UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8 - K
REPORT
SENIOR CARE INDUSTRIES, INC.
Nevada 68-0221599
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
410 Broadway, 2nd Floor, Laguna Beach, CA 92651
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
(949) 376-3125 (949) 376-9117 FAX
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(ISSUER'S TELEPHONE NUMBER)
SECURITIES REGISTERED UNDER SECTION 12 (b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
REGISTERED
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- --------------------------- ------------------------------
SECURITIES REGISTERED UNDER SECTION 12 (g) OF THE ACT:
Common Stock - .001 Par Value
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(TITLE OF CLASS)
<PAGE>
FORWARD LOOKING STATEMENTS
Senior Care Industries, Inc., ("Senior Care Industries, Inc.," or the "Company")
cautions readers that certain important factors may affect the Company's actual
results and could cause such results to differ materially from any
forward-looking statements that may be deemed to have been made in this Form 8-K
or that are otherwise made by or on behalf of the Company. For this purpose, any
statements contained in the Form 8-K that are not statements of historical fact
may be deemed to be forward-looking statements. Without limiting the generality
of the foregoing, words such as "may," "expect," "believe," "anticipate,"
"intend," "could," "estimate," "plans," or "continue" or the negative or other
variations thereof or comparable terminology are intended to identify
forward-looking statements. Factors that may affect the Company's results
include, but are not limited to, the Company's limited operating history, its
ability to produce additional products and services, its dependence on a limited
number of customers and key personnel, its possible need for additional
financing, its dependence on certain industries, and competition from its
competitors. With respect to any forward-looking statements contained herein,
the Company believes that it is subject to a number of risk factors, including:
the Company's ability to implement its product strategies to develop its
business in emerging markets; competitive actions; and, general economic and
business conditions. Any forward-looking statements in this report should be
evaluated in light of these important risk factors. The Company is also subject
to other risks detailed herein or set forth from time to time in the Company's
filings with the Securities and Exchange Commission.
2
<PAGE>
TABLE OF CONTENTS
Item 1. Changes in Control of Registrant
Item 2. Acquisition or Disposition of Assets
Item 3. Bankruptcy or Receivership
Item 4. Changes in Registrant's Certifying Accountant
Item 5. Other Events
Item 6. Resignation of Registant's Directors
Item 7. Financial Statements and Exhibits
Item 8. Change in Fiscal Year
Item 9. Change in Security Ratings
Signatures
Exhibit 1
3
<PAGE>
Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets
Senior Care Industries, Inc. ["SENR"] announces that on April 28, 2000 that it
purchased Nobel Concepts Fidelity, a furniture manufacturing company in San
Diego, California. The sale was effective on January 1, 2000 and was executed by
the parties on April 28, 2000. The effective date of the transaction means that
the income and expense of the operation of Nobel Concepts will become a part of
the SENR consolidated balance sheet and income statement as of January 1, 2000.
The purchase price was 750,000 shares of SENR common stock issued to the
shareholders of record of Nobel Concepts Fidelity, Inc. as of the date of
closing which was on April 28, 2000. The stock in SENR was unregistered but is
registerable under Rule 230.144 of the Securities & Exchange Act of 1933, as
amended.
Nobel Concepts Fidelity leases two properties, a 21,000 square foot facility and
another 20,000 square foot facility, both in El Cajon, California. The leases
are gross leases with a monthly rental of .33 cents per square foot and both
leases will terminate on May 1, 2002.
The President of Nobel Concepts Fidelity, Robert Eschwege, shall continue as
President of that company and shall continue to operate and manage the entire
furniture facility overseeing both manufacturing and sales.
The company was formed in 1992 and has developed a reputation in the furniture
manufacturing business as a manufacturer of quality mission style hard wood
furniture which is presently marketed and sold throughout the United States.
This purchase is a part of the plan of SENR to vertically integrate its services
to seniors by being able to supply furniture to its high end assisted living
developments.
Senior Care Industries is a diversified firm consisting of a real estate
division, a manufacturing division, and a pharmaceutical nutriceutical division.
The pharmaceutical division acquires nutriceutical and or pharmaceutical
manufacturing companies and web based health products distributors as a feeder
to manufacture and sell the products through an" E-commerce pharmacy. The
Company pharmaceutical division has developed a program to include a full
service web-based senior support system that sells direct to the consumer,
related health products in the financial services sector, including life
insurance, health insurance, dietary advice, holistic medical alternatives,
water and air purification. The Company is finalizing a web-site and a support
staff offering 24 hour access to these products and services.
The manufacturing division acquires furniture manufacturing companies and food
manufacturing companies, enabling the firm to service its Age restricted
communities with its own food and furnish its facilities through its own
manufacturing companies.
