the following individuals or entities. The percentage
owned prior to and after the offering reflects all of the then outstanding
common shares. The amount and percentage owned after the offering assumes
the sale of all of the Common Shares being registered on behalf of the
selling shareholders.
<TABLE>
<CAPTION>
Name and Amount Total Number % Owned Number of % Owned
Being Registered Owned Prior to Shares Owned After
Currently Offering After Offering Offering
<S> <C> <C> <C> <C>
Gencorp Enterprises, Inc.
100,000 3,228,796 90.32% 3,118,796 87.52%
Geneva A. Corace,
10,000 3,228,796 90.32% 3,118,796 87.52%
10,000 456,572 30.86% 446,572 30.23%
Meadow Run Farm, Inc.,
50,000 50,000(1) 3.39%(2) 0 0%
Arthur H. Bosworth,
5,000 5,000(1) .34%(2) 0 0%
David A. Ledden
2,500 2,500(1) .17%(2) 0 0%
Richard S. Klingenstein
2,500 2,500(1) .17%(2) 0 0%
Phillip B. Foster
2,500 2,500(1) .17%(2) 0 0%
Craddock-Columbine Realty
2,500 2,500(1) .17%(2) 0 0%
(1)Represents Common Shares underlying the A Warrants.
(2)Represents percent of A Warrants currently owned. There were 1,475,000 A
Warrants issued and outstanding prior to this offering
- -----------------------------------------------------------------------------
THE DISTRIBUTIONS
- -----------------------------------------------------------------------------
Lorain Capital Corp. On January 1, 1996, the Company entered into a one
year verbal consulting agreement with Lorain Telecom Corporation to assist
the Company in its acquisition of an operating business. During the life of
the agreement, Lorain Telecom Corporation provided consulting services
regarding locating an acquisition candidate and capital structuring.
Pursuant to the consulting agreement, Lorain Telecom Corporation received
85,328 A Units. Each A Unit consisted of One Common Share of the Company,
seven A Warrants, seven B Warrants and seven C Warrants. See "The Company"
and "Certain Transactions." These A Units were subsequently transferred to a
wholly owned subsidiary of Lorain Telecom Corporation, Lorain Capital Corp.,
a Nevada corporation ("Lorain").
After careful study and review, the Board of Directors of Lorain determined
that it would be in the best interests of Lorain and its shareholders to
distribute all of the Company's Common Shares and A Warrants held by Lorain
to its shareholders. In addition, the Company and Lorain determined that
such a distribution would be in the best interests of the Company. Lorain
shareholder's may realize economic benefits from the sale of any Common Share
or A Warrant distribution if a market for the Company's Common Stock
develops, although there can be no assurances that any such market will
result. Lorain and the Company believe that the distribution to Lorain's
shareholders, which will result in an increased shareholder base of the
Company, will be an advantage to the Company at such time as the Company may
require additional capital and/or make application to NASDAQ. The increased
shareholder base of approximately 1,435 shareholders represents an increase
in potential future purchasers of additional stock in any subsequent offering
or in the stock market if these individuals are satisfied with the
performance of the Company's operations. The estimated cost of the
distribution (along with the distribution to Prepaid shareholders) is $9,573
which will be paid by the Company
Accordingly, after obtaining the approval of the independent directors on
Lorain's Board of Directors, the Board of Directors of Lorain declared a
dividend pursuant to which, as soon as practicable after the effective date
of this registration statement 85,348 Common Shares and 597,436 A Warrants
of the Company, constituting all of the Common Shares and A Warrants owned by
Lorain, will be distributed to the shareholders of record of Lorain as of
June 30, 1998 on the basis of one Common Shares and seven A Warrants for each
<PAGE>13
common share of Lorain Common Stock held. The Common Shares and A Warrants
are being distributed by Lorain as a dividend to holders of Lorain Common
Stock and neither the Company nor Lorain will receive any cash or other
proceeds in connection with the Distribution. No fractional Common Shares
or A Warrants will be issued. Lorain had approximately 1,435 shareholders of
record on the Record Date.
In order to comply with certain provisions of Delaware corporate law, on
August 31, 1998 (the "Payment Date') Lorain deposited the Common Shares and A
Warrants to be distributed with Signature Stock Transfer, Inc. (the
"Depositary"). The Depositary will hold such Common Shares and A Warrants
for the benefit of Lorain shareholders on the Record Date. The terms of the
agreement with the Depositary provides that the Common Shares and A Warrants
will be released promptly after the Registration Statement to which this
Prospectus relates is declared effective by the Commission. However, if the
Registration Statement is not declared effective prior to July 31, 1999,
then, unless such date is changed by notice to the Depositary from the
Company, the Depositary shall return all such Common Shares and A Warrants to
Lorain without effecting the distribution.
American Prepaid Legal Services, Inc. On January 2, 1995, the Company
entered into a one year verbal consulting agreement with American Prepaid
Legal Services, Inc. ("Prepaid") to assist the Company in its acquisition of
an operating business. During the life of the agreement, Prepaid provided
consulting services regarding locating an acquisition candidate and capital
structuring. Pursuant to the consulting agreement, Prepaid received 50,856
A Units. Each A Unit consisted of One Common Share of the Company, seven A
Warrants, seven B Warrants and seven C Warrants. See "The Company" and
"Certain Transactions."
After careful study and review, the Board of Directors of Prepaid determined
that it would be in the best interests of Prepaid and its shareholders to
distribute all of the Company's Common Shares and A Warrants held by Prepaid
to its shareholders. In addition, the Company and Prepaid determined that
such a distribution would be in the best interests of the Company. Prepaid
shareholder's may realize economic benefits from the sale of any Common Share
and A Warrant distribution if a market for the Company's Common Stock
develops, although there can be no assurances that any such market will
result. Prepaid and the Company believe that the distribution to Prepaid's
shareholders, which will result in an increased shareholder base of the
Company, will be an advantage to the Company at such time as the Company may
require additional capital and/or make application to NASDAQ. The increased
shareholder base of approximately 572 shareholders represents an increase in
potential future purchasers of additional stock in any subsequent offering or
in the stock market if these individuals are satisfied with the performance
of the Company's operations. The estimated cost of the distribution (along
with the distribution to Lorain shareholders) is $9,573 which will be paid by
the Company.
Accordingly, after obtaining the approval of the independent directors on
Prepaid's Board of Directors, the Board of Directors of Prepaid declared a
dividend pursuant to which, as soon as practicable after the effective date
of this registration statement 50,856 Common Shares and 355,992 A Warrants of
the Company, constituting all of the Common Shares and A Warrants owned by
Prepaid, will be distributed to the shareholders of record of Prepaid as of
June 30, 1998 on the basis of one share of Common Stock for each 19.6 shares
of Prepaid Common Stock held. The Common Shares and A Warrants are being
distributed by Prepaid as a dividend to holders of Prepaid Common Stock and
neither the Company nor Prepaid will receive any cash or other proceeds in
connection with the Distribution. No fractional Common Shares or A Warrants
will be issued. Prepaid had approximately 572 shareholders of record on the
Record Date.
In order to comply with certain provisions of Colorado corporate law, on
August 31, 1998 (the "Payment Date') Prepaid deposited the Common Shares and
A Warrants to be distributed with Signature Stock Transfer, Inc. (the
"Depositary"). The Depositary will hold such Common Shares and A Warrants
for the benefit of Prepaid shareholders on the Record Date. The terms of
the agreement with the Depositary provides that the Common Shares and A
Warrants will be released promptly after the Registration Statement to which
this Prospectus relates is declared effective by the Commission. However,
if the Registration Statement is not declared effective prior to July 31,
1999, then, unless such date is changed by notice to the Depositary from the
Company, the Depositary shall return all such Common Shares and A Warrants to
Prepaid without effecting the distribution.
<PAGE>14
- --------------------------------------------------------------
SOURCE AND USE OF PROCEEDS
- --------------------------------------------------------------
Assuming successful completion of the Offering, the Company shall receive net
proceeds of $2,206,299 after payment of commissions ($250,000) and offering
expenses of approximately $43,701. The Company shall utilize the net
proceeds from the sale of its B Units for working capital. The proceeds are
to be utilized over a six month period.
Any proceeds received from the subsequent exercise of the A Warrants shall
be used as working capital and to expand operations. Due to the uncertainty
of the timing and amount of actual funds which may be received upon exercise
of the Warrants, no specific breakdown of uses have been established by the
Company. The aggregate amount of proceeds if all of the A Warrants are
exercised is $7,267,140. If all of the A Warrants are exercised, the proceeds
shall be utilized over a four year period.
- -------------------------------------------------------
DILUTION
- -------------------------------------------------------
Dilution. Assuming completion of the total offering amount, there will
be a total of 4,075,000 Common Shares outstanding. This does not include any
of the Common Shares which will be issued upon the subsequent exercise of the
A Warrants being registered in this offering. The following table
illustrates the per Share dilution as of the date of this Prospectus, which
may be experienced by investors upon reaching the maximum offering.
