<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA n/a
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
30 Wertheim Court
Suite 24, 2nd Floor
Richmond Hill, Ontario
L4B 1B9 Canada
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
(905) 763-3799
(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12 (b) OF THE ACT:
NONE
SECURITIES TO BE REGISTERED UNDER SECTION 12 (g) OF THE ACT:
COMMON STOCK, $0.001 PAR VALUE
(TITLE OF CLASS)
This Registration Statement contains forward-looking statements which involve
risks and uncertainties. When used in this Registration Statement, the words
"believe", "anticipate", "expects" and similar expressions are intended to
identify such forward-looking statements. The Company's actual results may
differ significantly from the results discussed in the forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
<PAGE>
ITEM 1 - BUSINESS
THE COMPANY
GENERAL. Environmental Solutions Worldwide, Inc. was formed in 1987
under the name BBC Stock Market, Inc. as a "blank check" or development stage
company for the purpose of seeking to acquire viable businesses. Through
January, 1999, the Company was not engaged in any business. In February
1999, the Company acquired all the issued and outstanding shares of BBL
Technologies Inc., a private company incorporated in Ontario, Canada ("BBL"),
and changed its name to Environmental Solutions Worldwide, Inc. BBL is the
owner of a Canadian patent covering catalytic converter technology for
automotive and non-automotive uses. BBL also has patents pending on spark
plug/fuel injector technology for automotive use. For purposes hereof,
references to the "Company" shall be deemed to be references to Environmental
Solutions Worldwide, Inc., and BBL, its wholly-owned subsidiary.
The Company's catalytic converter technology is under development.
The technology involves the manufacture of catalytic converters without the
use of precious metals, thus reducing the cost of the converter. The Company
also believes that catalytic converters produced with its technology will (i)
operate with fuels in addition to those with which current catalytic
converters operate, and (ii) have a longer life than existing catalytic
converters. A prototype has been produced, and has been subjected to
preliminary testing. The Company is now in the process of establishing a
small manufacturing operation to begin producing additional prototypes for
further testing and refinement.
The Company's spark plug/fuel injector technology is in the concept
stage. There are U.S. and Canadian patent applications pending on the
technology, but the Company has not yet constructed prototypes or conducted
testing. The spark plug/fuel injector technology is a mechanism combining the
functions of a spark plug and a fuel injector in a single device. The primary
advantage of that technology is that the Company believes that combining the
devices will produce greater fuel efficiencies, since the devices are
synchronized, but that belief has not been confirmed by tests. A disadvantage
of the technology is that the combined device will likely cost significantly
more than either current spark plugs or fuel injectors (but is likely to be
less expensive than both devices combined).
The Company has depleted its current cash resources, and does not
presently have the funds to fully develop its technology and sustain the
Company until its operating cash flow is positive. The Company presently
expects to raise approximately one million dollars (before fees and expenses)
through a private placement of its common stock (the "Private Placement"),
and anticipates the Private Placement will be effected prior to the end of
1999. However, there is no assurance that the Private Placement will be
successful. Furthermore, the Private Placement, if successful, is unlikely to
provide sufficient funds to sustain the Company until its cash flow is
positive, and therefore the Company will likely be required to seek
additional external financing, which may include the issuance of additional
debt or equity securities.
THE ANTICIPATED BUSINESS OF THE COMPANY. Although the technology
underlying catalytic converters has improved significantly since its
inception in the 1950's, their effectiveness in reducing toxic emissions from
internal combustion engines remains limited. There are many variables that
negatively affect performance of a catalytic converter including temperature,
various chemical compounds in the fuel, and the age of the converter.
Existing converters also contain expensive "rare earth" metals such as
platinum, palladium and rhodium, making them expensive to manufacture and
subject to price volatility.
The Company holds a Canadian patent covering its catalytic converter
technology. However, there can be no assurance that this patent, combined
with any patents or trade secret protection we may seek in the future, would
survive any legal challenge, or provide meaningful levels of protection for
the Company's technology. In addition, the Canadian patent only affords
protection against the manufacture, use or sale of the patented technology
within Canada; the Company is in the process of preparing patent applications
to protect its technology within the United States and other countries.
The Company believes that its technology will permit the manufacture
of catalytic converters less expensively than current technologies, since it
requires no precious metals in the manufacturing process. In addition, the
Company believes that catalytic converters produced with its technology will
(i) operate with fuels in addition to those with which current catalytic
converters operate; and (ii) have a longer life than existing catalytic
converters. Those beliefs are based upon (i) internal testing in which the
prototype catalytic converter performed satisfactorily with a engine using
diesel fuel; and (ii) the longevity of the prototype catalytic converter in
the testing process.
The Company believes that it has satisfactorily completed the first
stage of its research and development stage, comprised of initial feasibility
testing of its prototype catalytic converter. The Company's prototype
catalytic converter technology was compared to both baseline emissions and to
a new conventional catalytic converter for nitrogen oxide, carbon dioxide,
and hydrocarbons reductions. The results for the Company's prototype and the
conventional catalytic converter are discussed in detail below under the
heading "The Company's Technology." The Company is now engaged in the second
phase, which will entail setting up a small manufacturing operation to
produce additional prototypes for further testing and refinement. The Company
is in the process of negotiations for the acquisition of manufacturing
facilities and equipment in Toronto, and expects to begin the manufacture of
additional prototype catalytic converters in January 2000.
The initial business plan will focus on the North American market,
due to its proximity and size. The Company expects to initially produce
catalytic converters for automobiles using unleaded and diesel fuels, with
additional applications, including leaded fuels, to follow.
The Company's present plan of operations for the next twelve months
calls for the following estimated expenditures:
Staff Costs $ 435,000
Plant and Equipment 819,000
Office and General 204,000
Professional Fees and
Marketing 252,000
----------
$1,710,000
Expenses for staff costs include salaries and benefits for the
Company's technical director, his assistants, officers of the Company and
other personnel. Plant and equipment costs include the cost of a mixer, an
extruder, a laboratory extruder, dies, cut off equipment, electronic drier,
furnace, testing costs, raw materials, casings, plant space rental,
consulting fees and other costs. Office and general costs include general
office costs, equipment, insurance and travel. Professional fees and
marketing include patent, SEC and general legal fees, accounting fees, and
marketing expenses.
The Company believes that its catalytic converter technology will
reach the point of commercial viability by the end of 2000. Once commercial
viability has been achieved, the Company intends to seek to partner with one
or more major automobile component manufacturers to produce and sell
catalytic converters incorporating the Company's technology.
The Company presently has four employees, and Company's staffing
plan anticipates the expansion of the Company's staff to seven employees in
the near future.
THE EXISTING TECHNOLOGY. The catalytic converter was originally
developed in the late 1950's as a device to reduce the level of toxic
emissions in automobile exhausts, including hydrocarbons ("HC"), nitrogen
oxides ("NOx") and carbon dioxide ("CO"). Over time, the catalytic converter
has become standard equipment on vehicles sold in the North American
marketplace. The introduction of catalytic converters in Europe began in
1993. There has been substantial resistance in the used car and retrofit
markets, based upon price.
To date, catalytic converters have generally used nonprecious metals
and precious metals supported on pellets or monoliths of ceramic, usually
known as "cakes" or "honeycombs". The honeycomb effect provides a larger
surface area for contact with the various molecules of the engine exhaust
gases. The most significant toxic emissions from a combustion engine are HC,
CO and NOx.
There are two types of converters presently used in automotive
application; namely, "Oxidation" and "Three Way". Oxidation converters remove
CO and HC, leaving NOx unchanged. For Oxidation converters, air is pumped
into the engine exhaust upstream of the catalyst to ensure the presence of
O2. Platinum and palladium are primarily used as reactants. Three Way
converters remove all three components simultaneously. A chemically correct
environment is required, where the engine is operated very close to optimal
fuel-air ratio at all times. Feedback controls must be in place to ensure
that oxidizing or reducing atmospheres do not form in the exhaust. Platinum,
palladium and rhodium combined with non-precious metals are used. No sulfur,
lead or ammonia may be present in the fuel, since lead and sulfur poison the
converter. High temperature is also a detriment that can be caused by engine
misfiring. The present converters are generally ineffective at cold start-up
temperature (most pollutants are discharged while the engine is warming up
during the first 5-10 minutes of vehicle operation) and are limited in their
useful life span. Current catalytic converters operate only on unleaded
fuels, not diesel or leaded fuels.
THE COMPANY'S TECHNOLOGY. The Company's technology uses raw
materials that are a combination of metals and non-metallic compounds,
without precious metals. The Company believes that this technology will
permit the manufacture of catalytic converters which (i) cost significantly
less to produce, (ii) work on leaded, unleaded and diesel fuels, rather than
only unleaded fuel, and (iii) will not be readily contaminated, and will
therefore maintain their efficiency in extended vehicle operation.
1
<PAGE>
The Company recently conducted testing of its prototype and a new
conventional catalytic converter (an "OEM Converter") in an independent
emission testing lab based in Chicago, Illinois recognized by the EPA. The
results for the tests are shown below.
<TABLE>
<CAPTION>
Without Using the Using
Converter Company's OEM
(BASELINE)(1) CONVERTER(1) CONVERTER
----------- ---------- ---------
<S> <C> <C> <C>
NOx 3.62 0.14 0.14
CO 23.79 5.84 5.46
HC 2.27 1.12 0.43
MPG 19.35 20.47 20.36
</TABLE>
(1)FTP weighted grams per mile
NOx = Nitrogen Oxides
CO = Carbon Monoxide
HC = Hydrocarbons MPG = Miles per Gallon
While the test results show average NOx emissions as comparable
between the Company's converter and the OEM, or conventional, catalytic
converter, and average HC emissions as higher with the Company's converter
than with the OEM converter, the tests were comprised of three runs, and in
each case the results for the Company's converter showed a trend toward
increased efficiency over time, while the OEM converter showed a trend toward
decreased efficiency, as follows:
<TABLE>
<CAPTION>
NOx
COMPANY CONVERTER OEM CONVERTER
----------------- -------------
<S> <C> <C>
Run 1 0.175 0.128
Run 2 0.138 0.158
Run 3 0.121 0.156
<CAPTION>
HC
COMPANY CONVERTER OEM CONVERTER
----------------- -------------
<S> <C> <C>
Run 1 1.790 0.418
Run 2 1.082 0.449
Run 3 0.481 0.438
</TABLE>
Further, the OEM converter used in the testing was new, while the
prototype used had already been run for a substantial period of time. The
Company believes that the use of precious metals in conventional converter
manufacturing may result in those metals becoming contaminated over time,
leading to lower levels of efficiency in reducing NOx and HC emissions. An
EPA study published in the spring of 1998 showed that NOx comprises about 7.2
percent of all greenhouse gases, with cars equipped with catalytic converters
producing nearly half of that NOx. Since the Company's technology does not
utilize precious metals, the Company's converter technology may be more
effective in reducing total NOx and/or HC emissions by providing greater
efficiency over time. However, the Company cannot predict whether such
beliefs will be confirmed or disproved by further testing. The possibility
that the Company's converter may have no advantage over existing converter
technology, or may be less efficient than existing technology, in reducing
some or all noxious emissions may limit the market acceptance of the
Company's technology, and adversely affect the Company's ability to
successfully exploit the technology.
In July, 1999, the Company released a press release stating, in
part, that the Company believed that its technology was the only catalytic
converter technology in the world that reduces NOx. That press release was
predicated on (a) preliminary testing of the Company's technology that showed
a significant reduction in NOx emissions over a baseline and (b) a review of
publicly available information regarding conventional catalytic converter
technology and NOx emissions, and was not supported by the independent
testing described above.
The Company's tests have heretofore been limited, and there can be
no assurance that further testing and limited production may not reveal
problems with the technology. At this time, the Company is aware that the
testing has shown that the converter may create increased back pressure in
exhaust systems, which may require reengineering of the converter, and result
in additional costs and delays in the introduction of the Company's
technology. The Company believes that any delay attributable to such redesign
will not exceed ninety days, and that the related costs will not exceed
$30,000.
The primary raw materials used in the manufacture of the Company's
converters include molybdenum, copper, nickel and ceramics, all of which are
generally available in the marketplace. The Company does not anticipate any
material shortage of any raw material in the foreseeable future.
THE MARKET. The automotive/combustion engine marketplace itself is
vast, including automobiles, trucks, outboard marine vehicles, specialty
vehicles and equipment. There are currently 700 million automobiles and 250
million trucks on the road worldwide. Currently there are 40 million new
vehicles and 10 million new trucks being produced each year. The Company
intends to focus its efforts specifically on the North American market in the
first three years of operation. The North American market represents 30% of
the world market (200 million vehicles on the road) with an additional 12
million new vehicles produced each year.
The manufacture of "honeycombs" or "cakes," which act as the filter
of pollution in the catalytic converter, is dominated by two companies: (i)
Corning Glass ("Corning"), which currently holds 70% of the world market, and
NGK of Japan ("NGK") with the remaining 30% of the market. Corning has
licensed NGK to produce the "cakes", using the same equipment and formulas as
Corning. The Company expects to manufacture its cakes utilizing the same
extrusion technology currently utilized by Corning and NGK, but extruding its
own proprietary formulas, which the Company currently possesses. The Company
will not be required to secure a license from Corning in connection with such
manufacturing.
COMPETITION. Direct competition for the Company are other companies
involved in the manufacturing process of the existing catalytic converter,
including Corning and NGK. Corning and NGK are the presently the only two
manufacturers of "cakes" for the catalytic converter.
The Company will also face indirect competition in the form of
alternative fuel consumption vehicles, such as those using methanol,
hydrogen, ethanol and electricity. Currently, those technologies have
shortcomings in range of operation, reliability, and availability of the
technology and fuels at reasonable price points. The Company believes that
alternative power will not rival the internal combustion engine in the near
to medium-term future. In addition, the Company believes that it may face
resistance in customer acceptance of a new technology, particularly since
conventional converters have been the norm in the industry for the last 30
years. The Company will also be required to overcome long-standing
contractual and other obligations and relationships between catalytic
converter suppliers and the large automotive manufacturers.
PRICING. A finished catalytic converter currently sells to U.S. auto
manufacturers for approximately $85. A finished exhaust pipe, with converter
and muffler, currently sells to the U.S. auto manufacturers for about $250.
In Europe, the finished exhaust pipe, with converter and muffler, sells to
auto manufacturers for $500 to $700. The Company's current business plan
provides for a sales price for a finished catalytic converter of
approximately $70.
ITEM 2 - FINANCIAL INFORMATION
2
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth certain financial data for, and as of
the end of, the five years ended December 31, 1994, 1995, 1996, 1997 and
1998, and for the nine month period ending September 30, 1999:
<TABLE>
<CAPTION>
Nine
months Year Year Year Year Year
ended ended ended ended ended ended
Sept. 30, Dec. 31, Dec. 31, Dec. 31., Dec. 31, Dec. 31,
1999 1998 1997 1996 1995 1994
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Results of Operation
Total Revenue -- -- -- -- -- --
Net Operating Expenses 600,119 151,939 -- -- -- --
-------------------------------------------------------------
Net earnings (loss) (600,119) (151,939) -- -- -- --
-------------------------------------------------------------
-------------------------------------------------------------
Net earning per loss
per common share (0.02) (0.15) -- -- -- --
-------------------------------------------------------------
-------------------------------------------------------------
Balance Sheets
Total current assets 131,478
Long term assets 2,327
Current liabilities 80,286 151,939 -- -- -- --
Long term liabilities -- -- -- -- -- --
Shareholders' equity (deficiency) 53,519 (151,939) -- -- -- --
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION & RESULTS OF
OPERATIONS
GENERAL
The Company is a development stage company. Prior to January 1999, the
Company had no material operations, and there are no accordingly no
meaningful comparisons with operating results from prior periods.
THE BBL ACQUISITION
On January 29, 1999, the Company acquired 100% of the common shares of BBL
Technologies, Inc., an Ontario, Canada corporation, by issuing 11,048,000
common shares. BBL holds the Canadian patent to the Company's catalytic
converter technology. The Company acquired BBL in order to develop the
technology into a commercial product.
The Company owns the only shares with voting and participating rights in BBL.
The original holder of the patented technology, Next Catalytic Converter
Corporation ("NCCC"), an Ontario, Canada corporation, which is related to BBL
due to common shareholders, transferred the technology to BBL on December 14,
1998 in return for 700,000 special shares with a fixed value of $453,900
which are non-voting, non-participating and are redeemable only at the
discretion of BBL. For accounting purposes, no value is attributed to those
shares.
The acquisition has been accounted for by using the purchase method of
accounting. In determining the value of the purchase of BBL, it is
appropriate to use the quoted market price of the shares of the Company at
the time of acquisition if the shares reflected the fair value of the
Company. As the Company was a "shell company" at the time of acquisition, the
fair value of the Company was nominal and thus the use of the market value of
the shares of the Company in determining the purchase price would not be
appropriate. As a result, the purchase price was determined based upon the
fair value of the net assets of BBL, comprised of the patented technology.
Since the technology was acquired in a non-arm's length transaction between
BBL and NCCC, the original cost of the patented technology, as determined by
NCCC, of $2,321, is deemed to be the acquisition price.
The Company's business plan calls for expenditures of approximately $1.7
million over the next twelve months, and the catalytic converter technology
is expected to reach the point of commercial viability on or prior to the end
of that period.
From inception through September 30, 1999, the Company expended approximately
$254,920 in professional fees and expenses. Those fees included legal fees
(including general corporate, securities and intellectual property counsel);
audit fees; and consulting fees (including the services of Teodosio V. Pangia
and Dr. Liber). From inception through September 30, 1999, the Company
expended approximately $405,659 in development costs, which costs included
development and production of the prototype catalytic converter, general
research, and testing.
LIQUIDITY AND CAPITAL RESOURCES
NINE MONTHS ENDED SEPTEMBER 30, 1999
3
<PAGE>
During the nine month period ended September 30, 1999, the Company's cash and
cash equivalents increased by $131,478, comprised of an increase of $653,250
from the issuance of common shares and an increase in loans payable of
$18,567, offset by cash utilized in operating activities of $540,348.
The Company has no present source of revenue, and does not anticipate
generating any revenues until the catalytic converter technology is developed
to the point of commercial viability. The Company believes that this
commercial viability will occur on or before the end of 2000, but there is no
assurance that such commercial viability will not be delayed, or that such
commercial viability will ever be attained. Accordingly, the successful
completion of the Private Placement and/or other financing will be essential
for the Company to continue in operation until such time as the Company will
be able to generate revenue.
