As filed with the Securities
and
Exchange Commission on December 6, 1999
File No. 000-24987
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the Exchange Act
Date of Report: December 6, 1999
AEI ENVIRONMENTAL, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO
(State or Other Jurisdiction of Incorporation)
000-24987 05-0499526
(Commission File Number) (I.R.S. Employer Identification No.)
215 Bluegrass Road, Suite C,
Franklin, Kentucky 42135
(Address of Principal Executive Offices) (Zip Code)
(877) 586-8688
(Registrant's Telephone Number, Including Area Code)
CHUHAK &TECSON, P.C.
225 WEST WASHINGTON STREET, SUITE 1300
CHICAGO, IL 60606-3418
---------------------------------------------------
(Name and Address of agent for service)
---------------------------------------------------
FORWARD LOOKING STATEMENTS
---------------------------------------------------
THIS FORM 8-K AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY AEI
ENVIRONMENTAL, INC. (HEREINAFTER REFERRED TO AS "AEI" AND/OR "COMPANY" AND/OR
"REGISTRANT") OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES ACT OF 1933
AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
FIFTEEN U.S.C.A. SECTIONS 77Z-2 AND 78U-5 (SUPP. 1996). THOSE STATEMENTS
INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF AEI
AND MEMBERS OF ITS MANAGEMENT TEAM AS WELL AS THE ASSUMPTIONS ON WHICH SUCH
STATEMENTS ARE BASED.
PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS
ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES,
AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN FORWARD-
LOOKING STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE STATEMENT FOR
FORWARD-LOOKING STATEMENTS INCLUDED AS EXHIBIT 99.1 TO THIS FORM 8-K, AND ARE
HEREBY INCORPORATED HEREIN BY REFERENCE. THE COMPANY UNDERTAKES NO
OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED
ASSUMPTIONS, THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE
OPERATING RESULTS OVER TIME.
<PAGE> 1
INFORMATION INCLUDED IN THIS REPORT
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Change in Control
Oak Brook Capital I, Inc. (the "Company") was incorporated under the laws of
the State of Colorado on May 15, 1998. It was incorporated as a "blind pool"
or "blank check" company for the purpose of seeking to acquire one or more
properties or businesses. The Company elected to voluntarily file a
registration statement in order to become a reporting company under the
Securities Exchange Act of 1934, as amended (the "34 Act").
On September 13, 1999, the Company's sole officers and directors executed a
Plan of Merger Agreement (the "Plan") with Agtech Environmental, Inc., a
Delaware corporation ("AEI") whereby AEI shareholders agreed to receive
one (1) share of newly issued common stock of the Company (the "Shares") for
every one (1) share of AEI each respective AEI shareholder held (the "Merger").
The transaction with AEI is a private placement transaction in reliance upon
an exemption from registration under the Securities Act of 1933.
The transaction resulted in a change in control of the Company because
following its exchange of the Shares, AEI shareholders owned approximately
97.44% of the 10,271,780 fully diluted issued and outstanding Common Stock of
the Company.
AEI acquired control of the Company in anticipation of operating as a
Section 12 fully reporting company, pursuant to the rules and regulations
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act").
The Plan contemplated a series of transactions which resulted in a change
of control of the Company. At the effective time of the Merger, (i) each share
of $0.01 par value Class A Common Stock of AEI issued and outstanding was
converted into and became one (1) share of Common Stock of the Company, (ii)
each share of $0.01 par value Class B Common Stock of AEI issued and
outstanding was converted into and became 0.28249 shares of Common Stock
of the Company; (iii) each share of $0.01 par value Class C Common Stock of
AEI issued and outstanding was converted into and became two thirds (2/3)
shares of Common Stock of the Company. Each holder of outstanding Common
Stock of AEI shall surrender shares of Common Stock of AEI, regardless of
class, for shares of the Company, upon the ratios set forth above. Upon
surrender to the Company of one or more stock certificates for Common Stock of
AEI, each AEI shareholder shall be entitled to receive one or more stock
certificates for the full number of shares of Common Stock of the Company into
which the Common Stock of AEI so surrendered shall have been converted as
aforesaid together with any dividends on the Common Stock of AEI as to which
the payment date shall have occurred on or prior to the date of the surrender
of said shares; and (iv) voluntary surrender of approximately 965,200 shares
by the officers and directors of the Company.
<PAGE> 2
In conjunction with completion of the transactions contemplated by the Plan,
the current directors and officers of the Company resigned, and out-going
directors appointed successors designated by AEI, and such new directors
will appoint new executive officers.
The following table sets forth the name, age and position of each of the
persons expected to be designated by AEI to be appointed to the Company's
Board of Directors and each of the persons expected to be appointed as an
executive officer of the Company following completion of the transactions
contemplated by the Plan:
<TABLE>
<CAPTION>
Name and Beneficially
Address Age Owned Shares
_______________________ ___ ______________
<S> <C> <C>
Ed McMillan 52
3.78%
11578 Trail Ridge Place
Zionville, IN
Thomas F. Taft, Sr. 49 8.04%
P.O. Box 1766
Greenville, NC
Mark Margason 43 3.94%
105 E. First Street
Hinsdale, IL
Greg Ransdell 43 4.75%
215 Bluegrass Road,
Suite C
Franklin, KY
John T. Zick 55 2.43%
708 E. Woodland Avenue
Hinsdale, IL
<PAGE> 3
OFFICERS
The names, titles and address of the persons who, upon the effective date of
the Plan, shall constitute the officers of AEI, and who shall hold office,
subject to the By-Laws, until the first meeting of directors following the
next annual meeting of shareholders, are as follows:
Name Title Address
__________________ _________________________ ___________________________
Greg Ransdell Chief Executive Officer 215 Bluegrass Road, Suite C
Franklin, KY
Mark A. Margason Secretary; 105 E. First St.
Vice Chairman Hinsdale, IL
</TABLE>
Biographical Information:
Greg Ransdell:
Mr. Ransdell, a co-founder of the company, was the General Manager of U.S.
operations for Vall, Inc. the 25th largest swine grower in the United States.
Mr. Ransdell is the past General Manager of Prestage Farms, a privately-held
feed mill and swine integrator with 15,000 sows in Mississippi. Mr. Ransdell
was a Director of Production Services for Choctaw Maid Farms, a vertically
integrated poultry grower and processor of 2 million birds per week. Mr.
Ransdell has served as Senior Vice President of Valley Grain Products of
Kentucky, a manufacturer of corn-based products. Mr. Ransdell received a B.S.
in Accounting from California State University. Mr. Ransdell is leading the
day to day management of the Company and will have responsibility for its
profitability.
Mark Margason, B.S.B.A. degree from the University 1977, MBA in finance from
the University of Denver 1979. Mr. Margason has a fifteen-year banking and
investment banking career in Chicago Illinois with American National Bank and
Trust Company of Chicago, Mellon Bank, and Citicorp North America leveraged
capital division. Mr. Margason has banking and operational management
experience in a broad range of energy industries. Mr. Margason has served on
the Board of Directors of an integrated natural gas resources company and
directed power plant developments for Americas Power Partners. Mr. Margason
is a managing partner in MPI Venture Management. Mr. Margason is Secretary
and Vice President for Americas Power Partners.
<PAGE> 4
(b) Beneficial Ownership
The following table sets forth the beneficial ownership of the ownership of
AEI outstanding common stock on December 1, 1999 by (i) each director and
executive officer of AEI, (ii) all directors and executive officers of AEI as
a group, and (iii) each shareholder who was known by the Company to be the
beneficial owner of more than five percent (5%) of the outstanding shares of
AEI:
Shares of AEI
Common Stock to be
Beneficially Owned Percent
Name and as of the Distribution of
Address Record Date Class
______________________ ________________________ _________
Ed McMillan 336,649 3.78%
11578 Trail Ridge Place
Zionville, IN
Thomas F. Taft, Sr. 716,698 8.04%
P.O. Box 1766
Greenville, NC
Mark Margason 351,103 3.94%
105 E. First Street
Hinsdale, IL
Greg Ransdell 423,729 4.75%
215 Bluegrass Road
Suite C, Franklin, KY
John T. Zick 216,500 2.43%
708 E. Woodland Avenue
Hinsdale, IL
All Officers and
Directors as a Group 2,044,679 23.26%
<PAGE> 5
Management of AEI has advised that they may acquire additional shares of AEI
Common Stock from time to time in the open market at prices prevailing at the
time of such purchases.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The Plan of Merger was duly adopted by the Boards of Directors of the
respective corporations on September 13, 1999, and approved by the Board of
Directors and majority vote of the shareholders of the Company on September
13, 1999, and by the shareholders of AEI on September 13, 1999, in the manner
prescribed by the Delaware General Corporation Law. The number of shares
voted for the Plan of Share Merger was, with respect to each corporation,
sufficient for approval as set forth below.
The number of shares of the Company outstanding at the time of such adoption
was 1,228,000, and the number of Shares entitled to vote thereon was:
1,228,000.
The number of shares of AEI outstanding at the time of such adoption was
12,249,457, and the number of shares entitled to vote thereon was:
12,249,457.
The designation and number of outstanding shares of each class entitled to
vote thereon as a class were:
NONE.
The number of shares voted for such Plan of Merger by OAK BROOK CAPITAL I,
INC. was 1,105,200, and the number of shares voted against such Plan of
Merger
was:
NONE.
The number of shares voted for such Plan of Merger by AGTECH ENVIRONMENTAL,
INC., was 9,973,483, and the number of shares voted against such Plan of
Merger was:
NONE.
<PAGE> 6
CONVERSION OF SHARES IN THE MERGER
The mode of carrying into effect the Merger provided in the Plan of
Merger, and the manner and basis of converting the shares of AEI into shares
of the Company are as follows:
1. The Company Common Stock. No Shares of Common Stock, no par
value, of the Company issued and outstanding at the effective time of the
Merger shall be converted as a result of the Merger, and all of such shares
shall remain issued shares of Common Stock of the Company.
2. AEI Common Stock. At the effective time of the Merger, (i) each
share of $0.01 par value Class A Common Stock of AEI issued and outstanding
shall be converted into and become one (1) share of Common Stock of the
Company; (ii) each share of $0.01 par value Class B Common Stock of AEI issued
and outstanding shall be converted into and become 0.28249 shares of Common
Stock of the Company; and (iii) each share of $0.01 par value Class C Common
Stock of AEI issued and outstanding shall be converted into and become two
thirds (2/3) shares of Common Stock of the Company. Each holder of
outstanding Common Stock of AEI shall surrender shares of Common Stock of AEI,
regardless of class, for shares of the Company, upon the ratios set forth
above. Upon surrender to the Company of one or more stock certificates for
Common Stock of AEI, each AEI shareholder shall be entitled to receive one or
more stock certificates for the full number of shares of Common Stock of the
Company into which the Common Stock of AEI so surrendered shall have been
converted as aforesaid together with any dividends on the Common Stock of AEI
as to which the payment date shall have occurred on or prior to the date of
the surrender of said shares.
<PAGE> 7
The resulting common share allocation (the "Allocation") of the Company is
as follows:
10,271,780 fully diluted, common shares of the Company will be issued and
outstanding, inclusive of:
Option Holders of Class B Common Stock in AEI who may exercise and purchase up
to NINE HUNDRED FORTY-TWO THOUSAND THREE HUNDRED FIFTY-NINE (942,359)
shares of the Company
AEI shareholders own approximately 97.44% of the 10,271,780 fully
diluted, common shares of the Company issued and outstanding, inclusive of
the shares to be transferred pursuant to Section 8 hereof.
3. Surrender of AEI's Certificates. As soon as practicable after the
Merger becomes effective, the Stock Certificates representing Common Stock of
AEI issued and outstanding at the time the Merger shall be surrendered for
exchange to the Company as above provided. Until so surrendered for exchange,
each such Stock Certificate nominally representing Common Stock of AEI shall
be deemed for all corporate purposes (except for the payment of dividends,
which shall be subject to the exchange of stock certificates as above provided)
to evidence the ownership of the number of shares of Common Stock of the
Company which the holder thereof would be entitled to receive upon its
surrender to the Company.
4. Issuance of Shares Subsequent to Merger. As soon as practicable
after the Merger becomes effective, the Company shall issue to the
shareholders of AEI, on the basis set forth in Section 2 above, the necessary
shares of Common Stock in the Company. Thatcher and Werner agree to
personally cause such action to be taken by the Company.
5. Fractional Interests. No fractional shares of Common Stock of
the Company or certificate or scrip representing the same shall be issued.
In lieu thereof each holder of AEI Common Stock having a fractional interest
arising upon such conversion will be rounded up into one full additional
share of Common Stock of the Company by the transfer agent.
6. Status of Common Stock. All shares of Common Stock of the Company
into which shares of Common Stock of AEI are converted as herein provided
shall be fully paid and non-assessable and shall be issued in full
satisfaction of all rights pertaining to such shares of Common Stock of AEI.
7. Independent Appraisal, Right to Dissent and Obtain Payment for
Shares; Procedures for Protection of Dissenter's Rights. In order to
establish a "fair value" for the shares of AEI Common Stock which are paid in
cash in lieu of conversion into the Company's Common Stock, the Board of
Directors of AEI shall establish the value of AEI's stock prior to the Merger,
and shall afford to such shareholders of AEI all of the rights, and implement
the procedures for protection of dissenters' rights, pursuant to the
<PAGE> 8
provisions of the Delaware General Corporation Law, Section 262, et seq., as
amended, the terms and provisions of which are hereby incorporated by
reference and made a part hereof.