Offering price $5.00
Net tangible book value per
Share before offering $.0052
Increase per Share
attributable to investors .5448
------
Pro forma net tangible
book value per Common
Share after offering .55
-----
Dilution to investors $4.45
Dilution as a percent of
offering price 89%
Comparative Per Common Share Data.
</TABLE>
<TABLE>
Maximum Offering Amount
Total Price
Number of Paid Per Consider-
Shares % Share ation Paid %
<C> <S> <S> <S> <S> <S>
Existing Shareholders 3,575,000 87.53% $.038 $133,510 5.07%
New Investors
of Common Shares 500,000 12.47% $5.00 $2,500,000 94.93%
</TABLE>
Includes the 500,000 Common Shares comprised in the B Units but does not
include any Common Shares to be issued upon the exercise of the A Warrants.
Further Dilution. The Company may issue additional restricted
Common Shares pursuant to private business transactions. Any sales under
Rule 144 after the applicable holding period may have a depressive effect
upon the market price of the Company's Common Shares and investors in
this offering upon conversion. See "SALES OF STOCK PURSUANT TO RULE 144."
- -------------------------------------------------------
THE COMPANY
- -------------------------------------------------------
The Company. The Company was incorporated in the state of Texas on March 18,
1994 under the name of American/National Trucking, Inc. On August 28, 1998,
RC Capital, Inc., a Colorado corporation was merged into the Company.
Pursuant to the Articles of Merger, the name of the Company was changed to
Makepeace Capital Corp. (the "Company"). Prior to this acquisition, the
Company had no significant business activity. The Company is currently
engaged in the generation of prime and sub-prime home improvement contract
mortgages, construction of home improvement contracts and the generation of
commercial contracts for which the Company derives consulting fees from
material suppliers and contractors as well as profits from the construction
and sale of the property.
The Company is authorized to issue a total of 100,000,000 shares of its
capital stock (Common Shares), par value per share of $.001, 10,000,000
Series A Preferred Shares, 9,990,000 Series B Preferred Shares and 10,000
Series C Preferred Shares.
<PAGE>15
The Company's principal offices are located at 1660 South Albion Street,
#723, Denver, Colorado 80222. Its telephone number at such address is (303)
753-6512. These offices consist of 404 square feet on a month to month
lease with a lease payment of $491.08 per month.
There are presently outstanding 3,575,000 Common Shares, 1,475,000 A
Warrants, 1,400,000 B Warrants and 1,400,000 C Warrants. As a result, up to
4,075,000 Common Shares will be outstanding upon completion of this Offering.
This does not include any Common Shares which may be issued upon subsequent
exercise of the Class A, B or C Warrants. See "DILUTION", "DESCRIPTION OF
SECURITIES" and "CERTAIN TRANSACTIONS."
Employees. As of the date of this Prospectus, the Company has one full time
and no part time employees. See "RISK FACTORS."
The Company will, as operations demand, sub-contract the balance of its
personnel through independent contractors or hire additional employees.
Competition. There is significant competition in the mortgage industry.
The Company competes with established companies and other entities (many of
which possess substantially greater resources than the Company). Almost all
of the companies with which the Company competes are substantially larger,
have more substantial histories, backgrounds, experience and records of
successful operations, greater financial, technical, marketing and other
resources, more employees and more extensive facilities than the Company now
has, or will have in the foreseeable future. It is also likely that other
competitors will emerge in the near future. There is no assurance that the
Company will continue to compete successfully with other established mortgage
companies. The Company shall compete on the basis of price. Inability to
compete successfully might result in increased costs, reduced yields and
additional risks to the investors herein. See "The Company - Competition."
Merger with RC Capital, Inc.. On August 28, 1998, RC Capital, Inc., a
Colorado corporation was merged into the Company. In exchange for all of the
outstanding Common Shares of RC Capital, Inc., the shareholders of RC
Capital, Inc. were issued 10,000 B Units of the Company. RC Capital
commenced operations in August, 1997 and with its retail home improvement
business beginning in January 2, 1998.
- -------------------------------------------------
BUSINESS ACTIVITIES
- -------------------------------------------------
General. The net proceeds of this Offering will be used for working capital
purposes, including payment of employee compensation and other general and
administrative expenses. The net proceeds of the offering are intended to
be applied over the next six months.
The Company is engaged in the generation of prime and sub-prime home
improvement contract mortgages, construction of home improvement contracts
and the generation of commercial contracts for which the Company derives
consulting fees from material suppliers and contractors as well as profits
from the construction and sale of the property. The Company conducts the
above business through two segments, American Better Homes and Commercial
Exterior Consultants. Providing the successful conclusion of this offering,
the Company intends to pool mortgages for sale to third party financial
institutions utilizing the Company's capital and existing warehouse lines of
credit. The business of each of the segments are not seasonal to any
significant extent.
Through its division, American Better Homes, the Company generates prime and
sub-prime home improvement mortgages which it sells to third party financial
institutions such as Empire Financial Corp., First Plus Mortgage, Greentree
Financial, Money Store and Beneficial Finance upon completion of the contract
for home improvement. The Company is engaged, through direct consumer
marketing, in the sale and installation of siding and related exterior home
improvement products. The Company's customers pay for installation of siding
and related products in cash upon completion of the work, or by third party
installment or revolving financing arranged by the Company. In credit
arrangements by third parties, the Company does not assume any credit risk
and receives the full amount of contract price. Each customer who enters
into a credit arrangement with a third party installment lending institution
is required to deliver to the Company a financing statement and a mortgage on
the customer's home to secure the contract price. All such financing
statements and mortgages are assigned by the Company to the lending
institution with recourse to the Company. The lending institution
furnishing such financing approves the customer's credit in advance and
remits the full amount of the contract price to the Company upon completion
of installation. Most of the mortgages are seconds financed under the FHA
Title One program. The full amount of the job is paid to the Company from
which all costs are deducted with the remainder as profit to the Company.
Through its division, Commercial Exterior Consultants, the Company generates
commercial application of siding and related projects and earns revenue and
fees through the introduction of the contractor to the supplier of material
and for the introduction of the job to the contractor. To date, from August
1997, this division has delivered orders for approximately $235,000 in
material and $940,000 in aggregate amount of jobs. The Company earns a fee
of 5% on material shipments as well as the entire job. In many instances,
<PAGE>16
the Company will arrange for the construction of the job and will generally
derive a profit of 15% to 20% after sale of the property to previously
obtained permanent financing. Commercial jobs mostly fall in a range of
$200,000 to $1,500,000.
The Company, at the successful completion of this offering, intends to enter
the business of lending on mortgages, pooling the mortgages and selling the
mortgages to financial institutions or packaging them for sale on the open
market. In addition to the mortgages generated internally by the activities
described above, the Company will actively solicit mortgages from other
sources.
- ----------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- ----------------------------------------------------------------
Trends and Uncertainties. Demand for the Company's services will be
dependent on, among other things, general economic conditions which are
cyclical in nature. Inasmuch as a major portion of the Company's activities
is the generation of prime and sub-prime home improvement contract mortgages,
construction of home improvement contracts and the generation of commercial
contracts for which the Company derives consulting fees from material
suppliers and contractors as well as profits from the construction and sale
of the property.
In addition, the outcome of this offering is uncertain. The lack of sales of
this offering would negatively impact the Company's ability to successfully
continue operations.
Capital and Source of Liquidity. The Company currently has no material
commitments for capital expenditures. The Company intends to use a majority
of the proceeds of this offering for working capital and to expand
operations. If this offering is not successful, the Company's cash flow will
be negatively affected if the expenditures are attempted.
The Company recently completed an offering of its B units pursuant to Rule
504 of the Securities Act of 1933. Pursuant to the offering, the Company
sold 65,000 B Units for the aggregate purchase price of $2.00 per B Unit or
$130,000.
The Company expects that the net proceeds from its recent offering, this
Offering and the cash flow from operations will be sufficient to allow the
Company to meet the expected growth in demand for its products and services.
However, there can be no assurance that sufficient capital will be raised or
that future product sales will meet the Company's growth expectations.
Should either of these fail to occur, the Company may elect to (i) reduce the
planned expansion of operations or (ii) pursue other financing alternatives.
Implementation of either of the foregoing options could delay or diminish the
Company's planned growth and adversely affect its profitability.
Management is of the opinion that its current working capital and anticipated
funds from operations are sufficient to meet its cash requirements for
moderate growth in the year ahead. However, in order to achieve the
Company's plans for growth, additional capital is required.
On a long term basis, liquidity is dependent on increased revenues from
operations, additional infusions of capital and debt financing. The Company
believes that additional capital and debt financing in the short term will
allow the Company to commence its marketing and sales efforts and thereafter
result in revenue and greater liquidity in the long term. However, there can
be no assurance that the Company will be able to obtain additional equity or
debt financing in the future, if at all.