The real estate division invests in, manages, and develops conventional housing
and senior housing, with an emphasis on affordable for-sale and rental,
age-restricted independent living communities, and on a market sensitive case by
case basis, assisted living communities and commercial properties.
The real estate division builds, develops, services, acquires, finances, and
manages a diverse portfolio of real estate. The Real Estate Division is run by
senior officers of the Company who are themselves a diverse mix of real estate
and health care professionals whose decades of experience enable the company to
focus on three distinct real estate markets; (i) Age-restricted active living
senior housing, (ii) conventional housing consisting of town-home, apartments
<PAGE>
and condominiums; (iii) and commercial retail development, with a particular
emphasis on retail development that is ancillary to the Company's housing
project.
Because of their expertise and the fact that the principal officers and
directors of the Company's Real Estate Division are bi-coastal, the Real Estate
Division is able to focus on the development of its projects on the East Coast,
with an emphasis on the New York-New Jersey Metropolitan area, California, with
an emphasis on Southern California, and in Las Vegas and New Mexico, thereby
accessing and profiting from the most diverse and fundamentally sound real
estate markets in the country.
On April 30, 1999 Senior Care Industries acquired a licensing agreement with CF
Kent, a diversified manufacturer of furniture with separate 100,000 square foot
plants in Beijing and Shanghai, enabling the company to manufacture high end
furniture for its facilities at wholesale prices. CF Kent has a 10 year history
of manufacturing furniture for US furniture manufacturers who sell the products
to retail stores throughout the United States. The company is seeking to expand
its manufacturing capabilities by acquiring a domestic furniture manufacturer.
In addition, the Company is seeking a food manufacturing company to acquire in
order to service the food needs of its Senior facilities.
Although the Real Estate Division of the Company will continue it's west coast
development in Las Vegas, New Mexico, Arizona and California, it is placing
particular emphasis on locating opportunities within southern California's
"sixty mile circle". The Evergreen Manor II project owned by the Company, as
well as the commercial project in Laguna Beach that is owned by the Company,
fall within the "sixty mile circle", which is the area within sixty miles of
downtown Los Angeles.
5
<PAGE>
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
Not Applicable
Item 6. Financial Statements and Exhibits
<PAGE>
SENIOR CARE INDUSTRIES, INC. AND SUBSIDIARY
Nobel Concepts Fidelity, Inc.
Financial Statements
For Period Ended March 31, 2000
And
Projections for the Period from May 1, 2000
To April 30, 2001
Page
Independent Auditor's Report 4
Balance Sheet - Assets 5
Liabilities & Equity 6
Statement of Operations 7
Statement of Cash Flows 8
Notes to Financial Statements 9
Projections for the First Year of Operations 13
<PAGE>
JOHN H. SPURGEON CPA May 12, 2000
1787 E. Alosta Ave.
Glendora, CA 91740
INDEPENDENT AUDITORS' REPORT
- ----------------------------
Board of Directors
Senior Care Industries, Inc. (The Company)
Las Vegas, Nevada 89102
I have reviewed the Balance Sheet of Senior Care Industries, Inc., as of March
31, 2000 and the related Statements of Operations, Stockholders' Equity and Cash
Flows for the period then ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
A review consists principally of inquires of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be
made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
/S/ John H. Spurgeon CPA
4
<PAGE>
SENIOR CARE INDUSTRIES, INC. AND SUBSIDIARY
BALANCE SHEET
ASSETS
March 31, 2000 December 31, 1999
(Consolidated) (Unconsolidated)
CURRENT ASSETS:
Cash $ 105,228 $ 38,117
Deposits 110,859 45,000
Accounts receivable 554,603
Inventory 835,195
Loans receivable 66,862 12,550
Prepaid expenses 10,243 2,550
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Total current assets 1,682,990 98,217
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PROPERTY AND EQUIPMENT:
Machinery and equipment 776,291
Office equipment 17,681
Leasehold improvements 28,933
Real estate 21,477,937 21,507,510
Capitalized interest 58,677
Less accumulated depreciation (242,499) (88,250)
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Total property and equipment 22,117,020 21,419,260
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OTHER ASSETS:
Contracts receivable 1,805,000 1,805,000
Air quality permits 770,000
Goodwill 1,684,770
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Total other assets 4,259,770 1,805,000
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TOTAL ASSETS $ 28,059,780 $ 23,322,477
============= =============
See accompanying notes and auditors' report.