8. Shares of Werner and Thatcher. Werner and Thatcher agree to cause
nine hundred sixty-five thousand two hundred (965,200) shares of the Company
owned by them to be transferred to such person or persons as AEI shall direct
in writing within sixty (60) days following the effective time of the Merger.
EFFECT OF THE MERGER
At the effective time of the Merger, AEI shall succeed to, without other
transfer, and shall possess and enjoy, all the rights, privileges, immunities,
powers and franchises both of a public and a private nature, and be subject
to all the restrictions, disabilities and duties of the Company, and all the
rights, privileges, immunities, powers and franchises of the Company on
whatever account, for stock subscriptions as well as for all other things in
action or belonging to the Company, shall be vested in AEI; and all property,
rights, privileges, immunities, powers and franchises, and all and every other
interest shall be thereafter as effectually the property of AEI as if it was
the Company, and the title to any real estate vested by deed or otherwise in
the Company shall not revert or be in any way impaired by reason of the
Merger; provided, however, that all rights of creditors and all liens upon
any property of either of said Constituent Corporations shall be preserved
unimpaired, limited in lien to the property affected by such liens at the
effective time of the Merger.
ITEMS 3 THROUGH 4, 6, AND 8 THROUGH 9 NOT APPLICABLE.
ITEM 5. OTHER EVENTS.
AEI Environmental, Inc.
Executive Summary of Business Plan
The Company's authorized capital consists of 40,000,000 shares of
Common Stock, without a par value. Each common share is entitled to one vote
at the meetings of shareholders. All Common Shares are equal to each other
with respect to liquidation rights and dividends rights. There are no
preemptive rights to purchase any additional Common Shares. The Articles of
Incorporation of the Company prohibit cumulative voting on the election of
directors.
AEI is an organization devoted to providing fully integrated
environmental and operational control systems that address critical issues
facing livestock growers. AEI focuses attention on cost effective solutions
to improve a growers bottom line. The Company's principal assets consist of
proprietary waste treatment technology, proprietary cooling and odor control
systems technology, and software and hardware technologies relating to such
applications.
<PAGE> 9
The Company's corporate headquarters are located at 105 E. First Street,
Hinsdale, IL 60521. The Company's transfer agent is American Securities
Transfer, Inc., 1825 Lawrence Street, Ste 444 Denver, CO 80020 (303) 298-5370.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
- ---------------------------------
As of the date of the filing of this Amendment to the Current Report on
Form 8-K, the Registrant's Independent Auditor, Bersch Accounting, sc, has
completed the consolidated audit of the historical financial statements of
AEI that is hereby provided for financial statement requirements prescribed
by this Item 7(a).
AGTECH Environmental, Inc.
Financial Statements
June 30, 1999
Contents
Page
Independent Auditor's Report 2
FINANCIAL STATEMENTS:
Exhibit A - Balance Sheet 3-4
Exhibit B - Statement of Operations and Deficit
Accumulated During the Development
Stage 5
Exhibit C - Statement of Changes in Shareholders' Equity 6
Exhibit D - Statement of Cash Flows 7
Notes to Financial Statements 8-18
<PAGE> 2
Bersch Accounting s.c.
Certified Public Accountants
633 W. Wisconsin Ave., Suite 610
Milwaukee, Wisconsin 53203
Tel: 414-272-8800
www.berschaccounting.com
Fax: 414-223-4070
email: [email protected]
INDEPENDENT AUDITOR'S REPORT
November 17, 1999
To the Board of Directors and Stockholders
Agtech Environmental, Inc.
We have audited the accompanying Balance Sheet of Agtech Environmental, Inc.,
(a development stage company), as of June 30, 1999 and the related Statement of
Operations and Deficit Accumulated During the Development Stage, Statement of
Changes in Shareholders' Equity, and Statement of Cash Flows, for the fourteen
months then ended. 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 Agtech Environmental, Inc.
as of June 30, 1999 and the results of its operations and its cash flows for
the fourteen months then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the company
will continue as a going concern. As shown in the financial statements, the
Company has incurred considerable cost in organizing its business and
establishing itself in the marketplace during the development stage.
Its ability to remain viable depends on its ability to develop and refine
its products in such a way that they will be marketable and that the company
will develop sales revenue sufficient to cover product costs and operating
expenses before exhausting its present investment stake and/or its ability to
obtain additional capital through investments or borrowing sufficient to
operate as a going concern until profitable operations are achieved.
Management's plans in regard to these matters are described in Note #8.
The financial statements do not contain any adjustments which may result
from the outcome of this uncertainty.
/s/ Bersch Accounting S.C.
Milwaukee, Wisconsin
<PAGE> 3
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents (Exhibit D) $ 64,952
Accounts Receivable 10,444
Due from Employee/Shareholders (Note #5) 95,142
Recoverable costs and earnings in excess of
billings on contracts in progress 16,892
Prepaid Expenses 19,103
Total Current Assets $ 206,533
PROPERTY AND EQUIPMENT (Note #1)
Furniture and Fixtures $ 35,651
Computer Equipment and Software 20,458
Leasehold Improvements 25,819
$ 81,928
Less: Accumulated Depreciation (23,203)
Net Property and Equipment 58,725
OTHER ASSETS
Patents (Note #1) $ 77,719
Non-Compete Agreement (Net of Amortization expense
of $16,621) (Note #1) 83,379
Goodwill (Net of Amortization expense
of $22,449) (Note #1) 652,872
Other Intangible Asset (Net of Amortization expense
of $1,055) (Note #1) 33,945
Restricted Cash (Note # 6) 50,000
Due from Employees/Shareholders (Note #5) 75,000
Prepaid Deposits 6,033
Total Other Assets 978,948
TOTAL ASSETS $ 1,244,206
<PAGE> 4
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion - Capital Lease Obligations (Note #4) $ 8,266
Accounts Payable 163,030
Accrued Expenses 52,039
Total Current Liabilities $ 223,335
LONG-TERM LIABILITIES
Long-term Portion - Capital Lease Obligations (Note #4) 7,301
Total Liabilities $ 230,636
SHAREHOLDERS' EQUITY (Exhibit C) (Note #9)
Class A
Common Stock, $.01 par value; Authorized 9,000,000
shares Issued and Outstanding 3,202,412 $ 32,024
Additional Paid-in-Capital 1,749,674
Class B
Common Stock, $.01 par value; Authorized 18,000,000
shares Issued and Outstanding 2,387,080 23,871
Additional Paid-in-Capital 791,129
Class C
Common Stock, $.01 par value; Authorized 3,000,000
shares Issues and Outstanding 4,824,100 48,241
Additional Paid-in-Capital 157,301
$ 2,802,240
(Deficit) Accumulated during the Development Stage
(Exhibit B) (1,788,670)
Total Shareholders' Equity 1,013,570
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,244,206
<PAGE> 5
STATEMENT OF OPERATIONS AND DEFICIT ACCUMULATED
DURING THE DEVELOPMENT STAGE
For the fourteen months ended June 30, 1999
EXPENSES
Research and Development Expenses $ 1,057,509
Loss on Contract 59,341
Officers Salaries 153,042
Office Salaries 43,610
Rent 34,924
Insurance 52,737
Depreciation 23,202
Amortization 40,125
Auto Expense 29,946
Travel 66,323
Telephone 28,497
Office Expense 34,914
Advertising 10,437
Taxes 33,768
Organization expenses 39,308
Miscellaneous 16,023
Outside Services & Professional 82,667
Total Deficit Accumulated before Interest $ (1,806,373)
Other Income/(Expense)
Miscellaneous Income $ 28,176
Interest Expense (10,473)
Total Other Income/(Expense) 17,703
Net Loss Before Income Taxes $ (1,788,670)
Income Tax Expense (Note #2) 0
Net Loss $ (1,788,670)
(Exhibit A)
Net loss per share: (0.24)
(Note #12)
Fully Diluted net loss per share (0.17)
(Note #12)
<PAGE> 6
<TABLE>
<CAPTION>
For the fourteen months ended June 30, 1999
$.01 Par $.01 Par $.01 Par
Value,Class Add'l Value,Class Add'l Value,Class Add'l
A Common Paid-in-Cap B Common Paid-in-Cap C Common
Paid-in-Cap Retained
Stock Class A Stock Class B Stock Class C Earnings
Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance April 30, 1998 $ $ $ $ $ $ $ $
Shares granted to founders 3,965 (3,965) 19,825 (19,825) 0
Shares granted to employees
of MPI 871 (871) 0
Issuance of shares as
incentive bonus 15,000 15,000
Shares issued in connection
with business acquisition 8,000 792,000 800,000
Sale of capital stock 22,904 1,422,684 28,416 177,126 1,651,130
Exercise of stock options 700 700
Issuance of shares relating
to consulting agreements 700 34,300 35,000
Conversion of shares from
debt agreement 3,755 296,655 300,410
Net (Loss) (1,788,670) (1,788,670)
Balance June 30, 1999 $ 32,024 $ 1,749,674 $ 23,871 $ 791,129 $ 48,241 $ 157,301 $(1,788,670)$ 1,013,570
(Exhibit A)
<PAGE> 7
For the fourteen months ended June 30, 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $ (1,788,670)
Adjustments to reconcile net (loss) to net cash
(used) by operating activities:
Depreciation and Amortization $ 63,327
Accrued Penalties and Interest in relation
to Debt Conversion 25,409
(Increase) in:
Increase in Interest Receivable (5,142)
Increase in Accounts Receivable (10,444)
Increase in Excess of Costs over Billings (16,892)
Increase in Prepaid Expenses (19,103)
Increase in:
Increase in Accounts Payable 163,030
Increase in Accrued Expenses 52,039
Total Adjustments 252,224
Net cash (used) by operating activities $ (1,536,446)
CASH FLOWS FROM INVESTING ACTIVITES:
Purchase of Fixed Assets $ (28,971)
Patent Development (77,719)
Deposits (6,033)
Net cash (used) by investing activities (112,723)
CASH FLOWS FROM FINANCING ACTIVITES:
Loan Advances to Employees $ (150,000)
Capital Contributions (Net of negotiation
fees of $305,000) 1,926,831
Capital Lease Repayments (12,710)
Increase in Restricted Cash (50,000)
Net cash provided by financing activities 1,714,121
Net Increase in cash and equivalents $ 64,952
Cash and equivalents, beginning of period 0
Cash and equivalents, end of period $ 64,952
(Exhibit A)
<PAGE> 8
Note #1 Nature of Business and Summary of Significant Accounting Policies
Description of Development Stage Activities
The Company has been in the development stage since its formation on April 30,
1998. It expects to design, manufacture, and install waste treatment and
cooling systems for dairy and livestock operations and to supply necessary
chemical products to system users.
The Company expects to negotiate contracts with commercial livestock
operations for the installation of these systems and may finance these
contracts through a series of progress payments from the customer or by
granting credit to the customer until the system begins operating.
The Company is relying on its own estimates of the size of the potential
market for its products based on trends showing increases in the size of
livestock and dairy operations, the growing environmental sensitivity and
resulting economic stimuli to deal with waste products in a safe and
controlled manner, and its assumption that productivity increases brought
about by its products will create economic advantages which will justify their
costs.
The Company expects to evolve from the development stage to the operating
stage with the continuing refinement of its product lines and to commence
delivering systems under contracts in the second quarter of its next fiscal
year.
Method of Accounting
Assets, liabilities, revenues, and expenses are recognized on the accrual
method of accounting, with revenues and costs of installation to be recognized
under the percentage-of-completion method of accounting for contracts.
Accordingly, income is recognized in the ratio that the cost incurred bears to
the estimated total cost. Adjustments to cost estimates are made periodically,
and expected losses incurred on contracts in progress are charged to
operations in the period such losses are determined. The aggregate of costs
incurred and income recognized on uncompleted contracts in excess of related
billings is shown as a current asset, and billings in excess of cost and
income recognized are shown as a current liability.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
Basis for Assigning amounts to Equity Securities Issued For Other Than Cash
Shares of common stock issued for other than cash have been assigned amounts
equivalent to the fair value of the service or assets received in the
exchange.
<PAGE> 9
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
short-term investments in interest-bearing accounts, securities, and other
instruments with an original maturity of three months or less, to be
equivalent to cash.
Allowance for Doubtful Accounts
Accounts receivable are reviewed periodically by management to determine the
adequacy of the allowance for doubtful accounts. Based upon management's
evaluation as of June 30, 1999, an allowance for doubtful trade accounts was
not considered necessary, and amounts due from related parties are considered
in relation to their individual agreements.
Fixed Assets
Fixed assets, including capitalized equipment acquired by leases, are stated
at cost. Depreciation is computed using the straight-line method over the
following estimated useful lives:
Years
Furniture and Fixtures 5-10
Computer Equipment and Software 3-10
Leasehold improvements 3-9
Amortization expense on assets acquired under capitalized leases is included
with depreciation expense of owned assets. Depreciation expense for the
fourteen months ended June 30, 1999 was $23,202.
Organizational Expenses
In April, 1998 the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) 98-5, Reporting on the Costs of Start-up
Activities, which requires costs relating to start-up activities and
organizational expenses to be expensed as incurred. The company has adopted
this SOP during its development stage and accordingly these costs have been
expensed for the fourteen months ended June 30, 1999 in the amount of $61,358.