The Company has depleted its current cash resources, and does not presently
have the funds to fully develop its technology and sustain the Company until
its operating cash flow is positive. The Company presently expects to raise
approximately one million dollars (before fees and expenses) through the
Private Placement, and anticipates the Private Placement will be effected
prior to the end of 1999. However, there is no assurance that the Private
Placement will be successful. Furthermore, the Private Placement, if
successful, is unlikely to provide sufficient funds to sustain the Company
until its cash flow is positive, and therefore the Company will likely be
required to seek additional external financing, which may include the
issuance of additional debt or equity securities.
If the Company is unable to secure the required financing, it may be forced
to take steps to curtail its expenses, such as reducing its staff or its
research and development efforts. Any such action, however, may result in an
inability to develop the catalytic converter technology to the point of
commercial viability. In such event, the Company may be forced to cease
operations.
YEAR 2000
The year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any computer
program that is not year 2000 compliant and has date sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000.
The computer hardware and software being utilized by the Company is largely
"off-the-shelf" technology, of a word processing, data base or scientific
research nature. The Company believes that all such hardware and software is
year 2000 compliant, based on information made publicly available by the
manufacturers of such hardware and software. The Company's operations are
presently limited to research and development, and manufacturing of catalytic
converter prototypes is not expected to begin until January 2000. That
manufacturing operation will be of limited scope, and will require only small
amounts of raw materials and finished products from third party suppliers.
The nature of the raw materials and finished products required for such
manufacturing operation is such that they are available from multiple
sources, and the Company believes that a Year 2000-related failure by third
parties will result in, at worst, delays. Under these circumstances, the
Company has determined that further Year 2000 compliance investigations with
regard to its anticipated suppliers are not warranted.
ITEM 3 - DESCRIPTION OF PROPERTY
The Company does not presently lease or own any real property. Office
services, including telephone reception, mail, and office space, are provided
by Zoya Financial, the Company's public relations agency, and the Company
anticipates securing its own office space shortly.
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of November 15, 1999, the ownership of the
Company's Common Stock by (i) each director of the Company, (ii) all
executive officers and directors of the Company as a group, and (iii) all
persons known by the Company to own more than 5% of the Company's Common
Stock.
BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
Number of
Name and Address (1) Common Shares % (2)
- - -------------------- ------------- -----
<S> <C> <C>
Bengt George Odner (3) 650,000 *
Jervaulx Hall
Jervaulx, North Yorkshire
United Kingdom HG4 4PH
Adam Michael Oliver - -
Dr. Bruno Liber 5,000,000 17.9%
#804-165 LaRose Avenue
Etoicoke, Ontario
Canada
Teodosio V. Pangia (4) 3,170,975 11.3%
All Directors and Officers
as a group (2 persons) 650,000 *
</TABLE>
*Less than 5% of the outstanding shares of Common Stock.
4
<PAGE>
(1) All addresses are c/o the Company, at 30 Wertheim Court, Suite 24, 2nd
Floor, Richmond Hill, Ontario, Canada unless otherwise noted.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities & Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of Common Stock subject to options
or warrants currently exercisable or convertible, or exercisable or
convertible within 60 days of November 15, 1999, are deemed outstanding for
computing the percentage of the person holding such option or warrant but are
not deemed outstanding for computing the percentage of any other person.
Except as indicated in the footnotes to this table and pursuant to applicable
community property laws, the persons named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially
owned.
(3) The shares listed as beneficially owned by Mr. Odner include 400,000
shares held by Crystal Fund Ltd., a Bermuda mutual fund, of which Mr. Odner
is a director.
(4) The shares beneficially owned by Mr. Pangia are held of record by Tyler
Dylan Corp., an Ontario corporation in which Mr. Pangia is the sole
stockholder.
ITEM 5 - DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS; OFFICERS AND SIGNIFICANT STOCKHOLDERS
Bengt George Odner is the Chief Executive Officer of the Company. He was
appointed Chief Executive Officer by the Company's sole director in August,
1999. Mr. Odner has been a director of Crystal Fund Ltd., a Bermuda mutual
fund, and a director of Crystal Fund Managers, Ltd. since 1996. From 1990
through 1995, Mr. Odner was the Chairman of Altus Nord AB, a property holding
company specializing in Scandinavian properties and a wholly-owned subsidiary
of Credit Lyonais Bank Paris. As of August 30, 1999, Mr. Odner was 46 years
old.
Adam Michael Oliver is President and the sole director of the Company.
Mr. Oliver was elected director by the written consent of the majority
shareholder of the Company in October, 1998 and became President of the
Company in October, 1998. For more than the past five years, Mr. Oliver has
been a Barrister and Soliciter with the firm of White, Coach, Kapusts &
Oliver, a law firm specializing in real estate, corporate, commercial and
estate law. Mr. Oliver is also the sole director and President of BBL, the
Company's wholly-owned subsidiary. As of August 30, 1999, Mr. Oliver was 45
years old.
Dr. Bruno Benjamin Liber has been the technical director for the Company
since January, 1999. He is the inventor of the catalytic converter technology
that forms the basis for the Company's anticipated business. From 1997
through 1999, Dr. Liber was a technical director for Next Catalytic Converter
Corporation, and previous to that Dr. Liber was an independent inventor. As
of August 30, 1999, Mr. Liber was 77 years old.
Mr. Teodosio V. Pangia is the principal of TVP Consulting Services, which has
provided consulting services to the Company since November, 1997. Those
consulting services consisted of meetings with suppliers and vendors to
coordinate the production of the Company's prototype and proposed
manufacturing activities; overseeing testing activities; meetings and
discussions with the Company's potential business partners; and acting as
liaison between investors and the Company. From 1994 through 1997, Mr. Pangia
was director and Chief Executive Officer of Ecology Pure Air International, a
Canadian company engaged in the business of developing an automobile fuel
catalyst. In 1997, a petition in bankruptcy was brought against Mr. Pangia in
the Ontario Court of Justice. That petition, and a related order, were
dismissed. As of August 30, 1999, Mr. Pangia was 40 years old.
ITEM 6 - COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Mr. Oliver, the President of the Company, received a total of $4,100 in
compensation for his services to the Company during the six months ended
June 30, 1999. Mr. Odner currently serves without compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Name Year Salary Bonus Other Stock Awards Other
Compensation Compensation
<S> <C> <C> <C> <C> <C> <C>
Adam Michael 1999 0 0 4,100 None 0
Oliver
Bengt Odner 1999 0 0 0 None 0
</TABLE>
5
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
There were no grants of options or other rights to acquire stock to employees
of the Company in the past fiscal year.
EMPLOYMENT AGREEMENTS
The Company does not presently have formal employment agreements with any
employees or officers.
COMPENSATION OF DIRECTORS
The Company does not presently compensate its sole director for his
attendance at meetings of the Board of Directors.
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AGREEMENTS WITH AFFILIATED PARTIES
In June, 1999, the Company paid consulting fees of approximately $64,000 to
TVP Consulting Services, a company in which Teodosio Pangia, a beneficial
owner of approximately 11.3% of the Company's stock, is the principal.
ITEM 8 - LEGAL PROCEEDINGS
None
ITEM 9 - MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS' COMMON EQUITY AND
RELATED MATTERS
The Company's Common Stock was been quoted on the Over-the-Counter
Bulletin Board ("OTCBB") through January, 1999 under the symbol "BBSM", and
since January, 1999 has been quoted under the symbol "ESWW."
In January, 1999, the National Association of Securities Dealers,
Inc. ("NASD") amended NASD Rule 6530 and 6540 to limit quotations on the
OTCBB to the securities of issuers that report their current financial
information to the Securities and Exchange Commission, or to banking or
insurance regulators. The Company is required to become compliant with such
amended rules no later than September 2, 1999 (after taking into effect the
benefit of a thirty-day grace period pursuant to the NASD Rule 6530 and 6540
amendments). The Company did not become so compliant by such date, and
trading of the Common Stock of the Company will be limited to the so-called
"pink sheets," until such time as the Company can again qualify for trading
on the OTCBB. It therefore may be more difficult to dispose of or to obtain
accurate price quotations on the Common Stock. In August, 1999, the Company's
symbol was changed to "ESWEE" as a result of the Company's failure to become
compliant with the amendments to NASD Rule 6530 and 6540.
The following table sets forth the high and low bid prices for the
Common Stock for the quarters indicated, as reported by the Bloomberg
Reporting Service. Such market quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions:
<TABLE>
<CAPTION>
March 31, 1999 June 30, 1999 September 30, 1999
-------------- ------------- ------------------
<S> <C> <C> <C>
High 4.5625 3.0 4.875
Low 0.85 0.5625 1.25
</TABLE>
At June 30, 1999, there were approximately 50 holders of record of the Common
Stock.
6
<PAGE>
SHARES ELIGIBLE FOR SALE
Sales in the market of substantial amounts of currently outstanding Common
Stock could have an adverse effect on the price of the Common Stock. As of
August 30, 1999 16,154,542 shares of Common Stock are freely trading shares,
with the remainder of 11,847,996 shares of Common Stock currently subject to
restrictions as to their resale.
DIVIDENDS
The Company anticipates that for the foreseeable future, earnings will be
retained for the development of its business. Accordingly, the Company does
not anticipate paying dividends on the Common Stock in the foreseeable
future. The payment of future dividends will be at the sole discretion of the
Company's Board of Directors and will depend upon, among other things, future
earnings, capital requirements, the general financial condition of the
Company and general business conditions.
ITEM 10 - RECENT SALES OF UNREGISTERED SECURITIES
In January, 1999, the Company issued 15,000,000 shares of Common
Stock in settlement of indebtedness of $150,000. The shares were issued in
reliance on Rule 504 of the Securities Act, which provides an exemption from
registration under the Securities Act for certain limited offering and sales
of securities.
In January 1999, the Company issued 11,048,000 shares to Canadian
residents in connection with the acquisition of the stock of BBL in a
transaction not subject to the registration requirements of the Securities
Act pursuant to Regulation S (Rules 901 through 905) promulgated under the
Securities Act. At the time of the acquisition of BBL, there were no
relationships between the Company and BBL, other than was that an officer and
director of BBL was providing legal services to the Company. Dr. Bruno Liber,
the original holder of the catalytic converter technology, was a significant
stockholder in BBL.
In April, 1999, the Company issued 954,538 shares of Common Stock
for gross proceeds of $790,000 in cash. The shares were sold in reliance on
Rule 504 of the Securities Act, which provides an exemption from registration
under the Securities Act for certain limited offering and sales of securities.
ITEM 11 - DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The Company has authorized for issuance 50,000,000 shares of common stock,
par value $0.001 per share. Each holder of Common Stock is entitled to one
vote for each share held of record on all matters submitted to a vote of the
stockholders. The quorum for any meeting of shareholders is the presence, in
person or by proxy, of the holders of at least one-third of the outstanding
shares. In all matters other than the election of directors, when a quorum is
present at any stockholders' meeting, the affirmative vote of 50.01% of the
outstanding shares is required to approve any action of shareholders.
Directors are elected by a plurality of the votes of the shares present in
person or represented by proxy at a stockholders' meeting. The Board of
Directors of the Company currently consists of one member, and the By-Laws of
the Company provide that the Board shall consist of no fewer than one but no
more than seven members. The holders of Common Stock are not entitled to
cumulative voting rights with respect to the election of directors, and, as a
consequence, minority stockholders will not be able to elect directors on the
basis of their votes alone. Holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of
funds legally available therefor.
In the event of a liquidation, dissolution or winding up of the Company,
holders of the Common Stock would be entitled to share ratably in all assets
remaining after payment of liabilities and the satisfaction of any
liquidation preference of any then outstanding series of preferred stock.
Holders of Common Stock have no preemptive rights and no right to convert
their Common Stock into any other securities. There are no redemption or
sinking fund provisions applicable to the Common Stock. All outstanding
shares of Common Stock are fully paid and nonassessable.
As of August 30, 1999, there were 28,002,538 shares of Common Stock
outstanding held of record by approximately 50 stockholders. The Company has
granted an option to purchase 90,000 shares of Common Stock at a price of
$2.00 per share, expiring December 31, 2000, and an option to purchase 15,000
shares at $2.00 per share, expiring June 21, 2000, to two public relations
firms. There are warrants outstanding to purchase 122,500 shares of Common
Stock at prices from $2.50 to $3.00 per share, which expire five years from
the date of issue.
7
<PAGE>
TRANSFER AGENT
The Transfer Agent and Registrar for the Company's Common Stock is Interwest
Transfer Co., Inc.
ITEM 12 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
In accordance with the Florida Corporation Act (the "Act"), the Company's
Articles of Incorporation (the "Articles") contain provisions which state
that, to the fullest extent permitted by law, no director or officer shall be
personally liable to the Company or its shareholders for damages for breach
of any duty owned to the Corporation or its shareholders. The Company also
has the power, by a by-law provision or a resolution of its stockholders or
directors, to indemnify the officers and directors against any contingency or
peril as may be determined to be in the Company's best interests and in
connection therewith to secure policies of insurance.
ITEM 13 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information with respect to Item 13 is contained in the Company's financial
statements and is set forth herein beginning on page F-1.
ITEM 14 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL MATTERS
There have been no disagreements with the Company's independent
accountants on accounting and financial matters within the three year period
ended December 31, 1998, or in any period subsequent to that date.
In August 1998, the Board of Directors determined to engage a new
audit firm (the Board of Directors did not, and does not now, have an audit
committee), and terminated the services of the former auditor, James E.
Scheifly & Associates, P.C. There were no disagreements with the former
accountants on any matter of accounting principles or practices, financial
statement, disclosure, or auditing scope or procedure, that would have caused
the former accountants to make reference thereto in its reports, including
matters that were resolved to the satisfaction of the former accountant.
ITEM 15 - FINANCIAL STATEMENTS AND EXHIBITS
a. Each of the following items are contained in the Company's financial
statements and are set forth herein beginning on page F-1.
(i) Auditor's Report of Daren, Martenfeld, Carr, Testa and Company LLP,
Chartered Accountants
(ii) Balance Sheet as of December 31, 1998 and December 31, 1997
(iii) Statement of Operations for the years ended December 31, 1998, 1997,
1996 and 1995, and for the period October 15, 1987 (inception) to December
31, 1998
(iv) Statement of Changes in Shareholders' Deficiency from inception
through December 31, 1998
(v) Statement of Cash Flows for the years ended December 31, 1998, 1997,
1996 and 1995, and for the period October 15, 1987 (inception) to December
31, 1998
(vi) Notes to Financial Statements
(vii) Consolidated Balance Sheet as at September 30, 1999 and December 31,
1998 (unaudited)
(viii) Consolidated Statement of Operations for the nine month period ended
September 30, 1999, and for the year ended December 31, 1998, and for the
period from October 15, 1987 (inception) to June 30, 1999 (unaudited)
(ix) Consolidated Statement of Changes in Shareholders' Deficiency from
inception through September 30, 1999 (unaudited)
(x) Consolidated Statement of Cash Flows for the nine month period ended
September 30, 1999, and for the year ended December 31, 1998, and for the
period from October 15, 1987 (inception) to September 30, 1999 (unaudited)
(xi) Notes to Financial Statements
(xii) Report of James C. Scheifly & Associates, P.C. dated August 19, 1998
8
<PAGE>
(xi) Balance sheet as of August 3, 1998, December 31, 1997 and December 31,
1996.
(xii) Statements of Operation for periods ended August 31, 1998, December
31, 1997, December 31, 1996 and inception through August 3, 1998
(xiii) Statement of Changes in Stockholders' Equity for the period from
inception to August 3, 1998
(ix) Statement of Cash Flows for the periods ended August 3, 1998, December
31, 1997, December 31, 1996 and inception through August 3, 1998
(x) Notes to Financial Statements
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
b. Exhibits
3.1 Articles of Incorporation of the Company, as amended
3.2 By-laws of the Company
4.1 Warrant Certificate
10.1 Agreement dated January 29, 1999 by and between the shareholders of BBL
Technologies Inc.. and the Company
10.2 Consulting Agreement dated March 31, 1999 by and between May Davis Group
and the Company
10.3 Commission Agreement dated March 31, 1999 by and between May Davis Group
and the Company
10.4 Option Agreement dated June 21, 1999, between David Coates o/a Fifth
Business and the Company
10.5 Option Agreement dated June 21, 1999, between Zoya Financial Corp. and the
Company
21.1 List of Subsidiaries
Financial Data Schedule
9
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: November 16, 1999
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
By: /s/ Bengt Odner
-------------------------------
Bengt Odner
Chief Executive Officer
10
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
(U.S. DOLLARS)
FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1998
<PAGE>
DAREN, MARTENFELD, CARR, TESTA AND COMPANY LLP
CHARTERED ACCOUNTANTS
20 Eglinton Avenue West Telephone: 416-480-0160
Suite 2100 Facsimile: 416-480-2646
Toronto, Ontario
M4R 1K8
AUDITORS' REPORT
To the Shareholders' and Board of Directors of
BBC Stock Market, Inc.
(A Development Stage Company)
We have audited the balance sheet of BBC STOCK MARKET, INC. (a development stage
company) as at DECEMBER 31, 1998 and the statement of operations, cash flows and
changes in shareholders' deficiency for the year ended December 31, 1998. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of BBC Stock Market, Inc. (a development
stage company) from inception (October 15, 1987) to December 31, 1997 were
audited by another auditor whose report which expressed a going concern as
described below issued an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of BBC Stock Market, Inc. (a development stage
company) as at December 31, 1998 and the results of its operations, cash flows
and changes in shareholders' deficiency for the year ended December 31, 1998 in
accordance with generally accepted accounting principles in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue, which raise substantial doubts about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
DAREN, MARTENFELD, CARR, TESTA AND COMPANY LLP (SIGNED)
DAREN, MARTENFELD, CARR, TESTA AND COMPANY LLP
Toronto, Ontario
August 16, 1999
A Member Firm of 1.