5
<PAGE>
<TABLE>
SENIOR CARE INDUSTRIES, INC. AND SUBSIDIARY
BALANCE SHEET
LIABILITES AND EQUITY
<CAPTION>
March 31, 2000 December 31, 1999
(Consolidated) (Unconsolidated)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 347,550
Wages payable 24,717
Payroll taxes payable 3,676
Income taxes payable 72,480
Sales tax payable 186
Current portion of real estate loans 51,562 77,407
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Total Current Liabilities 500,171 77,407
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NON-CURRENT LIABILITIES:
Real estate loans 12,718,652 12,637,262
Notes payable 2,922,610 700,000
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Total liabilities 16,141,433 13,414,669
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EQUITY:
Series A convertible preferred stock-convertible, $.001 par value
34,500 shares authorized, 34,500 shares issued and outstanding 34 34
Series B convertible preferred stock, $.001 par value,
5,000,000 shares authorized, 400,000 shares issued and outstanding 400 400
Common stock, $.001 par value, 25,000,000 share
authorized, 7,412,904 shares issued and outstanding 7,412 6,662
Additional paid in capital 13,200,188 11,259,517
Accumulated deficit (1,289,687) (1,358,805)
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Total stockholders' equity 11,918,347 9,907,808
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TOTAL LIABILITES AND STOCKHOLDERS' OWNER'S EQUITY $ 28,059,780 $ 23,322,477
============= =============
</TABLE>
See accompanying notes and accountants' report.
6
<PAGE>
SENIOR CARE INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For Years Ending
March 31, 2000 December 31, 1999
(Consolidated) (Unconsolidated)
REVENUE
Sales $ 1,322,348 $ 1,850,000
Rents 123,013 100,428
Less: returns & discounts (36,909)
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Total Revenues 1,408,452 1,950,428
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COST OF SALES
Beginning inventory 2,341,685
Materials 602,246
Direct labor 216,950
Overhead:
Payroll taxes 24,110
Insurance 24,840
Freight 9,340
Depreciation - equipment 55,204
Less: ending inventory (2,430,723)
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Total cost of sales 843,652
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Gross profit 564,800 1,950,428
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COSTS AND EXPENSE
Cost of units sold 1,213,414
Selling, general and administrative 325,662 62,314
Depreciation expense - buildings 22,062 88,250
Interest expense 59,796 81,433
Property tax 15,959 4,200
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Total costs and expenses 423,479 1,449,611
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Net income 141,321 500,816
============= =============
Weighted average
Number of common
Shares outstanding:
Basic 7,412,154 4,826,979
Diluted 12,410,821 9,783,566
Net Income
Per Share
Basic $ .019 $ .104
Diluted $ .011 $ .051
See accompanying notes and accountants' report.
7
<PAGE>
<TABLE>
SENIOR CARE INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
January 1, 2000 January 1, 1999
to to
March 31, 2000 December 31, 1999
(Consolidated) (Unconsolidated)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income or (loss) from operations $ 141,321 $ 500,816
Adjustments to reconcile net income
To net cash provided:
Depreciation expense 77,253 88,250
Change in current assets (88,337) (60,100)
Change in current liabilities 9,038
Accounts receivable 4,122 (1,805,000)
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Net cash flow provided by operating
Activities: 143,397 (1,276,034)
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CASH FLOW FROM INVESTING ACTIVITIES:
Net cash used in investing activities 0 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash in from loans 226,705 1,611,241
Cash out for loans (302,990) (297,922)
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Net cash used by financing activities (76,285) 1,313,319
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Net increase in cash 67,112 37,285
Balance at beginning of period 38,117 832
Balance at end of period $ 105,229 $ 38,117
============ ============
</TABLE>
See accompanying notes and accountants' report.
8
<PAGE>
SENIOR CARE INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
March 31, 2000
NOTE 1 - ACCOUNTING POLICIES AND PROCEDURES
1. The Company uses the accrual method of accounting, recording revenues
when a transaction occurs where the Company has a reasonable
expectation of receiving the revenue.
2. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
3. The cost of equipment real property improvements are depreciated over
the estimated useful life of the asset utilizing the straight line
method of depreciation.
4. The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates
and assumptions which affect the reported amounts of assets and
liabilities as of the date of the financial statements and revenues and
expenses for the period reported. Actual results may differ from these
estimates.
5. The Company has a net operating loss carry forward as of December 31,
1999. The Company will review its need for a provision for federal
income tax after each operating quarter and each period for which a
statement of operations is issued. The Company's marginal tax rate is
34%. The Company's effective tax rate is 0% due to the tax loss carry
forward.
6. The Company evaluates the recoverability of long-lived assets in
accordance with Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of. "SFAS No. 121 requires recognition
of impairment of long-lived assets in the event the net book value of
such assets exceeds the future undiscounted cash flows attributable to
such assets. At December 31, 1999, management determined that there has
been no impairment of the Company's long-lived assets. There can be no
assurance, however, that market conditions will not change or demands
for the Company's services will continue which could result in future
long-lived assets impairments.