Covenant not to Compete
In December 1998, the Company purchased substantially all of the assets and
other intangibles of Numan Industries, Inc in exchange for 800,000 shares of
Class B common stock. In connection with this purchase, the Company entered
into a covenant not to compete with the owners (Covenantors) of the Seller.
The Covenantors have agreed that for a period of three years they will not
directly or indirectly service any customer of the Company or engage in any
business competitive with the Company. The intangible asset is being
amortized over the term of the agreement. Amortization expense on the
covenant not to compete for the fourteen months ended June 30, 1999 was
$16,621. Accumulated amortization on the covenant not to compete at June 30,
1999 was $16,621.
Goodwill
The asset, "Goodwill" relates to the purchase of Numan Industries, Inc as
described above and is being amortized over fifteen years. Amortization
expense on goodwill for the fourteen months ended June 30, 1999 was $22,449.
<PAGE> 10
Accumulated amortization on goodwill at June 30, 1999 was $22,449.
Patents
The Company has capitalized its expenditures relating to patent search and the
development of a prototype of its livestock cooling technology. Although the
company had not yet applied for a patent for its cooling technology at June
30, 1999, it is the intent of management to patent the system upon completion
of testing of the final prototype.
Other Intangible Assets
On September 1, 1998 the Company entered into an agreement with an agency to
assist in acquiring state and Federal funding for the Company's research
activities. Class A common stock valued at $12,500 was issued in exchange for
these services.
During 1999, the Company exchanged Class A common stock valued at $22,500 for
consulting services.
Amortization expense on other intangible assets for the fourteen months ended
June 30, 1999, is $1,055. Accumulated amortization of other intangible assets
at June 30, 1999 is $1,055.
Significant Non-Cash Transactions
On December 31, 1998 the company purchased all of the assets of Numan
Industries, Inc in exchange for 800,000 shares of Class B Stock for $1 per
share. This purchase included all assets, and intellectual property thereby
creating intangible assets to the Company as described above. The assets
purchased from Numan Industries, Inc. are as follows:
Office Equipment $ 7,830
Plant Equipment 16,849
Goodwill (Customer list, secret formulas for odor control) 675,321
Covenant not to Compete 100,000
Total $ 800,000
Research and Development
Research and development costs incident to new product development are charged
to the respective expense category when the costs are incurred.
Advertising
The Company follows the policy of charging the costs of advertising to expense
as incurred.
Note#2 Income Taxes
Income Taxes
Generally accepted accounting principles require an asset and liability
approach to financial accounting and reporting for income taxes. The
<PAGE> 11
difference between the financial statement and tax basis of assets and
liabilities is determined annually. Deferred income tax assets are computed
for those differences that have future tax consequences using the currently
enacted tax laws and rates that apply to the periods in which they are
expected to affect taxable income. Valuation allowances are established, if
necessary, to reduce the deferred tax asset to the amount that will more
likely than not be realized.
The Company's total deferred tax assets, and deferred tax asset valuation
allowance are as follows at June 30, 1999:
Total deferred tax asset $ 715,468
Less valuation allowance (715,468)
$ 0
The deferred tax asset results from a net operating loss carryforward.
The valuation allowance was established to reduce the deferred tax asset to
the amount that will more likely than not be realized. This reduction is
necessary due to uncertainty of the Company's ability to utilize all of the
net operating loss carryforwards before they expire.
The income tax provision consists of the following:
Current $ 0
Deferred 715,468
Less valuation allowance (715,468)
Total $ 0
The income tax provision differs from the expense that would result from
applying federal statutory tax rates to income before income taxes because
certain investment income is not taxable, and a valuation allowance has been
provided to reduce deferred tax assets to the amount that is more likely than
not to be realized. Deferred income taxes are based on average tax rates and
reflect the increased expense due to enacted tax rate increases.
At June 30, 1999 the Company has available for future periods a net operating
loss carryforward for tax purposes of $1,788,670. No income taxes were paid
for the year ended June 30, 1999.
Note #3 Contracts in Progress
As described in Note #1, the Company accounts for it long-term contracts under
the percentage of completion method of accounting. As of June 30, 1999 the
Company had one contract that had recoverable costs in excess of billings as
follows:
Costs minus estimated losses incurred on uncompleted contracts $56,892
Less: Billings on uncompleted contracts 40,000
Recoverable costs and earnings in excess of billings $16,892
<PAGE> 12
Note #4 Capitalized Lease Obligations
The Company leases certain office furniture and transportation equipment under
obligations that have been classified as capital leases. The equipment leased
has been recorded as fixed assets and is being depreciated over the economic
life of those assets. Net book values of the leased equipment is as follows as
of June 30, 1999:
Equipment $28,277
Less: Accumulated amortization 9,703
Net Leased Property Under Capitalized Leases $18,574
Amortization of capitalized lease assets included in depreciation expense for
the fourteen months ended June 30, 1999 was $9,703.
The future minimum lease payments required by the above-capitalized leases
together with the present value of the net minimum lease payments are as
follows for the years ended June 30:
2000 $ 8,816
2001 4,416
2002 3,225
Total minimum lease payments $16,457
Less: Amount representing interest 890
Present value of net minimum lease payments $15,567
Amount due currently (Exhibit A) $ 8,266
Amount due after one year (Exhibit A) $ 7,301
Capitalized lease obligations of $15,567 were incurred during the fourteen
months ended June 30, 1999.
Note #5 Related Party Transactions
Notes Receivable
The Company has two unsecured notes receivable due from the President and CEO
of the Company. A one-year $15,000 note dated May 1, 1998 bearing no stated
interest was outstanding at June 30, 1999. A second note for $75,000 dated
January 1, 1998, due July 1, 2001, bearing interest at 5% was outstanding as
of June 30, 1999. Interest income accrued relating to these notes at June 30,
1999 was $3,625.
The Company has two unsecured notes receivable from the Vice-President of
Sales. A three year note dated January 15, 1999 for $45,000 bearing interest
at 5% is outstanding as of June 30, 1999. A three year note for $30,000 dated
March 1, 1998 bearing interest at 5% was also
<PAGE> 13
outstanding as of June 30, 1999. Interest income accrued relating to these
notes at June 30, 1999 was $1,517.
The following is a summary of notes receivable as of June 30:
Total Notes Receivable $165,000
Less: current maturities 90,000
Amount due after one year $ 75,000
Management fees described in Note 12 includes $128,775 paid to Applied Power
Holdings, a company owned by related parties.
Note #6 Commitments
Operating Lease Obligations
The Company leases operating facilities in Franklin, Kentucky under an
operating lease originally dated August 24, 1998 and expiring on September 1,
1999. Terms of the lease require annual rent of $12,960 plus payment of all
operating expenses of the leased facilities. The Company leased additional
operating facilities under an operating lease dated November 1, 1998 and
expiring on October 31, 2000. Terms of this additional lease require rent of
$16,560 plus payment of all operating expenses of the leased facilities.
These two leases are renewable for an additional one-year term with an
additional rental increase on September 1, 1999 and October 31, 2000 that will
be tied to the increase in the Consumer Price Index.
The Company leases operating facilities in Goldsboro, North Carolina from
Wooten Oil Company Assigns under an operating lease originally dated February
8, 1999 and expiring on February 8, 2000. Terms of the lease require annual
rent of $9,000 plus payment of all operating expenses of the building. The
lease is renewable for an additional one-year term with an additional rental
increase on February 8, 2000, which will be tied to the increase in the
Consumer Price Index.
The future minimum lease payments required, not including potential increases
in the Consumer Price Index, for the two leases are as follows for the years
ending June 30:
2000 $ 38,520
2001 38,520
2002 38,520
2003 38,520
After 2003 38,520
Total $ 192,600
<PAGE> 14
The Company has various leases with non-related entities under lease
agreements beginning in 1998 and expiring in 2000. The minimum annual rental
payments required under these leases, having initial or remaining
non-cancelable terms in excess of one year, are as follows for the years
ending June 30:
2000 $ 15,829
2001 12,701
2002 5,128
Total $ 33,658
Rent expense for these leases for the fourteen months ended June 30, 1999 was
$11,180.
Employment and other Service Agreements
The Company has employment and independent contractor agreements with
officers, employees, and stockholders that were entered into in 1998 and
expiring in 2001. These employment agreements automatically renew for two
additional years. Each agreement specifies the amount of compensation to be
paid and the fringe benefits to which the officer or employee or stockholder
is entitled.
Additionally, each agreement provides an option to purchase class B common
stock at par in a vesting schedule stipulated in the agreement.
Note #7 Contingencies
Cash
The Company had at times during the year funds on deposit at one financial
institution that exceeded the federally insured limit.
Under an exclusive four year agreement dated June 22, 1998 and amended
December 11, 1998, the Company agreed to utilize A-TEK Technologies
exclusively for the development of hardware and software related to Agtech's
cooling and waste treatment systems, in exchange for a maximum of 160,000
shares of Agtech class B common stock as well as progress billings for time
and efforts expended. As of June 30, 1999, none of the stock had been issued
to A-TEK Technologies.
Under a three-year agreement dated September 1, 1998, the company agreed to
utilize Pearce Research Associates, Inc. to strategize and to market Agtech's
lagoon-less technology in order to obtain state and federal grants to be
utilized in refining the lagoon-less technologies developed by Agtech. In
exchange for Pearce's services, the company issued 25,000 shares of Class B
common stock with obligations for the following:
Annual compensation of 12,500 shares of Class B common stock issued
September 1, 1999 and September 1, 2000.
<PAGE> 15
5,000 shares of Class B common stock for every $100,000 in state or
Federal grants received by Agtech up to a maximum of 50,000 shares
Note #8 Subsequent Events
The Company management personnel's efforts to address the question of the
viability of the Company and its abilities to and eventually emerge as a
profitable going concern are directed on two fronts.
- -On March 29, 1999, the Company arranged to acquire the controlling interest
in Oak Brook Capital I, a "shell", or "blank check" company registered with
the Securities and Exchange Commission. The express purpose of the existence
of such a company is to acquire a company with operations with which to merge
and enhance financial operations by providing accessibility to public capital
markets. The intended merger had not yet take place at balance sheet date.
The reverse merger was closed on October 5 prior to the end of audit
fieldwork.
- -The Company continues to develop and refine its products and expects revenue-
producing contracts to be in place before the end of the second quarter of its
next fiscal year. The Company was negotiating contracts for the delivery of
a livestock cooling and pharmaceutical delivering system for $114,000 at an
expected cost of $14,000, and a lagoon-less dairy waste treatment system of
a similar scale. Contracts had not been signed at the completion of audit
field work on October 17, 1999.
Note #9 Capital Stock
The following schedule summarizes the share activity of the capital stock from
inception through June 30, 1999:
$.01 Par $.01 Par $.01 Par
Value,Class Value,Class Value,Class
A Common B Common C Common
Stock Stock Stock
___________ ___________ ___________
Shares granted to founders 396,500 1,982,500
Shares granted to employees of MPI 87,080
Issuance of shares as incentive bonus 1,500,000
Shares issued in connection with business
Acquisition 800,000
Sale of capital stock 2,290,400 2,841,600
Exercise of stock options 70,000
Issuance of shares relating to consulting
Agreements 70,000
Conversion of shares from debt agreement 375,512 0 0
Balance June 30, 1999 3,202,412 2,387,080 4,824,100
<PAGE> 16
Stock Classifications
The capital stock of the Company is described as follows:
Class A Common Stock: 9,000,000 shares authorized, $.01 par value,
Entitled to elect one member of the board,
1 vote per share,
Shares equally in dividends with class B and C stock,
Preference upon liquidation to receive par value as well
as 100% of additional paid-in capital before Class B and
Class C stock participates.
Class B Common Stock 18,000,000 shares authorized, $.01 par value
Entitled to elect one member of the board
1 vote per share
Shares equally in dividends with class A and C stock
Class C Common Stock 3,000,000 shares authorized
Entitled to elect two members of the board
1 vote per share
Shares equally in dividends with Class A and B Stock
May not be diluted below 10% of all shares issued and
outstanding before August 8, 2000
Note # 10 Debt Exchanged for Stock
On March 9, 1999, the Company executed convertible notes in the amount of
$275,000 due June 9, 1999 with two shareholders, each bearing an interest rate
of 8.75%. Each note also contained a penalty clause charging the maker of the
note 11.75% interest on all outstanding principal and interest as well as an
additional 10,000 shares each of Class A common stock for every 30 day period
the note has not been paid. The holder of the each note may convert the
outstanding principal, and accrued interest into Class A common stock at a
conversion price of $.80 share. Attached to each note is a stock warrant for
100,000 shares of Class A Common stock at par. This stock warrant is
exercisable within five years of the date of the related note.