Results of Operations. Since inception, the Company has not generated any
revenues. The Company intends to pursue the operations of the company it
recently acquired, RC Capital, Inc. For the year ended June 30, 1998, on a
proforma basis, the Company had a net loss of $77,857. The Company has net
sales of $132,365 and cost of sales of $73,497. General and administrative
expenses were $135,677 for the year ended June 30, 1998 which consisted
primarily of advertising ($10,432), commissions ($41,201), insurance
($2,424), legal ($19,585), office expense ($10,834), rent ($17,004),
telephone ($10,504) Officer draw and expenses ($11,435) and other
miscellaneous expenses ($12,218).
The Company shall seek to maintain low operating expenses while trying to
expand operations and increase operating revenues. The Company is focusing
on maintaining a low cost administrative approach. However, increased
marketing expenses will probably occur in future periods as the Company
attempts to further increase its marketing and sales efforts.
<PAGE>17
- ---------------------------------------------------------
MANAGEMENT
- ---------------------------------------------------------
Officers and Directors. Pursuant to the Articles of Incorporation, each
Director shall serve until the annual meeting of the stockholders, or until
his successor is elected and qualified. The Company's basic philosophy
mandates the inclusion of directors who will be representative of management,
employees and the minority shareholders of the Company. Directors may only
be removed for "cause". The term of office of each officer of the Company is
at the pleasure of the Company's Board.
The principal executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
Name Position Term(s) of Office
<S> <C> <C>
W. Ross C. Corace President, Treasurer July 27, 1998
age 57 Director
Samuel C. Cummings Senior Vice President July 27, 1998
age 46 Secretary, Director
Robert L. Fedelleck Director July 27, 1998
age 54
W. Ross C. Corace has been President, Treasurer and a Director of Makepeace
Capital Corp. since August, 1998. Mr. Corace was President, Treasurer and a
Director of RC Capital, Inc., a mortgage company, from July of 1997 until it
was merged into the Company in July, 1998. Mr. Corace was President of
Foxmorr Industries, Ltd., a publicly held corporation from December 14, 1981
until its purchase by General Pacific Corp. in June, 1997. Mr. Corace was
President of Commodity Resources, Inc., a publicly held corporation from
September 7, 1977 until completion of its merger with Tri-Valley Oil and Gas
Company in July 1981. From 1974 to present, Mr. Corace has served as
President of Medusa Management Corp., a privately held investment company.
Mr. Corace received a BBA degree in Business Administration from Ohio
University in 1963.
Samuel C. Cummings has been Secretary and a Director of Makepeace Capital
Corp. since August, 1998. Mr. Cummings was Secretary and a Director of RC
Capital, Inc., a mortgage company, from July, 1997 until it was merged into
the Company in August, 1998. Since 1972, Mr. Cummings has held various
positions in the building materials and home improvement business. Mr.
Cummings attended San Antonio College with a major in Business
Administration.
Robert L. Fedelleck. Mr. Fedelleck has been a Director of Makepeace Capital
Corp. since August, 1998. Mr. Fedelleck was a Director of RC Capital, Inc., a
mortgage company, from January 2, 1998 until it was merged into the Company
in July, 1998. From May of 1998 to present, Mr. Fedelleck has been vice-
president of Professional Siding, Inc., a Denver based commercial siding and
window company. From 1971 to May, 1998, Mr. Fedelleck was President and
sole owner of Three Crowns Distributing, Inc., a Denver based retail home
improvement siding and window company. Mr. Fedelleck received his high
school diploma from Central High School in Grand Junction, Colorado.
SUMMARY COMPENSATION TABLE
</TABLE>
<TABLE>
<CAPTION> Long Term Compensation
Annual Compensation Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name Annual Restricted LTIP Other
and Compen- Stock Options/ Pay- Compen-
Principal Salary Bonus sation Awards SARs Outs sation
Position(1) Year ($) ($) ($) ($) ($) ($) ($)
W. Ross C. Corace
President/CEO 1998 - - - - - - -
Samuel Cummings
Secretary 1998 $52,000 - - - - - -
</TABLE>
Board of Directors Compensation. Members of the Board of Directors will
receive $500 per meeting if said Directors are not separately compensated by
the Company and will be required to attend a minimum of four meetings per
fiscal year. All expenses for meeting attendance or out of pocket expenses
connected directly with their Board representation will be reimbursed by the
Company. Director liability insurance may be provided to all members of the
Board of Directors. No differentiation is made in the compensation of
"outside directors" and those officers of the Company serving in that
capacity.
Conflicts of Interest Policy. The Company has adopted a policy that any
transactions with directors, officers or entities of which they are also
officers or directors or in which they have a financial interest, will only
be on terms consistent with industry standards and approved by a majority of
<PAGE>18
the disinterested directors of the Company's Board of Directors. The Bylaws
of the Company provide that no such transactions by the Company shall be
either void or voidable solely because of such relationship or interest of
directors or officers or solely because such directors are present at the
meeting of the Board of Directors of the Company or a committee thereof which
approves such transactions, or solely because their votes are counted for
such purpose if: (i) the fact of such common directorship or financial
interest is disclosed or known by the Board of Directors or committee and
noted in the minutes, and the Board or committee authorizes, approves or
ratifies the contract or transaction in good faith by a vote for that purpose
without counting the vote or votes of such interested directors; or (ii) the
fact of such common directorship or financial interest is disclosed to or
known by the shareholders entitled to vote and they approve or ratify the
contract or transaction in good faith by a majority vote or written consent
of shareholders holding a majority of the Common Shares entitled to vote (the
votes of the common or interested directors or officers shall be counted in
any such vote of shareholders), or (iii) the contract or transaction is fair
and reasonable to the Company at the time it is authorized or approved. In
addition, interested directors may be counted in determining the presence of
a quorum at a meeting of the Board of Directors of the Company or a committee
thereof which approves such transactions.
Indemnification. The Company shall indemnify to the fullest extent permitted
by, and in the manner permissible under the laws of the State of Texas,
any person made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that he is or was a director or officer of the Company, or
served any other enterprise as director, officer or employee at the request
of the Company. The Board of Directors, in its discretion, shall have the
power on behalf of the Company to indemnify any person, other than a director
or officer, made a party to any action, suit or proceeding by reason of the
fact that he/she is or was an employee of the Company.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceedings) is asserted by such director, officer, or controlling person in
connection with any securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issues.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE COMPANY FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE AGAINST
PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE
UNENFORCEABLE.
- ------------------------------------------------------
CERTAIN TRANSACTIONS
- ------------------------------------------------------
Preferred Shares retired. In August 1998, Gencorp Enterprises, Inc., a
company controlled by Geneva A. Corace, wife of W. Ross C. Corace, agreed to
return 10,000 Series C Preferred Shares to the treasury of the Company.
These 10,000 Series C Preferred Shares have been canceled on the books and
records of the Company.
During the year ended June 30, 1998, the Company (on a proforma basis)
received gross cash working capital advances from its president amounting to
$41,612 and made cash repayments of the advances aggregating $37,346. The
balance of the advances at June 30, 1998 amounted to $4,266 and is expected
to be repaid currently without interest.
During the year ended June 30, 1998, the Company (on a proforma basis)
received gross cash working capital advances from an entity controlled by the
Company's president amounting to $155,591. The balance of the advances
outstanding at June 30, 1998 is expected to be repaid currently without
interest.
Additionally, during the year ended June 30, 1998, the Company, (on a
proforma basis) made a $9,000 cash advance to an entity controlled by the
Company's president. The balance of the uncollateralized advance is expected
to be repaid by the entity currently without interest.
<PAGE>19
- ----------------------------------------------------------------
PRINCIPAL SHAREHOLDERS
- ----------------------------------------------------------------
There are currently 3,575,000 Common Shares outstanding. The following
tabulates holdings of shares of the Company by each person who, subject to
the above, at the date of this Memorandum, holds of record or is known by
Management to own beneficially more than 5.0% of the Common Shares and, in
addition, by all directors and officers of the Company individually and as a
group.
Shareholdings at Date of
This Memorandum
<TABLE>
<CAPTION>
Percentage of
Outstanding
Shares as
Adjusted
to Reflect
Percentage Conclusion
Number & Class Prior to of the
Name and Address of Shares(1)(4) Offering Offering
<S> <C> <C> <C>
W. Ross C Corace 100,000 2.80% 2.45%
1570 S. York Street 3,118,796(2) 87.24% 76.53%
Denver, Colorado 80210 10,000(3) .28% .25%
Geneva A. Corace(2)(3) 10,000(3) .28% .25%
1570 S. York Street 3,118,796(2) 87.24% 76.53%
Denver, Colorado 80210 100,000(2) 2.80% 2.45%
Samuel C. Cummings 25,000 .70% .61%
2040 S. Oneida Street
Suite 100
Denver, Colorado 80224
Robert L. Fedelleck 20,000 .56% .49%
318 S. 24th Avenue
Brighton, Colorado 80601
Gencorp Enterprises, Inc.(3) 3,118,796(2) 87.24% 76.53%
1660 South Albion Street, #723
Denver, Colorado 80222
.