9
<PAGE>
NOTE 2 - ACQUISITION
On May 1, 2000 the Company purchased Nobel Furniture, Inc. (Nobel) for 750,000
shares of Company common stock valued at $3,187,500. The combination will be
accounted for by the purchase method. Accordingly, the Company will record
assets acquired at their fair values. The effective date of this combination was
agreed to as January 1, 2000. Therefore the results of operations of Nobel will
be included in the income statement of the Company beginning January 1, 2000.
NOTE 3 - SEGMENT INFORMATION
The Company has adopted Statement of Financial Accounting Standards No. 131
("SFAS 131"), "Disclosures about Segments of an Enterprise and Related
Information." SFAS 131 changes the way public companies report information about
segments of their business in their annual financial statements and requires
them to report selected segment information in their quarterly reports issued to
stockholders. It also requires entity-wide disclosures about the products and
services an entity provides, the material countries in which it holds assets and
reports revenues and its major customers. The Company acquired Nobel furniture,
Inc. as discussed in note 2. Nobel manufactures furniture for the national
market.
Selected information for the three months ending March 31, 2000
Furniture manufacturer Senior Care
---------------------- -----------
Gross sales $1,322,349 $123,013
Operating income 231,986 (90,665)
Assets 1,684,774 26,375,006
Liabilities 3,422,781 12,718,652
NOTE 4 - EARNINGS PER SHARE
Basic net income per common share is computed by dividing the net income
available to common stockholders for the period by the weighted average number
of common shares outstanding during the period. Incremental common shares
issuable upon the exercise of stock options and warrants, are included in the
computation of diluted net income per common share to the extent such shares are
dilutive.
<TABLE>
<CAPTION>
<S> <C>
Numerator:
Numerator for basic earnings per share - net profit $ 141,321
------------
Numerator for diluted earnings per share - net profit 141,321
Denominator:
Denominator for basic earnings per share - weighted
Average shares outstanding 7,412,154
------------
Denominator for diluted earnings per share - weighted
Average shares outstanding 12,410,821
------------
</TABLE>
10
<PAGE>
SENIOR CARE INDUSTRIES, INC.
Balance Sheet
(Unaudited)
March 31, 2000
Assets
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principal for interim financial
information and with the instructions to Form 10-QSB and Item 310 (b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended March
31, 2000 are not necessarily indicative of the results that may be expected for
the year ended March 31, 2000. For further information, refer to the audited
financial statements and footnotes included in the Company's Form 10-SB filing,
filed December 23, 1999. The audited financial statements in the Form 10-SB
covered to the close of business as of August 31, 1999. You may also refer to
the Company's Annual Report, 10KSB, filed March 29, 2000 which has audited
financial statements and footnotes.
11
<PAGE>
Nobel Concepts Fidelity
A Wholly Owned Subsidiary of Senior Care Industries, Inc.
Projections for the First Year
Of Operations by Senior Care Industries, Inc.
Period from May 1, 2000
to April 30, 2001
Consolidated Gross Sales
Craftsman Mission Furniture Line 8,358,055.00
Catalogue Sales 631,014.00
Subcontracting 150,000.00
--------------
Total Projected Sales 9,960,658.00
Cost of Sales
Materials
Craftsman Mission 4,011,867.00
Catalogue Sales 283,957.00
Subcontracting 123,238.00
--------------
Total Cost of Sales 6,110,245.00
Gross Profit on Sales 3,850,412.00
Operating Expenses
Rent 223,500.00
Salaries 294,769.00
Telephone 49,128.00
Utilities 176,862.00
Postage/Supplies 19,651.00
Printing 19,651.00
Sales/Marketing 982,564.00
Taxes/Licenses 117,908.00
Office Expense 19,651.00
Security 19,651.00
Insurance 49,128.00
Depreciation 49,128.00
Transportation 294,769.00
Miscellaneous 147,385.00
--------------
Total Operating Expenses 2,463,747.00
Net Income before Taxes & Interest 1,386,666.00
Interest Expense
Interest on Equipment Financing 5,400.00
Interest on Accounts Receivable Financing 63,499.00
Interest on Inventory Financing 25,057.00
--------------
Net Income Before Taxes 1,292,710.00
Provision for Income Tax 646,355.00
--------------
Net Income (Loss) 646,355.00
Notes to Projections:
Nobel Concepts believes that it will increase its gross sales by approximately
50% over its actual sales for the historical year ended March 31, 2000. The
reason for this ability to increase actual sales is that the company has
extended its sales areas throughout the United States whereas previously, it had
limited penetration nationally. It has picked up major new accounts in New
England, Chicago and New York. The company has stocked showroom orders for these
markets. This will result in sales increases exponentially based upon sales
which will be generated from these showroom samples. Furthermore, in April,
2000, the company has doubled its plant size which previously, had limited its
ability to produce beyond its historical annual sales.