On June 30, 1999, the shareholder's converted their notes as follows:
# 1 # 2
Principal $ 137,500 $ 137,500
Accrued Interest @ 8% 3,002 3,002
Accrued Interest @ 11.75% 1,697 1,697
Total principal and accrued interest $ 142,204 $ 142,204
Total number of shares exchanged 177,756 >177,756
Additional Class A Shares issued due
to note past due 10,000 10,000
Total shares converted into Common Stock 187,756 187,756
<PAGE> 17
Note #11 Shares Reserved for a Specific Purpose
In order to attract initial investors, specialized contractors and other
unique individuals needed for product development, financing, or management
the company has reserved Class B common stock as of June 30, 1999:
Options granted to independent contractor agreements
for goods and services 4,496,602
Warrants granted relating to issuance of debt 200,000
Options exercised (700)
Total stock warrants, grants and
options of class B common stock outstanding 4,695,902
shares
Note #12 Earnings per share
Basic earnings per share are computed by dividing earnings available to common
shareholders by the weighted average number of common shares outstanding
during the period. Diluted earnings per share reflect per share amounts that
would have resulted if dilutive potential common stock had been converted to
common stock. The following reconciles amounts reported in the financial
statements:
For the fourteen months ended June 30, 1999
Income Shares Per-share
(Numerator) (Denominator) Amount
Loss from continuing operationsand
allocated to common shareholders-
basic earning per share $ (1,788,670) 7,419,519 $ (.24)
Effect of dilutive securities
Stock Options 2,857,887
Loss allocated to common
shareholders - fully diluted
earnings per share $ (1,788,670) 10,277,406 $ (.17)
<PAGE> 18
Note #13 Research and Development stage expeses
As of June 30, 1999 the company is in the development stage. Accordingly, the
company has incurred research and development expenses for the eighteen months
ended June 30, 1999 as follows:
Consultant Expense $ 741,790
Management Fees - APH 128,775
R&D - Miscellaneous 59,844
R&D - Salaries 127,100
Total $ 1,057,509
(b) Pro Forma Financial Information.
The pro forma financial statement required by this Item 7(b) is set forth
below.
Pursuant to Rule 11-02b(2) of Regulation S-X of the Act, we herewith submit
the following:
On October 6, 1999 this 8-K was filed to report on the combination of AEI
Environmental, Inc. and Oak Brook Capital I, Inc. Oak Brook Capital I, Inc.
was the surviving corporation and changed its name to AEI Environmental, Inc.
Since Oak Brook Capital I was a "blank check" company prior to the
transaction, and had no assets, one liability, and negative equity according
to the Amended Form 10QSB filed October 19, 1999, and those items were all of
insignificant materiality, the pro forma information necessary to complete the
requirements of Section 7a will be almost identical to the June 30, 1999
audit report.
Balance Sheets
Pro-forma Combined
Oak Brook AEI Environ- Surviving
Capital I mental, Inc. Corp. Renamed
6-30-99 6-30-99 @6-30-99
ASSETS
Cash & cash equiv. - $ 64,952 64,952
Accounts Rec. - 10,444 10,444
Prepaid Expenses - $ 19,103 $ 19,103
LIABILITIES
Accounts payable $ 7,725 $ 163,030 $ 170,755
EQUITY
Common Stock $ 4,200 $ 104,136 $ 108,336
Accumulated Deficit (11,925) (1,778,670) (1,790,595)
Total Equity (7,725) 1,013,570 1,005,845
Total Liabilities & Equity $ - $ 1,244,206 $ 1,244,206
Operating Statements
From Inception to 6-30-99
Oak Brook AEI Environ- Pro-forma Combined
Capital I mental, Inc. Surviving
Inception Corp. Renamed
5-15-98 14 Month @6-30-99
Revenue $ - $ - $ -
Expenses Incurred during
the development stage 11,925 1,806,373 1,818,298
Net Loss 11,925 1,788,670 1,800,595
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AEI ENVIRONMENTAL, INC.
By: /s/ Mark A. Margason
________________________________
MARK A. MARGASON
Vice Chairman
Date: December 6, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
________________ ______________ _________________
/s/Mark Margason Vice Chairman December 6, 1999
& Director
<PAGE> 11
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
EXHIBITS
TO
FORM 8-K
CURRENT REPORT FILED PURSUANT TO
THE SECURITIES EXCHANGE ACT OF 1934
---------------------------
AEI ENVIRONMENTAL, INC.
EXHIBIT INDEX
Exhibit No. Exhibit
__________ _______
x 2.1 Articles of Merger between Oak Brook Capital I, Inc.
and AEI Environmental, Inc., dated September 29, 1999;
x 2.2 Plan of Merger dated September 15, 1999;
# 3(a) Articles of Incorporation
# 3(b) Bylaws
# 4(a) Agreements Defining Certain Rights of Shareholders
# 4(b) Specimen Stock Certificate
x 5.1 Opinion of Mark T. Thatcher, P.C. regarding the legality
of the securities being offered hereby.
7 Not applicable
<PAGE> 12
Exhibit No. Exhibit
___________ _______
9 Not applicable
x 10.1 Issuance of Restricted Shares from Authorized Shares
x 10.2 Opinion to Transfer Agent Authorizing Issuance of
Restricted Shares from Authorized Shares
11 Not applicable
14 Not applicable
16 Not applicable
x 20.1 Board of Director's Resolution's authorizing merger and
name change from Oak Brook Capital I, Inc. to AEI
Environmental, Inc.;
21 Not applicable
x 23.1 Consent of Counsel
(contained in Exhibit 5.1)
x 24.1 Consent of Dennis W. Bersch, CPA.
27 Financial Data Schedule
28 Not applicable
# 99.1 Safe Harbor Compliance Statement
____________________________
x filed herewith
# incorporated herein by reference from Registrant's Third
Amendment to Form 10SB12G, filed July 29, 1999.
</TABLE>
OAK BROOK CAPITAL I, INC.
and
AGTECH ENVIRONMENTAL, INC.
ARTICLES OF MERGER
Pursuant to the provisions of the Colorado Business Corporation Act (CRS
7-111-107, et seq., as amended) the undersigned corporations adopt the
following Articles of MERGER:
FIRST: Attached hereto as Exhibit A is the Plan of Merger of OAK BROOK
CAPITAL I, INC., a Colorado corporation, and AGTECH ENVIRONMENTAL, INC., a
Delaware corporation, a copy of which has been mailed to all respective
shareholders.
SECOND: The Plan of Merger was duly adopted by the Boards of Directors
of the respective corporations on August 17, 1999, and approved by the Board
of Directors and Shareholders of OAK BROOK CAPITAL I, INC. on September 13,
1999, and by the shareholders of AGTECH ENVIRONMENTAL, INC., on September 13,
1999, in the manner prescribed by the Delaware General Corporation Law. The
number of shares voted for the Plan of Merger was, with respect to each
corporation, sufficient for approval as set forth below.
(A) The number of shares of OAK BROOK CAPITAL I, INC. outstanding at the
time of such adoption was 1,228,000, and the number of Shares entitled to vote
thereon was:
1,228,000.
The number of shares of AGTECH ENVIRONMENTAL, INC. outstanding at the time of
such adoption was 12,248,457, and the number of shares entitled to vote
thereon was:
12,249,457.
The designation and number of outstanding shares of each class entitled to
vote thereon as a class were:
NONE.
The address of the registered office of the corporation shall continue to be
17 West Cheyenne Mountain Boulevard, Colorado Springs, CO 80906, and the name
of the registered agent at such address is Mark T. Thatcher, Esq. Either the
registered office or the registered agent may be changed in the manner
provided by law.
/s Mark T. Thatcher
______________________________
REGISTERED AGENT
<PAGE>
(B) The number of shares voted for such Plan of Merger by OAK BROOK
CAPITAL I, INC. was 1,105,200, and the number of shares voted against such
Plan of Merger was:
NONE.
The number of shares voted for such Plan of Merger by AGTECH ENVIRONMENTAL,
INC., was 9,973,483, and the number of shares voted against such Plan of
Merger was:
NONE.
IN WITNESS WHEREOF, the following persons have duly executed and verify
these Articles of Merger this 23RD day of September, 1999.
OAK BROOK CAPITAL I, INC.,
a Colorado corporation
Attest:
/s/ Gerard Werner /s/ Mark T. Thatcher
_____________________ By:______________________
GERARD WERNER, MARK T. THATCHER,
Secretary President
AGTECH ENVIRONMENTAL, INC.,
a Delaware corporation
/s/ Mark A. Margason
By:______________________
MARK A. MARGASON,
Secretary
PLAN OF MERGER
OAK BROOK CAPITAL I, INC.
AND
AGTECH ENVIRONMENTAL, INC.
THIS PLAN AND AGREEMENT OF MERGER (hereinafter called "this Agreement"),
dated as of September 13, 1999, is by and between OAK BROOK CAPITAL I, INC., a
Colorado corporation (hereinafter referred to as "Oak Brook" and/or "Surviving
Corporation"), and AGTECH ENVIRONMENTAL, INC., a Delaware corporation
(hereinafter called "AgTech" and/or "Disappearing Corporation"), said
corporations being hereafter sometimes collectively referred to as the
"Constituent Corporations", and Mark T. Thatcher ("Thatcher"), and Gerard
Werner ("Werner").
WITNESSETH:
WHEREAS, Oak Brook is a corporation duly organized and existing under the
laws of the State of Colorado, having been incorporated in 1998, and AgTech
is a corporation duly organized and existing under the laws of the State of
Delaware, having been incorporated in 1998; and
WHEREAS, the authorized capital stock of Oak Brook consists of FORTY
MILLION (40,000,000) shares of no par value Common Stock, of which ONE MILLION
TWO HUNDRED TWENTY-EIGHT THOUSAND (1,228,000) shares are issued and
outstanding, and TEN MILLION (10,000,000) shares of Preferred Stock, $100.00
par value, of which ZERO (0) shares are issued and outstanding; and
WHEREAS, the authorized capital stock of AgTech consists of (i) NINE
MILLION (9,000,000) shares of Class A Common Stock, $0.01 par value, of which
THREE MILLION EIGHT HUNDRED EIGHTY-FIVE THOUSAND THREE HUNDRED FIFTY-SEVEN
(3,885,357) shares are issued and outstanding; (ii) EIGHTEEN MILLION
(18,000,000) shares of Class B Common Stock, $0.01 par value of which THREE
MILLION FIVE HUNDRED FORTY THOUSAND (3,540,000) shares are issued and
outstanding; and (iii) SIX MILLION (6,000,000) shares of Class C Common Stock,
$0.01 par value, of which FOUR MILLION EIGHT HUNDRED TWENTY-FOUR
THOUSAND ONE
HUNDRED (4,824,100) shares are issued and outstanding; and
<PAGE>
WHEREAS, the Boards of Directors of the Constituent Corporations deem it
advisable for the general welfare and advantage of the Constituent
Corporations and their respective shareholders that the Constituent
Corporations merge pursuant to this Agreement and pursuant to the applicable
provisions of the laws of the States of Colorado and Delaware; and
WHEREAS, Werner and Thatcher each own 552,600 shares of the issued and
outstanding common stock of Oak Brook;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereby agree, in accordance with the
applicable provisions of the laws of the States of Colorado and Delaware, that
the Constituent Corporations shall merge, to wit: AgTech Environmental, Inc.,
a Delaware corporation, one of the Constituent Corporations, which is not a
new corporation, and which shall cease its existence under the laws of the
State of Delaware pursuant to the Merger (said corporation hereafter being
sometimes called the "Disappearing Corporation"), and the terms and conditions
of the Merger hereby agreed upon (hereafter called the "Merger") which the
parties covenant to observe, keep and perform and the mode of carrying the
same into effect are and shall be as hereafter set forth:
ARTICLE I
CONDITIONS
The Merger shall be subject to the following conditions:
(a)the approval of the boards of directors of both Constituent
Corporations;
(b)the approval of that number of shareholders of both Constituent
Corporations, as required by the by-laws, articles of incorporation, and/or
the law of the States of Colorado and Delaware, as applicable.
ARTICLE II
EFFECTIVE TIME OF THE MERGER
At the effective time of the Merger, the separate existence of AgTech
shall cease and Oak Brook shall become the surviving corporation.
Consummation of this Agreement shall be effected on the date on which a
Certificate and Articles of Merger in substantially the form annexed hereto
is filed in the office of the Secretaries of State of the State of Colorado and
State of Delaware, all after satisfaction of the respective requirements of
the applicable laws of each of said states prerequisite to such filings.
<PAGE>
ARTICLE III
GOVERNING LAW; ARTICLES OF INCORPORATION
The laws which are to govern the Surviving Corporation are the laws of
the State of Colorado. The Articles of Incorporation of Oak Brook, as
heretofore amended, shall, prior to the effective time of the Merger, be
amended to the extent set forth in Paragraph Third of the Articles of Merger,
attached hereto, to amend the name of Oak Brook to AEI Environmental, Inc. As
so amended, such Articles of Incorporation shall remain in effect thereafter
until the same shall be further amended or altered in accordance with the
provisions thereof.
ARTICLE IV
BY-LAWS
The By-Laws of Oak Brook, at the effective time of the Merger shall be
the By-Laws of the Surviving Corporation until the same shall be altered or
amended in accordance with the provisions thereof.
ARTICLE V
DIRECTORS AND OFFICERS
1. Directors. On and after the Effective Date, the Directors of Oak
Brook at the effective time of the Merger shall be as set forth below, until
their respective successors are duly elected and qualified at the next annual
meeting of shareholders of Oak Brook. As of the effective time of the
Merger, the previous directors of Oak Brook shall resign.
The names and addresses of the Directors of the Surviving Corporation,
Oak Brook, are as follows:
Name Address
Ed McMillan 11578 Trail Ridge Place, Zionville, IN
Thomas F. Taft, Sr. P.O. Box 1766, Greenville, NC
Mark Margason 105 E. First Street, Hinsdale, IL
Greg Ransdell 215 Bluegrass Road, Suite C, Franklin, KY
John T. Zick 708 E. Woodland Avenue, Hinsdale, IL
<PAGE>
2. Officers. The names, titles and addresses of the persons who,
upon the Effective Date, shall constitute the officers of Oak Brook, and who
shall hold office, subject to the By-Laws, until the first meeting of
directors following the next annual meeting of shareholders, are as follows:
Name Title Address
Greg Ransdell Chief Executive Officer 215 Bluegrass Road, Suite C
Franklin, KY
Mark A. Margason Secretary; 105 E. First St.