All Officers and Directors
as a Group (3 persons) 3,273,796 91.57% 80.34%
</TABLE>
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or
shared investment power (including the power to dispose or direct the
disposition) with respect to a security whether through a contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, each person indicated above has sole power to vote, or dispose or
direct the disposition of all shares beneficially owned, subject to
applicable community property laws.
(2) Gencorp Enterprises, Inc. is controlled by Geneva Corace, wife of W. Ross
C. Corace, the Company's President. As a result, Mr. Corace and Geneva A.
Corace would be deemed to be the beneficial owners of these Common Shares.
Assuming all of the 446,572 B Warrants and 446,572 C Warrants owned by
Gencorp Enterprises, Inc. were exercised, Gencorp Enterprises, Inc. would
directly own 4,011,940 Common Shares (45.33%). Geneva A. Corace and W. Ross
C. Corace would indirectly and directly own a total of 4,121,940 Common
Shares or .46.58% of the then outstanding 8,850,000 Common Shares assuming
all A, B and C Warrants were exercised.
(3) Geneva A. Corace is wife of W. Ross C. Corace, the Company's president.
As a result, Mr. Corace would be deemed to be the beneficial owner of these
Common Shares. Assuming all of the 10,000 A Warrants owned by Geneva A.
Corace were exercised, Geneva A. Corace and W. Ross C. Corace would
indirectly and directly own a total of 4,121,940 Common Shares or .46.58% of
the then outstanding 8,850,000 Common Shares assuming all A, B and C Warrants
were exercised.
There are currently 1,475,000 A Warrants outstanding. The following
tabulates holdings of A Warrants of the Company by each person who, subject
to the above, at the date of this Memorandum, holds of record or is known by
Management to own beneficially more than 5.0% of the A Warrants and, in
addition, by all directors and officers of the Company individually and as a
group.
<PAGE>20
<TABLE>
<CAPTION>
Percentage of
Outstanding
Shares as
Adjusted
to Reflect
Percentage Conclusion
Number of prior to of the
Name and Address A Warrants(1)(4) Offering Offering
<S> <C> <C> <C>
W. Ross C Corace
1570 S. York Street 446,572(2) 30.28% 22.61%
Denver, Colorado 80210 10,000(3) .68% .51%
Geneva A. Corace(2)(3) 10,000 .68% .51%
1570 S. York Street 446,572(2) 30.28% 22.61%
Denver, Colorado 80210
Samuel C. Cummings 0 0% 0%
2040 S. Oneida Street, Suite 100
Denver, Colorado 80224
Robert L. Fedelleck
318 S. 24th Avenue 0 0% 0%
Brighton, Colorado 80601
Gencorp Enterprises, Inc.(3) 446,572(2) 30.28% 22.61%
1660 South Albion Street, #723
Denver, Colorado 80222
Lorain Capital Corp. 597,436 40.50% 0%
2618 SW 23rd Terrace, Suite 102
Fort Lauderdale, FL 33312
American Prepaid
Legal Services, Inc. 355,992 24.14% 0%
2618 SW 23rd Terrace, Suite 102
Fort Lauderdale, FL 33312
All Officers and Directors
as a Group (3 persons) 456,572(2) 30.86% 23.12%
</TABLE>
(1) Gencorp Enterprises, Inc. is controlled by Geneva Corace, wife of W. Ross
C. Corace, the Company's President. As a result, Mr. Corace and Geneva A.
Corace would be deemed to be the beneficial owners of these A Warrants.
(2) Geneva A. Corace is wife of W. Ross C. Corace, the Company's president.
As a result, Mr. Corace would be deemed to be the beneficial owner of A
Warrants.
There are currently 1,400,000 B Warrants outstanding. The following
tabulates holdings of shares of the Company by each person who, subject to
the above, at the date of this Memorandum, holds of record or is known by
Management to own beneficially more than 5.0% of the B Warrants and, in
addition, by all directors and officers of the Company individually and as a
group.
<TABLE>
<S> <C> <C> <C>
W. Ross C Corace
1570 S. York Street 446,572(1) 31.90% 31.90%
Denver, Colorado 80210
Geneva A. Corace(2)(3) 446,572(1) 31.90% 31.90%
1570 S. York Street
Denver, Colorado 80210
Samuel C. Cummings 0 0% 0%
2040 S. Oneida Street
Suite 100
Denver, Colorado 80224
Robert L. Fedelleck
318 S. 24th Avenue 0 0% 0%
Brighton, Colorado 80601
Gencorp Enterprises, Inc.(3) 446,572(1) 31.90% 31.90%
1660 South Albion Street, #723
Denver, Colorado 80222
Lorain Capital Corp. 597,436 42.67% 42.67%
2618 SW 23rd Terrace, Suite 102
Fort Lauderdale, FL 33312
<PAGE>21
American Prepaid
Legal Services, Inc. 355,992 25.43% 25.43%
2618 SW 23rd Terrace, Suite 102
Fort Lauderdale, FL 33312
All Officers and Directors
as a Group (3 persons) 446,572 31.90% 31.90%
</TABLE>
(1) Gencorp Enterprises, Inc. is controlled by Geneva Corace, wife of W. Ross
C. Corace, the Company's President. As a result, Mr. Corace and Geneva A.
Corace would be deemed to be the beneficial owners of these B Warrants.
There are currently 1,400,000 C Warrants outstanding. The following
tabulates holdings of shares of the Company by each person who, subject to
the above, at the date of this Memorandum, holds of record or is known by
Management to own beneficially more than 5.0% of the C Warrants and, in
addition, by all directors and officers of the Company individually and as a
group.
<TABLE>
<S> <C> <C> <C>
W. Ross C Corace
1570 S. York Street 446,572(1) 31.90% 31.90%
Denver, Colorado 80210
Geneva A. Corace(2)(3) 446,572(1) 31.90% 31.90%
1570 S. York Street
Denver, Colorado 80210
Samuel C. Cummings 0 0% 0%
2040 S. Oneida Street
Suite 100
Denver, Colorado 80224
Robert L. Fedelleck
318 S. 24th Avenue 0 0% 0%
Brighton, Colorado 80601
Gencorp Enterprises, Inc.(3) 446,572(1) 31.90% 31.90%
1660 South Albion Street, #723
Denver, Colorado 80222
Lorain Capital Corp. 597,436 42.67% 42.67%
2618 SW 23rd Terrace, Suite 102
Fort Lauderdale, FL 33312
American Prepaid
Legal Services, Inc. 355,992 25.43% 25.43%
2618 SW 23rd Terrace, Suite 102
Fort Lauderdale, FL 33312
All Officers and Directors
as a Group (3 persons) 446,572 31.90% 31.90%
</TABLE>
(1) Gencorp Enterprises, Inc. is controlled by Geneva Corace, wife of W. Ross
C. Corace, the Company's President. As a result, Mr. Corace and Geneva A.
Corace would be deemed to be the beneficial owners of these C Warrants.
- ----------------------------------------------------------
SHARES ELIGIBLE FOR FUTURE SALE
- ----------------------------------------------------------
The Company currently has 3,575,000 shares of Common Stock outstanding. Of
these, 3,163,796 Common Shares are "restricted securities" and may be sold in
compliance with Rule 144 adopted under the Securities Act of 1933, as
amended. Other securities may be issued, in the future, in private
transactions pursuant to an exemption from the Securities Act. Rule 144
provides, in essence, that a person who has held restricted securities for a
period of two years may sell every three months in a brokerage transaction or
with a market maker an amount equal to the greater of 1% of the Company's
outstanding shares or the average weekly trading volume, if any, of the
shares during the four calendar weeks preceding the sale. The amount of
"restricted securities" which a person who is not an affiliate of the Company
may sell is not so limited. Nonaffiliates may each sell without limitation
shares held for three years. The Company will make application for the
listing of its Shares in the over-the-counter market. Sales under Rule 144
may, in the future, depress the price of the Company's Shares in the over-
the-counter market, should a market develop. Prior to this offering there
has been no public market for the Common Stock of the Company. The effect,
if any, of a public trading market or the availability of shares for sale at
prevailing market prices cannot be predicted. Nevertheless, sales of
substantial amounts of shares in the public market could adversely effect
prevailing market prices.
<PAGE>22
- ----------------------------------------------------------
MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
- ----------------------------------------------------------
Prior to this Offering, there has been no market for the Company's common
stock. Upon successful completion of this offering, the Company intends to
apply to have its common stock traded on the Electronic Bulletin Board.
Holders. The approximate number of holders of record of the Company's .001
par value common stock, as of June 30, 1998 was seven.
Dividends. Holders of the Company's common stock are entitled to receive
such dividends as may be declared by its Board of Directors.