Cost projections are based upon historical percentages of costs for each item
manufactured.
<PAGE>
Exhibits attached:
Exhibit 1 - Copy of the Acquisition Agreement between Senior Care Industries,
Inc. and Nobel Concepts Fidelity, Inc.
Item 8. Changes in Fiscal Year
Not Applicable
Item 9. Change is Security Rating
Not Applicable
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Senior Care Industries, Inc.
(Registrant)
Dated: May 8, 2000
/S/ Stephen Reeder
- -----------------------------------
Stephen Reeder
Chief Executive Officer & Director
Dated: May 8, 2000
Exhibit 1
AGREEMENT AND PLAN OF REORGANIZATION
Agreement and Plan of Reorganization ("Agreement") between Senior Care
Industries, Inc., a Nevada corporation ("Senior Care "), and the undersigned
Shareholders. as "Shareholders" (the "Shareholder"), being the owner of record
of all of the issued and outstanding shares of Noble Concepts-Fidelity Inc., a
Costa Rican Company (the "Company").
WHEREAS, Senior Care wishes to acquire and the Shareholders wishes to
transfer all of the issued and outstanding stock of the Company in exchange for
750,000 shares of common stock of Senior Care the value of said stock to be
determined based upon the market value of said shares on the date of closing of
this transaction.
NOW, THEREFORE, Senior Care and the Shareholders adopt this Plan of
Reorganization and agree as follows:
SECTION 1. EXCHANGE OF STOCK
1.01 NUMBER OF SHARES. The Shareholders agrees to transfer to Senior
Care at the Closing all shares of stock in the Company presently owned by
Shareholders in exchange for 750,000 shares of Senior Care.
1.02 DELIVERY OF CERTIFICATES BY SHAREHOLDERS. The transfer of the
Company Shares by the Shareholders shall be effected by the delivery to Senior
Care at the Closing of certificates representing the Company Shares endorsed in
blank or accompanied by stock powers executed in blank, with all signatures
guaranteed by a national bank or broker-dealer.
1.03 FURTHER ASSISTANCE. At the Closing and from time to time
thereafter, the Shareholders shall execute such additional instruments and take
such other action as Senior Care may request in order to more effectively sell,
transfer and assign the transferred Company Shares to Senior Care and to confirm
Senior Care 's title thereto.
1.04 CHANGES IN SENIOR CARE 'S CAPITALIZATION. If between the date of
this Agreement and the Closing, the outstanding shares of Senior Care common
stock are, without the receipt of new consideration by Senior Care , increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of Senior Care through reorganization, reclassification, stock
dividend, stock split, reverse stock split or similar change in Senior Care 's
capitalization, Senior Care will issue and deliver to the Shareholders in
addition to or in lieu of the Senior Care Shares specified in Section 1.01,
voting stock of Senior Care in equitably adjusted amounts. In the event of any
change in Senior Care 's capitalization, all references to Senior Care Shares
herein shall refer to the number of Senior Care Shares as thus adjusted.
SECTION 2. CLOSING
2.01 The closing contemplated by Section 1.01 (the "Closing") shall be
held at the offices of Senior Care , on March 31, 2000, or as soon as practical
thereafter unless another place or time is agreed upon in writing by the
parties.
2.02 The effective date of this transaction for purposes of reflecting
the income and expense of the Company on the consolidated balance sheet and
income statement of Senior Care shall be January 1, 2000 even though this
Agreement is being executed at a later date.
<PAGE>
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders hereby warrant, represent and agree as follows:
3.01 CORPORATE STATUS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the Costa Rica and is
licensed or qualified as a foreign corporation in all jurisdictions in which the
nature of its business or the character or ownership of its properties makes
such licensing or qualification necessary.
3.02 CAPITALIZATION. The authorized capital stock of the Company
consists of 1,000 shares of common stock, of which 1,000 shares are issued and
outstanding. All such shares are fully paid and non-assessable.
3.03 FINANCIAL STATEMENTS. The financial statements of the Company
furnished to Senior Care , consisting of an unaudited balance sheet as of March
31, 2000 and a related statement of income for the period then ended (the
"Financial Statements") will be delivered at the Closing, will be correct and
fairly present the financial condition of the Company as of the dates and for
the periods involved.