Vice Chairman Hinsdale, IL
ARTICLE VI
CONVERSION OF SHARES IN THE MERGER
The mode of carrying into effect the Merger provided in this Agreement,
and the manner and basis of converting the shares of the Constituent
Corporations into shares of the Surviving Corporation are as follows:
1. Oak Brook Common Stock. No Shares of Common Stock, no par value,
of Oak Brook issued and outstanding at the effective time of the Merger shall
be converted as a result of the Merger, and all of such shares shall remain
issued shares of Common Stock of the Surviving Corporation.
2. AgTech Common Stock. At the effective time of the Merger, (i)
each share of $0.01 par value Class A Common Stock of AgTech issued and
outstanding shall be converted into and become one (1) share of Common Stock
of the Surviving Corporation; (ii) each share of $0.01 par value Class B
Common Stock of AgTech issued and outstanding shall be converted into and
become 0.28249 shares of Common Stock of the Surviving Corporation; and (iii)
each share of $0.01 par value Class C Common Stock of AgTech issued and
outstanding shall be converted into and become two thirds (2/3) shares of
Common Stock of the Surviving Corporation. Each holder of outstanding Common
Stock of AgTech shall surrender shares of Common Stock of AgTech, regardless
of class, for shares of Oak Brook, upon the ratios set forth above. Upon
surrender to Oak Brook of one or more stock certificates for Common Stock of
AgTech, each AgTech shareholder shall be entitled to receive one or more stock
certificates for the full number of shares of Common Stock of Oak Brook into
which the Common Stock of AgTech so surrendered shall have been converted as
aforesaid together with any dividends on the Common Stock of AgTech as to
which the payment date shall have occurred on or prior to the date of the
surrender of said shares.
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The common share allocation (the "Allocation") of the Surviving Corporation
will be as follows:
10,271,780 fully diluted, common shares of Oak Brook will be issued and
outstanding, inclusive of:
Option Holders of Class B Common Stock in AgTech who may exercise and
purchase up to NINE HUNDRED FORTY-TWO THOUSAND THREE HUNDRED
FIFTY-NINE (942,359) shares of Oak Brook
AgTech shareholders will own approximately 97.44% of the 10,271,780 fully
diluted, common shares of Oak Brook issued and outstanding, inclusive of the
shares to be transferred pursuant to Section 8 hereof.
3. Surrender of AgTech's Certificates. As soon as practicable after
the Merger becomes effective, the Stock Certificates representing Common Stock
of AgTech issued and outstanding at the time the Merger becomes effective
shall be surrendered for exchange to the Surviving Corporation as above
provided. Until so surrendered for exchange, each such Stock Certificate
nominally representing Common Stock of AgTech shall be deemed for all
corporate purposes (except for the payment of dividends, which shall be
subject to the exchange of stock certificates as above provided) to evidence
the ownership of the number of shares of Common Stock of the Surviving
Corporation which the holder thereof would be entitled to receive upon its
surrender to the Surviving Corporation.
4. Issuance of Shares Subsequent to Merger. As soon as practicable
after the Merger becomes effective, the Surviving Corporation shall issue to
the shareholders of the Disappearing Corporation, on the basis set forth in
Section 2 above, the necessary shares of Common Stock in the Surviving
Corporation. Thatcher and Werner agree to personally cause such action to be
taken by the Surviving Corporation.
5. Fractional Interests. No fractional shares of Common Stock of
the Surviving Corporation or certificate or scrip representing the same shall
be issued. In lieu thereof each holder of AgTech Common Stock having a
fractional interest arising upon such conversion will be rounded up into one
full additional share of Common Stock of the Surviving Corporation by the
transfer agent.
6. Status of Common Stock. All shares of Common Stock of the
Surviving Corporation into which shares of Common Stock of AgTech are
converted as herein provided shall be fully paid and non-assessable and shall
be issued in full satisfaction of all rights pertaining to such shares of
Common Stock of AgTech.
7. Independent Appraisal, Right to Dissent and Obtain Payment for
Shares; Procedures for Protection of Dissenter's Rights. In order to establish
a "fair value" for the shares of AgTech Common Stock which are paid in cash
in lieu of conversion into Oak Brook Common Stock, as provided above in this
Article VI, the Board of Directors of AgTech shall establish the value of
<PAGE>
AgTech's stock prior to the Merger, and shall afford to such shareholders of
AgTech all of the rights, and implement the procedures for protection of
dissenters' rights, pursuant to the provisions of the Delaware General
Corporation Law, Section 262, et seq., as amended, the terms and provisions
of which are hereby incorporated by reference and made a part hereof.
8. Shares of Werner and Thatcher. Werner and Thatcher agree to cause
nine hundred sixty-five thousand two hundred (965,200) shares of Oak Brook
owned by them to be transferred to such person or persons as AgTech shall
direct in writing within sixty (60) days following the effective time of the
Merger.
ARTICLE VII
EFFECT OF THE MERGER
At the effective time of the Merger, the Surviving Corporation shall
succeed to, without other transfer, and shall possess and enjoy, all the
rights, privileges, immunities, powers and franchises both of a public and a
private nature, and be subject to all the restrictions, disabilities and
duties of the Disappearing Corporation, and all the rights, privileges,
immunities, powers and franchises of the Disappearing Corporation on whatever
account, for stock subscriptions as well as for all other things in action or
belonging to the Disappearing Corporation, shall be vested in the Surviving
Corporation; and all property, rights, privileges, immunities, powers and
franchises, and all and every other interest shall be thereafter as
effectually the property of the Surviving Corporation as if it was the
Disappearing Corporation, and the title to any real estate vested by deed or
otherwise in the Disappearing Corporation shall not revert or be in any way
impaired by reason of the Merger; provided, however, that all rights of
creditors and all liens upon any property of either of said Constituent
Corporations shall be preserved unimpaired, limited in lien to the property
affected by such liens at the effective time of the Merger.
ARTICLE VIII
ACCOUNTING MATTERS
The assets and liabilities of the Disappearing Corporation as at the
effective time of the Merger shall be taken up on the books of the Surviving
Corporation at the amounts they are carried at that time on the books of the
Surviving Corporation. The amount of capital of the Surviving Corporation
after the Merger shall be equal to the sum of the aggregate stated and paid-in
capital of the Disappearing Corporation and of the aggregate amount of the
stated and paid-in capital of the Surviving Corporation. The surplus of the
Surviving Corporation after the Merger, including any surplus arising in the
Merger, shall be available to be used for any legal purposes for which
surplus may be used.
<PAGE>
ARTICLE IX
SHAREHOLDER APPROVAL;
FILING OF CERTIFICATE AND ARTICLES OF MERGER
This Agreement shall be submitted to the shareholders of each of the
Constituent Corporations for approval. If such requisite shareholder approval
is obtained, Articles of Merger in substantially the form annexed hereto as
Exhibit A shall be signed, verified and delivered to the Secretary of State
of the State of Colorado as provided by Section 7-111-105 of the Colorado
Business Corporation Act., and a Certificate of Merger in substantially the
form annexed hereto as Exhibit B shall be signed, verified and delivered to
the Secretary of State of the State of Delaware as provided by Section 252 of
Delaware General Corporation Law.
ARTICLE X
OAK BROOK REPRESENTATIONS AND WARRANTIES
Oak Brook, Werner and Thatcher, jointly and severally, represent and
warrant to AgTech, as follows:
1. Organization, Etc. Oak Brook is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado.
Oak Brook has corporate power to carry on its business as it is now being
conducted and is qualified to do business in every jurisdiction in which the
character and location of the assets owned by it or the nature of the
business transacted by it require qualification.
2. Capitalization. Oak Brook's capitalization consists of FORTY
MILLION (40,000,000) authorized shares, no par value Common Stock, of which
ONE MILLION TWO HUNDRED TWENTY-EIGHT THOUSAND (1,228,000) shares are
outstanding, and TEN MILLION (10,000,000) shares of Preferred Stock, $100.00
par value, of which ZERO (0) shares are outstanding as of the date hereof.
Each issued share is validly issued, fully paid, non-assessable and each
outstanding share is entitled to one vote.
3. List of Information. Oak Brook has delivered to AgTech a list of
information concerning Oak Brook and its subsidiaries dated the date hereof.
The information set forth in such list and the copies of documents referred
to in such list and furnished to AgTech are complete and accurate.
<PAGE>
4. Further Warranties and Representations:
(a) Oak Brook has and on the closing date will have good and marketable
title to all tangible/intangible assets in its records and books of account,
free and clear of all liens, encumbrances and charges and except for current
taxes and assessments not delinquent and liens, encumbrances and charges shown
in its records and books of account which are not substantial in character or
amount, and do not materially detract from the value or interfere with the
use of properties subject thereto or affected thereby.
(b) Oak Brook has and on the closing date will have good and marketable
title to the machinery, equipment, merchandise, materials, supplies and other
property of every kind, tangible or intangible, or shown as assets in its
records and books of account, free and clear of all liens, encumbrances and
charges and except for liens, encumbrances and charges, in any, which do not
materially detract from the value of or interfere with the use of the
properties subject thereto or affected thereby.
(c) There are no pending claims, all taxes imposed by the U.S. or by any
foreign country or by any state, municipality, subdivision or instrumentality
of the U.S. or of any foreign county or by any other taxing authority, which
are due or payable by Oak Brook, and all price redetermination or
renegotiation claims asserted or that may be asserted against it, have been
paid in full or are adequately provided for by reserves shown in the records
and books of account of Oak Brook's and will be so paid or provided for on
the closing date. Oak Brook has no knowledge of any unassessed tax deficiency
proposed or threatened against it.
(d) Except for agreements described in and appended to the Disclosure
Schedule, if any, none of which materially and adversely affects the earnings,
business, properties, or assets of Oak Brook, Oak Brook is not a party to:
(1)any sales agency agreement not subject to termination without
liability on notice of sixty (60) days or less;
(2)any pension, retirement or profit sharing plan or agreement not
cancelable within sixty (60) days without liability;
(3)any management or consultation agreement not terminable at will
without liability;
(4)any union agreement or loan agreement;
(5)any contract, accepted order or commitment for the purchase of
materials, products or supplies having a total contract price in excess of
$50,000; or
<PAGE>
(6)any other agreement which materially affects the business,
properties or assets of Oak Brook's, or which was entered into other than in
the ordinary and usual course of business.
Adequate reserves will be provided and set up on the books of account of Oak
Brook, and will continue to be so provided and set up throughout the expansion
of the project, for any contract, order or commitment expected to be
performed.
(e) Oak Brook is enjoying and on the closing date will enjoy good
working relationships under all of the agreements, dealer, sales
representation and other agreements necessary to the normal operation of its
business. All or substantially all of the real and personal properties used
in the business of Oak Brook are and on the closing date will be in good and
operable condition. Oak Brook is adequately insured with respect to risks
normally insured against by companies similarly situated. The "Disclosure
Schedule" shall contain a list, and be accompanied by copies, of all existing
insurance policies of Oak Brook's, including but not limited to group
insurance and pension plans. All such policies are in full force and
effect.
(f) The Disclosure Schedule shall also contain a list of all claims for
insured losses filed by Oak Brook during the three (3) year period immediately
preceding the date of this Agreement, including but not limited to workmen's
compensation, automobile and general and product liability.
(g) Except for liabilities to be discharged at the closing of the
Merger, Oak Brook has no liabilities whether known, unknown or contingent.
5. Litigation and Proceedings. There is no suit, action or legal or
administrative proceeding pending, or to the knowledge of Oak Brook
threatened, against it or any of its consolidated subsidiaries, which, if
adversely determined, might materially and adversely affect the financial
condition of Oak Brook or the conduct of its businesses nor is there any
decree, injunction or order of any court, governmental department or agency
outstanding against Oak Brook or any of its consolidated subsidiaries having
any such effect.
6. Material Contracts. Oak Brook is not in default in any respect
under the terms of any material outstanding contract, agreement, lease or
other commitment.
7. No Conflict with Other Instruments. At the effective time of the
Merger, the consummation of the transactions contemplated by this Agreement
will not result in the breach of any term or provision of or constitute a
default under any indenture, mortgage, deed of trust or other material
agreement or instrument to which Oak Brook or any of its subsidiaries is a
party.
8. Governmental Authorizations. Oak Brook has all licenses,
franchises, permits and other governmental authorizations which are valid and
sufficient for all businesses presently carried on by Oak Brook and its
consolidated subsidiaries.
<PAGE>
9. Exchange Act of 1934, Section 12 Reporting. Oak Brook has a class
of securities reported under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), is (and covenants that, prior to the
Effective Date, it will remain) current in its reporting obligations under
Section 13, 14 and 15(d) of the Exchange Act, has timely filed all documents
required to be filed by it with the Securities and Exchange Commission and has
conducted (and covenants that, prior to the Effective Date, it will continue
to conduct) its operation according to its ordinary and usual course of
business consistent with its status as a reporting company under the Exchange
Act.
10. Absence of Certain Changes or Events. From January 1, 1999 to
the date hereof, there has not been:
(i) Any change in the corporate status, businesses, operations or
financial condition of Oak Brook, other than changes in the ordinary course
of business.