Midsnell International
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
- - -------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 151,939 $ --
- - -------------------------------------------------------------------------------
SHAREHOLDERS' DEFICIENCY
Common shares, $.001 par value,
50,000,000 shares authorized, 1,000,000
shares issued and outstanding 1,000 1,000
(Deficit) accumulated during development stage (152,939) (1,000)
- - -------------------------------------------------------------------------------
(151,939) --
- - -------------------------------------------------------------------------------
$ -- $ --
- - -------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
APPROVED BY A. MICHAEL OLIVER (SIGNED) DIRECTOR
2.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------
OCT. 15, 1987
(INCEPTION) TO
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1998 1997 1996 1995 1998
- - --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Professional fees $ 150,000 $ -- $ -- $ -- $ 150,000
Operating expenses 1,939 -- -- -- 2,939
- - --------------------------------------------------------------------------------------------------
Net loss $ (151,939) $ -- $ -- $ -- $ (152,939)
- - --------------------------------------------------------------------------------------------------
Per share information:
Basic loss per common
shares $ (0.15) $ -- $ -- $ -- $ (0.15)
- - --------------------------------------------------------------------------------------------------
Weighted average shares
outstanding 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
- - --------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
3.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIENCY
(U.S. DOLLARS)
<TABLE>
<CAPTION>
DEFICIT
ADDITIONAL ACCUMULATED
COMMON SHARE PAID-IN DURING DEVELOP-
ACTIVITY SHARES AMOUNT CAPITAL MENT STAGE TOTAL
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares issued at inception for
services 1,000,000 $ 1,000 $ -- $ -- $ 1,000
Net loss for the period ended
December 31, 1987 -- -- -- (1,000) (1,000)
- - ----------------------------------------------------------------------------------------------------
Balance, December 31, 1987
to December 31, 1997 1,000,000 1,000 -- (1,000) --
Net loss for the year ended
December 31, 1998 -- -- -- (151,939) (151,939)
- - ----------------------------------------------------------------------------------------------------
Balance, December 31, 1998 1,000,000 $ 1,000 $ -- $ (152,939) $(151,939)
- - ----------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
4.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------
OCT. 15, 1987
(INCEPTION) TO
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1998 1997 1996 1995 1998
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net loss $(151,939) $-- $-- $-- $(152,939)
Adjustment to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Common stock issued for
services -- -- -- -- 1,000
Changes in assets and
liabilities
Increase in accounts payable and accrued
liabilities 151,939 -- -- -- 151,939
- - -----------------------------------------------------------------------------------------------------------
Net cash from operating activities -- -- -- -- --
Cash flows from investing activities -- -- -- -- --
Cash flows from financing activities -- -- -- -- --
- - -----------------------------------------------------------------------------------------------------------
Increase (decrease) in cash -- -- -- -- --
Cash and cash equivalents at
beginning of period -- -- -- -- --
- - -----------------------------------------------------------------------------------------------------------
Cash and cash equivalents at
end of period $ -- $-- $-- $-- $ --
- - -----------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
5.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(U.S. DOLLARS)
- - -------------------------------------------------------------------------------
1. ORGANIZATION
The Company was incorporated on October 15, 1987, in the State of Florida.
The Company is in the development stage and its intent is to locate
suitable business ventures to acquire. The Company has had no significant
business activity to date and has chosen December 31st as a fiscal year
end.
2. SIGNIFICANT ACCOUNTING POLICIES
ESTIMATES
The preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's short-term financial instruments consists of accounts
payable. The carrying amounts of the Company's financial instruments
approximates fair value because of their short-term maturities. The Company
does not hold or issue financial instruments for trading purposes nor does
it hold or issue interest rate or leveraged derivative financial
instruments.
3. SHAREHOLDERS' EQUITY
On July 22, 1998, the Company's Board of Directors approved an amendment to
the Company's Articles of Incorporation whereby the authorized capital was
increased to 50,000,000 of $.001 par value common stock. Additionally, a
forward stock split of 10,000 shares to 1 share was approved. All share and
per share data included in these financial statements has been restated to
reflect the effect of the stock split.
At inception, the Company issued 1,000,000 shares of common stock to an
officer for services provided in connection with the organization of the
Company. The value of the services had been charged to operations for the
period ended December 31, 1987.
4. BASIS OF PRESENTATION
The accompanying financial statements have been prepared on a "going
concern" basis which contemplates the realization of assets and the
liquidation of liabilities in the ordinary course of business.
The Company has no established source of revenue and has incurred operating
losses since its inception aggregating $152,939 and has negative working
capital at December 31, 1998 of $151,939. There can be no assurance that
profitable operations will be attained or that management will be
successful in raising additional equity capital for the Company.
Management plans to seek an operating company as a merger partner for the
Company which would provide a base of operations and additional capital.
6.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(U.S. DOLLARS)
5. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer. The cost of such
services are immaterial to the financial statements and, accordingly, have
not been reflected therein. The officers and directors of the Company are
involved in other business activities and may, in future, become involved
in other business opportunities. If a specific business opportunity becomes
available, such persons may face a conflict of interest in carrying out
their specific duties with respect to the Company. The Company has not
established a policy for the resolution of such potential conflicts.
6. INCOME TAXES
At December 31, 1998, the Company has net loss carry forwards for income
tax purposes of approximately $153,000 which expires in various years to
2012.
7. YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems, which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure, which could affect an entity's
ability to conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 Issue affecting the company,
including those related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.
8. SUBEQUENT EVENTS
i. On January 21, 1999 the Company satisfied $150,000 of the accounts
payable and accrued liabilities by the issuance of 15,000,000 common
shares.
ii. On January 29, 1999, the Company acquired 100% of the common shares of
BBL Technologies Inc., an Ontario, Canada Corporation by issuing
11,048,000 common shares. BBL Technologies Inc. ("BBL") holds the
Canadian patent to a catalytic converter/muffler technology. The
Company acquired BBL in order to develop the technology into a
commercial product.
The Company owns the only shares with voting and participating rights
of BBL. The original holder of the patented technology Next Catalytic
Converter Corporation ("NCCC"), an Ontario, Canada corporation, which
is related to BBL due to common shareholders, transferred the
technology to BBL on December 14, 1998 in return for 700,000 special
shares with a fixed value of $453,900 which are non-voting,
non-participating and are only retractable by BBL. As the special
shares are retractable only at the discretion of BBL, no value will be
attributed to those shares.
7.
<PAGE>
BBC STOCK MARKET, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(U.S. DOLLARS)
8. SUBEQUENT EVENTS (Cont'd.)
The acquisition has been accounted for by using the purchase method of
accounting. In determining the value of the purchase of BBL, it is
appropriate to use the quoted market price of the shares of the Company at
the time of acquisition if the shares reflected the fair value of the
Company. As the Company was a "shell company" at the time of acquisition,
the fair value of the Company was nominal and thus the use of the market
value of the shares of the Company in determining the purchase price would
not be appropriate.
As a result the purchase price was determined based upon the fair value of
the net assets of BBL, being the patented technology. Since the technology
was acquired in a non-arm's length transaction between BBL and NCCC the
original cost of the patented technology, as determined by NCCC, being
$2,327 is deemed to be the acquisition price.
<TABLE>
<S> <C>
Patented technology $2,327
Special shares --
------
$2,327
</TABLE>
iii The Company changed its name to Environmental Solutions Worldwide, Inc.
on February 19, 1999.
iv. The Company issued 954,538 common shares for net proceeds of $653,250.
8.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
AS AT SEPTEMBER 30, 1999
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
NOTE 1999 1998
- - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT
Cash $ 131,478 $ -
- - ----------------------------------------------------------------------------------------------
PATENTED TECHNOLOGY 4 2,327 -
- - ----------------------------------------------------------------------------------------------
$ 133,805 $ -
- - ----------------------------------------------------------------------------------------------
LIABILITIES
CURRENT
Accounts payable $ 61,710 $ 151,939
Loan payable, shareholder, non-interest
bearing and due on demand 18,576 -
- - ----------------------------------------------------------------------------------------------
80,286 151,939
- - ----------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY (DEFICIENCY)
Special shares, no par value, unlimited
shares authorized, 700,000 shares
issued and outstanding 4 - -
Common shares, $.001 par value,
50,000,000 shares authorized, 28,002,538
shares issued and outstanding 5 28,002 1,000
Additional paid-in capital 778,575
(Deficit) accumulated during development stage (753,058) (152,939)
- - ----------------------------------------------------------------------------------------------
53,519 (151,939)
- - ----------------------------------------------------------------------------------------------
$ 133,805 $ -
- - ----------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
1.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------
NINE MONTH NINE MONTH
PERIOD PERIOD OCTOBER 15, 1987
ENDED ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
NOTE 1999 1998 1999
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EXPENSES
Development costs $ 405,659 $ - $ 405,659
Professional fees 104,920 - 254,920
Consulting fees 7 31,500 - 31,500
Office and general 53,940 1,939 56,879
Director fees 4,100 - 4,100
- - ---------------------------------------------------------------------------------------------------------
Net loss $ (600,119) $ (1,939) $ (753,058)
- - ---------------------------------------------------------------------------------------------------------
Loss per share information:
Basic $ (0.02) $ - $ (0.028)
Diluted (0.02) - (0.027)
- - ---------------------------------------------------------------------------------------------------------
Weighted average shares
outstanding 25,154,653 1,000,000 25,154,653
- - ---------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
2.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIENCY
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------
DEFICIT
ADDITIONAL ACCUMULATED
COMMON SHARE PAID-IN DURING DEVELOP-
ACTIVITY SHARES AMOUNT CAPITAL MENT STAGE TOTAL
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares issued at inception for
services 1,000,000 $ 1,000 $ -- $ -- $ 1,000
Net loss for the period ended
December 31, 1987 -- -- -- (1,000) (1,000)
Net loss for the period ended
December 31, 1998 -- -- -- (151,939) (151,000)
- - ----------------------------------------------------------------------------------------------------------------
Balance, December 31, 1987
to December 31, 1998 1,000,000 1,000 -- (152,939) (151,939)
Net loss for the nine month period
ended September 30, 1999 -- -- -- (600,119) (600,119)
Shares issued in settlement of
debt 15,000,000 27,002 122,998 -- 150,000
Shares issued for cash, net
of issuance costs of $136,750 954,538 -- 653,250 -- 653,250
Shares issued on acquisition
of BBL Technologies, Inc. 11,048,000 -- 2,327 -- 2,327
- - ----------------------------------------------------------------------------------------------------------------
Balance, September 30, 1999 28,002,538 $28,002 $ 778,575 $ (753,058) $ 53,519
- - ----------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
3.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------
NINE MONTH NINE MONTH
PERIOD PERIOD OCTOBER 15, 1987
ENDED ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net loss $ (600,119) $ (1,939) $ (752,058)
Adjustment to reconcile net
loss to net cash provided by
(used in) operating activities:
Changes in assets and liabilities
Increase in accounts payable 59,771 1,939 211,710
- - ---------------------------------------------------------------------------------------------------------
Net cash provided by (used in)
operating activities (540,348) - (540,348)
Cash flows from financing activities:
Issue of common shares, net of
Issuance costs 653,250 - 653,250
Increase in loan payable 18,576 - 18,576
- - ---------------------------------------------------------------------------------------------------------
Increase in cash 131,478 - 131,478
Cash and cash equivalents at
beginning of period - - -
- - ---------------------------------------------------------------------------------------------------------
Cash and cash equivalents at
end of period $ 131,478 $ - $ 131,478
- - ---------------------------------------------------------------------------------------------------------
Supplemental disclosures
Non-cash investing and financing activities
Conversion of accounts payable into equity $ 150,000 - $ 150,000
Acquisition of BBL 2,327 - 2,327
- - ---------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
4.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
1. BASIS OF PRESENTATION - DEVELOPMENT STAGE COMPANY
Environmental Solutions Worldwide, Inc. ("the Company") is considered to be
in the development stage, and the accompanying financial statements,
represent those of a development stage enterprise. The successful
completion of the company's business plan and, ultimately, the attainment
of profitable operations is dependent upon future events, including
obtaining adequate financing to fulfil its business plan.
2. BUSINESS
The Company was incorporated on October 15, 1987 in the state of Florida
and was inactive until January 29, 1999 when it acquired 100% of the issued
and outstanding common shares of BBL Technologies Inc. ("BBL"), a private
Ontario, Canada corporation.
BBL, a wholly owned subsidiary of the Company holds the Canadian patent to
a catalytic converter/muffler technology.
As the technology is in its development phase, the Company is still
considered to be a development stage company.
3. SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary. All significant intercompany transactions
are eliminated.
ESTIMATES
The preparation of the Company's financial statements requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from these estimates. Estimates that are particularly susceptible to change
in the near term include the evaluation of the recoverability of the
patented technology.
FINANCIAL INSTRUMENTS
The Company's short-term financial instruments consists of accounts
payable. The carrying amounts of the Company's financial instruments
approximates fair value because of their short-term maturities. The Company
does not hold or issue financial instruments for trading purposes nor does
it hold or issue interest rate or leveraged derivative financial
instruments.
NET LOSS PER SHARE
The basic loss per share is computed by dividing the net loss for the
period by the weighted average number of common shares outstanding for the
period. When present, common stock equivalents are excluded from the
computation if their effect would be antidilutive. Shares issued at
inception are considered to be outstanding for the entire period presented.
5.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
3. SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
CASH AND CASH EQUIVALENTS
Cash and cash equivalent consist of cash and other highly liquid debt
instruments with an original maturity of less than three months.
PATENTED TECHNOLOGY
The patented technology is carried at cost less amounts amortized.
Amortization will be provided once the product has begun its test marketing
phase and will be based on an estimate of the time required for the Company
to cover its initial investment.
RECENT PRONOUNCEMENTS
SFAS N. 120, "Reporting Comprehensive Income", establishes guidelines for
all items that are to be recognized under accounting standards as
components of comprehensive income to be reported in the financial
statements. The statement is effective for all periods beginning after
December 15, 1997 and reclassification of financial statements for earlier
periods will be required for comparative purposes. To date, the Company has
not engaged in transactions which would result in any significant
difference between its reported net loss and comprehensive net loss as
defined in the statement.
4. ACQUISITON
On January 29, 1999, the Company acquired 100% of the common shares of BBL
Technologies Inc., an Ontario, Canada Corporation by issuing 11,048,000
common shares. BBL Technologies Inc. ("BBL") holds the Canadian patent to a
catalytic converter/muffler technology. The Company acquired BBL in order
to develop the technology into a commercial product.
The Company owns the only shares with voting and participating rights of
BBL. The original holder of the patented technology Next Catalytic
Converter Corporation "(NCCC"), an Ontario, Canada corporation, which is
related to BBL due to common shareholders, transferred the technology to
BBL on December 14, 1998 in return for 700,000 special shares with a fixed
value of $453,900 which are non-voting, non-participating and are only
retractable only at the discretion of BBL, no value will be attributed to
those shares.
The acquisition has been accounted for by using the purchase method of
accounting. In determining the value of the purchase of BBL, it is
appropriate to use the quoted market price of the shares of the Company at
the time of acquisition if the shares reflected the fair value of the
Company. As the Company was a "shell company" at the time of acquisition,
the fair value of the Company was nominal and thus the use of the market
value of the shares of the Company in determining the purchase price would
not be appropriate.
6.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
4. ACQUISITION (Cont'd.)
As a result, the purchase price was determined based upon the fair value of
the net assets of BBL, being the patented technology. Since the technology
was acquired in a non-arm's length transaction between BBL and NCCC, the
original cost of the patented technology, as determined by NCCC, being
$2,327 is deemed to be the acquisition price.
<TABLE>
<S> <C>
Patented technology $ 2,327
Special shares -
------
$ 2,327
</TABLE>
5. SHAREHOLDERS' EQUITY
On July 22, 1998, the Company's Board of Directors approved an amendment to
the Company's Articles of Incorporation whereby the authorized capital was
increased to 50,000,000 of $.001 par value common stock. Additionally, a
forward stock split of 10,000 shares to 1 share was approved. All share and
per share data included in these financial statements has been restated to
reflect the effect of the stock split.
At inception, the Company issued 1,000,000 shares of common stock to an
officer for services provided in connection with the organization of the
Company. The value of the services had been charged to operations for the
period ended December 31, 1987.
On January 21, 1999, the Company satisfied $150,000 of the accounts
payable and accrued liabilities by the issuance of 15,000,000 common
shares.
6. DEVELOPMENT COSTS
The Company through its wholly owned subsidiary has commenced the
development phase of its patented technology. The development costs
incurred up to September 30, 1999 are summarized as follows:
<TABLE>
<S> <C>
Product Development $ 328,403
Consulting 77,256
-------
$ 405,659
-------
-------
</TABLE>
7.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
7. OPTIONS AND WARRANTS
I) WARRANTS
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------
ISSUED AMOUNT DUE DATE EXERCISED CANCELLED OUTSTANDING
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
60,000 $2.50/warrant April 9, 2004 - - 60,000
62,500 $3.00/warrant April 9, 2004 - - 62,500
</TABLE>
II) OPTIONS
The Company granted options to consultants of the Company. The options can
be exercised any time up to December 31, 2000.
Activity of Stock Options is summarized below:
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------
WEIGHTED
OPTIONS LOW HIGH AVERAGE
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding January 1, 1998 - - - -
Granted during period 105,000 $ 2.00 $ 2.00 $ 2.00
- - -------------------------------------------------------------------------------------------------------
Options outstanding September 30, 1999 105,000 $ 2.00 $ 2.00 $ 2.00
- - -------------------------------------------------------------------------------------------------------
Weighted average remaining life of
options 1.16 years
- - -------------------------------------------------------------------------------------------------------
</TABLE>
STOCK-BASED COMPENSATION
The compensation expense has been recognized for its stock-based
compensation plan. The compensation costs for the Stock Options granted has
been determined based on the fair value at the grant date, consistent with
the methodology prescribed under SFAS 123.
8.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
7. OPTIONS AND WARRANTS (Cont'd.)
The weighted average fair value of all options granted during fiscal 1999
was estimated as of the date of grant using the Black-Scholes option
pricing model with the following and weighted average results and
assumptions.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------
NINE MONTH PERIOD ENDED
SEPTEMBER 30, 1999
- - ------------------------------------------------------------------------------------
<S> <C>
Estimated stock-based compensation costs $ 31,500
Weighted average fair value of options issued 0.30
Expected option life, in years 1.16
Volatility 75%
Risk free interest rate 4.9%
Dividend yield -
</TABLE>
The Black-Scholes model used by the Company to calculate option values, as
well as other currently accepted option valuation models, were developed to
estimate the fair value of freely tradable, fully transferable options
without vesting restrictions, which significantly differ from the Company's
stock option awards. These models also require highly subjective
assumptions, including future stock price volatility and expected time
until exercise, which greatly affect the calculated values. Accordingly,
Management believes that this model does not necessarily provide a reliable
single measure of the fair value of the Company's stock option awards.