Broker-Dealer Sales of Company Securities. Until the Company successfully
obtains a listing on the NASDAQ quotation system, if ever, the Company's
securities may be covered by Rule 15g-2 under the Securities Exchange Act of
1934 that imposes additional sales practice requirements on broker-dealers
who sell such securities to persons other than established customers and
accredited investors (generally institutions with assets in excess of
$5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination of the purchaser and have received the purchaser's
written agreement to the transaction prior to the sale. In order to approve
a person's account for transactions in designated securities, the broker or
dealer must (i) obtain information concerning the person's financial
situation, investment experience and investment objectives; (ii) reasonably
determine, based on the information required by paragraph (i) that
transactions in designated securities are suitable for the person and that
the person has sufficient knowledge and experience in financial matters that
the person reasonably may be expected to be capable of evaluating the rights
of transactions in designated securities; and (iii) deliver to the person a
written statement setting forth the basis on which the broker or dealer made
the determination required by paragraph (ii) in this section, stating in a
highlighted format that it is unlawful for the broker or dealer to effect a
transaction in a designated security subject to the provisions of paragraph
(ii) of this section unless the broker or dealer has received, prior to the
transaction, a written agreement to the transaction from the person; and
stating in a highlighted format immediately preceding the customer signature
line that the broker or dealer is required to provide the person with the
written statement and the person should not sign and return the written
statement to the broker or dealer if it does not accurately reflect the
person's financial situation, investment experience and investment objectives
and obtain from the person a manually signed and dated copy of the written
statement. A designated security means any equity security other than a
security (i) registered, or approved for registration upon notice of
issuance on a national securities exchange that makes transaction reports
available pursuant to 17 CFR 11Aa3-1 (ii) authorized or approved for
authorization upon notice of issuance, for quotation in the NASDAQ system;
(iii) that has a price of five dollars or more or . . . (iv) whose issuer has
net tangible assets in excess of $2,000,000 demonstrated by financial
statements dated less than fifteen months previously that the broker or
dealer has reviewed and has a reasonable basis to believe are true and
complete in relation to the date of the transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell the
Company's securities and also may affect the ability of purchasers in this
Offering to sell their shares in the secondary market.
- ----------------------------------------------------------
TERMS OF OFFERING
- ----------------------------------------------------------
Plan of Distribution. The Company hereby offers up to 500,000 B Units at the
purchase price of $5.00 per B Unit. The B Units are being offered on a
"best efforts" basis by the Company (employees, officers and directors) and
possibly selected broker-dealers. No sales commission will be paid for B
Units sold by the Company. Selected broker-dealers shall receive a sales
commission of up to 10% for any B Units sold by them. The Company reserves
the right to withdraw, cancel or reject an offer in whole or in part. The B
Units offered hereby will not be sold to insiders, control persons, or
affiliates of the Company.
Determination of Offering Price. The offering price and other terms of the
B Units were arbitrarily determined by the Company after considering the
total offering amount needed and the possible dilution to existing and new
shareholders.
Offering Procedure. This Offering will terminate on or before June 30,
1999. In the Company's sole discretion, the offering of Units may be
extended for up to three Thirty day periods, but in no event later than
September 30, 1999.
Subscription Procedure. The full amount of each subscription will be
required to be paid with a check payable to the Company in the amount of the
subscription. Such payments are to be remitted directly to the Company by
the purchaser or by the soliciting broker/dealer before 12:00 noon, on the
<PAGE>23
following business day, together with a list showing the names and addresses
of the person subscribing for the offered Units or copies of subscribers
confirmations.
No Escrow Account. There is no minimum offering amount and no escrow
account. As a result, any and all offering proceeds will be deposited
directly into the operating account of the Company.
- --------------------------------------------------------------
DESCRIPTION OF SECURITIES
- ---------------------------------------------------------------
Qualification. The following statements constitute brief summaries of the
Company's Certificate of Incorporation and Bylaws, as amended. Such
summaries do not purport to be complete and are qualified in their entirety
by reference to the full text of the Certificate of Incorporation and Bylaws.
The Company's articles of incorporation authorize it to issue up to
100,000,000 Common Shares. Shares of common stock purchased in this
offering will be fully paid and non-assessable.
Common Stock. There are presently outstanding 3,575,000 Common Shares. As a
result, up to 4,075,000 Common Shares will be outstanding upon completion of
this Offering.
Holders of Common Shares of the Company are entitled to cast one vote for
each share held at all shareholders meetings for all purposes. There are no
cumulative voting rights. Upon liquidation or dissolution, each outstanding
Common Share will be entitled to share equally in the assets of the Company
legally available for distribution to shareholders after the payment of all
debts and other liabilities. Common Shares are not redeemable, have no
conversion rights and carry no preemptive or other rights to subscribe to or
purchase additional Common Shares in the event of a subsequent offering. All
outstanding Common Shares are, and the shares offered hereby will be when
issued, fully paid and non-assessable.
There are no limitations or restrictions upon the rights of the Board of
Directors to declare dividends out of any funds legally available therefor.
The Company has not paid dividends to date and it is not anticipated that any
dividends will be paid in the foreseeable future. The Board of Directors
initially may follow a policy of retaining earnings, if any, to finance the
future growth of the Company. Accordingly, future dividends, if any, will
depend upon, among other considerations, the Company's need for working
capital and its financial conditions at the time.
Preferred Stock. The Company is authorized to issue 20,000,000 shares of
preferred stock, par value of $.001. The preferred stock is divided into
Series A, Series B and Series C preferred stock which shall have all the same
rights and privileges except voting rights as expressly set forth below:
Series A preferred shares which consist of 10,000,000 shares, have no
voting rights.
Series B preferred shares which consist of 9,990,000 shares, have no
voting rights.
Series C preferred shares which consist of 10,000 shares, are entitled to
vote fifty (50% percent of the stockholder voting rights. Each holder of
preferred stock, Series C, shall be entitled to one vote for each share of
preferred stock, Series C, held.
Authorized stock may be issued from time to time without action by the
stockholders for such consideration as may be fixed from time to time by the
Board of Directors, and shares so issued, the consideration for which have
been paid or delivered, shall be deemed fully paid stock and the holder of
such shares shall not be liable for any further payment thereon.
The capital stock of the Company, after the amount of the subscription price
or par value has been paid in full, shall not be subject to assessment to pay
debts of the Company and no paid up stock and no stock issued as fully paid
shall ever be accessible or assessed and the Articles of Incorporation shall
not be amended in this particular.
B Units. The Company has authorized the issuance of 610,000 B Units. There
are currently outstanding 75,000 B Units. Each B Unit consists of One
Common Share of the Company and one A Warrant.
Warrants. The Company authorized the issuance of 2,010,000 A Warrants,
1,400,000 B Warrants and 1,400,000 C Warrants. There are currently
outstanding, 1,475,000 A Warrants, 1,400,000 B Warrants and 1,400,000 C
Warrants. The A Warrants are exercisable into one common share at the
purchase price of $5.00. The A Warrants shall be exercisable for a period
of four years after registration with the Securities and Exchange Commission
and shall be redeemable by the Company at $.001 per A Warrant upon thirty
days notice. The B Warrants are exercisable into one common share at the
purchase price of $7.50. The B Warrants shall be exercisable for a period
of four years after registration with the Securities and Exchange Commission
and shall be redeemable by the Company at $.001 per B Warrant upon thirty
days notice. The C Warrants are exercisable into one common share at the
<PAGE>24
purchase price of $10.00. The C Warrants shall be exercisable for a period
of four years after registration with the Securities and Exchange Commission
and shall be redeemable by the Company at $.001 per C Warrant upon thirty
days notice.
Transfer Agent. Signature Stock Transfer, Inc. acts as transfer agent for
the Company.
- -----------------------------------------------------------
LEGAL MATTERS
- -----------------------------------------------------------
The due issuance of the Common Shares offered hereby will be opined upon for
the Company by J. M. Walker, Attorney-At-Law, in which opinion Counsel will
rely on the validity of the Certificate and Articles of Incorporation issued
by the State of Texas, as amended and the representations by the
management of the Company that appropriate action under Texas law has
been taken by the Company.
- --------------------------------------------------------
LEGAL PROCEEDINGS
- --------------------------------------------------------
The Company is not involved in any legal proceedings as of the date of this
Prospectus.
- --------------------------------------------------------
EXPERTS
- --------------------------------------------------------
The audited financial statements included in this Prospectus have been so
included in reliance on the report of James E. Scheifley and Associates,
P.C., Certified Public Accountants, on the authority of such firm as experts
in auditing and accounting.
- --------------------------------------------------------
INTERESTS OF NAMED
EXPERTS AND COUNSEL
- --------------------------------------------------------
None of the experts or counsel named in the Prospectus are affiliated with
the Company.
<PAGE>25
- --------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------
Index to Financial Statements
American/National Trucking, Inc.