(ii) any declaration, setting aside or payment of any dividend or
other distribution with respect to Oak Brook's Common Stock; or any purchase,
redemption or acquisition of such stock by Oak Brook; and
(iii) any other event or condition of any character which has
materially and adversely affected the corporate status, businesses, operations
or financial condition of Oak Brook and its consolidated subsidiaries taken
as a whole.
11. Liabilities. Oak Brook covenants and agrees to discharge all of
its liabilities prior to closing of the transaction contemplated herein.
12. Financial Statements. Oak Brook has delivered to AgTech copies
of its audited consolidated balance sheet as at December 31, 1998, and related
statements of consolidated earnings and earnings retained in the business for
the fiscal year ended on such date, in each case including the notes thereto.
All of such financial statements are true and complete and have been prepared
in accordance with generally accepted accounting principles consistently
followed throughout the periods indicated, except as otherwise indicated in
the notes thereto. Each of such balance sheets presents a true and complete
statement as of its date of the corporation's financial condition and assets
and liabilities subject to year-end adjustments. Except as and to the extent
reflected or reserved against therein (including the notes thereto), Oak Brook
did not have, as of the date thereof, any liabilities or obligations (whether
accrued, absolute, contingent or otherwise) of a nature customarily reflected
in a consolidated corporate balance sheet or the notes thereto, prepared in
accordance with generally accepted accounting principles. Each of such
statements of earnings and earnings retained in the business presents a true
and complete statement of the results of operations of Oak Brook for the
period indicated.
<PAGE>
13. Start Up. Oak Brook is a start up company and has had no sales,
has not conducted operations, and does not now have or ever had any debt for
borrowed funds, any inventory or employees.
14. S-8 Registration. Oak Brook shall have filed an S-8 Registration
for 140,000 shares of Common Stock issued pursuant to the 1998 Consultation
Services Agreement Plan of Oak Brook ("S-8 Registration"). The shares issued
pursuant to the S-8 Registration will be fully transferable in compliance
with the Securities Act of 1933.
ARTICLE XI
AGTECH'S REPRESENTATIONS AND WARRANTIES
AgTech represents and warrants to Oak Brook, as follows:
1. Organization. AgTech is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. AgTech
has corporate power to carry on its business as it is now being conducted and
is qualified to do business in every jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted
by it require qualification.
2. Capitalization. AgTech's capitalization consists of (i) NINE
MILLION (9,000,000) shares of Class A Common Stock, $0.01 par value, of which
THREE MILLION EIGHT HUNDRED EIGHTY-FIVE THOUSAND THREE HUNDRED FIFTY-SEVEN
(3,885,357) shares are outstanding; (ii) EIGHTEEN MILLION (18,000,000) shares
of Class B Common Stock, $0.01 par value of which THREE MILLION FIVE HUNDRED
FORTY THOUSAND (3,540,000) shares are outstanding; and (iii) SIX MILLION
(6,000,000) shares of Class C Common Stock, $0.01 par value, of which FOUR
MILLION EIGHT HUNDRED TWENTY-FOUR THOUSAND ONE HUNDRED (4,824,100) shares are
outstanding. Each issued share is validly issued, fully paid, non-assessable
and each outstanding share is entitled to one vote.
3. Shares to be Issued. At the effective time of the Merger, each
share of no par value Common Stock of AgTech shall be converted into and become
shares of Common Stock of the Surviving Corporation, pursuant to the conversion
terms of Article VI. Upon surrender to Oak Brook of one or more stock
certificates for Common Stock of Oak Brook, each AgTech shareholder shall be
entitled to receive one or more stock certificates for the full number of
shares of Common Stock of Oak Brook into which the Common Stock of AgTech so
surrendered shall have been converted as aforesaid together with any dividends
on the Common Stock of AgTech as to which the payment date shall have occurred
on or prior to the date of the surrender of said shares.
<PAGE>
4. Financial Statements. AgTech has retained the services of an
independent certified public accounting firm known as Bersch & Associates, of
Milwaukee, Wisconsin for the purpose of preparing audited financial
statements, including a balance sheet, consolidated statement of income and
statement of sources and uses of funds, for the period ending June 30, 1999.
APP agrees to deliver to Oak Brook on or before sixty (60) days from the date
of this Agreement a true and correct copy of the audit report for its period
ending June 30, 1999 as prepared by the independent certified public
accountants.
5. Further Warranties and Representations:
(a) AgTech has and on the closing date will have good and
marketable title to all tangible/intangible assets in its records and books of
account, free and clear of all liens, encumbrances and charges and except for
current taxes and assessments not delinquent and liens, encumbrances and
charges shown in its records and books of account which are not substantial
in character or amount, and do not materially detract from the value or
interfere with the use of properties subject thereto or affected thereby.
(b) AgTech has and on the closing date will have good and
marketable title to the machinery, equipment, merchandise, materials, supplies
and other property of every kind, tangible or intangible, or shown as assets
in its records and books of account, free and clear of all liens, encumbrances
and charges and except for liens, encumbrances and charges, in any, which do
not materially detract from the value of or interfere with the use of the
properties subject thereto or affected thereby.
(c) There are no pending claims, all taxes imposed by the U.S. or
by any foreign country or by any state, municipality, subdivision or
instrumentality of the U.S. or of any foreign country or by any other taxing
authority, which are due or payable by AgTech, and all price redetermination
or renegotiation claims asserted or that may be asserted against it, have been
paid in full or are adequately provided for by reserves shown in the records
and books of account of AgTech and will be so paid or provided for on the
closing date. AgTech has no knowledge of any unassessed tax deficiency
proposed or threatened against it.
(d) Except for agreement described in and appended to the
Disclosure Schedule, if any, none of which materially and adversely affects
the earnings, business, properties, or assets of AgTech, AgTech is not a
party to:
(1)any sales agency agreement not subject to termination
without liability on notice of sixty (60) days or less;
(2)any pension, retirement or profit sharing plan or agreement
not cancelable within sixty (60) days without liability; or
(3)any union agreement or loan agreement.
<PAGE>
(e) AgTech is enjoying and on the closing date will continue to enjoy
good working relationships under all agreements, dealer, sales representation
and other agreements necessary to the normal operation of its business. All
or substantially all of the real and personal properties used in the business
of AgTech are and on the closing date will be in good and operable condition.
AgTech is adequately insured with respect to risks normally insured against
by companies similarly situated.
6. Litigation and Proceedings. There is no suit, action or legal or
administrative proceeding pending, or to the knowledge of AgTech threatened,
against it or any of its consolidated subsidiaries, which, if adversely
determined, might materially and adversely affect the financial condition of
AgTech and its consolidated subsidiaries or the conduct of their businesses
nor is there any decree, injunction or order of any court, governmental
department or agency outstanding against AgTech or any of its consolidated
subsidiaries having any such effect.
7. Material Contracts. AgTech is not in default in any material
respect under the terms of any material outstanding contract, agreement,
lease or other commitment.
8. No Conflict with Other Instruments. At the effective time of the
Merger, the consummation of the transactions contemplated by this Plan will
not result in the breach of any term or provision or constitute a default
under any indenture, mortgage, deed of trust or other material agreement or
instrument to which AgTech or any of its subsidiaries is a party.
9. Governmental Authorizations. AgTech and each of its consolidated
subsidiaries have all licenses, franchises, permits and other governmental
authorizations which are valid and sufficient for all businesses presently
carried on by AgTech and its consolidated subsidiaries.
10. Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by AgTech directly with
David Pequet and Mark Margason, and without the intervention of any other
person.
11. Covenants and Obligations of Breaching Party. Each party agrees
to indemnify and hold harmless the other party for and from all liability,
loss, cost, damage or expense, including reasonable attorneys fees and costs
of litigation, which the other party may sustain or incur or which the other
party may be threatened by reason of or arising out of any breach or any
untrue or misrepresented statement of fact contained in the warranties,
representations and agreements set forth in this Agreement, or any omission
therein of a material fact necessary to make the statements contained therein
accurate or the breach by a party of any representation made under or in
connection with this Agreement or the transactions contemplated hereby or the
nonfulfillment of any covenant or agreement on the part of the party under or
in connection with this Agreement or the transactions contemplated hereby.
The non-breaching party shall promptly notify the breaching party in writing
of any claims for indemnification and provide the breaching party the
opportunity to cure claims for indemnification or defend indemnifiable claims
by third parties at the expense of the breaching party.
<PAGE>
12. Nature and Survival of Representations. All statements contained
in any certificate or other instrument delivered by or on behalf of either
party pursuant hereto, or in connection with the transactions contemplated
hereby, shall be deemed to be representations and warranties by such
disclosing party to the receiving party. All representations, warranties,
rights to indemnification and agreements made by each party in this
Agreement, or pursuant hereto, shall survive the closing.
ARTICLE XII
CONDUCT OF BUSINESSES PENDING THE MERGER
From and after the date of this Agreement and prior to the effective time
of the Merger, neither of the Constituent Corporations will, without the prior
written consent of the other:
1. Amend its Certificate of Incorporation or By-Laws except, in the
case as may be necessary to enable them to carry out the provisions of this
Agreement;
2. Engage in any material activity or transaction or incur any
material obligation (by contract or otherwise) except in the ordinary course
of business;
3. Issue rights or options to purchase or subscribe to any shares of
its capital stock or subdivide or otherwise change any such shares;
4. Issue or sell any shares of its capital stock or securities
convertible into shares of its capital stock; or
5. Declare or pay any dividends on or make any distributions in
respect of any shares of its capital stock.
6. From and after the date of this Agreement and prior to the
effective time of the Merger, AgTech will use its best efforts to preserve
its business organizations; to keep available to Oak Brook the services of
AgTech's present officers and employees; and to preserve for Oak Brook the
goodwill of AgTech's suppliers, customers and others having business relations
with any of them. During the same period, AgTech will not put into effect
any material increase in the compensation or other benefits applicable to
officers or other key personnel.
7. Oak Brook shall not engage in any business and will not enter
into any contracts or commitment, borrow any money or retain any employees.
<PAGE>
ARTICLE XIII
ADDITIONAL AGREEMENTS
The Constituent Corporations further agree as follows:
1. Access and Information. Oak Brook and AgTech hereby agree that
each will give to the other and to the other's accountants, counsel and other
representatives full access during normal business hours throughout the period
prior to the Merger to all of its properties, books, contracts, commitments
and records, and that each will furnish the other during such period with all
such information concerning its affairs as such other party may reasonably
request. In the event of the termination of this Agreement each party will
deliver to the other all documents, work papers and other material obtained
from the other relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, and will use its best efforts
to have any information so obtained and not heretofore made public kept
confidential.
2. Expenses. Upon a termination of this Agreement as provided in
Section C of Article XIV hereof, each party will pay all costs and expenses
of its performance of and compliance with all agreements and conditions
contained herein to be performed or complied with, including fees, expenses and
disbursements of its accountants and control.
3. Further Assurances. If at any time the Disappearing Corporation
shall consider or be advised that any further assignment or assurance in law
or other action is necessary or desirable to vest, perfect, or confirm, of
record or otherwise, in the Disappearing Corporation, the title to any
property or rights of AgTech acquired or to be acquired by or as a result of
the Merger, the proper officers and directors of Oak Brook and the
Disappearing Corporation, respectively, shall be and they hereby are severally
and fully authorized to execute and deliver such proper deeds, assignments and
assurances in law and take such other action as may be necessary or proper in
the name of Oak Brook or the Disappearing Corporation to vest, perfect or
confirm title to such property or rights in the Disappearing Corporation and
otherwise carry out the purposes of this Agreement.
ARTICLE XIV
CONDITIONS PRECEDENT; TERMINATION; GENERAL PROVISIONS
A. Conditions Precedent to AgTech's Obligations. The obligations of
AgTech to effect the Merger shall be subject to the following conditions
(which may be waived in writing by AgTech):
1. The representations and warranties of Oak Brook, Thatcher and
Werner herein contained shall be true as of and at the effective time of the
Merger with the same effect as though made at such time; Oak Brook, Thatcher
and Werner shall have performed all obligations and
<PAGE>
complied with all covenants required by this Agreement to be performed or
complied with by them prior to the effective time of the Merger; and Oak Brook
shall have delivered to AgTech a certificate, dated the effective date of the
Merger and signed by its President or one of its Vice Presidents and its
Secretary or one of its Assistant Secretaries, to such effect.
2. No material changes in the corporate status, businesses,
operations or financial condition of Oak Brook, and its consolidated
subsidiaries shall have occurred since January 1, 1999 (whether or not covered
by insurance), other than changes in the ordinary course of business, none of
which has been materially adverse in relation to Oak Brook and its
subsidiaries, taken as a whole, and no other event or condition of any
character shall have occurred or arisen since that date which shall have
materially and adversely affected the corporate status, businesses, operations
or financial condition of Oak Brook, and its subsidiaries, taken as a whole.
3. AgTech shall have received such written consents and
confirmations (or opinions of counsel to the effect that such consents or
confirmations are not required), as it may reasonably request to the effect
that the Surviving Corporation will succeed upon consummation of the Merger to
all of AgTech's right, title and interest in and to its material contracts,
agreements, leases and other commitments and that the Surviving Corporation
shall possess and enjoy all material licenses, franchises, permits and other
governmental authorizations possessed by AgTech at the date hereof.
4. Oak Brook, acting through its Board of Directors, shall, subject
to and in accordance with applicable law and its Certificate of Incorporation
and its By-Laws, (i) promptly and duly call, give notice of, convene and hold
as soon as practicable a meeting of the holders of Oak Brook Common Stock for
the purpose of voting to approve and adopt this Agreement and the transactions
contemplated hereby, and (ii) recommend approval and adoption of this
Agreement and the transactions contemplated hereby, by the stockholders of the
Company and include the Proxy Statement such recommendations and (iii) take
all reasonable action to solicit and obtain such approval.