3.04 UNDISCLOSED LIABILITIES. The Company has no liabilities of any
nature except to the extent reflected or reserved against in the Financial
Statements, whether accrued, absolute, contingent or otherwise, including,
without limitation, tax liabilities and interest due or to become due, and the
Company's accounts receivable are collectible in accordance with the terms of
such accounts, except to the extent of the reserve therefor in the Financial
Statements.
3.05 INTERIM CHANGES. Between December 1, 1999 and the date of this
Agreement, there have not been, (1) any changes in the Company's financial
condition, assets, liabilities, or business which, in the aggregate, have been
materially adverse; (2) any damage, destruction or loss of or to the Company's
property, whether or not covered by insurance; (3) any declaration or payment of
any dividends or other distribution in respect of the Company's capital stock,
or any direct or indirect redemption, purchase or other acquisition or any such
stock; or (4) any increase paid or agreed to in the compensation, retirement
benefits or other commitments to employees.
3.06 TITLE TO PROPERTY. The Company has good and marketable title to
all properties and assets, real and personal, reflected in the Financial
Statements, except as since sold or otherwise disposed of in the ordinary course
of business, and the Company's properties and assets are subject to no mortgage,
pledge, lien or encumbrance, except for liens shown therein, with respect to
which no default exists.
3.07 LITIGATION. There is no litigation or proceeding pending, or to
Shareholders' knowledge threatened, against or relating to the Company, its
properties or business.
3.08 ACCESS TO RECORDS, ETC. From the date of this Agreement to the
Closing, the Shareholders will cause the Company (1) to give to Senior Care and
its representatives full access during normal business hours to all of its
offices, books, records, contracts, and other corporate documents and properties
so that Senior Care may inspect and audit them; and (2) to furnish such
information concerning the Company's properties and affairs as Senior Care may
reasonably request.
3.09 CONFIDENTIALITY Until the Closing (and permanently if there is no
Closing), the Shareholders and their representatives will keep confidential any
information which they obtain from Senior Care concerning its properties, assets
and business. If the transactions contemplated by this Agreement are not
consummated by March 31, 2000, the Shareholders will return to Senior Care all
written matter with respect to Senior Care obtained by them in connection with
the negotiation or consummation of this Agreement.
<PAGE>
3.10 TITLE TO SHARES. The Shareholder is, in the aggregate, the owner,
free and clear of any liens, claims and encumbrances, of all Company Shares.
3.11 INVESTMENT INTENT. The Shareholders is acquiring the Senior Care
Shares for its own respective accounts, for investment purposes, and not for or
with a view to resale or distribution. The Senior Care shares shall bear a
legend to the effect that they represent restricted securities which may not be
sold, transferred or hypothecated in the absence of a registration statement
under the Securities Act of 1933, as amended, or an opinion of counsel that
registration is not required.
3.12 EMPLOYMENT AGREEMENTS. At the Closing each of the Shareholders
shall execute an employment agreement with the Company in the form attached
hereto as Exhibit 3.12.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SENIOR CARE
Senior Care represents and warrants to, and covenants with the
Shareholders as follows:
4.01 CORPORATE STATUS. Senior Care is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
is licensed or qualified as a foreign corporation in all jurisdictions in which
the nature of its business or the character or ownership of its properties makes
such licensing or qualification necessary.
4.02 CAPITALIZATION. The authorized capital stock of Senior Care
consists of 20,000,000 shares of common stock, having a par value of $.001 per
share, of which 5,465,000 shares are issued and outstanding, fully paid and
non-assessable.
4.03 UNDISCLOSED LIABILITIES. Senior Care has no liabilities of any
nature except to the extent reflected in Exhibit C, attached hereto.
4.04 TITLE TO PROPERTY. Senior Care has good and marketable title to
all properties and assets, real and personal, and Senior Care 's properties and
assets are subject to no mortgage, pledge, lien or encumbrance, except for liens
shown therein, with respect to which no default exists.
4.05 LITIGATION. There is no litigation or proceeding pending, or to
Senior Care 's knowledge threatened, against or relating to Senior Care , its
properties or business.
4.06 CONFIDENTIALITY. Until the Closing (and permanently if there is no
Closing), the Company and its representatives will keep confidential any
information which it obtained from the Company concerning its properties, assets
and business. If the transactions contemplated by this Agreement are not
consummated by May 1, 2000 Senior Care will return to the Company all written
matter with respect to the Company obtained by it in connection with the
negotiation or consummation of this Agreement.
4.07 INVESTMENT INTENT. Senior Care is acquiring the Company Shares to
be transferred to it under this Agreement for investment and not with a view to
the sale or distribution thereof, and Senior Care has no commitment or present
intention to liquidate the Company or to sell or otherwise dispose of the
Company Shares.