8. RELATED PARTY TRANSACTIONS
i. The patented technology was acquired by the Company's wholly owned
subsidiary BBL for $2,327 from a company with the same common
shareholders (Note 4).
ii. Included in development costs are consulting fees of $25,390 which were
paid to Bruno Liber, a significant shareholder.
iii. Included in development costs are consulting fees of $64,234 which
were paid to TVP Consulting Services, a company which is related to a
shareholder of the Company.
9.
<PAGE>
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
(FORMERLY BBC STOCK MARKET, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED - PREPARED BY MANAGEMENT)
(U.S. DOLLARS)
9. YEAR 2000
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems, which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 Issue
may be experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range from
minor errors to significant systems failure, which could affect an entity's
ability to conduct normal business operations. It is not possible to be
certain that all aspects of the Year 2000 Issue affecting the company,
including those related to the efforts of customers, suppliers, or other
third parties, will be fully resolved.
10. INCOME TAXES
At September 30, 1999, the Company had net loss carry forwards for income
tax purposes of approximately $721,000 which expire at various years to
2013.
11. CHANGE OF NAME
On February 19, 1999, the Company changed its name to Environmental
Solutions Worldwide, Inc.
10.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
BBC Stock Market, Inc.
We have audited the accompanying balance sheet of BBC Stock Market, Inc. (a
development stage company) as of August 3, 1998 and December 31, 1997 and
1996 and the related statements of operations, stockholders' equity, and cash
flows for the period ended August 31, 1998 and the years ended December 31,
1997 and 1996. 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BBC Stock Market, Inc. (a
development stage company) as of August 3, 1998 and the results of its
operations, and its cash flows for the period ended August 31, 1998 and the
years ended December 31, 1997 and 1996 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered recurring losses from
operations and has no established source of revenue, which raise substantial
doubts about its ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 4. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
/s/ James E. Scheifley & Associates, P.C.
------------------------------------------
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
August 19, 1998
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
August 31, December 31, December 31,
ASSETS 1998 1997 1996
------ ---------- ------------ -----------
<S> <C> <C> <C>
Current Assets:
Cash $ -- $ -- $ --
---------- ------------ -----------
Total current assets -- -- --
Other assets -- -- --
---------- ------------ -----------
$ -- $ -- $ --
========== ============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 1,939 $ -- $ --
---------- ----------- -----------
Total current liabilities 1,939 -- --
Stockholders' equity:
Common stock, $.001 par value,
50,000,000 shares authorized,
1,000,000 shares issued
and outstanding 1,000 1,000 1,000
Additional paid-in capital -- -- --
(Deficit) accumulated during
development stage (2,939) (1,000) (1,000)
---------- ----------- -----------
(1,939) -- --
---------- ----------- -----------
$ -- $ -- $ --
========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
Period October 15, 1987
Ended Years Ended (Inception) to
August 3, December 31, December 31, August 3,
1998 1997 1996 1998
----------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
Operating expenses 1,939 -- -- 1,000
----------- ------------ ------------ ---------------
Net (loss) $ (1,939) $ -- $ -- $ (1,000)
----------- ------------ ------------ ---------------
Per share information:
Basis (loss) per common share $ (0.00) $ -- $ -- $ (0.00)
----------- ------------ ------------ ---------------
Weighted average shares outstanding 1,000,000 1,000,000 1,000,000 1,000,000
----------- ------------ ------------ ---------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (October 15, 1987) to August 3, 1998
<TABLE>
<CAPTION>
Deficit
Common Stock Additional Accumulated
---------- -------- Paid-in Development
ACTIVITY Shares Amount Capital Stage Total
---------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
Balance at inception -- $ -- $ -- $ -- $ --
Shares issued at inception for services 1,000,000 1,000 -- 1,000
Net (loss) for the period
ended December 31, 1987 -- -- -- (1,000) (1,000)
---------- -------- ---------- ----------- --------
Balance, December 31, 1987 through 1997 1,000,000 1,000 -- (1,000) --
Net (loss) for the period
ended August 3, 1998 -- -- -- (1,939) (1,939)
---------- -------- ---------- ----------- --------
Balance, August 3, 1998 1,000,000 $ 1,000 $ -- $ (3,939) $ (2,939)
========== ======== ========== =========== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
Period October 15, 1987
Ended Years Ended (Inception) to
August 3, December 31, December 31, August 3,
1998 1997 1996 1998
----------- ------------ ------------ ---------------
<S> <C> <C> <C> <C>
Net income (loss) $ (1,939) $ (2,939)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Common stock issued
for services -- -- -- 1,000
Changes in assets and liabilities:
(Increase) decrease in
accounts payable 1,939 -- -- 1,939
----------- ------------ ------------ ---------------
Net cash provided by (used in)
operating activities -- -- -- --
Cash flows from investing
activities -- -- -- --
Cash flows from financing
activities -- -- -- --
----------- ------------ ------------ ---------------
Increase (decrease) in cash -- -- -- --
Cash and cash equivalents,
beginning of period -- -- -- --
----------- ------------ ------------ ---------------
Cash and cash equivalents,
end of period $ -- $ -- $ -- $ --
=========== ============ ============ ================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BBC Stock Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
Note 1. ORGANIZATION
The Company was incorporated on October 15, 1987, in the State of Florida.
The Company is in the development stage and its intent is to locate suitable
business ventures to acquire. The Company has had no significant business
activity to date and has chosen December 31st as a fiscal year end.
SIGNIFICANT ACCOUNTING POLICIES
Estimates
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
these estimates.
Fair Value of Financial Instruments
The Company's short-term financial instruments consists of accounts payable.
The carrying amounts of the Company's financial instruments approximates fair
value because of their short-term maturities. The Company does not hold or
issue financial instruments for trading purposes nor does it hold or issue
interest rate or leveraged derivative financial instruments
Net loss per share
In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128, "Earnings Per Share." SFAS No. 128 supersedes and simplifies
the existing computational guidelines under Accounting Principles Board
("APB") Opinion No. 15, "Earnings Per Share."
The statement is effective for financial statements issued for periods ending
after December 15, 1997. Among other changes, SFAS No. 128 eliminates the
presentation of primary earnings per share and replaces it with basic
earnings per share for which common stock equivalents are not considered in
the computation. it also revises the computation of diluted earnings per
share. The Company has adopted SFAS No. 128 and there is no material impact
to the Company's earnings per share, financial condition, or results of
operations. The Company's earnings per share have been restated for all
periods presented to be consistent with SFAS No. 128.
The basic loss per share is computed by dividing the net loss for the period
by the weighted average number of common shares outstanding for the period.
When present, common stock equivalents are excluded from the computation if
their effect would be anti-dilutive. Shares issued at inception are
considered to be outstanding for the entire period presented.
<PAGE>
Cash and cash equivalents
Cash and cash equivalents consist of cash and other highly liquid debt
instruments with an original maturity of less than three months.
Recent Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines for
all items that are to be recognized under accounting standards as components
of comprehensive income to be reported in the financial statements. The
statement is effective for all periods beginning after December 15, 1997 and
reclassification of financial statements of financial statements for earlier
periods will be required for comparative purposes. To date, the Company has
not engaged in transactions which would result in any significant difference
between its reported net loss and comprehensive net loss as defined in the
statement.
Note 2. STOCKHOLDERS' EQUITY
On July 22, 1998, the Company's Board of Directors approved an amendment to
the Company's Articles of Incorporation whereby the authorized capital was
increased to 50,000,000 of $.001 par value common stock. Additionally, a
forward stock split of 10,000 shares to 1 share was approved. All share and
per share data included in these financial statements has been restated to
reflect the effect of the stock split.
At inception, the Company issued 1,000,000 shares of common stock to an
officer for services provided in connection with the organization of the
Company. The value of the services had been charged to operations for the
period ended December 31, 1987.
Note 3. INCOME TAXES
Deferred income taxes may arise from temporary differences resulting from
income and expense items reported for financial accounting and tax purposes
in different periods. Deferred taxes are classified as current or
non-current, depending on the classifications of the assets and liabilities
to which they relate. Deferred taxes arising from temporary differences that
are not related to an asset or liability are classified as current or
non-current depending on the periods in which the temporary differences are
expected to reverse. The deferred tax asset related to the operating loss
carryforward has been fully reserved.
The Company has not provided current or deferred income taxes for the period
presented due to a loss from operations.
<PAGE>
The Company currently has a net operating loss carryforward aggregating
approximately $2,900 which expires $1,000 in 2002 and 1900 in 2013. The tax
benefit of the loss, estimated to be approximately $440, has been fully
reserved as its realization in future periods is not assured.
Note 4. Basis of presentation
The accompanying financial statements have been prepared on a "going concern"
basis which contemplates the realization of assets and the liquidation of
liabilities in the ordinary course of business.
The Company has no established source of revenue and has incurred operating
losses since its inception aggregating $2,939 and has negative working
capital at August 3, 1998 and $1,939. There can be no assurance that
profitable operations will be attained or that management will be successful
in raising additional equity capital for the Company.
Management plans to seek an operating company as a merger partner for the
Company which would provide a base of operations and additional capital.
Note 5. Related party transactions.
The Company neither owns nor leases any real or personal property. Office
services are provided without charge by an officer. The cost of such services
are immaterial to the financial statements and, accordingly, have not been
reflected therein. The officers and directors of the Company are involved in
other business activities and may, in future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict of interest in carrying out their specific
duties with respect to the Company. The Company has not established a policy
for the resolution of such potential conflicts.
<PAGE>
EXHIBIT 3.1
[FILED
99 FEB 19 PM 3: 28
SECRETARY OF STATE
TALLAHASSEE, FLORIDA]
BBC STOCK MARKET INC.
Articles of Amendment
Pursuant to the provisions of Section 607.1006 of the Florida
Statutes, BBC STOCK MARKET, INC., a Florida corporation, does hereby amend
its Articles of Incorporation.
1. The name of the corporation whose Articles of Incorporation are
being amended by these Articles of Amendment is BBC Stock Market, Inc., a
Florida corporation.
2. Article I of the Articles of Incorporation of BBC Stock Market,
Inc., a Florida corporation, is hereby amended by deleting it in its entirety
and replacing it with the following to be added in its place:
"Article I
CORPORATE NAME
--------------
The name of the corporation shall be ENVIRONMENTAL SOLUTIONS
WORLDWIDE, INC."
3. The amendment to the Articles of Incorporation of BBC Stock
Market, Inc., a Florida corporation, set forth in paragraph 2 above was duly
adopted by the Board of Directors of the corporation as of February 3, 1999.
4. The only voting group entitled to vote on the amendments to the
Articles of Incorporation of BBC Stock Market, Inc., a Florida corporation
set forth in paragraph 2 above was the holders of shares of Common Stock of
the corporation. The number of votes cast in favor or such amendment by the
members of such voting group was sufficient for approval by that voting group.
In witness whereof, the corporation, by and through its undersigned
officer thereunto duly authorized, has executed these Articles of Amendment
on February 3, 1999.
BBC STOCK MARKET, INC.
By: /s/ A. MICHAEL OLIVER
------------------------------------
A. Michael Oliver,
<PAGE>
President
<PAGE>
ARTICLES OF AMENDMENT
TO
BBC STOCK MARKET, INC.
THE UNDERSIGNED, being the sole director and president of BBC Stock
Market Inc., does hereby amend its Articles of incorporation as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation is BBC Stock Market, Inc.
ARTICLE II
PURPOSE
The Corporation shall be organized for any and all purposes
authorized under the laws of the state of Florida.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the Corporation shall continue perpetual.
ARTICLE IV
SHARES
The capital stock of this corporation shall consist of 50,000,000
shares of common stock, $0.001 par value.
ARTICLE V
PLACE OF BUSINESS
The initial address of the principal place of business of this
corporation in the State of Florida shall be 200 E. Robinson St., Suite 450,
Orlando, Fl. 32801. The Board of Directors may at any time and from time to
time move the principal office of this corporation.
ARTICLE VI
DIRECTORS AND OFFICERS
The business of this corporation shall be managed by its Board of
Directors. The number of such directors shall not be less than one (1) and,
subject to such minimum may be increased or decreased from time to time in
the manner provided in the By-Laws.
<PAGE>
ARTICLE VII
DENIAL OF PREEMPTIVE RIGHTS
No shareholder shall have any right to acquire share or other
securities of the corporation except to the extent to such right may be
granted by an amendment to these Articles of Incorporation or by a resolution
of the Board of Directors.
ARTICLE VII
AMENDMENT OF BY-LAWS
Anything in these Articles of Incorporation, the By-Laws, or the
Florida Corporation Act notwithstanding, by-laws not be adopted, modified,
amended or repealed by the shareholders of the Corporation except upon the
affirmative vote of a simple majority vote of the holders of all the issued
and outstanding shares of the corporation entitled to vote thereon.
ARTICLE IX
SHAREHOLDERS
9.1 INSPECTION OF BOOKS. The Board of Directors shall make the
reasonable rules to determine at what times and place and under what
conditions the books of the Corporation shall be open to inspection by
shareholders or a duly appointed representative of a shareholder.
9.2 CONTROL SHARE ACQUISITION. The provisions relating to any
control share acquisition as contained in Florida Statutes now, or
hereinafter amended, and any successor provision shall not be applied to the
Corporation.
9.3 QUORUM. The holders of shares entitled to one-third of the votes
at a meeting of shareholders shall constitute a quorum.
9.4 REQUIRED VOTE. Acts of shareholders shall require the approval
of holders of 50.01% of the outstanding votes of shareholders.
ARTICLE X
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
To the fullest extent permitted by law, no director or officer of
the Corporation shall be personally liable to the Corporation or its
shareholders for damages for breach of any duty owed to the Corporation or
its shareholders. In addition, the Corporation shall have the power, in its
by-laws or in any resolution of its stockholders or directors, to undertake
to indemnify the officers and directors of this corporation against any
contingency or peril as may be determined to be in the best interest of this
corporation, and in conjunction therewith, to procure, at this corporation's
expense, policies of insurance.
<PAGE>
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any
person, firm or corporation shall be affected by the fact that any officer or
director of this corporation is such other party or is, or at some time in
the future becomes, an officer, director or partner of such other contracting
party, or has now or hereafter a direct or indirect interest in such contract.
I hereby certify that the following was adopted by a majority vote
of the shareholders and directors of the corporation on July 29, 1998 and
that the number of votes cast was sufficient for approval.
IN WITNESS WHEREOF I have hereunto subscribed to and executed the
Articles of Incorporation on this 29th day of July 1998.
/s/ PAMELA J. WILKINSON
- - ---------------------------------
Pamela Wilkinson, Sole Director
President
The foregoing instrument was acknowledged before me on July 29,
1998, by Pamela Wilkinson who is personally known to me.
/s/ NICOLE JOHNSON
- - ---------------------------------
Nicole Johnson, Notary Public
My Commission Expires:
[NOTARY SEAL] NICOLE JOHNSON
My Comm Exp. 3/05/2001
Bonded by Service Ins
No. 00627050
[X] Personally Known [ ] Other I.D.
<PAGE>
ARTICLES OF INCORPORATION [J98527]
OF [EFFECTIVE DATE
10-15-87
-------------]
BBC STOCK MARKET, INC.
----------------------
THE UNDERSIGNED SUBSCRIBER to these Articles of Incorporation hereby
associates himself together to form a corporation under the Laws of the State
of Florida.
ARTICLE ONE:
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[FILED
The name of the corporation is: BBC Stock Market, Inc. OCT 20 3 40 P.M. '87
SECRETARY OF STATE
ARTICLE TWO: TALLAHASSEE FLORIDA]
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The corporation shall exist perpetually commencing upon the date of
execution and acknowledgment of these Articles.
ARTICLE THREE:
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The corporation is organized for the purpose of brokering baseball cards
and sports memorabilia and selling same.
Further, the corporation may engage in any business or purpose lawful
under the laws of the State of Florida.
ARTICLE FOUR:
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The corporation is authorized to issue 100 shares of Ten Dollar ($10) par
value shares which shall be designated common shares.
ARTICLE FIVE:
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The street address of the initial registered office of the corporation is
160 A North Parsons Avenue, (P.O. Box 813), Brandon, Florida 34299-0813.
The name of the corporation's registered agent at that address is Leslie
P. Roth.
ARTICLE SIX:
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This corporation shall have two directors initially. The number of
directors may be either
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increased or decreased from time to time by amendment to the By-Laws but
shall never be less than the number shown in this Article. The names and
addresses of the initial directors of this
<PAGE>
corporation are:
NAME ADDRESS
- - ---- -------
Leslie P. Roth 13348 Golf Crest Circle
Tampa, Florida 33624
Esther Roth 13348 Golf Crest Circle
Tampa, Florida 33624
ARTICLE SEVEN:
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The name and address of the person signing these Articles as incorporator
is:
NAME ADDRESS
- - ---- -------
Leslie P. Roth 13348 Golf Crest Circle
Tampa, Florida 33624
ARTICLE EIGHT:
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The power to adopt, alter, amend or repeal the By-Laws shall be vested in
the Board of Directors and the Shareholders.
ARTICLE NINE:
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The corporation shall indemnify any officer or director or any former
officer or director, to the ful1 extent permitted by law.
ARTICLE TEN:
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This corporation reserves the right to amend or repeal any provisions
contained in these Articles of Incorporation, or amendments hereto, and any
right conferred upon the shareholders is subject to this reservation.
ARTICLE ELEVEN:
---------------
At each election for directors every shareholder entitled to vote shall
have the right to cumulate his votes by giving one candidate as many votes as
the number of directors to be elected at that time multiplied by the number
of his shares, or by distributing such votes on the same
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principle among any number of such candidates.
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ARTICLE TWELVE:
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The members of the Board of Directors may participate in meetings of the
Board of Directors by means of conference telephone as provided by law.
ARTICLE THIRTEEN:
-----------------
The corporation and the parties hereto shall take whatever action as shall
be necessary to cause the shares of the corporation to qualify as "Section
1244 Stock" as such term is used and defined in the Internal Revenue Code of
1954, as amended, and regulations issued thereunder.
IN WITNESS WHEREOF, the undersigned subscriber has executed these Articles
of Incorporation this fifteenth day of October, 1987.
