SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Event Requiring Report: March 21, 2000
ADPADS, INC.
(Exact name of registrant as specified in its charter)
Colorado 000-28373 84-1306598
(State of Incorporation) (Commission (IRS Employer
File Number) Identification #)
1000 Highway 34, Matawan, New Jersey 07747
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(Address of Principal Executive Offices)
(800) 877-6666
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(Registrant's telephone number, including area code)
Visual-Presentation Systems, Inc.
16910 Dallas Parkway, Ste. 100, Dallas, Texas 75248
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(Registrant's Former Name and Address)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On March 20, 2000, a change in control of the Registrant occurred in
conjunction with closing under an Agreement and Plan of Reorganization (the
"Reorganization Agreement") between the Registrant and AdPads, Inc., a Colorado
corporation.
The closing under the Reorganization Agreement consisted of a stock for
stock exchange in which the Registrant acquired all of the issued and
outstanding common stock of API in exchange for the issuance of 23,900,015
shares of its common stock. As a result of this transaction, the Registrant
became a wholly-owned subsidiary of the Company.
The Reorganization was approved by the unanimous consent of the Board
of Directors of AdPads on March 18, 2000. The Reorganization is intended to
qualify as a reorganization within the meaning of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended.
Prior to the Agreement, AdPads had 23,900,015 shares of common stock
issued and outstanding. Following the Agreement, Registrant had 24,150,015
shares of common stock outstanding. AdPads, formerly known as Regents Road,
Ltd., was incorporated in the State of Colorado on September 22, 1994.
Upon effectiveness of the Reorganization Agreement, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the Securities and Exchange
Commission, AdPads became the successor issuer to Visual-Presentation Systems,
Inc. for reporting purposes under the Securities Exchange Act of 1934 and elects
to report under the Act effective March 21, 2000.
<PAGE>
A copy of the Agreement is filed as an exhibit to this Form 8-K and is
incorporated in its entirety herein. The foregoing description is modified by
such reference.
(b) The following table contains information regarding the shareholdings
of the Company's current directors and executive officers and those persons or
entities who beneficially own more than 5% of the Company's common stock:
NAME AMOUNT OF COMMON STOCK PERCENT OF COMMON STOCK
BENEFICIALLY OWNED (1) BENEFICIALLY OWNED
David I. Brownstein 16,000,000 66%
(1) Based upon 24,150,015 outstanding shares of common stock.
COMPANY'S BUSINESS AND SUBSIDIARIES
AdPads, Inc. (OTCBB: "RGRD"), provides its customers with a wide array
of marketing services. From printed items to Internet based products, we are a
one-stop-operation.
Our namesake, the AdPads Marketing System, is our "front-line" media.
This system consists of custom designed display boards that are installed in
high traffic locations throughout the community. A monetary fee or an equivalent
amount of marketing service is provided to the location hosting the board in
exchange for this exclusive right. Supermarkets, family restaurants, movie
theaters, and shopping centers are typical examples. The display boards are
specially constructed to hold full-color, 4inch by 5 inch pads, each
representing a different advertiser. The AdPads, in a "take-one" format, provide
an enormous amount of visibility for each displayed advertiser. The business may
offer a coupon on its AdPad, which allows the system to provide measurable
results through a recording of redemption by the advertiser. Each ad is
displayed for a period of one year with an unlimited supply of pads. AdPads
allows only one business in each category to contract for a space on each
display board. This guarantees that a competing business is never allowed to
advertise directly next to a competitor. Our maintenance staff visits each
display board location to refill the pads at least once per week to assure
maximum visibility during the length of the contract. We currently have display
boards in over 100 locations in Central New Jersey, and have started small test
areas in Nassau County, NY, Danbury, CT and Kansas City, MO.
In addition to AdPads, the printed version, each customer receives, at
no additional charge, a page on our web site located at www.adpads.com. At the
bottom of each page on every AdPad, the end consumer is encouraged to view and
print hundreds of offers from the web site. When they visit the site, consumers
are shown a series of maps. Through a few simple clicks, they are presented with
a list of businesses in their area offering discounts through the AdPads
program. They may choose any one, view it on their screen, print it, and redeem
it. Our clients get 24 hour per day, 7 days a week exposure.
AdPads offers full graphic design and printing services. Flyers,
brochures, envelopes, letterheads, business cards, banners and much more are
offered to our clients. Through high-tech digital printing, we provide the
highest level of quality and customer service at costs far below local print
shops. From one color to full-color, we can do it all. In addition, pick-up and
delivery service is available.
<PAGE>
Custom direct mail campaigns are another service offered by AdPads. We
can define a "target market" for the client. Next, we develop and print the
piece - a postcard, letter, or a tri-fold brochure. The mailing list is based on
very specific criteria, and is prepared and shipped at bulk postage rates.
Finally, and perhaps the most exciting division of AdPads is our
Internet web site development service. We provide turn-key solutions for any
business service, retail, professional, or manufacturing looking to have a
presence on the World Wide Web. From simple "online brochures" to full
e-commerce enabled web sites, AdPads, can handle the job. Our talented staff of
graphic designers and programmers put together the hottest, most functional web
sites ever seen on the Internet. We are constantly upgrading to stay ahead of
the competition, and to provide our clients with the latest technology
available.
Our client base is developed through our team of marketing consultants.
After an initial training period, these professional sales reps are sent into
the field to develop relationships with local business owners. It is this
personal contact, along with the "one-stop-shop" advantage that sets us apart
from all other places that provide similar services. Each potential client is
introduced to the AdPads Marketing System. In addition, the consultant describes
all of the additional marketing services that we provide. The consultant listens
to the client, evaluates his/her needs, and suggests products and services to
help the client increase business and profits. The goal is to establish an
ongoing relationship between the client and marketing consultant. This provides
the client with a single source for all marketing needs. It provides the
consultant and the company a continuous stream of revenue without the need to
constantly bring in new accounts.