4.08 CORPORATE AUTHORITY. Senior Care has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to the Shareholders at the Closing a certified copy
of resolutions of its Board of Directors authorizing execution of this Agreement
by its officers and performance thereunder.
4.09 DUE AUTHORIZATION. Execution of this Agreement and performance by
Senior Care hereunder has been or prior to the Closing will be duly authorized
by all requisite corporate and Shareholders action on the part of Senior Care ,
and this Agreement constitutes a valid and binding obligation of Senior Care and
performance hereunder will not violate any provision of Senior Care 's Articles
of Incorporation, Bylaws, mortgages, agreements with third parties or other
commitments.
<PAGE>
SECTION 5. CONDUCT OF COMPANY PENDING THE CLOSING
The Shareholders agree that from the date of this Agreement until the
Closing the Company will conduct itself in the following manner:
5.01 CERTIFICATE OF INCORPORATION AND BYLAWS. The Company will not
change its Certificate of Incorporation or Bylaws.
5.02 CAPITALIZATION, ETC. The Company will not make any change in its
authorized, issued or outstanding capital stock; grant any stock option or right
to purchase shares of its capital stock; issue any security convertible into
shares of its capital stock; purchase, redeem, retire, or otherwise acquire any
shares of its capital stock; or agree to do any of the foregoing; or declare,
set aside or pay any dividend or other distribution in respect of its capital
stock.
5.03 BUSINESS IN ORDINARY COURSE. The Company will conduct its business
in the ordinary course and will (1) use its best efforts to preserve its
business organization intact, to keep available to Senior Care the services of
its present officers and employees and to preserve the goodwill of suppliers,
customers and others having business relations with it; (2) maintain its
properties in customary repair, working order and condition, reasonable wear and
tear and damage by casualty excepted; (3) keep in force at no less than their
present limit all policies of insurance; (4) make no material change in the
customary terms and conditions on which it extends credit to customers; and (5)
enter into no sale, lease, contract, commitment or other transaction; provided,
however, that nothing in this Section 5.03 shall prohibit compliance by the
Company with, or the Company's borrowings or repayment funds pursuant to, and
agreements or other commitments disclosed by the Company to Senior Care .
5.04 BANKING ARRANGEMENTS; POWERS OF ATTORNEY. The Company will not
make any change in its banking and safe deposit arrangements and will not grant
any powers of attorney.
5.05 ACCOUNTING PRACTICES. Except as required by generally accepted
accounting principles, the Company will not make any changes in its accounting
methods or practices.
5.06 MERGER, ETC. The Company will not merge or consolidate with any
other corporation; sell or lease all or substantially all of its assets and
business; acquire all or substantially all of the stock of the business or
assets or any other person, corporation or business organization; or agree to do
any of the foregoing.
SECTION 6. COVENANTS AFTER THE CLOSING
6.01 AFTER CLOSING. From and after the Closing, all parties hereto
agree to issue certificates representing the Senior Care Shares to the
Shareholders of the Company pursuant to Paragraph 1.01 hereof.
SECTION 7. CONDITIONS PRECEDENT - SENIOR CARE
All obligations of Senior Care under this Agreement are subject, at
Senior Care 's option, to the fulfillment, before or at the Closing, of each of
the following conditions:
7.01 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The Shareholders'
representations and warranties contained in this Agreement shall be true and
correct as of the date hereof and as of the Closing in all material respects.
<PAGE>
7.02 DUE PERFORMANCE. The Shareholders shall have performed and
complied with all the terms and conditions required by this Agreement to be
performed or complied with by them before the Closing.
7.03 BOOKS AND RECORDS. The Shareholders has caused the Company to make
available to Senior Care all books and records of the Company, including minute
books and stock transfer records.
7.04 ACCEPTANCE BY THE SHAREHOLDERS. The terms of this Agreement shall
have been accepted by all of the Shareholders of the Company as evidenced by
their signatures on the signature page of this Agreement.
SECTION 8. CONDITIONS PRECEDENT - THE SHAREHOLDERS
All obligations of the Shareholders under this Agreement are subject,
at their option, to the fulfillment, before or at the Closing, of each of the
following conditions:
8.01 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Senior Care 's
representations and warranties contained in this Agreement shall be true and
correct as of the date hereof at and as of the Closing in all material respects.
8.02 DUE PERFORMANCE. Senior Care shall have performed and complied
with all of the terms and conditions required by this Agreement to be performed
or complied with by it before the Closing.
8.03 REVOCATION OF PRIOR AUTHORIZATIONS. The Shareholders shall have
delivered to Senior Care , certified copies of resolutions of the Company's
Board of Directors revoking as of the Closing all prior authorizations, powers
of attorney, designations and appointments relating to the signing of checks,
borrowing of funds, access to corporate safe deposit boxes and other similar
matters, to the extent requested by Senior Care .