/s/ LESLIE P. ROTH
--------------------------------------
SUBSCRIBER - LESLIE P. ROTH
STATE OF FLORIDA )
) ss:
COUNTY OF HILLSBOROUGH )
BEFORE ME, a Notary Public authorized to take acknowledgments in
the State and County set forth above, personally appeared Leslie P. Roth,
known to me and known by me to be the person who executed the foregoing
Articles of Incorporation, and he acknowledged before me that he executed
those Articles of Incorporation.
IN WITNESS WHEREOF, I have hereto set my hand and affixed my
official seal, in the State and County aforesaid, this fifteenth day of
October, 1987.
/s/ MARY JANE BISIUTO
--------------------------------------
NOTARY PUBLIC
State of Florida at Large
My Commission Expires: [NOTARY PUBLIC STATE - FLORIDA AT LARGE
MY COMMISSION EXPIRES _______21, 1989]
<PAGE>
EXHIBIT 3.2
BY-LAWS
OF
BBC STOCK MARKET, INC.
ARTICLE I. MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of
this corporation shall be held on the 30th day of June of each year or at
such other time and place designated by the Board of Directors of the
corporation. Business transacted at the annual meeting shall include the
election of directors of the corporation. If the designated day shall fall on
a Sunday or legal holiday, then the meeting shall be held on the first
business day thereafter.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders
shall be held when directed by the President or the Board of Directors, or
when requested in writing by the holders of not less than 10% of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than 3 nor more than 30 days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting
shall designate another person to do so.
SECTION 3. PLACE. Meetings of shareholders shall be held at the
principal place of business of the corporation or at such other place as
may be designated by the Board of Directors.
SECTION 4. NOTICE. Written notice stating the place, day and hour of
the meeting and in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less
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than 3 nor more than 30 days before the meeting, either personally or by
first class mail, or by the direction of the President, the Secretary or the
officer or persons calling the meeting to each shareholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to the
shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
SECTION 5. NOTICE OF ADJOURNED MEETING. When a meeting is adjourned
to another time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and at the
adjourned meeting any business may be transacted that might have been
transacted on the original date of the meeting. If, however, after the
adjournment the Board of Directors fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given as provided in this
Article to each shareholder of record on a new record date entitled to vote
at such meeting.
SECTION 6. SHAREHOLDER QUORUM AND VOTING. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. If a quorum is present, the affirmative
vote of a majority of the shares represented at the meeting and entitled to
vote on the subject matter shall be the act of the shareholders unless
otherwise provided by law.
SECTION 7. VOTING OF SHARES. Each outstanding share shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders.
SECTION 8. PROXIES. A shareholder may vote either in person or by
proxy executed in writing by the shareholder or his duly authorized
attorney-in-fact. No proxy shall be valid after the duration of 11 months
from the date thereof unless otherwise provided in the proxy.
2
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SECTION 9. ACTION BY SHAREHOLDERS WITHOUT A MEETING. Any action
required by law or authorized by these by-laws or the Articles of
Incorporation of this corporation or taken or to be taken at any annual or
special meeting of shareholders, or any action which may be taken at any
annual or special meeting of shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
ARTICLE II. DIRECTORS
----------------------
SECTION 1. FUNCTION. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall
be managed under the direction of, the Board of Directors.
SECTION 2. QUALIFICATION. Directors need not be residents of
this state or shareholders of this corporation.
SECTION 3. COMPENSATION. The Board of Directors shall have
authority to fix the compensation of directors.
SECTION 4. PRESUMPTION OF ASSENT. A director of the corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the, action
taken unless he votes against such action or abstains from voting in respect
thereto because of an asserted conflict of interest.
SECTION 5. NUMBER. This corporation shall have a minimum of 1
director but no more than 7.
SECTION 6. ELECTION AND TERM. Each person named in the Articles of
Incorporation as a member of the initial Board of Directors shall hold office
until the next shareholder meeting or until his earlier
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resignation, removal from office or death. If no shareholder meeting takes
place, each director shall continue serve until such meeting takes place. At
each shareholder the shareholders shall elect directors to hold office until
the next succeeding shareholder meeting. Each director shall hold office for
a term for which he is elected and until his successor shall have been
elected and qualified or until his earlier resignation, removal from office
or death.
SECTION 7. VACANCIES. Any vacancy occurring in the Board of
Directors, including any vacancy created by reason of an increase in the
number of Directors, may be filled by the affirmative vote of a majority of
the remaining directors though less than a quorum of the Board of Directors.
A director elected to fill a vacancy shall hold office only until the next
election of directors by the shareholders.
SECTION 8. REMOVAL OF DIRECTORS. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may
be removed, with or without cause, by a vote of the holders of a majority of
the shares then entitled to vote at an election of directors.
SECTION 9. QUORUM AND VOTING. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
SECTION 10. EXECUTIVE AND OTHER COMMITTEES. The Board of Directors,
by resolution adopted by a majority of the full Board of Directors, may
designate from among its members an executive committee and one or more other
committees each of which, to the extent provided in such resolution shall
have and may exercise all the authority of the Board of Directors, except as
is provided by law.
SECTION 11. PLACE OF MEETING. Regular and special meetings of the
Board of Directors shall be held at the principal place of business of the
corporation or as otherwise determined by the Directors.
4
<PAGE>
SECTION 12. TIME, NOTICE AND CALL OF MEETINGS. Regular meetings of
the Board of Directors shall be held without notice on the first Monday of
the calendar month two (2) months following the end of the corporation's
fiscal, or if the said first Monday is a legal holiday, then on the next
business day. Written notice of the time and place of special meetings of the
Board of Directors shall be given to each director by either personal
delivery, telegram or cablegram at least three (3) days before the meeting or
by notice mailed to the director at least 3 days before the meeting.
Notice of a meeting of the Board of Directors need not be given to
any director who signs a waiver of notice either before or after the meeting.
Aftendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the
meeting, the time of the meeting, or the manner in which it has been called
or convened, except when a director states, at the beginning of the meeting,
any objection to the transaction of business because the meeting is not
lawfully called or convened.
Neither the business to be transacted at, nor the purpose, of any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting. A majority of the directors
present, whether or not a quorum exists, may adjourn any meeting of the Board
of Directors to another time and place. Notice of any such adjourned meeting
shall be given to the directors who were not present at the time of the
adjournment, and unless the time and place of adjourned meeting are announced
at the time of the adjournment, to the other directors. Meetings of the Board
of Directors may be called by the chairman of the board, by the president of
the corporation or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating
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<PAGE>
in the meeting can hear each other at the same time. Participation by such
means shall constitute presence in person at a meeting.
SECTION 13. ACTION WITHOUT A MEETING. Any action, required to be
taken at a meeting of the Board of Directors, or any action which may be
taken at a meeting of the Board of Directors or a committee thereof, may be
taken without a meeting if a consent in writing, setting forth the action so
to be taken, is signed by such number of the directors, or such number of the
members of the committee, as the case may be, as would constitute the
requisite majority thereof for the taking of such actions, is filed in the
minutes of the proceedings of the board or of the committee. Such actions
shall then be deemed taken with the same force and effect as though taken at
a meeting of such board or committee whereat all members were present and
voting throughout and those who signed such action shall have voted in the
affirmative and all others shall have voted in the negative. For
informational purposes, a copy of such signed actions shall be mailed to all
members of the board or committee who did not sign said action, provided
however, that the failure to mail said notices shall in no way prejudice the
actions of the board or committee.
ARTICLE III. OFFICERS
----------------------
SECTION 1. OFFICERS. The officers of this corporation shall consist
of a president, a secretary and a treasurer, each of whom shall be elected by
the Board of Directors. Such other officers and assistant officers and agents
as may be deemed necessary may be elected or appointed by the Board of
Directors from time to time. Any two or more offices may be held by the same
person.
SECTION 2. DUTIES. The officers of this corporation shall have the
following duties:
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<PAGE>
The President shall be the chief executive officer of the
corporation, shall have general and active management of the business and
affairs of the corporation subject to the directions of the Board of
Directors, and shall preside at all meetings of the shareholders and Board of
Directors.
The Secretary shall have custody of, and maintain, all of the
corporate records except the financial records; shall record the minutes of
all meetings of the shareholders and Board of directors, send all notices of
all meetings and perform such other duties as may be prescribed by the Board
of Directors or the President.
The Treasurer shall have custody of all corporate funds and
financial records, shall keep full and accurate accounts of receipts and
disbursements and render accounts thereof at the annual meetings of
shareholders and whenever else required by the Board of Directors or the
President, and shall perform such other duties as may be prescribed by the
Board of Directors or the President.
SECTION 3. REMOVAL OF OFFICERS. An officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in
its judgment the best interests of the corporation will be served thereby.
Any vacancy in any office may be filed by the Board of Directors.
ARTICLE IV. STOCK CERTIFICATES
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SECTION 1. ISSUANCE. Every holder of shares in this corporation
shall be entitled to have a certificate representing all shares to which he
is entitled. No certificate shall be issued for any share until such share is
fully paid.
SECTION 2. FORM. Certificates representing shares in this
corporation shall be signed by the President orvice President and the
Secretary or an Assistant Secretary and may be sealed with the seal of this
corporation or a facsimile thereof.
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<PAGE>
SECTION 3. TRANSFER OF STOCK. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly
endorsed by the holder of record or by his duly authorized attorney.
SECTION 4. LOST, STOLEN OR DESTROYED CERTIFICATES. If the
shareholder shall claim to have lost or destroyed a certificate of shares
issued by the corporation, a new certificate shall be issued upon the making
of an affidavit of that fact by the person claiming the certificate of stock
to be lost, stolen or destroyed, and, at the discretion of the Board of
Directors, upon the deposit of a bond or other indemnity in such amount and
with such sureties, if any, as the board may reasonably require.
ARTICLE V. BOOKS AND RECORDS
----------------------------
SECTION 1. BOOKS AND RECORDS. This corporation shall keep correct
and complete books and records of account and shall keep minutes of the
proceedings of its shareholders, Board of Directors and committee of
directors.
This corporation shall keep at its registered office, or principal
place of business a record of its shareholders, giving the names and
addresses of all shareholders and the number of the shares held by each.
Any books, records and minutes may be in written form or in any
other form capable of being converted into written form within a reasonable
time.
SECTION 2. SHAREHOLDERS' INSPECTION RIGHTS. Any person who shall
have been a holder of record of shares of voting trust certificates therefor
at least six months immediately preceding his demand or shall be the holder
of record of, or the holder of record of voting trust certificates for, at
least five percent of the outstanding shares of the corporation, upon written
demand stating the purpose thereof, shall have the right to examine, in
person or by agent or attorney, at any reasonable time or times, for any
proper purpose its
8
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relevant books and records of accounts, minutes and records of shareholders
and to make extracts therefrom.
SECTION 3. FINANCIAL INFORMATION. Not later than four months after
the close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during the fiscal year.
Upon the written request of any shareholder or holder of voting
trust certificates for shares of the corporation, the corporation shall mail
to each shareholder or holder of voting trust certificates a copy of the most
recent such balance sheet and profit and loss statement. The balance sheets
and profit and loss statements shall be filed in the registered office of the
corporation in tris state, shall be kept for at least five years, and shall
be subject to inspection during business hours by any shareholder or holder
of voting trust certificates, in person or by agent.
ARTICLE VI. DIVIDENDS
----------------------
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property
or its own shares, except when the corporation is insolvent or when the
payment thereof would render the corporation insolvent subject to the
provisions of the Florida Statutes.
ARTICLE VII. CORPORATE SEAL
----------------------------
The Board of Directors shall provide a corporate seal which shall be
in circular form.
ARTICLE VI. DIVIDENDS
----------------------
9
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The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property
or its own shares, except when the corporation is insolvent or when the
payment thereof would render the corporation insolvent subject to the
provisions of the Florida Statutes.
ARTICLE VII. CORPORATE SEAL
----------------------------
The Board of Directors shall provide a corporate seal which shall be
in circular form.
ARTICLE VIII. AMENDMENT
------------------------
These by-laws may be altered, amended or repealed, and new by-laws
may be adopted by the a majority vote of the directors of the corporation.
registered office of the corporation in this state, shall be kept for at
least five years, and shall be subject to inspection during business hours by
any shareholder or holder of voting trust certificates, in person or by agent.
I hereby certify that the preceding were duly adopted by the Company
on July 1, 1988.
/s/ PAMELA J. WILKINSON
---------------------------------------------
Pamela Wilkinson, President and Sole Director
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<PAGE>
EXHIBIT 4.1
WARRANT CERTIFICATE
*COMMON SHARE PURCHASE WARRANTS
WARRANTS TO PURCHASE COMMON SHARES OF ENVIRONMENTAL
SOLUTIONS WORLDWIDE, INC.
THIS IS TO CERTIFY THAT, for value received, ENVIRONMENTAL SOLUTIONS
WORLDWIDE, INC. (the "Corporation"), a corporation incorporated under the
laws of the State of Florida agrees, subject to the terms and conditions
hereinafter expressed, to sell and deliver to the bearer of this Warrant
Certificate one fully paid and non-assessable common share of the Corporation
for each Warrant represented hereby together with the Subscription Form on
the reverse side hereof duly executed at any time prior to 5:00 p.m. eastern
standard time on April 9th, 2004 (the "Expiry Time"), at the principal office
of the Corporation and upon payment therefor of the purchase price of $ * US
per common share.
These Warrants are issued subject to the terms and conditions governing the
holding of the Warrants as set forth on the reverse hereof.
These Warrants shall become wholly void and shall terminate and lapse at the
Expiry Time and thereafter be of no further force and effect.
IN WITNESS WHEREOF the Corporation has caused these Warrants to be executed
by its proper officers.
DATED the day of April, 1999.
ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
Per:
----------------------------------
President
TERMS AND CONDITIONS
I. If the Corporation between the date hereof and the Expiry Time (a)
consolidates its common shares into a lesser number of shares, subdivides its
common shares into a greater number of shares or reclassifies its common
shares, then when the right to purchase is exercised the holder shall have
the right to receive and the obligation to take shares in number and
description as if such holder had exercised the right to purchase hereunder
before such event or the first of such events, if more than one, and had held
the securities such holder would have received until such event, or (b)
consolidates, amalgamates or merges with any other body corporate, then when
the right to purchase is exercised the holder shall have the right to receive
and the obligation to take the securities in the consolidated, amalgamated or
merged body corporate as if such holder had exercised the right to purchase
hereunder before such event and had held the securities such holder would
have received until such event, or (c) pays any stock dividend(s) or makes
any other distribution other than dividends in the ordinary course upon its
common shares, then when the right to purchase is exercised the holder shall
have the right to receive the additional number of securities of the
appropriate class payable pursuant to the stock dividend or dividends or
other distribution as if such holder had exercised the right to purchase
before the payment of such stock dividend or dividends or other distribution
and had held the securities such holder would have received until such event,
or (d) transfers all or substantially all of its assets,
<PAGE>
then when the right to purchase is exercised the holder shall have the right
to receive and the obligation to take the securities in number and
description or other property as if such holder had exercised the right to
purchase before such event and had held the securities such holder would have
received until such event, or (e) fixes a record date for the issue of
rights, options or warrants to all or substantially all the holders of common
shares under which such holders are entitled during a period expiring not
more than forty-five days after the record date for such issue to subscribe
for or purchase common shares, or securities convertible into or exchangeable
for common shares, at a price per common share or having a conversion or
exchange price per common share less than 80% of the weighted average closing
market price per common share on the Stock Exchange for the thirty trading
days preceding such record date, then, the Exercise Price shall be adjusted
immediately after such record date so that it shall equal the price
determined by multiplying the Exercise Price in effect on such record date by
a fraction of which the numerator shall be the total number of common shares
outstanding on such record date plus a number equal to the number arrived at
by dividing the aggregate price of the total number of additional common
shares offered for subscription or purchase, or the aggregate conversion or
exchange price of the convertible securities so offered, by the aforesaid
weighted average market price per common share and of which the denominator
shall be the total number of common shares outstanding on such record date,
plus the total number of additional common shares offered for subscription or
purchase (or into which the convertible securities so offered are convertible
or exchangeable); to the extent that any adjustment in the Exercise Price
occurs pursuant to this clause (e) as a result of the fixing by the
Corporation of a record date for the distribution of rights, options or
warrants referred to in this clause (e), the Exercise Price shall be
readjusted immediately after the expiration of any relevant exchange,
conversion or exercise right to the Exercise Price which would be in effect
based upon the number of common shares actually issued and remaining issuable
after such expiration, and shall be further readjusted in such manner upon
expiration of any ftirther such right. Further, if the holder exercises
Warrants prior to the expiry of the relevant rights, options or warrants
referred to in this clause, the holder shall have the right to receive such
number of rights, options or warrants as it would have been issued had it
exercised such Warrants prior to the record date for the issuance of such
rights, options or warrants.
2. Payment of the purchase price may only be made by delivery to the
Corporation of a certified cheque, bank draft or money order payable in
Canadian funds at par to the order of the Corporation.
3. A share certificate evidencing the common shares of the Corporation
purchased will be issued and delivered or mailed by prepaid mail to the
purchaser as soon after receipt of the subscription and payment as may be
practicable.
4. The holding of this Warrant shall not constitute being a shareholder
of the Corporation.
5. This Warrant and all rights hereunder are transferable by delivery. The
holder of this Certificate may have the Certificate divided into two or more
Certificates, evidencing the total number of Warrants evidenced by this
Certificate, upon demand of the same to the Corporation. The holder of this
Certificate may subscribe for and purchase any lesser number of common shares
than the number of common shares subject to purchase under this Certificate
and in such event shall be entitled to receive a new certificate or
certificates representing the balance of the Warrants evidenced by this
Certificate not then subscribed for. The Corporation shall not be obligated
to issue fractional common shares in satisfaction of its obligations
hereunder and any fractional shares to which the holder might otherwise be
entitled shall be canceled. The Corporation may, without any liability
whatsoever, treat the bearer of this Certificate for all purposes as the
absolute owner hereof, notwithstanding any notice or knowledge, actual or
otherwise, to the contrary.
6. No person, firm or corporation who is a national or resident of the
United States of America or the territories or possessions or any other
jurisdiction may purchase common shares hereunder where such purchase would
constitute a breach of State, Federal or other securities laws.
7. Every holder of this Certificate and the Warrants represented hereby,
by accepting the same, agrees without reservation to the terms herein set
forth.