Oak Brook shall, as promptly, as practicable (or at such other time
as may be mutually agreed by Oak Brook and AgTech), cause the definitive
Proxy Statement to be mailed to the stockholders of Oak Brook.
As of the effective time of the Merger the Oak Brook stockholders
will have voted to approve and adopt this Agreement and the transactions
contemplated hereby and such vote has not been rescinded.
5. Oak Brook is a fully reporting company under the Exchange Act and
is in full compliance with the requirements of the Exchange Act.
6. The shares issued pursuant to the S-8 registration are fully
transferable in compliance with the Securities Act of 1933.
<PAGE>
B. Conditions Precedent to Oak Brook's Obligations. The obligations
of Oak Brook to effect the Merger shall be subject to the following
conditions (which may be waived in writing by Oak Brook):
1. The representations and warranties of AgTech herein contained
shall be true as of and at the effective time of the Merger with the same
effect as though made at such time; AgTech shall have performed all
obligations and complied with all covenants required by this Agreement to be
performed or complied with by it prior to the effective time of the Merger;
and AgTech shall have delivered to Oak Brook a Certificate, dated the
effective date of the Merger; and signed by its Chairman of the Board and
President or one of its Vice Presidents and its Secretary or one of its
Assistant Secretaries, to such effect.
2. Oak Brook shall have received such written consents and
confirmations (or opinions of counsel to the effect that such consents or
confirmations are not required), as it may reasonably request to the effect
that the Surviving Corporation will succeed upon consummation of the Merger to
all of AgTech's right, title and interest in and to its material contracts,
agreements, leases and other commitments and that the Surviving Corporation
shall possess and enjoy all material licenses, franchises, permits and other
governmental authorizations possessed by Oak Brook at the date hereof.
3. The AgTech stockholders have voted to approve and adopt this
Agreement and the transactions contemplated hereby.
C. Termination and Abandonment. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and abandoned at
any time before the effective time of the Merger, whether before or after
adoption or approval of this Agreement by the Directors of the Constituent
Corporations under any one or more of the following circumstances:
1. By the mutual consent of the Boards of Directors of the
Constituent Corporations;
2. By AgTech if, prior to the effective time of the Merger, each of
the conditions set forth in Paragraphs 1 through 5, inclusive, of Section A
of this Article XIV shall not have been met;
3. By Oak Brook if, prior to the effective time of the Merger, each
of the conditions set forth in Paragraphs 1 through 4 inclusive of Section B
of this Article XIV shall not have been met;
4. By either of the Constituent Corporations if any action or
proceeding before any court or other governmental body or agency shall have
been instituted or threatened to restrain or prohibit the Merger and such
Constituent Corporation deem it advisable to proceed with the Merger; or
5. By either of the Constituent Corporations if the Certificate of
Merger shall not have been filed as provided in Article II hereof on or before
September 30, 1999.
<PAGE>
Upon any such termination and abandonment, neither party shall have any
liability or obligation hereunder to the other.
D. General. The headings in this Agreement shall not affect in
anyway its meaning or interpretation. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. So long as the basic intent of the Merger is not obviated, in
the event that any provision of this Plan of Merger is held to be invalid or
illegal for any reason, such determination shall not effect the remaining
provisions which shall be construed and enforced as if such illegal or
invalid provision had never been included. All section headings, titles and
subtitles contained herein are inserted for convenience and reference only
and are to be ignored in any construction of the provisions hereof.
E. Amendments. Any of the terms or conditions of this Agreement may
be modified or waived at any time before the effective time of the Merger by
the party which is, or the shareholders of which are, entitled to the benefit
thereof upon the authority of the Board of Directors of such party, provided
that any such modification or waiver shall in the judgment of the party making
it not affect substantially or materially or adversely the benefits to such
party or its shareholders intended under this Agreement.
This Agreement has been signed by the Chairman or President of each of
the Constituent Corporations and attested by the signature of its Secretary
or an Assistant Secretary, all as of the day and year first above written.
OAK BROOK CAPITAL I, INC.,
a Colorado corporation
ATTEST:
/s/ Gerard Werner /s/ Mark T. Thatcher
_____________________________ __________________________________
, Secretary Mark T. Thatcher, Chairman
AGTECH ENVIRONMENTAL, INC.,
a Delaware corporation:
ATTEST:
/s/ Mark A. Margason
_____________________________ __________________________________
Mark A. Margason, Vice Chairman
THATCHER:
/s/ Mark T. Thatcher
__________________________________
Mark T. Thatcher
WERNER:
/s/ Gerard Werner
__________________________________
Gerard Werner
September 29, 1999
CONFIDENTIAL
Office of Small Business Policy
Division of Corporation Finance
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Oak Brook Capital I, Inc.-
Opinion re Legality of Securities to be Issued
Ladies and Gentlemen:
I have acted as special counsel to AEI Environmental, Inc.., a Delaware
corporation (the "Registrant"), in connection with the execution, delivery and
performance of a Plan of Merger executed between the Registrant and Oak Brook
Capital I, Inc. (hereinafter referred to as "Oak Brook"), whose corporate
address is 360 Thames Street, Newport, 02840.
In connection with this matter, I have examined the originals or copies
certified or otherwise identified to my satisfaction of the following:
(a) Articles of Incorporation of the Registrant and Oak Brook, as amended to
date;
(b) By-laws of the Registrant and Oak Brook, as amended to date;
(c) Certificates from the Secretary of State of the States of Delaware and
Colorado, dated as of a recent date, stating that the Registrant and the Oak
Brook are duly incorporated and in good standing in their respective states
of incorporation;
(d) Certificates from the Secretary of State of the State of Delaware and
Colorado, dated as of a recent date, stating that the Registrant and Oak
Brook are duly qualified to do business and are in good standing in their
respective states of incorporation and have filed all required reports and
paid all taxes due;
Page 2
S.E.C.
September 29, 1999
- --------------------------
(e) Certificates from the Secretary of State of the States of Delaware and
Colorado dated as of a recent date for the Registrant and Oak Brook listing
all charter documents on file, attaching a copy of each charter document so
listed, and certifying as to the true nature of each such copy;
(f) Certificate of the Registrant and Oak Brook, dated the date hereof,
described in the Plan of Merger between Oak Brook and the Registrant;
(g) Certificate of the Secretary of the Registrant and Oak Brook, dated the
date hereof, relating to various matters of fact;
(h) Resolutions of the Board of Directors of the Registrant adopted on
September 13, 1999, authorizing the issuance of nine million sixty-six
thousand six hundred twenty-one (9,066,621) of Registrant shares, the
execution and delivery of the Plan of Merger between Oak Brook and the
Registrant, the filing of said documents, and establishing the market value
per share for the shares that will be issued;
(i) Executed copy of the Plan of Merger;
In addition to the foregoing, I have also relied as to matters of fact upon
the representations made by the Registrant in compliance with due diligence
requirements submitted by my office and related certificates and upon
representations made by the Registrant. Based upon and in reliance upon the
foregoing, and after examination of such corporate and other records,
certificates and other documents and such matters of law as I have deemed
applicable or relevant to this opinion, it is my opinion that:
1. The Registrant and Oak Brook have been duly incorporated and are validly
existing as corporations in good standing under the laws of the jurisdiction
of their incorporation and have full corporate power and authority to own
their properties and conduct their businesses; the Registrant and Oak Brook
are duly qualified as foreign corporations and are in good standing in
Delaware and Colorado and in each other jurisdiction in which the ownership
or leasing of property requires such qualification (except for those
jurisdictions in which the only material consequence of a failure to be so
qualified, other than potential penalties not individually or in the aggregate
material to the Registrant or Oak Brook taken as a whole, is that actions may
not be brought in the courts of such jurisdictions by the Registrant until
its failure to so qualify, if required, has been cured);
Page 3
S.E.C.
September 29, 1999
- --------------------------
2. The authorized capital stock of the Registrant consists of 40,000,000
shares of Common Stock, .001 par value, of which there are outstanding
10,271,780 shares. Proper corporate proceedings have been taken validly to
authorize such authorized capital stock; all the outstanding shares of such
capital stock (including the Shares) have been duly and validly issued and
are fully paid and nonassessable; the shareholders of the Registrant have no
preemptive rights with respect to the Common Stock of the Registrant;
3. The Registrant timely files reports and is current with respect to all
reports required to be filed on behalf of the Registrant, pursuant to Section
12, 13 and/or 15 of the Securities Exchange Act of 1934 (the "Exchange Act")
and, to the best of my knowledge, no stop order suspending the effectiveness
of any registration statement, Exchange Act filing, or suspending or preventing
trading on the Over-the-Counter ("OTC") Bulletin Board is in effect and no
proceedings for that purpose have been instituted or are pending or
contemplated by the N.A.S.D.;
4. The Registrant's reports (except as to the financial statements contained
therein, as to which I express no opinion) comply as to form in all material
respects with the requirements of the Exchange Act and with the rules and
regulations of the Securities and Exchange Commission thereunder;
5. On the basis of information developed and made available to me, the
accuracy or completeness of which has not been independently verified by me, I
have no reason to believe that the Plan of Merger or the Exchange Act reports
(except as to the financial statements contained therein, as to which I
express no opinion) contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading;
6. The information required to be set forth in the Plan of Merger is, to the
best of my knowledge, accurately and adequately set forth therein in all
material respects or no response is required with respect to such items, and,
to the best of my knowledge, the description of the Registrant's plans and
agreements granted thereunder accurately and fairly represents the information
required to be shown with respect to said plans, agreements, and reports by
the Exchange Act and the rules and regulations of the Securities and Exchange
Commission thereunder;
7. The terms and provisions of the capital stock of the Registrant conform
to the description thereof contained in all filed reports under the caption
"Description of Common Stock" and have been reviewed by me and insofar as
such statements constitute a summary of the law or documents
Page 4
S.E.C.
September 29, 1999
_____________________
referred to therein, are correct in all material respects, and the forms of
certificates evidencing the Common Stock comply with the Colorado and
Delaware law;
8. The descriptions in the filed reports and Plan of Merger of material
contracts and other material documents are fair and accurate in all material
respects; and I do not know of any franchises, contracts, leases, licenses,
documents, statutes or legal proceedings, pending or threatened,
which in my opinion is of a character required to be described in the filed
reports and Plan of Merger or to be filed as exhibits to the reports or Plan
of Merger, which are not described and filed as required;
9. The Plan of Merger has been duly authorized, executed, and delivered by
the Registrant and constitutes the valid and legally binding obligation of the
Registrant except as the indemnity provisions thereof may be limited by the
principles of public policy;
10. The issuance of 9,066,621 Shares of the Registrant as contemplated by the
Plan of Merger will not conflict with, or result in a breach of, any material
agreement or instrument known to me which the Registrant is a party or by
which it is bound, or any applicable law or regulation, or, so far as is known
by us, any order, writ, injunction or decree applicable to the Registrant of
any jurisdiction, court or governmental instrumentality, or the Articles of
Incorporation or By-laws of the Registrant;
11. To the best of my knowledge and belief after due inquiry, there are no
holders of Common Stock or other securities of the Registrant having
registration rights with respect to such securities on account of the filing
of a registration statement who have not effectively waived such rights; and
12. No consent, approval, authorization, or order of any court or
governmental agency or body is required for the consummation by the Registrant
of the transactions on its part contemplated by the Plan of Merger, except
such as have been obtained under the Exchange Act and such as may be
required under state or other securities or blue sky laws in connection with
the distribution of the Shares to the shareholders of Oak Brook.
Page 5
S.E.C.
September 29, 1999
_____________________
In addition, I have participated in conferences with representatives of Oak
Brook and the Registrant and accountants for Oak Brook at which the contents
of the Plan of Merger were discussed. Although I have not verified the
accuracy or completeness of the statements contained in the Plan of Merger
(other than the caption "Description of Common Stock"), I advise you that on
the basis of foregoing, I have no reason to believe that the Plan of Merger,
as of the effective date, contained any untrue statements of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading (except in each such
case for the financial statements or other financial data contained in the
Plan of Merger as to which I am not called upon to and do not express any
opinion).
This letter is furnished to you as for filing purposes on behalf of the
Company, and is solely for the benefit of the United States Securities and
Exchange Commission.
Respectfully,
/s/ Mark T. Thatcher
Mark T. Thatcher, Esq.
Atty Reg. No. 25-275 CO
Atty Reg. No. 453658 DC
UNANIMOUS WRITTEN CONSENT OF
THE BOARD OF DIRECTORS OF
OAK BROOK CAPITAL I, INC.
The undersigned being all of the directors of Oak Brook Capital I, Inc. (the
"Company"), hereby adopt the following resolutions:
RESOLVED, that the Company hereby agrees to merge with AEI Environmental,
Inc., a Delaware corporation ("Merger"); and
RESOLVED FURTHER, that in connection with the Merger, the Company hereby
agrees to issue 9,066,621 restricted shares of its common stock to the former
shareholders of AEI Environmental, Inc.; and
RESOLVED FURTHER, that the form of Certificate of Merger attached to this
Written Consent as Exhibit A to be filed with the State of Colorado to
consummate the Merger and in connection with the Merger, the Company hereby
agrees to issue 9,066,621 restricted shares of its common stock to the former
shareholders of AEI Environmental, Inc.; and the form of the Articles of
Merger attached to this Written Consent as Exhibit B to be filed with the
State of Colorado to consummate the Merger, are hereby adopted and confirmed;
and
RESOLVED FURTHER, that the corporate officers of the Company are hereby
authorized and directed to implement the foregoing resolutions.