8.04 RESIGNATIONS. There shall have been delivered to Senior Care the
signed resignations of such directors of the Company as Senior Care shall
request, dated as of the Closing.
SECTION 9. INDEMNIFICATION
9.01 INDEMNIFICATION OF SENIOR CARE . The Shareholders severally (and
not jointly) agree to indemnify Senior Care against any loss, damage or expense
(including reasonable attorneys' fees) suffered by Senior Care from (1) any
breach by the Shareholders of this Agreement; or (2) any inaccuracy in or breach
of any of the representations, warranties or covenants by the Shareholders
herein; provided, however that (a) Senior Care shall be entitled to assert
rights of indemnification hereunder only if and to the extent that it suffers
losses, damages and expenses (including reasonable attorneys' fees) exceeding
$50,000 in the aggregate; and (b) Senior Care shall give notice of any claims
hereunder within the twenty-four (24) month period beginning on the date of the
Closing. No loss, damage or expense shall be deemed to have been sustained by
Senior Care to the extent of insurance proceeds paid to, or tax benefits
realizable by, Senior Care or the Company as a result of the event giving rise
to such light indemnification.
9.02 INDEMNIFICATION OF SHAREHOLDERS. Senior Care agrees to indemnify
the Shareholders against any loss, damage or expense (including reasonable
attorneys' fees) suffered by any of the Shareholders from (1) any breach by
Senior Care of this Agreement; or (2) any inaccuracy in or breach of any of
Senior Care 's representations, warranties or covenants herein.
9.03 DEFENSE OF CLAIMS. Upon obtaining knowledge thereof, the
indemnified party shall promptly notify the indemnifying party of any claim
which has given or could give rise to a right of indemnification under this
Agreement. If the right of indemnification relates to a claim asserted by a
third party against the indemnified party, the indemnifying party shall have the
right to employ counsel acceptable to the indemnified party to cooperate in the
<PAGE>
defense of any such claim. So long as the indemnifying party is defending any
such claim in good faith, the indemnified party will not settle such claim. If
the indemnifying party does not elect to defend any such claim, the indemnified
party shall have no obligation to do so.
SECTION 10. TERMINATION
10.01 TERMINATION. This Agreement may be terminated (1) by mutual
consent in writing; (2) by either the Shareholders or Senior Care if there has
been a material misrepresentation or material breach of any warranty or covenant
by the other party; or (3) by either the Shareholders of Senior Care if the
Closing shall not have taken place, unless adjourned to a later date by mutual
consent in writing by March 31, 2000
SECTION 11. GENERAL PROVISIONS
11.01 FURTHER ASSURANCES. At any time, and from time to time, after the
Effective Date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
11.02 WAIVER. Any failure on the part of either party hereto to comply
with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
11.03 BROKERS. Each party represents to the other party that no broker
or finder has acted for it in connection with this Agreement, and agrees to
indemnify and hold harmless the other party against any fee, loss or expense
arising out of claims by brokers or finders employed or alleged to have been
employed by it.
11.04 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first-class registered or certified mail, return receipt requested,
as follows:
To: Senior Care Industries, Inc.
c/o Stephen Reeder
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410 Broadway, 2nd Floor
Laguna Beach, CA 92651
To: Fidelity Capital Group Holdings, Inc.
Craig H. Brown
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1278 Glenneyre, Suite 212
Laguna Beach, CA 92651
11.05 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
11.06 HEADINGS. The section and subsection headings in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.07 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Nevada.
11.08 ASSIGNMENT. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided,
however, that any assignment by either party of its rights under this Agreement
without the written consent of the other party shall be void.
<PAGE>
11.09 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Facsimile
signatures shall be considered as original signatures.
1110 REVENUES Upon closing, 100% of all revenues resultant from
operations of Noble Concepts-Fidelity Inc., from January 1, 2000 forward shall
be the property of Senior Care and forwarded to Senior Care.
<PAGE>
Executed as of this 28th day of April, 2000 . Senior Care Industries,
Inc.
By: /s/ Stephen Reeder
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Stephen Reeder
Senior Care Industries, Inc.
SHAREHOLDERS OF Noble Concepts-Fidelity Inc.,
By: /s/ Robert Eschwege
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Robert Eschwege
Shares of Company: 20,000
Shares to be issued in Senior Care : 150,000
By: s/ Craig H. Brown
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Craig H. Brown
President
Fidelity Capital Group Holdings Inc.
Shares of Company: 80,000
Shares to be issued in Senior Care : 600,000
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