8. Time shall be of the essence hereof.
SUBSCRIPTION FOR COMMON SHARES
------------------------------
<PAGE>
TO: ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
The undersigned hereby exercises the right to purchase and subscribes for
common shares of the Corporation at a price of $ * US per common share,
payment for which is submitted herewith.
Total Subscription Price: $
DATED the day of
- - ------------------------
Subscriber
Address in full:
Shares to be registered as follows:
<PAGE>
EXHIBIT 10.1
This memorandum is evidence of an agreement (the "Agreement") made as of the
29th day of January, 1999 (the "effective date") between
1 THE PARTIES
1.1 The shareholders of BBL Technologies Inc. executing a copy of this
agreement (hereinafter collectively referred to as the "Vendors" and
individually as a "Vendor"); and
1.2 BBC Stock Market Inc. (the "Purchaser").
2 RECITALS
2.1 The Purchaser is a company whose common shares are quoted for trading
over the counter on the Bulletin Board OTC (the "BBOTC").
2.2 The Vendors and Purchaser wish to set out the terms and conditions
upon which the Purchaser shall acquire from the Vendors, all of the issued
and outstanding shares (the "Shares") of BBL Technologies Inc. ("BBL").
3 SHARE PURCHASE
3.1 The Vendors shall sell and the Purchaser shall purchase the Shares
for a purchase price of US$0.99 for each of the Shares (the "Purchase Price").
3.2 The Purchase Price shall be satisfied by the issuance of 11,048,000
common shares of the Purchaser (the "Public Shares") valued at US$0.99 per
share for purposes of this Agreement. Such Public Shares will be issued to
the Vendors pro rata to the Vendors' holding of common shares of BBL. The
Public Shares shall be subject to such restrictions on resale as are set out
in the Purchaser's representations and warranties contained herein and shall
be subject to a pooling arrangement to be contained in a separate agreement
which each Vendor shall execute, and containing the following: an 18 month
term whereby all of the Public Shares shall be held by an independent pooling
agent who shall hold the stock for the duration of any applicable regulatory
hold period, and thereafter, shall release stock into the market on a
controlled basis so as not to adversely affect the market for common shares
of the Purchaser.
3.3 The Purchase Price shall be allocated among the Vendors and Public
Shares shall be allotted and issued to the Vendors in the numbers and to the
respective Vendors in accordance with the tables contained in Schedule "A"
hereto, and share certificates evidencing such Public Shares shall be
delivered to the Vendors without delay on or within thirty (30) days after
the date of closing.
3.4 This Agreement and the purchase and sale hereunder shall be
completed on the 4th day of February, 1999 (the "date of closing"), or on
such later date as the parties may agree. The Shares shall be transferred to
the Purchaser by virtue of the execution of this Agreement and without
further formality and the Vendors hereby grant, assign and transfer to the
Purchaser as of the effective date, all of the Vendors' beneficial right,
title and interest in and to the Shares, and the Purchaser hereby issues and
allots
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-2-
the Public Shares. The Purchaser shall deliver to the Vendors share
certificates representing the Public Shares as soon as practical after the
date of closing.
3.5 In the event that shareholders holding at least 75% of the
shares of BBL evidence their agreement to sell their shares of BBL by
executing and delivering a copy of this agreement, this agreement shall be
binding as between such shareholders and the Purchaser, notwithstanding that
not all shareholders have agreed to sell their shares of BBL to the Purchaser.
4 REPRESENTATIONS AND WARRANTIES
4.1 BBL and its sole director, Michael Smith, represent and warrant that
as of the date of closing:
(a) DUE INCORPORATION. BBL is duly incorporated and validly
subsisting under the laws of the Province of Ontario.
(b) CAPITALIZATION. The authorized capital of BBL consists. of
an unlimited number of common shares of which the number
set out in Schedule "A" are issued and outstanding and an
unlimited number of Special shares, of which 700,000 shall
be issued and outstanding. Each Vendor owns all of the
issued and outstanding shares of BBL listed beside the
Vendor's name in Schedule "A" hereto with good and
marketable title thereto, free and clear of any and all
encumbrances.
(c) NO OTHER SHAREHOLDERS. No person has any agreement, option,
understanding or of any and all encumbrances.
(c) NO OTHER SHAREHOLDERS. No person has any agreement, option,
understanding or commitment, or any right or privilege
(whether by law, pre-emptive or contractual) capable of
becoming an agreement, option or commitment, including
convertible securities, warrants or convertible obligations
of any nature, for:
(i) the purchase, subscription, allotment or issuance of,
or conversion into, any of the unissued shares in the
capital of BBL or any securities of BBL; or
(ii) the purchase or other acquisition from BBL of any its
undertaking, property or assets, other than in the
ordinary course of business.
(d) ALL NECESSARY APPROVALS. Such Vendor, BBL, and their
respective shareholders and board of directors, as the case
may be, have taken all necessary or desirable actions to
approve or authorize, validly and effectively, the entering
into, and the execution, delivery and performance of this
agreement and the sale and transfer of the Shares by such
Vendor to the Purchaser.
(e) AGREEMENT IS BINDING. This Agreement is a legal, valid and
binding obligation of such Vendor, enforceable against such
Vendor in accordance with its terms subject to:
(i) bankruptcy, insolvency, moratorium, reorganization and
other laws relating to or affecting the enforcement of
creditors' rights generally, and
(ii) the fact that equitable remedies, including the
remedies of specific performance and injunction, may
only be granted in the discretion of a court.
(f) OTHER COMPANIES. BBL has no subsidiaries and does not own
any securities issued by, or any equity or ownership
interest in, any other person. BBL is not subject to any
<PAGE>
-3-
obligation to make any investment in or to provide funds by
way of loan, capital contribution or otherwise to any
person.
(g) CORPORATE RECORDS. The corporate records and minute books
of BBL contain complete and accurate minutes of all
meetings of the directors and shareholders of BBL held
since its incorporation, and original signed copies of all
resolutions and by-laws duly passed or confirmed by the
directors or shareholders of BBL other than at a meeting.
All such meetings were duly called and held. The share
certificate books, register of security holders, register
of transfers and register of directors and any similar
corporate records of BBL are complete and accurate.
(h) NO BREACH CAUSED BY THIS AGREEMENT. The execution, delivery
and performance of this Agreement by such Vendor, and the
completion of the transactions contemplated hereby, will
not constitute or result in a violation or breach of or
default under, or cause the acceleration of any obligations
of BBL under:
(i) any term or provision of any of the articles, by-laws
or other constating documents of BBL, or any unanimous
shareholder agreement among its shareholders;
(ii) subject to obtaining the consents referred to in this
agreement, the terms of any agreement (written or
oral), indenture, instrument or understanding or
other obligation or restriction to which BBL is a
party or by which it is bound, or
(iii) subject to obtaining the consents referred to in this
Agreement, to the best of such Vendor's knowledge,
without making any enquiries in respect thereof, any
term or provision of any of BBL's licences, or any
order of any court, governmental authority or
regulatory body or any law or regulation of any
jurisdiction in which the business is carried on.
Duly licensed. BBL has all licences and permits
required to legally operate its business and all such
licences and permits are valid and will be in full
force and effect as of the date of closing of this
transaction. There are no proceedings in progress,
pending or, to the best of the knowledge of BBL or
Smith without making any enquiries in respect
thereof, threatened, which could result in the
revocation, cancellation or suspension of any of such
licences.
(j) NO DIVIDENDS. BBL has not declared or paid any dividend or
made any other distribution on any of its shares of any
class, or redeemed or purchased or otherwise acquired any
of its shares of any class, or reduced its authorized
capital or issued capital, or agreed to any of the
foregoing.
(k) NO LITIGATION. There are no actions, suits or proceedings,
judicial or administrative (whether or not purportedly on
behalf of BBL) pending or, to the best of the knowledge of
BBL or Smith, threatened, by or against or affecting BBL,
at law or in equity, or before or by any court or any
federal, provincial, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign to the best of BBI or
Smith's knowledge, without making any enquiries in respect
thereof. There are no grounds on which any such action,
suit or proceeding might be commenced with any
<PAGE>
-4-
reasonable likelihood of success to the best of BBL or
Smith's knowledge, without making any enquiries in respect
thereof.
(l) OWNERSHIP OF PROPERTY AND ASSETS. BBL is the owner of and
has good and marketable title to all of its properties and
assets, free and clear of all encumbrances whatsoever,
except as BBL may advise the Purchaser. BBL has received an
assignment of a certain Canadian patent for a catalytic
converter, being patent number 2010754.
(m) NO PARTNERS. BBL is not a partner or participant in any
partnership, joint venture, profit-sharing arrangement or
other association of any kind and not party to any
agreement under which BBL agrees to carry on any part of
the business or any other activity in such manner or by
which BBL agrees to share any revenue or profit with any
other person except as may have been disclosed to Purchaser
by BBL.
(n) RESTRICTIONS ON BUSINESS. BBL is not a party to or bound
by any agreement which would restrict or limit its right to
carry on any business or activity or to solicit business
from any person or in any geographical area or otherwise to
conduct the business as BBL may determine. BBL is not
subject to any legislation or any judgment, order or
requirement of any court or governmental authority which is
not of general application to persons carrying on a
business similar to the business. To the best of the
knowledge of BBI or Smith, there are no facts or
circumstances which could materially adversely affect the
ability of BBL to continue to operate the business as
presently conducted following the completion of the
transactions contemplated by this Agreement.
(o) NO GUARANTEES AND CONTINGENT LIABILITIES. BBL is not a
party to or bound by any agreement of guarantee,
indemnification, assumption or endorsement or any other
like commitment of the obligations, liabilities (contingent
or otherwise) or indebtedness of any person. BBL has not
given any guarantee or warranty in respect of any of the
products sold or the services provided by it, except
warranties made in the ordinary course of the business by
BBL or by way of assignment from its product suppliers, and
except for warranties implied by law. BBL is not now
subject to any agreement or commitment to any customer of
the business which would require BBL to adjust any price or
grant any refund, discount or other concession to such
customer except in the ordinary course of its business, and
BBL is not required to provide any letters of credit, bonds
or other financial security arrangements in connection with
any transactions with its suppliers or customers, save and
except as specifically referred to in this Agreement.
(p) NOT IN DEFAULT UNDER ANY CONTRACTS. To the best of the
knowledge of BBL and Smith, BBL is not in default or
breach of any of its obligations under any one or more
contracts, agreements (written or oral), commitments,
indentures or other instruments to which it is a party or
by which it is bound which would have a materially adverse
affect on BBL, and there exists no state of facts which,
after notice or lapse of time or both, would constitute
such a default or breach. There are no contracts,
agreements, commitments, indentures or other instruments
under which BBL's rights, or the performance of obligations
of BBL are dependent upon or supported by the guarantee of
or any security provided by any other person.
<PAGE>
-5-
(q) NO UNION. There are no employee union, management, or
concession contracts in effect other than stated herein.
(r) NO STRIKES. There are no existing or, to the best of the
knowledge of BBL and Smith, threatened, labour strikes or
labour disputes, grievances, controversies or other labour
troubles affecting BBL or the business of BBL.
(s) TRUTHFULNESS AND COMPLETENESS OF INFORMATION PROVIDED. No
representation or warranty contained in this paragraph 4.1,
and no statement contained in any schedule, certificate,
list, summary or other disclosure document provided or to
be provided to the Purchaser pursuant hereto or in
connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact
which is necessary in order to make the statements
contained therein not misleading.
4.2 Each Vendor represents and warrants as follows:
(a) DUE INCORPORATION. If a corporation, such Vendor is duly
incorporated and validly subsisting under the laws of the Province of Ontario.
(b) CAPITALIZATION. Such Vendor owns all of the issued and
outstanding shares of BBL listed beside such Vendor's name in Schedule "A"
hereto with good and marketable title thereto, free and clear of any and all
encumbrances.
(a) NO OTHER SHAREHOLDERS. No person has any agreement, option,
understanding or commitment, or any right or privilege (whether by law,
pre-emptive or contractual) capable of becoming an agreement, option or
commitment, including convertible securities, warrants or convertible
obligations of any nature, for:
(i) the purchase from such Vendor of any of the Shares.
(b) ALL NECESSARY APPROVALS. Such Vendor, and their respective
shareholders and board of directors, as the case may be,
have taken all necessary or desirable actions to approve or
authorize, validly and effectively, the entering into, and
the execution, delivery and performance of this agreement
and the sale and transfer of the Shares by such Vendor to
the Purchaser.
(c) AGREEMENT IS BINDING. This Agreement is a legal, valid and
binding obligation of such Vendor, enforceable against such
Vendor in accordance with its terms subject to:
(i) bankruptcy, insolvency, moratorium, reorganization and
other laws relating to or affecting the enforcement of
creditors' rights generally, and
(ii) the fact that equitable remedies, including the
remedies of specific performance and injunction, may
only be granted in the discretion of a court.
4.3 The Purchaser represents and warrants as follows:
(a) DUE INCORPORATION. The Purchaser is duly incorporated and
validly subsisting under the laws of the State of Florida.
(b) ALL NECESSARY APPROVALS. The Purchaser and its shareholders
and board of directors, as the case may be, have taken all
necessary or desirable actions to approve or authorize,
<PAGE>
-6-
validly and effectively, the entering into, and the
execution, delivery and performance of this agreement, the
purchase of the Vendors' Shares by the Purchaser, and the
issue of the Public Shares to the Vendors,
(c) AGREEMENT IS BINDING. This Agreement is a legal, valid and
binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms subject to:
(iii) bankruptcy, insolvency, moratorium, reorganization
and other laws relating to or affecting the enforcement of
creditors' rights generally, and (iv) the fact that
equitable remedies, including the remedies of specific
performance and injunction, may only be granted in the
discretion of a court.
(d) NO BREACH CAUSED BY THIS AGREEMENT. The execution, delivery
and performance of this Agreement and each of the other
agreements contemplated or referred to herein, and the
completion of the transactions contemplated hereby, will
not constitute or result in a violation or breach of or
default under, or cause the acceleration of any obligations
of the Purchaser under:
(i) any term or provision of any of the articles,
by-laws or other constating documents of the
Purchaser;
(ii) subject to obtaining the consents referred to in
this agreement, the terms of any agreement (written
or oral), indenture, instrument or understanding or
other obligation or restriction to which the
Purchaser is a party or by which either of them is
bound, or
(iii) subject to obtaining the consents referred to in
this agreement, any term or provision of any of
the Purchaser's licences or any order of any court,
governmental authority or regulatory body or any
law or regulation of any jurisdiction in which the
business is carried on.
(e) PUBLIC SHARES As of the date of closing, a bid and ask
price for the purchase and sale of common shares of the
Purchaser are quoted on the Bulletin Board OTC. The Public
Shares shall be issued to the Vendors as restricted
securities pursuant to exemption from the registration
requirements of the Securities Act of 1933 (USA) contained
in Rule 144 of the General Rules and Regulations
promulgated under the Securities Act of 1933.
5 COVENANTS OF THE VENDOR
5.1 At or before the date of closing, the Vendors will cause all
necessary steps and corporate proceedings to be taken in order to
permit the Shares to be duly and regularly transferred to the
Purchaser.
6 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
6.1 Notwithstanding anything herein contained, the obligation of the
Purchaser to complete the transactions provided for herein will be
subject to the fulfilment of the following conditions at or prior to
the date of closing, and the Vendors covenant to use their best
efforts to ensure that such conditions are fulfilled.
<PAGE>
-7-
(a) The representations and warranties of the Vendors contained in
this Agreement or in any documents delivered in order to carry
out the transactions contemplated hereby shall be true and
accurate on the date of closing. In addition, the Vendors shall
have complied with all covenants and agreements herein agreed
to be performed or caused to be performed by, the Vendors at or
prior to the date of closing.
(b) No order, decision or ruling of any court, tribunal or
regulatory authority having jurisdiction shall have been made,
and no action or proceeding shall be pending or threatened
which, in the opinion of counsel to the Purchaser, is likely to
result in an order, decision or ruling to disallow, enjoin,
prohibit or impose any limitations or conditions on the
purchase and sale of the Shares contemplated hereby or the
right of the Purchaser to own the Shares.
(c) All consents required to be obtained in order to carry out the
transactions contemplated hereby, in compliance with all laws
and agreements binding upon the parties hereto shall have been
obtained.
6.2 The conditions contained in paragraph 6.1 hereof are inserted for
the exclusive benefit of the Purchaser and may be waived in whole or
in part by the Purchaser at any time. The Vendors acknowledge that
the waiver by the Purchaser of any condition or any part of any
condition shall constitute a waiver only of such condition or such
part of such condition, as the case may be, and shall not constitute
a waiver of any covenant, agreement, representation or warranty made
by the Vendors herein that corresponds or is related to such
condition or such part of such condition, as the case may be. If any
of the conditions contained in paragraph 6.1 hereof are not
fulfilled or complied with as herein provided, the Purchaser may, at
or prior to the date of closing at its option, rescind this
Agreement by notice in writing to the Vendors and in such event the
Purchaser shall be released from all obligations hereunder, and
unless the condition or conditions which have not been fulfilled are
reasonably capable of being fulfilled or caused to be fulfilled by
the Vendors, then the Vendors shall also be released from all
obligations hereunder.
7 CONDITIONS TO THE OBLIGATIONS OF THE VENDORS
7.1 Notwithstanding anything herein contained, the obligations of the
Vendors to complete the transactions provided for herein will be
subject to the fulfilment of the following conditions at or prior to
the date of closing, and the Purchaser will use its best efforts to
ensure that such conditions are fulfilled.
(a) The representations and warranties of the Purchaser contained
in this Agreement or in any documents delivered in order to
carry out the transactions contemplated hereby will be true and
accurate on the date of closing. In addition, the Purchaser
shall have complied with all covenants and agreements herein
agreed to be performed or caused to be performed by it at or
prior to the date of closing.
(b) No order, decision or ruling of any court, tribunal or
regulatory authority having jurisdiction shall have been made,
and no action or proceeding shall be pending or threatened
which, in. the opinion of counsel to the Vendors, is likely to
result in an order, decision or ruling, to disallow, enjoin or
prohibit the purchase and sale of the Shares contemplated
hereby.
<PAGE>
-8-
(c) All consents required to be obtained in order to carry out the
transactions contemplated hereby, in compliance with all laws
and agreements binding upon the parties hereto shall have been
obtained.