Dated: September 13, 1999
/s/ Mark T. Thatcher
_____________________________
MARK T. THATCHER, Chairman
/s/ Gerard Werner
____________________________
GERARD WERNER, Secretary
September 29, 1999
CONFIDENTIAL
American Securities Transfer, Inc.
As Representative of Acadia National Health Systems, Inc.
938 Quail Street, Suite 101
Lakewood, CO 80215-5513
Re: Oak Brook Capital I, Inc. ("Brook") -
Restricted Issuance of 9,066,621 common shares of Oak Brook to
the shareholders of AEI Environmental, Inc.
Ladies and Gentlemen:
This office represents Oak Brook Capital I, Inc. ("Oak Brook"). I am in
receipt of various communications from Oak Brook relating to the proposed
issuance of 9,066,621 shares of Oak Brook common stock to the shareholders of
AEI Environmental, Inc. (the "AEI"), pursuant to a Plan of Merger and Section
4(2) of the Securities Act of 1933.
Based on representations contained in these documents, copies of which are
attached hereto, it is my opinion that you may issue the 9,066,621 shares of
common stock from the authorized, but un-issued, common shares of Oak Brook in
reliance upon the exemption from registration provided for in Section 4(2).
All shares, when issued, should bear a restricted legend in standard form and
should not be further transferred without the prior written consent of Oak
Brook.
In rendering the above opinion, I have excluded from consideration state
securities or blue sky laws, except as specifically noted. My opinion is
limited to the federal laws of the United States, the laws of the State of
Colorado and Delaware and the General Corporation Law of the States of
Colorado and Delaware, and I can assume no responsibility with respect to the
applicability or effect of the laws of any other jurisdiction. I disclaim any
obligation to notify you or any other person or entity if any change in fact
and/or law should change my opinion with respect to any matter on which I am
expressing an opinion herein.
Page 2
American Securities Transfer, Inc.
September 29, 1999
_________________________________
The foregoing opinion is furnished by me as counsel for the Registrant and is
solely for your benefit and may not be relied upon by any other person unless
my prior written consent is obtained.
Respectfully,
/s/ Mark T. Thatcher
Mark T. Thatcher, Esq.
Atty. Reg. No. 25-275
MTT/jet
cc:Mark A. Margason
MINUTES OF A SPECIAL MEETING OF
DIRECTORS OF OAK BROOK CAPITAL I, INC.
ADOPTING A PLAN OF MERGER
Pursuant to the provisions of the Colorado Business Corporation Act, as
amended, a Special Meeting of the Directors of OAK BROOK CAPITAL I, INC.
(the "Corporation") was held, pursuant to written notice as required by
Sections 7-7-106, 7-4-123 and 7-3-124 of the Colorado Revised Statutes on
September 13, 1999, at 10:00 a.m. at the Corporation's offices at 360 Thames
Street, Newport, Rhode Island 02840.
Mr. Mark T. Thatcher, President of the Corporation, served as Chairman of the
meeting, and asked Mr. Gerard Werner to serve as Secretary of the meeting.
There were two (2) shareholders present at the meeting, including Mr. Werner,
together with Mr. Thatcher. Mr. Thatcher reported that written notice of the
meeting had been duly given, according to the requirements of Colorado law, to
all shareholders of the Corporation. He further reported that there were
currently ONE MILLION TWO HUNDRED TWENTY-EIGHT THOUSAND (1,228,000)
shares of
the Corporation outstanding, and the number of shares entitled to vote was the
same. He stated that ONE MILLION ONE HUNDRED FIVE THOUSAND TWO HUNDRED
(1,105,200) shares were represented in person at the meeting, and that none
were represented by written proxy.
Mr. Werner then stated that a quorum was present, and that the only
business of the meeting was to consider a Plan of Merger with AEI ENVIRONMENTAL,
INC., as set forth in the Notice to Shareholders of Special Meeting, which had
been mailed to all shareholders of record of the Corporation on or about July
14, 1999.
Whereupon, upon motion duly made, seconded and carried, with 1,105,200
shares voting for, 122,800 shares abstaining, and no shares voting against,
it was:
1.RESOLVED, that the Directors of this Corporation hereby determine that the
merger of the Corporation with AEI ENVIRONMENTAL, INC., a
Delaware corporation, pursuant to the provisions of CRS Section 7-7-106, as
amended, and upon the terms and conditions set forth in the written Plan of
Merger, dated September 13, 1999, as submitted to and as attached to the
minutes of this meeting, is advisable and generally to the advantage of and
for the benefit of this Corporation and its shareholders; and
2.RESOLVED, that the Plan of Merger dated September 13, 1999 presented to
the meeting and the merger therein provided for be and the same are hereby
approved, and the execution of the said Plan of Merger by the members of the
Board of Directors and by proper officers of this Corporation is hereby
approved and authorized; and
3.FURTHER RESOLVED, that the proper officers, counsel, and accountants for
the Corporation, in collaboration with the officers, counsel, and accountants
for AEI ENVIRONMENTAL, INC., be and they hereby are, authorized and
directed to take all further steps necessary or desirable to implement the
Plan of Merger, in accordance with its terms; and
4.FURTHER RESOLVED, that inasmuch as said Plan of Merger has now been
duly adopted by the directors and approved by the shareholders of this
Corporation, pursuant to the laws of the State of Colorado and by the
directors and shareholders of AEI ENVIRONMENTAL, INC., the President or any
Vice President and the Secretary or any Assistant Secretary of this
Corporation be, and each of them hereby is, authorized to certify the fact of
such adoption of said Plan of Merger, and that, when said Plan of Merger
shall have been so certified on behalf of this Corporation and have been
similarly certified on behalf of AEI ENVIRONMENTAL, INC., the proper officers
of this Corporation be and they hereby are, authorized and directed to cause
Articles of Merger to be filed with the Secretary of State of Colorado
pursuant to the provisions of the Colorado Business Corporation Act, 1973
C.R.S. Section 7-7-104, as amended; and
5.FURTHER RESOLVED, that the proper officers and directors of this Corporation
be, and they hereby are, authorized and directed to execute, in the name and
on behalf of this Corporation and under its corporate seal or otherwise, and
to deliver any and all agreements, certificates, applications or other
instruments and to take from time to time any and all such other action
necessary or desirable to carry out the purposes of the foregoing resolutions.
Whereupon there being no further business, the meeting was adjourned.
/s/ Mark T. Thatcher
________________________________
MARK T. THATCHER, Director
/s/ Gerard Werner
________________________________
GERARD WERNER, Director
<PAGE>
UNANIMOUS CONSENT MINUTES OF
BOARD OF DIRECTORS OF OAK BROOK CAPITAL I, INC.
ADOPTING A PLAN OF MERGER
Pursuant to the provisions of the Colorado Business Corporation Act, as
amended, the following actions were taken by the Board of Directors of
OAK BROOK CAPITAL I, INC. (hereinafter referred to as "Oak Brook" and/or
the "Corporation") by the unanimous written consent of each of the directors
of the Corporation as of September 13, 1999:
1.RESOLVED, that the Board of Directors of this Corporation hereby determines
that the merger of the Corporation with AEI ENVIRONMENTAL, INC., a
Delaware corporation, pursuant to the provisions of CRS Section 7-7-106, as
amended, and upon the terms and conditions set forth in the written Plan of
Merger, dated September 13, 1999, as submitted to the Board and as attached to
the minutes of this meeting, is advisable and generally to the advantage of
and for the benefit of this Corporation and its shareholders; and
2.FURTHER RESOLVED, that the Plan of Merger presented to the meeting
and the merger therein provided for be and the same are hereby approved, and
the execution of the said Plan of Merger by the members of this Board and
by proper officers of this Corporation is hereby approved and authorized; and
3.FURTHER RESOLVED, that the proper officers, counsel, and accountants for the
Corporation, in collaboration with the officers, counsel, and accountants for
OAK BROOK CAPITAL I, INC., be and they hereby are, authorized and directed
to take all further steps necessary or desirable to implement the Plan of
Merger, in accordance with its terms; and
4.FURTHER RESOLVED, that inasmuch as said Plan of Merger has been duly
adopted by the directors of this Corporation, pursuant to the laws of the
State of Colorado and by the directors of OAK BROOK CAPITAL I, INC., the
President or any Vice President and the Secretary or any Assistant Secretary
of this Corporation be, and each of them hereby is, authorized to certify the
fact of such adoption by the Board of Directors of this Corporation of said
Plan of Merger; and
5.FURTHER RESOLVED, that the proper officers of this Corporation be and they
hereby are authorized and directed to submit the Plan of Merger, and to
give notice to all shareholders of the Corporation, pursuant to the statutory
requirements of Sections 7-7-106, 7-4-123 and 7-4-124 of the Colorado Revised
Statutes.
/s/ Mark T. Thatcher
________________________________
MARK T. THATCHER, Director
/s/ Gerard Werner
________________________________
GERARD WERNER, Director
OAK BROOK CAPITAL I, INC.
Board of Directors' Resolution Authorizing
NAME CHANGE OF CORPORATION TO "AEI ENVIRONMENTAL, INC."
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned, being all of the Directors of OAK BROOK CAPITAL I, INC.
(hereinafter referred to as "OAK BROOK" or the "Corporation") do hereby waive
any and all notice that may be required to be given with respect to a meeting
of the Directors of the Corporation and do hereby unanimously take, ratify,
confirm and approve the following action, as of September 13, 1999:
RESOLVED: That a majority of the entire Board of Directors of the Corporation
does hereby authorize and approve the change in the corporate name of "Oak
Brook Capital I, Inc." to "AEI ENVIRONMENTAL, INC." and that the proper
officers of the Corporation be and they are hereby authorized and directed
for and on behalf of the Corporation to amend the name as an amendment to
the Corporation's Articles of Incorporation and to do and perform any and all
other necessary and proper acts incident thereto.
RESOLVED, that all other actions taken by the officers of the Corporation
since the date of the last Annual Minutes of the Board of Directors are
hereby ratified, approved and confirmed.
IN WITNESS WHEREOF, the undersigned Directors have evidenced their approval
of the above proceedings as of the date first above mentioned.
/s/ Mark T. Thatcher
________________________________
MARK T. THATCHER,
Chairman
DATED: September 13, 1999
DENNIS W. BERSCH
CERTIFIED PUBLIC ACCOUNTANTS
CONSENT FOR INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Oak Brook Capital I, Inc.
(Predecessor corporation to AEI)
Dated: June 22, 1999
I hereby consent to the incorporation by reference in this Form 8-K of my
report dated February 25, 1999 appearing on page F-2 of Oak Brook Capital I,
Inc. Registration Statement on Form 10SB12G for the year ended December 31,
1998. I also consent to the reference to me under the heading "Exhibits" in
such Registration Statement.
/s/Dennis W. Bersch
------------------------------------
Dennis W. Bersch
CONSENT OF COUNSEL
I hereby consent to the incorporation by reference of my consent dated May 16,
1999 appearing in the Oak Brook Capital I, Inc. Registration Statement on Form
10SB12G, Third Amendment, filed July 29, 1999. I also consent to the
reference to me under the heading "Exhibits" in such Registration Statement.
MARK T. THATCHER, ESQ.
/s/ Mark T. Thatcher
By:_______________________
MARK T. THATCHER, ESQ.
Newport, RI
<TABLE> <S> <C>
<ARTICLE> 5
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 64,952
<SECURITIES> 0
<RECEIVABLES> 10,444
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 206,533
<PP&E> 58,725
<DEPRECIATION> (23,203)
<TOTAL-ASSETS> 1,244,206
<CURRENT-LIABILITIES> 7,725
<BONDS> 223,335
0
0
<COMMON> 104,136
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,244,206
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,806,373
<OTHER-EXPENSES> 17,703
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (10,473)
<INCOME-PRETAX> (1,788,670)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
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</TABLE>
EXHIBIT 99.1
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR COMPLIANCE STATEMENT
FOR FORWARD-LOOKING STATEMENTS
In passing the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"), 15 U.S.C.A. Sections 77z-2 and 78u-5 (Supp. 1996), Congress
encouraged public companies to make "forward-looking statements" by creating a
safe harbor to protect companies from securities law liability in connection
with forward-looking statements. AEI Environmental, Inc. ("AEI" or the
"Company") intends to qualify both its written and oral forward-looking
statements for protection under the Reform Act and any other similar safe
harbor provisions.
"Forward-looking statements" are defined by the Reform Act. Generally,
forward-looking statements include expressed expectations of future events and
the assumptions on which the expressed expectations are based. All forward-
looking statements are inherently uncertain as they are based on various
expectations and assumptions concerning future events and they are subject to
numerous known and unknown risks and uncertainties which could cause actual
events or results to differ materially from those projected. Due to those
uncertainties and risks, the investment community is urged not to place undue
reliance on written or oral forward-looking statements of AEI. The Company
undertakes no obligation to update or revise this Safe Harbor Compliance
Statement for Forward-Looking Statements (the "Safe Harbor Statement") to
reflect future developments. In addition, AEI undertakes no obligation
to update or revise forward-looking statements to reflect changed assumptions,
the occurrence of unanticipated events or changes to future operating results
over time.