Independent Auditor's Report dated July 23, 1998
Balance Sheet for the year ended June 30, 1998
Statement of Operations for Years Ended June 30, 1998 and 1997
And for the period from inception (March 18, 1994)
to June 30, 1998
Statement of Changes in Stockholders' Equity
For the Period from Inception (March 18, 1994) to June 30, 1998
Statements of Cash Flows
Years Ended June 30, 1998 and 1997
For the period from Inception (March 18, 1994) to June 39, 1998
Notes to Financial Statements
PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited)
Pro forma Combined Balance Sheet as of June 30, 1998
Pro Forma Combined Statement of Operations for the
Year Ended June 30, 1998
RC Capital, Inc.
Independent Auditor's Report dated August 14, 1998
Balance Sheet as of June 30, 1998
Statement of Operations For the
Year Ended June 30, 1998
Statement of Changes in Stockholders' Equity
For The Year Ended June 30, 1998
Statements of Cash Flows For The
Year Ended June 30, 1998
Notes to Financial Statements
<PAGE>26
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
American/National Trucking, Inc.
We have audited the balance sheet of American/National Trucking, Inc. (a
development stage company) as of June 30, 1998, and the related statements
of operations, stockholders' equity, and cash flows for each of the years
ended June 30, 1998 and 1997, and the period from March 18, 1994, (date of
inception) to June 30, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform 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 audit provides 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 American/National
Trucking, Inc. (a development stage company), as of June 30, 1998, and the
results of its operations and cash flows for years ended June 30, 1998 and
1997, and the period from March 18, 1994, (date of inception) to June 30,
1998, in conformity with generally
accepted accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
July 23, 1998
<PAGE>27
American/National Trucking, Inc.
(A Development Stage Company)
Balance Sheet
June 30, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ -
------------
Total current assets -
$ -
============
STOCKHOLDERS' EQUITY
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value -
Series A, 10,000,000 shares authorized
no voting rights
Series B, 9,990,000 shares authorized
no voting rights -
Series C, 10,000 shares authorized
50% voting rights, one vote per share
10,000 outstanding 10
Common stock, $.001 par value,
100,000,000 shares authorized,
3,500,000 shares issued and outstanding 3,500
(Deficit) Accumulated deficit
during development stage (3,510)
-----------
-
-----------
$ -
</TABLE>
See accompanying notes to financial statements.
<PAGE>28
American/National Trucking, Inc.
(A development stage company)
Statement of Operations
Years Ended June 30, 1998 and 1997
And for the period from inception (March 18, 1994)
to June 30, 1998
<TABLE>
<CAPTION>
Period From
Inception to
June 30, June 30, June 30,
1998 1998 1998
-------- -------- -------------
<S> <C> <C> <C>
Operating expenses $ - $ - $ 3,510
-------- ------- --------
(Loss) from operations and net
(loss) $ - $ - $ (3,510)
======== ======= ========
Per share information:
Basic (loss per common share $ - $ - $ -
======== ======== ========
Weighted average shares
outstanding 3,500,000 3,500,000 3,500,000
========= ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>29
American/National Trucking, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period from Inception (March 18, 1994) to June 30, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Paid-in During Develop-
Shares Amount Capital ment Stage Total
----------------------- --------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Shares issued at inception for
services @ $.001 per share 3,500,000 $ 3,500 $ - $ (3,500) $ -
Net (loss) for the period ended
June 30, 1994
--------- ------- ------- ------------ -------
Balance, June 30, 1994 through 1998 3,500,000 3,500 - (3,500) -
========= ======= ======= =========== =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>30
American/National Trucking, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended June 30, 1998 and 1997
For the period from Inception (March 18, 1994) to June 39, 1998
<TABLE>
<CAPTION>
Period from
Inception to
June 30, June 30, June 30,
1998 1997 1998
<S> <C> <C> <C>
Net income (loss) $ - $ - $ (3,500)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Services provided for common stock - - 3,500
---------- -------- -----------
Total adjustments - - 3,500
Net cash provided by (used in)
operating activities - - -
Increase (decrease) in cash - - -
Cash and cash equivalents,
beginning of period - - -
---------- -------- -----------
Cash and cash equivalents,
end of period $ - $ - $ -
========== ======== ===========
Supplemental cash flow information:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
</TABLE>
See accompanying notes to financial statements.
<PAGE>31
American/National Trucking, Inc.
(A Development Stage Company)
Notes to Financial Statements
Note 1. Organization
The Company was incorporated on March 19, 1994 in the State of Texas. The
Company is in the development stage and its intent is to seek a suitable
merger partner. The Company has had no significant business activity to
date and has chosen June 30 as a year end.
Estimates:
The preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates.
Loss per share
In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128, "Earnings Per Share." SFAS No. 128 supersedes and simplifies
the existing computational guidelines under Accounting Principles Board
("APB") opinion No. 15, "Earnings Per Share."
The statement is effective for financial statements issued for periods ending
after December 15, 1997. Among other changes, SFAS No. l 128 eliminates the
presentation of primary earnings per share and replaces it with basic earning
per share for which common stock equivalents are not considered in the
computation. It also revises the computation of diluted earnings per share.
The Company has adopted SFAS No. 128 and there is not material impact to the
Company's earnings per share, financial condition, or results of operations.
The Company's earnings per share have been restated for all periods presented
to be consistent with SFAS No. 128..
The basic loss per share is computed by dividing the net loss for the period
by the weighted average number of common shares outstanding for the period.
Common stock equivalent are excluded from the computation as their effect
would be anti-dilutive. Loss per share is unchanged on a diluted basis.
Cash and cash equivalents
Cash and cash equivalents consist of cash and other highly liquid debt
instruments with an original maturity of less than three months.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines for
all items that are to be recognized under accounting standards as components
of comprehensive income to be reported in the financial statements. The
statement is effective for all periods beginning after December 15, 1997 and
reclassification of financial statements of financial statements for earlier
periods will be required for comparative purposes. To date, the Company has
not engaged in transactions which would result in any significant difference
between its reported net loss and comprehensive net loss as defined in the
statement.
Note 2. Stockholders' Equity.
At its inception, the Company issued 3,500,000 shares of its
$.001 par value common stock to affiliates for services valued at their fair
market value of $3,500 based upon the value of the services provided.
Note 6. Income taxes
The Company currently has net operating loss carryforward amounting to $3,500
which expires in 2009. The Company is unable to predict future taxable
income whereby it could utilize this carryforward and therefore the deferred
tax asset related to the loss carryforward ($525) has been fully reserved.
<PAGE>32
PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited)
On August 26, 1988 the controlling shareholder of RC Capital,
Inc. (RC) agreed to purchase 3,200,000 shares of the issued and
outstanding shares of American/National Trucking, Inc. (American)
and to file articles of merger between the companies. In
connection with the merger, American effected a change of its
corporate identity to Makepeace Capital Corp. Additionally in
connection with the merger, all of the issued and outstanding
shares of RC Capital, Inc. were exchanged for 10,000 units of
Makepeace securities. Each unit consists of 1 share of common
stock and an option to purchase one share of common stock at an
exercise price of five dollars. The unaudited pro forma combined
statement of operations assumes that the transaction occurred on
July 1, 1997 and is presented for the year ended June 30, 1998.
The unaudited pro forma combined balance sheet reflects the
combination of the Company's balance sheet with RC's balance
sheet as of June 30, 1998.
The pro forma information is presented for illustrative purposes
only and does not purport to be indicative of the operating
results or financial position that would actually have occurred
if the transaction had been in effect on the dates indicated, nor
is it indicative of future operating results or financial
position. The pro forma adjustments are based upon available
information and assumptions that the Registrant believes are
reasonable in the circumstances.
The pro forma information should be read in conjunction with the
Company's June 30, 1998 financial statements and notes thereto
contained in the Registration Statement of Form SB-2 dated August
28,1998.
The transaction is accounted as a reverse merger and therefore,
the accumulated deficit and operating activities of American are
eliminated. There is no adjustment made to the carrying values
of any of the assets or liabilities of RC in connection with the
reverse merger.
Pro forma adjustments to reflect the merger of the companies
gives effect to the following:
(1) To record the payment of $30,000 of the Company's funds to
the certain shareholders of American with a corresponding
adjustment to amounts due from related parties.
(2) To record the conversion of notes payable and notes payable -
related parties into new shares of Makepeace for the portion
of such notes payable for which Makepeace has received
subscription agreements from the note holders at a conversion
rate of $2.00 per share.
(3) To reclassify a portion of common stock issued to additional
paid in capital.
<PAGE>33
Makepeace Capital Corp. / RC Capital, Inc.