7.2 The conditions contained in paragraph 7.1 hereof are inserted for
the exclusive benefit of the Vendors and may be waived in whole or
in part by the Vendors at any time. The Purchaser acknowledges that
the waiver by a Vendor of any condition or any part of any condition
shall constitute a waiver only of such condition or such part of
such condition, as the case may be, and shall not constitute a
waiver of any covenant, agreement, representation or warranty made
by the Purchaser herein that corresponds or is related to such
condition or such part of such condition, as the case may be. If any
of the conditions contained in paragraph 7.1 hereof are not
fulfilled or complied with as herein provided, the Vendors may, at
or prior to the date of closing at their option, rescind this
Agreement by notice in writing to the Purchaser and in such event
such Vendors shall be released from all obligations hereunder and,
unless the condition or conditions which have not been fulfilled are
reasonably capable of being fulfilled or caused to be fulfilled by
the Purchaser, then the Purchaser shall also be released from all
obligations hereunder.
8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 The representations and warranties of the Vendors and Purchaser
contained herein shall survive the date of closing and
notwithstanding the closing of the transaction herein shall continue
in full force and effect for a period of six (6) months after the
date of closing. Undertakings and obligations by any party hereto
which are not completed by the date of closing shall continue and
shall not merge in the completed agreement on closing.
9 NOTICES
9.1 Any notice, designation, communication, request, demand or other
document, required or permitted to be given or sent or delivered
hereunder to any party hereto shall be in writing and shall be
sufficiently given or sent or delivered if it is delivered
personally to an officer or director of such party, sent to the
party entitled to receive it by registered mail, postage prepaid,
pre-paid Federal Express courier, or sent by telecopy machine to the
last known address of the party, or in the case of the Purchaser,
notices shall be sent to the Purchaser at *, facsimile number*.
9.2 Any notice, designation, communication, request, demand or other
document given or sent or delivered as aforesaid shall:
(a) if delivered, be deemed to have been given, sent, delivered and
received on the date of delivery;
(b) if sent by mail, be deemed to have been given, sent, delivered
and received (but not actually received) on the fourth day
following the date of mailing, unless at any time between the
date of mailing and the fourth day thereafter there is a
discontinuance or interruption of regular postal service,
whether due to strike or lockout or work slowdown,
<PAGE>
-9-
affecting postal service at the point of dispatch or delivery
or any intermediate point, in which case the same shall be
deemed to have been given, sent, delivered and received in the
ordinary course of the mails, allowing for such discontinuance
or interruption of regular postal service, and
(c) if sent by telecopy machine, be deemed to have been given,
sent, delivered and received on the date the sender receives
the telecopy answer back confirming receipt by the recipient.
10 GENERAL
10.1 The recitals are an integral part of this agreement.
10.2 Each party agrees to execute such further documents and to do such
further acts as may be reasonably required to give effect to the
agreement of the parties set out herein. Each of the Vendors hereby
irrevocably appoints the president of Purchaser his/her/its true and
lawful attorney, in his/her/its name, to do such acts and execute
and deliver such documents as may be necessary or appropriate to
complete the sale and transfer of shares of BBL to Purchaser, and to
permit Purchaser to take control of BBL as majority shareholder.
10.3 This agreement shall be binding on the parties, their successors and
assigns.
10.4 This agreement is to be read with all changes of gender or number
required by the context. Article, paragraph, and section headings
are for convenience only and shall not be used to interpret or
construe this Agreement.
10.5 The Vendors and the Purchaser agree that execution and acceptance of
this Agreement and any amendments, notices and/or waivers related
thereto may be communicated by telecopier/facsimile machine by
either party to the other and such communication shall be binding
upon the parties so long as such communication is legible in its
entirety.
10.6 It is agreed and understood by the parties hereto that should tender
be necessary on behalf of the Purchaser, that tender shall be
sufficient by delivery of the Public Shares to the solicitor for the
Vendors.
10.7 This agreement may be executed and delivered in counterparts. All
such counterparts shall constitute one agreement.
11 EXECUTION
As evidence of their agreement, the Parties have signed this memorandum as of
the date first above written.
<PAGE>
-10-
/s/ BRUNO B. LIBER
- - -----------------------------------
Bruno B. Liber
Tyler Dylan Corp.
Per:
/s/
- - -----------------------------------
/s/ ROBERT VIVACQUA
- - -----------------------------------
Robert Vivacqua
/s/ PARDEEP SINGH
- - -----------------------------------
Pardeep Singh
/s/ LOUIS KELL
- - -----------------------------------
Louis Kell
1322001 Ontario Inc.
Per:
/s/
- - -----------------------------------
/s/ COLEEN WALSH
- - -----------------------------------
Coleen Walsh
/s/ L. MORRA
- - -----------------------------------
Lily Morra
<PAGE>
-11-
SCHEDULE "A"
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------
HOLDERS OF COMMON SHARES OF NO. OF COMMON SHARES OF BBL NO. OF COMMON SHARES OF BBC TO
BBL ("VENDORS") (SHARES TO BE SOLD BY VENDORS) BE ISSUED TO HOLDERS OF COMMON
SHARES OF BBL IN EXCHANGE FOR THE
SHARES
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bruno B. Liber 5,000,000 5,000,000
- - ----------------------------------------------------------------------------------------------------------------
Tyler Dylan Corp. 3,170,975 3,170,975
- - ----------------------------------------------------------------------------------------------------------------
Robert Vivacqua 1,010,000 1,010,000
- - ----------------------------------------------------------------------------------------------------------------
Pardeep Singh 656,000 656,000
- - ----------------------------------------------------------------------------------------------------------------
Louis Kell 150,000 150,000
- - ----------------------------------------------------------------------------------------------------------------
1322001 Ontario Inc. 100,000 100,000
- - ----------------------------------------------------------------------------------------------------------------
Coleen Walsh 75,000 75,000
- - ----------------------------------------------------------------------------------------------------------------
Lily Morra 75,000 75,000
- - ----------------------------------------------------------------------------------------------------------------
Vincent Spedaliere 45,000 45,000
- - ----------------------------------------------------------------------------------------------------------------
Dominic Spedaliere 10,000 10,000
- - ----------------------------------------------------------------------------------------------------------------
BKE Holdings Inc. 30,000 30,000
- - ----------------------------------------------------------------------------------------------------------------
Judi Falardeau 20,000 20,000
- - ----------------------------------------------------------------------------------------------------------------
Alex Guizzetti 50,400 50,400
- - ----------------------------------------------------------------------------------------------------------------
Ronald Ricketts 42,000 42,000
- - ----------------------------------------------------------------------------------------------------------------
John Pelligrino 10,000 10,000
- - ----------------------------------------------------------------------------------------------------------------
Nancy Pelligrino 10,000 10,000
- - ----------------------------------------------------------------------------------------------------------------
Frank Pelligrino 8,000 8,000
- - ----------------------------------------------------------------------------------------------------------------
Ignazio Pelligrino 5,000 5,000
- - ----------------------------------------------------------------------------------------------------------------
Nick Marchese 20,000 20,000
- - ----------------------------------------------------------------------------------------------------------------
1330501 Ontario Inc. 131,600 131,600
- - ----------------------------------------------------------------------------------------------------------------
Wrelton International Limited 300,000 300,000
- - ----------------------------------------------------------------------------------------------------------------
Mark Emery 5,000 5,000
- - ----------------------------------------------------------------------------------------------------------------
Michael Gioiosa 2,000 2,000
- - ----------------------------------------------------------------------------------------------------------------
Peter Fotia 16,500 16,500
- - ----------------------------------------------------------------------------------------------------------------
Shuvtinder Chahal 16,000 16,000
- - ----------------------------------------------------------------------------------------------------------------
Anthony Tullo 14,025 14,025
- - ----------------------------------------------------------------------------------------------------------------
Jagraj Gill 2,000 2,000
- - ----------------------------------------------------------------------------------------------------------------
Jaswinder Sekhon 2,000 2,000
- - ----------------------------------------------------------------------------------------------------------------
Robert Sidhu 20,000 20,000
- - ----------------------------------------------------------------------------------------------------------------
Surinder Braich 6,000 6,000
- - ----------------------------------------------------------------------------------------------------------------
David Caporiccio 6,700 6,700
- - ----------------------------------------------------------------------------------------------------------------
Domenic Pieragostini 2,800 2,800
- - ----------------------------------------------------------------------------------------------------------------
Murad Dewji 5,000 5,000
- - ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-12-
<TABLE>
<S> <C> <C>
Zahir Murji
- - ----------------------------------------------------------------------------------------------------------------
Fazel Bhaba 5,000 5,000
- - ----------------------------------------------------------------------------------------------------------------
Giaocchino Debartolo 1,500 1,500
- - ----------------------------------------------------------------------------------------------------------------
Valco Investments Inc. 16,000 16,000
- - ----------------------------------------------------------------------------------------------------------------
Kevin Jones 1,500 1,500
- - ----------------------------------------------------------------------------------------------------------------
Totals 11,048,000 11,048,000
- - ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-13-
/s/ DOMINIC SPEDALIERE
- - ------------------------------------
Dominic Spedaliere
- - ------------------------------------
Vincent Spedaliere
BKE Holdings Inc.
Per:
/s/
- - ------------------------------------
/s/ J. FALARDEAU
- - ------------------------------------
Judy falardeau JF
/s/ ALEX GUIZZETTI
- - ------------------------------------
Alex Guizzetti
/s/
- - ------------------------------------
476586 Ontario Limited
/s/ JOHN PELLIGRINO
- - ------------------------------------
John Pelligrino
/s/ NANCY PELLIGRINO
- - ------------------------------------
Nancy Pelligrino
/s/ FRANK PELLIGRINO
- - ------------------------------------
Frank Pelligrino
/s/ IGNAZIO PELLIGRINO
- - ------------------------------------
lgnazio Pelligrino
/s/ NICK MARCHESE
- - ------------------------------------
Nick Marchese
1330501 ONT. INC.
- - ------------------------------------
Per:
<PAGE>
-14-
/s/
- - ------------------------------------
<PAGE>
-15-
Zoya Financial Corp.
Per:
/s/
- - ------------------------------------
/s/ MARKE EMERY
- - ------------------------------------
Mark Emery
/s/ MIKE GIOIOSA
- - ------------------------------------
Mike Gioiosa
/s/ PETER FOTIA
- - ------------------------------------
Peter Fotia
/s/ SONNY CHAHAL
- - ------------------------------------
Sonny Chahal
/s/ ANTHONY TULLO
- - ------------------------------------
Anthony Tullo
/s/ JAGRAJ GILL
- - ------------------------------------
Jagraj Gill
/s/ JASWINDER SEKHON
- - ------------------------------------
Jaswinder Sekhon
/s/ ROBERT SIDHU
- - ------------------------------------
Robert Sidhu
/s/ SURINDER K. BRAICH
- - ------------------------------------
Surinder Braich
/s/ DAVID CAPORICCIO
- - ------------------------------------
David Caporiccio
/s/ D. PIERAGOSTINI
- - ------------------------------------
Domenic Pieragostini
/s/ MURAD DEWJI
- - ------------------------------------
Murad Dewji
/s/ ZAHIR MURJI
- - ------------------------------------
Zahir Murji
/s/ FAZEL BHABA
- - ------------------------------------
Fazel Bhaba
/s/ GIAOCCHINO DEBARTOLO
- - ------------------------------------
Giaocchino Debartolo
<PAGE>
-16-
Valco Investments
Per:
/s/
- - ------------------------------------
/s/ KEVIN JONES
- - ------------------------------------
Kevin Jones
/s/ MICHAEL SMITH
- - ------------------------------------
Michael Smith
BBL Technologies Inc.
Per: /s/
- - ------------------------------------
BBC Stock Market, Inc.
Per: /s/
- - ------------------------------------
<PAGE>
EXHIBIT 10.2
CONSULTING AGREEMENT
Consulting Agreement (the "Agreement") made and entered into on this
31st day of March, 1999 by and between May Davis Group Inc. ("MDG"), having
offices at One World Trade Center, Suite 8735 in New York, NY 10048 and
Environmental Solutions Worldwide ("Company"), having its principal place of
business at 30 MacIntosh Boulevard, Suite 8, in Concord, Ontario L4K 4P1,
Canada.
- - ------------------------------------------------------------------------------
WHEREAS, the Company agrees to hire MDG as Consultant to the Company
for financial and investment banking advice and services on a non-exclusive
basis.
WHEREAS, the Company agrees to pay MDG a consulting fee for services
to be rendered on a non-accountable and non-refundable basis in equity. The
fee shall be paid as instructed below upon completion of documents evidencing
a financing arranged by MDG.
WHEREAS, the equity compensation shall be in the form of a Warrant
to purchase 60,000 common shares ("Warrant") of Company, symbol ESWW and
currently trading OTC:BB. The Warrant will be delivered to MDG with in Ten
business days execution of the Agreement. The Warrant shall be in name(s) to
be determined by MDG and delivered to the following address:
May Davis Group
Attention: Max Rockwell
One World Trade Center, Suite 8735
New York, NY 10048
(212) 775-7400
WHEREAS, The Warrant shall survive for five years from Issue Date,
have demand and piggyback" registration rights and have an exercise price of
$2.50 US.
WITNESSETH:
1. HOLD HARMLESS. Company recognizes that MDG shall use its best
efforts to advise and service Company with regard to the Company's
financial and investment banking needs. The Company also recognizes
that MDG is working on a "best efforts" basis and therefore no
guarantees, representations or promises may be made as to
performance. Therefore, Company holds MDG harmless for performance
and indemnify MDG from any legal proceedings against MDG by the
Company or any of its management, shareholders or other entities
with regard to this Agreement, services and advice performed in good
faith by MDG or financing MDG may arrange on Company's behalf,
except for any loss or damage suffered or incurred through gross
negligence of MDG.
<PAGE>
2. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the local laws of the State of New
York applicable to agreements made and to be performed within the
State, without regard to conflict of law principles.
3. ASSIGNMENT. MDG shall have the right to assign, pledge or
transfer his interest in this Agreement, but not his duties and
responsibilities under this Agreement.
4. BINDING EFFECT. This Agreement shall inure to the benefit of, and
is binding upon, the parties hereto and their respective heirs,
representatives, successors and assigns.
5. WAIVER. No waiver of any provision hereof shall be valid unless
it is in writing signed by the person against whom it is charged. No
waiver of any provision herein shall constitute a waiver of any
other provision hereof, or of the provision at any other time
6. NOTICES. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the parties hereto at their
respective addresses set forth at the beginning of this Agreement.
Such notice shall be deemed duly given when (a) personally
delivered, (b) five (5) business days after having been properly
addressed, enclosed in a properly sealed envelope or wrapper and
sent postage-paid by certified mail, return receipt requested, (c)
transmitted by telefax, immediately confirmed (that day) by
telephone by the person to whom the notice is sent and the original
is sent by regular mail to such party in a properly sealed and
postage-paid envelope or wrapper addressed as required herein, or
(d) one (1) business day after being sent, at the expense of the
sender, by Federal Express, Airborne, U.S. Express Mail or similar
overnight carrier.
7. NO JOINT VENTURE. This is an agreement between separate legal
entities and neither is the agent or employee of the other for any
purpose whatsoever. The parties do not intend to create a
partnership or joint venture between themselves. Neither party shall
have the right to bind the other to any agreement with a third party
or to inure any obligation or liability on behalf of the other party.
8. FORCE MAJEURE. If the circumstances beyond the control of the
parties shall temporarily make it impossible for either of them to
perform their agreements hereunder, then the principles of force
majeure period to the extent that such performance is reasonably
affected thereby. It is agreed that such circumstances may arise by
reason of governmental laws or regulations, war, strike, fire,
flood, act of God, or other casualty or natural calamity.
9. COMPLETE AGREEMENT. This Agreement contains the whole agreement
between the parties concerning the subject matter hereof and there
are not collateral or precedent representation, agreements or
conditions not specifically set forth herein.
10. MODIFICATION OR AMENDMENT. Any modification or amendment of any
provision of this Agreement must be in writing, signed by the
parties hereto and dated hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day, month and year first written above.
COMPANY MAY DAVIS GROUP, INC.
By: /s/ A. MICHAEL OLIVER By: /s/
-------------------------- --------------------------
Name: A. Michael Oliver Name:
Title: President Title:
<PAGE>
EXHIBIT 10.3
COMMISSION AGREEMENT
Commission Agreement (the "Agreement") made and entered into on this 31" day
of March 1999 by and between May Davis Group Inc. "MDG" having offices at One
World Trade Center, Suite 8735 in New York, N.Y., 10048 and Environmental
Solutions Worldwide Inc. ("Company"), having its principal place of business
at 30 Macintosh Blvd., Suite 8 in Concord, Ontario L4K 4P1, Canada.
- - ------------------------------------------------------------------------------
WHEREAS, the Company agrees to hire MDG as placement agent to the Company for
financial and investment banking advice and services to raise $600,000.00 in
a private placement.
WHEREAS, the Company agrees to compensate MDG ten (10%) percent of gross
proceeds received by the Company pursuant financing arranged by MDG in cash
and equity.
WHEREAS, the cash compensation, equal to ten (10%) percent of the gross
proceeds, shall be in the form of immediate, liquid funds. The Company will
wire, via Federal Funds, the cash compensation to the below account
information with in three business days of receipt of the gross proceeds
pursuant to any financing arranged by MDG for Company. The Federal Funds
instructions are as follows:
Chase Manhattan Bank
New York City
ABA number: 021 000 021
Account number: 1400 8232 2865
Account name: May Davis Group Inc.
WHEREAS, the equity compensation shall be in the form of a Warrant to
purchase 60,000 common shares ("Warrant") of the Company, symbol ESWW and
currently trading OTC:BB. The Warrant will be delivered to MDG with in three
business days of a financing, funding and/or draw arranged by MDG on behalf
of Company. The Warrant shall be in name to be determined by MDG and
delivered to the following address:
May Davis Group
Attention: Max Rockwell
One World Trade Center, Suite 8735
New York, N.Y. 10048
(212) 775-7400
WHEREAS, The Warrant shall survive for five years from Issue Date, have
demand and "piggyback" registration rights and have an exercise price of
$3.00 US.
ADDITIONALLY, the compensation for arranging an equity line of $10,000,000
shall be the same as above except the Warrant shall be to purchase 240,000
shares.
<PAGE>
WITNESSETH:
1. Hold Harmless."Company recognizes that MDG shall use its best
efforts to advise and service Company with regard to the Company's
financial and investment banking needs. The Company also recognizes
that MDG is working on a "best efforts" basis and therefore no
guarantees, representations or promises may be made as to
performance. Therefore, Company holds MDG harmless for performance
and indemnify MDG from any legal proceedings against MDG by the
Company or any of its management, shareholders or other entities
with regard to this Agreement, services and advice performed in good
faith by MDG on behalf of Company or financing MDG may arrange on
Company's behalf, except for any loss or damage suffered or incurred
through gross negligence of MDG.
2. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the local laws of the State of New
York applicable to agreements made and to be performed within the
State, without regard to conflict of law principles.
3. Assignment. MDG shall have the right to assign, pledge or
transfer it's compensation under this Agreement but not it's duties
and responsibilities under this Agreement.
4. Binding Effect. This Agreement shall inure to the benefit of, and
is binding upon, the parties hereto and their respective heirs,
representatives, successors and assigns.
5. Waiver. No waiver of any provision hereof shall be valid unless
it is in writing signed by the person against whom it is charged. No
waiver of any provision herein shall constitute a waiver of any
other provision hereof, or of the provision at any other time.
6. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the parties hereto at their
respective addresses set forth at the beginning of this Agreement.
Such notice shall be deemed duly given when (a) personally
delivered, (b) five (5) business days after having been properly
addressed, enclosed in a properly sealed envelope or wrapper and
sent postage-paid by certified mail, return receipt requested, (c)
transmitted by telefax, immediately confirmed (that day) by
telephone by the person to whom the notice is sent and the original
is sent by regular mail to such party in a properly sealed and
postage-paid envelope or wrapper addressed as required herein, or
(d) one (1) business day after being sent, at the expense of the
sender, by Federal Express, Airborne, U.S. Express Mail or similar
overnight carrier.
7. No Joint Venture. This is an agreement between separate legal
entities and neither is the agent or employee of the other for any
purpose whatsoever. The parties do not intend to create a
partnership or joint venture between themselves. Neither party shall
have the right to bind the other to any agreement with a third party
or to inure any obligation or liability on behalf of the other party.
<PAGE>
8. Force Majeure. If the circumstances beyond the control of the
parties shall temporarily make it impossible for either of them to
perform their agreements hereunder,
<PAGE>
then the principles of force majeure period to the extent that such
performance is reasonably affected thereby. It is agreed that such
circumstances may arise by reason of governmental laws or
regulations, war, strike, fire, flood, act of God, or other casualty
or natural calamity.
9. Complete Agreement. This Agreement contains the whole agreement
between the parties concerning the subject matter hereof and there
are not collateral or precedent representation, agreements or
conditions not specifically set forth herein.
10. Modification or Amendment. Any modification or amendment of any
provision of this Agreement must be in writing, signed by the
parties hereto and dated hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day, month and year first written above.
Company May Davis Group
By: /s/ A. MICHAEL OLIVER By: /s/
-------------------------- --------------------------
Name: A. Michael Oliver Name:
Title: President Title:
<PAGE>
EXHIBIT 10.5
OPTION AGREEMENT
THIS AGREEMENT made the day of January, 1999
BETWEEN:
BBC STOCK MARKET, INC.
a corporation existing under the laws of the State of Florida
(the "Optionor").
-and-
ZOYA FINANCIAL CORP.
AN ONTARIO CORPORATION HAVING AN OFFICE IN RICHMOND HILL, ONTARIO
(the "Optionee")
WHERAS the Optionee has been retained by the Optionor as a public relations
firm;
AND WHEREAS as part of the consideration for services rendered by the
Optionee, it has been agreed that the Optionor shall grant to the Optionee an
option to purchase Shares on the terms and conditions set out herein.
NOW THEREFORE in consideration of the mutual promises contained herein and
the payment of $1.00 by each party hereto to the other and for other good and
valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto agree as follows:
Article I
Interpretation
1.1 Definitions
In this Agreement and the recitals hereto, unless the context otherwise
requires, the following words and expressions shall have the following
meanings:
(a) "Option" means the option granted to the Optionee under Section 2.1;
(b) "Option Notice" means a notice indicating that the Optionee is
exercising the Option in whole or in part;
(c) "Option Price" means TWO DOLLARS ($2.00 ) per optioned share purchased
by the Optionee under this agreement;
(d) "Optioned Shares" means NINETY THOUSAND SHARES;
(e) "Shares" means the common shares currently constituted; and
(f) "Termination Date" means DECEMBER 31ST, 1999.
1.2 SECTIONS AND HEADINGS
The division of this Agreement into Articles and Sections and the insertion
of headings are for the convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof, "hereunder' and similar expressions refer to this
Agreement and not to any
<PAGE>
particular Article, Section or other portion hereof and include any agreement
or instrument supplemental or ancillary hereto. Unless something in the
subject matter or context is inconsistent therewith, references herein to
Articles and Sections are to Articles and Sections of this Agreement.
1.3 TIME PERIODS
When calculating the period of time within which or following which any act
is to be done or step taken pursuant to this Agreement, the date which is the
reference date in calculating such period shall be excluded.
1.4 EXTENDED MEANINGS
Words importing the singular number only shall include the plural and vice
versa and words importing gender shall include masculine, feminine and neuter
genders.
1.5 U.S. DOLLARS
Unless otherwise provided herein, all monetary amounts set forth in this
Agreement are in U.S. dollars.
Article 2
Option
2.1 The Optionor hereby grants to the Optionee the irrevocable option
(the "Option") to purchase the Optioned Shares, at the Option Price, subject
to the terms and provisions of this Agreement.
2.2 The Option may be exercised in whole or in part at any time and from
time to time up to and including the Termination in respect of NINETY
THOUSAND (90,000) common shares (the "Optioned Shares").
2.3 The Optionor hereby represents and warrants that all necessary
corporate action has been taken to permit some or all of the Optioned Shares
to be validly issued to the Optionee and recorded on the books of the
Optionor in the name of the Optionee upon exercise of the Option in whole or
in part in accordance with the terms and conditions of this Agreement.
2.4 The Optionor will at all times prior to the Termination Date reserve
and keep available such number of its Shares as will be sufficient to satisfy
the requirements of this Agreement.
Article 3
General
3.1 AMENDMENTS AND WAIVERS
No modification, variation, amendment or termination by mutual consent of
this Agreement and no waiver of the performance of any of the
responsibilities of any of the parties hereto shall be effected unless such
action Is taken in writing and is signed by all parties. No amendment to this
Agreement shall be valid or binding unless set forth in writing and duly
executed by all of the parties hereto, No waiver of any breach of any
provision of this Agreement shall be effective or binding unless made in
writing and signed by the party purporting to give the same and, unless
otherwise provided in the written waiver, shall be limited to the specific
breach waived.
<PAGE>
3.2 SEVERABILITY
Each of the covenants, provisions, Articles, Sections, subsections and other
subdivisions hereof is severable from every other covenant, provision,
Article, Section, subsection and the invalidity or unenforceability of any
one or more covenants, provisions, Articles, Sections, subsections or
subdivisions of this Agreement shall not affect the validity or
enforceability of the remaining covenants, provisions, Articles, Sections,
subsections and subdivisions hereof.
3.3 TIME OF ESSENCE
Time shall be of the essence in this Agreement.
3.4 NOTICE
(1) Any notice or other written communication required or permitted hereunder
shall be in writing and:
(a) delivered personally to the party or, if the party is a
corporation, an officer of the party to whom it is directed;
(b) sent by registered mail, postage prepaid, return receipt
requested (provided that such notice or other written
communication shall not be forwarded by mail if on the date of
mailing the party sending such communication knows or ought
reasonably to know of any difficulties with the postal system
which might affect the delivery of mail, including the
existence of an actual or imminent postal service disruption
in the city from which such communication is to be mailed or
in which the address of the recipient is found); or
(c) sent by facsimile or telex with all necessary charges fully
prepaid, confirmation of delivery requested.
(2) All such notices shall be addressed to the party to whom it is directed
at the party's last known address of record.
(3) Any such notice or other written communication shall, if mailed or given
by fax, be effective on the day it is first attempted to be delivered to such
party at such address (whether or not such delivery takes place), and if
given by personal delivery, shall be effective on the day of actual delivery.
3.4 ENTIRE AGREEMENT
This Agreement constitutes and contains the entire and only agreement among
the parties relating to the matters described herein and supersedes and
cancels any and all previous agreements and understandings between all or any
of the parties relative hereto. Any and all prior and contemporaneous
negotiations, memoranda of understanding or position, and preliminary drafts
and prior versions of this Agreement, whether signed or unsigned, between the
parties leading up to the execution hereof shall not be used by any party to
construe the terms or affect the validity of this Agreement. There are no
representations, inducements, promises, understandings, conditions or
warranties express, implied or statutory, between the parties other than as
expressly set forth in this Agreement.
3.5 APPLICATION OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective heirs, administrators, executors, successors and
permitted assigns. Except as hereinafter provided, neither of the
<PAGE>
parties hereto may assign its rights or obligations under this Agreement
without the prior written consent of the other party hereto.
<PAGE>
3.6 SUBDIVISION OR CONSOLIDATION OF SHARES
If the Shares are changed by way of being classified or reclassified,
subdivided, consolidated or converted into a different number or class of
shares or otherwise, or if the Optionor amalgamates, the Option Price and the
type of security to be delivered to the Optionee upon exercise of the Option
in whole or in part shall be adjusted accordingly, in all cases so that the
Optionee shall receive the same number and type of securities as would have
resulted from such change if the Option or the remaining part thereof had
been exercised before the date of the change.
3.7 ASSIGNMENT
This Agreement is personal to the Optionee and may not be assigned without
the prior written consent of the Optionor.
3.8 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws
of the State of Florida.
3.9 EXECUTION
This Agreement may be executed in several counterparts, each of which, when
so executed, shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEROF THE PARTIES have executed this agreement as of the date
first written above.
BBC STOCK MARKET, INC.
Per: /s/
--------------------------------------
Authorized Signing Officer
ZOYA FINANCIAL CORP.
Per:
--------------------------------------
Authorized Signing Officer
<PAGE>
EXHIBIT 10.5
OPTION AGREEMENT
THIS AGREEMENT made the day of January, 1999
BETWEEN:
BBC STOCK MARKET, INC.
a corporation existing under the laws of the State of Florida
(the "Optionor").
-and-
ZOYA FINANCIAL CORP.
AN ONTARIO CORPORATION HAVING AN OFFICE IN RICHMOND HILL, ONTARIO
(the "Optionee")
WHERAS the Optionee has been retained by the Optionor as a public relations
firm;
AND WHEREAS as part of the consideration for services rendered by the
Optionee, it has been agreed that the Optionor shall grant to the Optionee an
option to purchase Shares on the terms and conditions set out herein.
NOW THEREFORE in consideration of the mutual promises contained herein and
the payment of $1.00 by each party hereto to the other and for other good and
valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto agree as follows:
Article I
Interpretation
1.1 Definitions
In this Agreement and the recitals hereto, unless the context otherwise
requires, the following words and expressions shall have the following
meanings:
(a) "Option" means the option granted to the Optionee under Section 2.1;
(b) "Option Notice" means a notice indicating that the Optionee is
exercising the Option in whole or in part;
(c) "Option Price" means TWO DOLLARS ($2.00 ) per optioned share purchased
by the Optionee under this agreement;
(d) "Optioned Shares" means NINETY THOUSAND SHARES;
(e) "Shares" means the common shares currently constituted; and
(f) "Termination Date" means DECEMBER 31ST, 1999.
1.2 SECTIONS AND HEADINGS
The division of this Agreement into Articles and Sections and the insertion
of headings are for the convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof, "hereunder' and similar expressions refer to this
Agreement and not to any
<PAGE>
particular Article, Section or other portion hereof and include any agreement
or instrument supplemental or ancillary hereto. Unless something in the
subject matter or context is inconsistent therewith, references herein to
Articles and Sections are to Articles and Sections of this Agreement.
1.3 TIME PERIODS
When calculating the period of time within which or following which any act
is to be done or step taken pursuant to this Agreement, the date which is the
reference date in calculating such period shall be excluded.
1.4 EXTENDED MEANINGS
Words importing the singular number only shall include the plural and vice
versa and words importing gender shall include masculine, feminine and neuter
genders.
1.5 U.S. DOLLARS
Unless otherwise provided herein, all monetary amounts set forth in this
Agreement are in U.S. dollars.
Article 2
Option
2.1 The Optionor hereby grants to the Optionee the irrevocable option
(the "Option") to purchase the Optioned Shares, at the Option Price, subject
to the terms and provisions of this Agreement.
2.2 The Option may be exercised in whole or in part at any time and from
time to time up to and including the Termination in respect of NINETY
THOUSAND (90,000) common shares (the "Optioned Shares").
2.3 The Optionor hereby represents and warrants that all necessary
corporate action has been taken to permit some or all of the Optioned Shares
to be validly issued to the Optionee and recorded on the books of the
Optionor in the name of the Optionee upon exercise of the Option in whole or
in part in accordance with the terms and conditions of this Agreement.
2.4 The Optionor will at all times prior to the Termination Date reserve
and keep available such number of its Shares as will be sufficient to satisfy
the requirements of this Agreement.
Article 3
General
3.1 AMENDMENTS AND WAIVERS
No modification, variation, amendment or termination by mutual consent of
this Agreement and no waiver of the performance of any of the
responsibilities of any of the parties hereto shall be effected unless such
action Is taken in writing and is signed by all parties. No amendment to this
Agreement shall be valid or binding unless set forth in writing and duly
executed by all of the parties hereto, No waiver of any breach of any
provision of this Agreement shall be effective or binding unless made in
writing and signed by the party purporting to give the same and, unless
otherwise provided in the written waiver, shall be limited to the specific
breach waived.
<PAGE>
3.2 SEVERABILITY
Each of the covenants, provisions, Articles, Sections, subsections and other
subdivisions hereof is severable from every other covenant, provision,
Article, Section, subsection and the invalidity or unenforceability of any
one or more covenants, provisions, Articles, Sections, subsections or
subdivisions of this Agreement shall not affect the validity or
enforceability of the remaining covenants, provisions, Articles, Sections,
subsections and subdivisions hereof.
3.3 TIME OF ESSENCE
Time shall be of the essence in this Agreement.
3.4 NOTICE
(1) Any notice or other written communication required or permitted hereunder
shall be in writing and:
(a) delivered personally to the party or, if the party is a
corporation, an officer of the party to whom it is directed;
(b) sent by registered mail, postage prepaid, return receipt
requested (provided that such notice or other written
communication shall not be forwarded by mail if on the date of
mailing the party sending such communication knows or ought
reasonably to know of any difficulties with the postal system
which might affect the delivery of mail, including the
existence of an actual or imminent postal service disruption
in the city from which such communication is to be mailed or
in which the address of the recipient is found); or
(c) sent by facsimile or telex with all necessary charges fully
prepaid, confirmation of delivery requested.
(2) All such notices shall be addressed to the party to whom it is directed
at the party's last known address of record.
(3) Any such notice or other written communication shall, if mailed or given
by fax, be effective on the day it is first attempted to be delivered to such
party at such address (whether or not such delivery takes place), and if
given by personal delivery, shall be effective on the day of actual delivery.
3.4 ENTIRE AGREEMENT
This Agreement constitutes and contains the entire and only agreement among
the parties relating to the matters described herein and supersedes and
cancels any and all previous agreements and understandings between all or any
of the parties relative hereto. Any and all prior and contemporaneous
negotiations, memoranda of understanding or position, and preliminary drafts
and prior versions of this Agreement, whether signed or unsigned, between the
parties leading up to the execution hereof shall not be used by any party to
construe the terms or affect the validity of this Agreement. There are no
representations, inducements, promises, understandings, conditions or
warranties express, implied or statutory, between the parties other than as
expressly set forth in this Agreement.
3.5 APPLICATION OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective heirs, administrators, executors, successors and
permitted assigns. Except as hereinafter provided, neither of the
<PAGE>
parties hereto may assign its rights or obligations under this Agreement
without the prior written consent of the other party hereto.
<PAGE>
3.6 SUBDIVISION OR CONSOLIDATION OF SHARES
If the Shares are changed by way of being classified or reclassified,
subdivided, consolidated or converted into a different number or class of
shares or otherwise, or if the Optionor amalgamates, the Option Price and the
type of security to be delivered to the Optionee upon exercise of the Option
in whole or in part shall be adjusted accordingly, in all cases so that the
Optionee shall receive the same number and type of securities as would have
resulted from such change if the Option or the remaining part thereof had
been exercised before the date of the change.
3.7 ASSIGNMENT
This Agreement is personal to the Optionee and may not be assigned without
the prior written consent of the Optionor.
3.8 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws
of the State of Florida.
3.9 EXECUTION
This Agreement may be executed in several counterparts, each of which, when
so executed, shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEROF THE PARTIES have executed this agreement as of the date
first written above.
BBC STOCK MARKET, INC.
Per: /s/
--------------------------------------
Authorized Signing Officer
ZOYA FINANCIAL CORP.
Per:
--------------------------------------
Authorized Signing Officer
<PAGE>
Exhibit 21.1
List of Subsidiaries
BBL Technologies, Inc., Ontario, Canada
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BBC STOCK
MARKET INC. FINANCIAL STATEMENTS AT DECEMBER 31, 1998 AND 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> DEC-31-1998 DEC-31-1997
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 151,939 0
<BONDS> 0 0
0 0
0 0
<COMMON> 1,000 1,000
<OTHER-SE> (152,939) (1,000)
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 151,939<F1> 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (151,939) 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (151,939) 0
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
<FN>
<F1>Includes professional fees $150,000
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
ENVIRONMENTAL SOLUTIONS WORLDWIDE INC. (FORMERLY BBC STOCK MARKET INC.) AT
SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 131,478
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 131,478
<PP&E> 2,327<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 133,805
<CURRENT-LIABILITIES> 80,286
<BONDS> 0
0
0
<COMMON> 28,002
<OTHER-SE> 25,517
<TOTAL-LIABILITY-AND-EQUITY> 133,805
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 600,119<F2><F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (600,119)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (600,119)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
<FN>
<F1>INTANGIBLE ASSET SEE NOTES 3 AND 4 TO FINANCIAL STATEMENTS
<F2>INCLUDED IN OTHER EXPENSES ARE DEVELOPMENT COSTS $405,159
<F3>PROFESSIONAL FEES $104,920
</FN>
</TABLE>