Pro Forma Combined Balance Sheet
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Makepeace RC Capital Adjustments Combined
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash $ - $ 57,220 $ - $ 57,220
Accounts receivable - related par - - 9,000 30,000 (1) 39,000
----------- ----------- ---------- ---------
Total current assets - 66,220 30,000 96,220
Property and equipment, net - 17,951 17,951
Deposits - 35,000 (30,000) (1) 5,000
Organization costs - 1,458 1,458
Goodwill -
---------- -------- ---------- ---------
- 120,629 - 120,629
========== ======== ========== =========
Liabilities and stockholders' equity
Current liabilities:
Notes payable - 15,000 (15,000) (2) -
Current portion of long-term debt - 2,430 2,430
Accounts payable - 4,181 - 4,181
Loan payable - related party - 155,591 (80,000) (2) 75,591
Loan payable - officer - 13,266 - 13,266
-------- --------- --------- --------
Total current liabilities - 190,468 (95,000) 95,468
Long-term debt - 7,018 - 7,018
Common stock 3,500 1,000 (943) (2) (3) 3,557
Additional paid-in capital - - 92,443 (3) 92,443
(Deficit) (3,500) (77,857) 3,500 (77,857)
---------- -------- -------- ---------
Total stockholders' equity - - (76,857) 95,000 18,143
---------- -------- -------- ---------
- 120,629 - 120,629
========== ======== ======== =========
</TABLE>
<PAGE>34
Makepeace Capital Corp. / RC Capital, Inc.
Pro Forma Combined Statement of Operations
Year Ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Makepeace RC Capital Adjustments Combined
<S> <C> <C> <C> <C>
Net sales $ - $ 132,365 $ - $ 132,365
Cost of sales - 73,497 - 73,497
--------- --------- ---------- ---------
Gross profit - 58,868 - 58,868
General and administrative - 135,677 - 135,677
Interest (income) - (80) -
(80)
Interest expense - 1,128 - 1,128
-------- --------- ---------- --------
Net income before taxes - (77,857) -
(77,857)
Taxes on income - - - -
-------- --------- ---------- --------
Net income (loss) $ - $ (77,857) $ -
$(77,857)
======== ========= ========== ========
Basic income per share $ - $ - $
(0.02)
======== ========== =========
Weighted average shares 3,500,000 57,500
3,557,500
========= ========== =========
</TABLE>
<PAGE>35
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
RC Capital, Inc.
We have audited the balance sheet of RC Capital, Inc. as of June 30,
1998, and the related statements of operations, changes in stockholders'
equity, and cash flows for the year ended June 30, 1998. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform 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 audit provides 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 RC Capital,
Inc. as of June 30, 1998, and the results of its operations and cash
flows for year ended June 30, 1998, in conformity with generally
accepted accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
August 14, 1998
<PAGE>36
RC Capital, Inc.
Balance Sheet
June 30, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 57,220
Accounts receivable, related party 9,000
------------
Total current assets 66,220
Property and equipment, at cost, net of
accumulated depreciation of $4,025 17,951
Deposits 35,000
Organization costs, net of amortization of $292 1,458
-----------
$ 120,629
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 2,430
Notes payable 15,000
Accounts payable 4,181
Loan payable - related party 155,591
Loan payable - officer 13,266
-----------
Total current liabilities 190,468
Long-term debt 7,018
Stockholders' equity:
Common stock, no par value,
50,000 shares authorized,
1,000 shares issued and outstanding 1,000
Accumulated deficit (77,857)
-----------
(76,857)
-----------
$ 120,629
</TABLE?
See accompanying notes to financial statements.
<PAGE>36
RC Capital, Inc.
Statement of Operations
Year Ended June 30, 1998
</TABLE>
<TABLE>
<CAPTION>
1998
<S> <C>
Sales $ 132,365
Cost of sales 73,497
------------
Gross profit 58,868
Other costs and expenses:
General and administrative 135,677
-----------
(Loss) from operations (76,809)
Other income and (expense):
Interest income 80
Interest expense (1,128)
-----------
(1,048)
-----------
(Loss) before income taxes (77,857)
Provision for income taxes -
-----------
Net (loss) $ (77,857
</TABLE>
See accompanying notes to financial statements.
<PAGE>37
RC Capital, Inc.
Statement of Changes in Stockholders' Equity
Year Ended June 30, 1998
<TABLE>
<CAPTION>
Common
Common Stock Stock Accumulated
Shares Amount Subscribed (Deficit) Total
<S> <C> <C> <C> <C> <C>
Balance at inception, July 22, 1997 - $ - $ - $ - $ -
Common stock sold for cash 1,000 1,000 1,000
Net (loss) for the year (77,857) (77,857)
------- ------- ------- -------- --------
Balance, June 30, 1998 1,000 $ 1,000 $ - $(77,857) $(77,857)
</TABLE>
See accompanying notes to financial statements.
<PAGE>39
RC Capital, Inc.
Statements of Cash Flows
Year Ended June 30, 1998
<TABLE>
<CAPTION>
1998
<S> <C>
Net income (loss) $ (77,857)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 4,317
Changes in assets and liabilities:
Increase (decrease) in accounts payable 4,181
----------
Total adjustments 8,498
----------
Net cash (used in)
operating activities (69,359)
Cash flows from investing activities:
Increase in deposits (35,000)
Loan to related party (9,000)
Payment of organization costs (1,750)
Acquisition of plant and equipment (10,870)
----------
Net cash (used in) investing activities (56,620)
Cash flows from financing activities:
Repayment of long-term debt (1,658)
Proceeds from the sale of common stock 1,000
Proceeds from notes payable 15,000
Advances from related party 155,591
Advances from officer 13,266
----------
Net cash provided by
financing activities 183,199
----------
Increase (decrease) in cash 57,220
Cash and cash equivalents,
beginning of period -
----------
Cash and cash equivalents,
end of period $ 57,220
</TABLE>
See accompanying notes to financial statements.
<PAGE>40
RC Capital, Inc.
Statements of Cash Flows
Year Ended June 30, 1998
<TABLE>
<CAPTION>
1998
<S> <C>
Supplemental cash flow information:
Cash paid for interest $ 1,128
Cash paid for income taxes $ -
Non-cash investing and financing activities:
Assets acquired by issuance of long-term debt $ 11,106
</TABLE>
See accompanying notes to financial statements.
<PAGE>41
RC Capital, Inc.
Notes to Financial Statements
June 30, 1998
Note 1. Organization and Summary of Significant Accounting Policies.
The Company was incorporated in Colorado in July 1997. The Company is
engaged in the business of the installation of commercial and residential
window and siding products in the western United States.
Property, Plant and Equipment:
Property, plant and equipment are recorded at cost and are depreciated
based upon estimated useful lives using the straight-line method. Estimated
useful lives range from 3 to 5 years for furniture and fixtures and
equipment.
Revenue Recognition:
Revenue is recognized at the time the product is delivered or the service
is performed.
Intangible Assets:
Intangible assets consist of the costs of organizing the Company and such
costs being amortized using the straight line method over a period of 5
years. Amortization expense amounted to $292 for the year ended June 30,
1998.
The Company makes reviews for the impairment of long-lived assets and
certain identifiable intangibles whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Under SFAS No. 121, an impairment loss would be recognized
when estimated future cash flows expected to result from the use of the
asset and its eventual disposition is less than its carrying amount. No
such impairment losses have been identified by the Company for the 1997
and 1996 fiscal years.
Cash:
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Estimates:
The preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates.
Advertising costs:
Advertising costs are charged to operations when the advertising first
takes place. Advertising costs charged to operations were $10,432 for the
year ended June 30, 1998.
Fair value of financial instruments
The Company's short-term financial instruments consist of cash and cash
equivalents, accounts and loans receivable, and payables and accruals. The
carrying amounts of these financial instruments approximates fair value
because of their short-term maturities. Financial instruments that
potentially subject the Company to a concentration of credit risk consist
principally of cash and accounts receivable, trade. During the year the
Company did not maintain cash deposits at financial institutions in excess
of the $100,000 limit covered by the Federal Deposit Insurance Corporation.
Although the Company had customers during the year ended June 30, 1998
which accounted for in excess of 10% of the Company's total revenue, such
customers are not expected to utilize the Company's services on an ongoing
basis. The Company does not hold or issue financial instruments for
trading purposes nor does it hold or issue interest rate or leveraged
derivative financial instruments
Note 2. Property, Plant and Equipment.
Property, plant and equipment consists of the following at June 30, 1998:
Office furniture and equipment $ 6,870
Vehicle 15,106
21,976
-----------
Less accumulated depreciation (4,025)
-----------
$ 17,951
Depreciation charged to operations was $4,025 for the year ended June 30,
1998. The vehicles are pledged as collateral for the underlying purchase
financing contract, see Note 4.
<PAGE>42
Note 3. Deposits.
At June 30, 1998 the Company had $30,000 on deposit with its attorney as an
earnest money deposit for a proposed acquisition of a public shell company
known as American/National Trucking, Inc. The shell company has had no
significant activities to date. The deposit is fully refundable to the
Company should the merger not be completed.
Note 4. Stockholders' Equity.
During the year ended June 30, 1998 the Company issued 1,000 shares of its
common stock for cash aggregating $1,000. The stock was issued to an
immediate family member of the Company's president
Note 5. Notes payable and long term debt
During the year ended June 30, 1998, the Company received proceeds of notes
due to two unrelated individuals amounting to $15,000. The
uncollateralized notes have no stated interest rate and are expected to be
repaid currently. The Company expects that these loans will convert to
stockholders' equity in connection with a proposed re-capitalization with
American/National Trucking, Inc., an inactive Texas corporation.
During the year ended June 30, 1998, the Company entered into a vehicle
purchase contract which provides for monthly payments of $306 through
August 2001. The contract bears interest at 14.5% per annum and is secured
by the Company's vehicle. Aggregate amounts due under the contract are
$2,269 in 1999, $3,098 in 2000, $3,320 in 2001 and $600 in 2002.
Note 6. Income taxes
The Company has not provided for income taxes for the year ended June 30,
1998 due to an operating loss.
The Company has a net operating loss carryforward available to offset
future taxable income of approximately $77,000 which expires in the year
2013.
The Company does not anticipate the utilization of the net operating loss
in the near future and has established a valuation allowance for the full
amount of deferred tax asset ($15,000) estimated to arise therefrom. The
reserve amount increased by approximately $15,000 during the year ended
June 30, 1998.
Note 7. Related Party Transactions.
During the year ended June 30, 1998, the Company received gross cash
working capital advances from its president amounting to $41,612 and made
cash repayments of the advances aggregating $37,346. The balance of the
advances at June 30, 1998 amounted to $4,266 and is expected to be repaid
currently without interest.
During the year ended June 30, 1998, the Company received gross cash
working capital advances from an entity controlled by the Company's
president amounting to $155,591. The balance of the advances outstanding
at June 30, 1998 is expected to be repaid currently without interest. The
Company expects that $80,000 of these advances will convert to
stockholders' equity in connection with a proposed re-capitalization with
American/National Trucking, Inc., an inactive Texas corporation.
Additionally, during the year ended June 30, 1998, the Company made a
$9,000 cash advance to an entity controlled by the Company's president.
The balance of the uncollateralized advance is expected to be repaid by the
entity currently without interest.
<PAGE>43
PART II
INFORMATION NOT REQUIRED BY PROSPECTUS
Item 24. Indemnification of Officers and Directors.
The By-Laws of the Company provides that a director of the registrant shall
have no personal liability to the Registrant or its stockholders for monetary
damages for breach of a fiduciary duty as a director, except for liability
(a) for any breach of the director's duty of loyalty to the Registrant or its
stockholders, (b) for acts and omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, and (c) pursuant to
Texas law for any transaction from which the director derived an improper
personal benefit. Registrant's By-Laws exculpates and indemnifies the
directors, officers, employees, and agents of the registrant from and against
certain liabilities. Further the By-Laws also provides that the Registrant
shall indemnify to the full extent permitted under Texas law any director,
officer employee or agent of Registrant who has served as a director,
officer, employee or agent or the Registrant or, at the Registrant's request,
has served as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE COMPANY FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE AGAINST
PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE
UNENFORCEABLE.
Item 25. Other Expenses of Issuance and Distribution.
Other expenses in connection with this offering which will be paid
by Makepeace Capital Corp. (hereinafter in this Part II referred to as
the "Company") are estimated to be substantially as follows:
<TABLE>
Amount
Payable
Item By Company
<S> <C>
S.E.C. Registration Fees 3,701.45
State Securities Laws (Blue Sky) Fees and Expenses 3,500.00
Printing and Engraving Fees 7,500.00
Legal Fees 20,000.00
Accounting Fees and Expenses 5,000.00
Transfer Agent's Fees 1,500.00
Miscellaneous 2,500.00
Total $43,701.45
</TABLE>
Item 26. Recent Sales of Unregistered Securities.
In August, 1998, pursuant to the merger with RC Capital, Inc., the Company
issued 10,000 B Units to Geneva Corace, sole shareholder of RC Capital, Inc.
Each B Unit consisted of One common share and 5 A warrants. This issuance
was made to a sophisticated individual pursuant to an exemption from
registration under Sec. 4(2) of the Securities Act of 1933.
In August, 1998, the Company conducted an offering pursuant to Rule 504 of
the Securities Act of 1933 at an offering price of $2.00 per B Unit.
<TABLE>
<CAPTION>
Name Total Number cash
of B Units Date Issued payment
<S> <C> <C> <C>
Meadow Run Farm, Inc. 50,000 August 28, 1998 $100,000
Arthur H. Bosworth 5,000 August 28, 1998 $10,000
David A. Ledden 2,500 August 28, 1998 $5,000
Richard S. Klingenstein 2,500 August 28, 1998 $5,000
Phillip B. Foster 2,500 August 28, 1998 $5,000
Craddock-Columbine Realty 2,500 August 31, 1998 $5,000
</TABLE>
These sales were made pursuant to an exemption from registration pursuant to
Section 504 of Regulation D. The offering was approved and/or exempted by
the required states and the appropriate Form D was filed with the Securities
and Exchange Commission.
Item 27. Exhibit Index.
<TABLE>
<S> <C>
(1) Not Applicable
(2) Not Applicable
(3) Certificate of Incorporation incorporated by reference to
Form SB-2 filed September 8, 1998
(3.1) Bylaws incorporated by reference to Form SB-2 filed
September 8, 1998
(3.2) Articles of Merger between the Company and RC Capital,
Inc., effective August 28, 1998 incorporated by reference
to Form SB-2 filed September 8, 1998
(4) Specimen certificate for Common Stock incorporated by
reference to Form SB-2 filed September 8, 1998
<PAGE>44
(4.1) Specimen Warrant certificate incorporated by reference to
Form SB-2 filed September 8, 1998
(5) Consent and Opinion of Jody M. Walker regarding
legality of securities registered under this
Registration Statement and to the
references to such attorney in the Prospectus filed
as part of this Registration Statement
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10.1) Joint Venture Agreement between Samuel C. Cummings and RC
Capital, Inc. dated August 7, 1997 incorporated by
reference to Form SB-2 filed September 8, 1998
(10.2) Independent Contractor Agreement between Commercial
Exterior, Sam Cummings and U.S. Building Supply, Inc. dated
May 1, 1998 incorporated by reference to Form SB-2 filed
September 8, 1998
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of James E. Scheifley & Associates, P.C.
(25) Not Applicable
(26) Not Applicable
(27) Financial Data Schedule
(28) Not Applicable
</TABLE>
Item 28. Undertaking.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(I) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the formation set forth in the Registration
Statement.
(iii) To include any additional or changed material information on the
plan of distribution.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Delivery of Certificates. The undersigned registrant hereby undertakes
to provide to the Transfer Agent at the closing, certificates in such
denominations and registered in such names as are required by the Transfer
Agent to permit prompt delivery to each purchaser.
(c) Indemnification. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions set forth in
the Company's Articles of Incorporation or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>45
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of Denver, State of Colorado on the 1st day of September 10, 1998.
Makepeace Capital Corp.
/s/ W. Ross C. Corace
--------------------------------
By: W. Ross C. Corace , President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated.
<TABLE>
Signature Capacity Date
<S> <C> <C>
/s/W. Ross C. Corace Principal Executive Officer September 10, 1998
- ------------------- Principal Financial Officer
W. Ross C. Corace Controller/Director
/s/Samuel C. Cummings Director September 10, 1998
- -------------------
Samuel C Cummings
/s/Robert L. Fedelleck Director September 10, 1998
- -------------------
Robert L. Fedelleck
</TABLE>
<PAGE>46
Jody M. Walker
7841 South Garfield Way
Littleton, Colorado 80122
Telephone (303) 850-7637
Facsimile (303) 220-9902
September 10, 1998
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Dear Sirs:
Re: OPINION RE: LEGALITY AND CONSENT OF COUNSEL TO USE OF NAME IN
THE REGISTRATION STATEMENT ON FORM SB-2 OF MAKEPEACE CAPITAL CORP.
I am securities counsel for the above mentioned Company and I have
prepared the amendment to the registration statement on Form SB-2. I hereby
consent to the inclusion and reference to my name in the
Registration Statement on Form SB-2 for Makepeace Capital Corp.
It is my opinion that the securities of Makepeace Capital Corp. and those
which are registered with the Securities and Exchange Commission pursuant to
Form SB-2 Registration Statement of Makepeace Capital Corp. have been legally
issued and will be, when sold, legally issued, fully paid and non-assessable.
Yours very truly,
/s/ Jody M. Walker
---------------------
Jody M. Walker
<PAGE>47
INDEPENDENT AUDITOR'S CONSENT
We do hereby consent to the use of our report dated July 23, 1998 on the
financial statements of American/National Trucking, Inc. and our report dated
August 14, 1998 on the financial statements of RC Capital, Inc. included in
and made part of the amendment to the registration statement of Makepeace
Capital Corp. dated September 10, 1998.
September 10, 1998
/s/ James E. Scheifley & Associates, P.C.
Certified Public Accountant
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 3,500
0
10
<OTHER-SE> (3,510)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