However, AdPads presently operates at a loss and has not received
revenues from operations sufficient to maintain its operations. AdPads has
raised funds for operations through the sale of its securities and may continue
to do so. See "RISK FACTORS".
On March 15, 2000, the Company executed an "Asset Purchase Agreement"
with Regents Roads, Ltd, a Colorado corporation. Pursuant to the terms and
conditions of that Agreement, Regents issued 16,000,000 shares or an amount
equal to approximately eighty-nine percent (89%) of its post-Agreement
outstanding no par value common voting stock in exchange for the Ad Pads Assets.
All of the shares of Regents common stock issued to Ad Pads were deemed to be
"restricted securities" as defined in Rule 144 of the Securities and Exchange
Commission, and were issued in accordance with and subject to, applicable
securities laws, rules and regulations.
PROPERTY
AdPads maintains its administrative offices at 1000 Highway 34,
Matawan, New Jersey 07747. The Company does not lease its own space and pays no
rent. The offices are leased by other companies affiliated with the Company's
president and the office space and all office services are shared.
DESCRIPTION OF SECURITIES
The Company has an authorized capitalization of 50,000,000 shares of
common stock, no par value per share and 5,000,000 authorized preferred stock,
no par value. Prior to the execution of this Agreement, the Company had
23,900,015 shares of common stock issued and outstanding. The Company's
post-merger issued and outstanding shares is 24,150,015.
<PAGE>
MARKET FOR ADPADS' SECURITIES
AdPads is a non-reporting publicly traded company with certain of its
securities exempt from registration under the Securities Act of 1933, as
amended, pursuant to Regulation D, Rule 504 of the General Rules and Regulations
of the Securities and Exchange Commission. AdPads's common stock is presently
traded on the NASD OTC Bulletin Board under the symbol "RGRD." The Company has
recently requested a symbol change. The NASDAQ Stock Market has implemented a
change in its rules requiring all companies trading securities on the NASD OTC
Bulletin Board to become reporting companies under the Securities Exchange Act
of 1934.
The Company was required to become a reporting company by the close of
business on March 23, 2000. AdPads acquired 100% the outstanding shares of
Visual to become successor issuer to it pursuant to Rule 12g-3 in order to
comply with the reporting company requirements implemented by the NASDAQ Stock
Market.
MANAGEMENT
Name Age Title
---- --- -----
David I. Brownstein 28 President, Secretary,
Treasurer & Director
David Brownstein has been interested and involved with computers for
much of his adult life. After graduating from Rutgers University, he was
appointed marketing director of The Princeton Review, a multi-million dollar
standardized test preparation company with offices worldwide. He was responsible
for both print and Internet marketing campaigns. After two years in that
position, he pursued his own entrepreneurial dreams. Mr. Brownstein formed a
computer training and web development company in the early 1990's.
EXECUTIVE COMPENSATION
Mr. Brownstein is not currently receiving any salary or other
remuneration from the Company.
All directors of the Company hold office until the next annual meeting
of shareholders or until their successors are elected and qualified. Currently,
there are two directors of the Company. The by-laws permit the Board of Director
to fill any vacancy and such director may serve until the next annual meeting of
shareholders or until his successor is elected and qualified. Officers serve at
the discretion of the Board of Directors.
RISK FACTORS
ADPADS IS CURRENTLY OPERATING AT A LOSS. If losses continue, AdPads may
need to raise additional capital through the placement of its securities or from
other debt or equity financing. If the Company is not able to raise such
financing or obtain alternative sources of funding, management may be required
to curtail operations. There is no assurance that the Company will be able to
continue to operate if additional sales of its securities cannot be generated or
other sources of financing located.
THE COMPANY HAS NOT BEEN AUDITED BY INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS.
Although the Company is required to file audited financial statements
no later than 60 days from the date that this report is required to be filed, no
such audited financial statements have been prepared or are available for
inspection as of the date hereof. Consequently, there can be no assurance that
any representations as to the financial condition or assets of the Company are
as stated herein.
<PAGE>
COMPETITION FROM LARGER AND MORE ESTABLISHED COMPANIES MAY HAMPER
MARKETABILITY.
At the present time, the AdPads Marketing System (Display Boards and
Coupon Web Site)has no direct competition. There are a variety of display media
available in the marketplace, but none similar to the quality of exposure
provided by the AdPads Marketing System. For this reason, we use the AdPads
Marketing System as our "front-line" product to introduce the Company to
prospective clients.
There are numerous print shops in all of the areas where we intend to
operate and will operate in the future. However, their ability to provide true
marketing advice and service is presently limited. Presently, no one provides
the level of service or the variety of products that AdPads provides. Many of
the services that AdPads provides are available from various vendors. The
Company believes that its emphasis on volume will enable it to stay one step
ahead of the competition.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS' SHARE VALUE.
The Company's Articles of Incorporation, as amended, of AdPads
authorizes the issuance of 50,000,000 shares of common stock. The future
issuance of all or part of the remaining authorized common stock may result in
substantial dilution in the percentage of the Company's common stock held by its
then existing shareholders. Moreover, any common stock issued in the future may
be valued on an arbitrary basis by AdPads. The issuance of the Company's shares
for future services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by investors, and might have an
adverse effect on any trading market, should a trading market develop for the
Company's common stock.
PENNY STOCK REGULATION.
Penny stocks generally are equity securities with a price of less than
$5.00 per share other than securities registered on certain national securities
exchanges or quoted on the NASDAQ Stock Market, provided that current price and
volume information with respect to transactions in such securities is provided
by the exchange or system. The Company's securities may be subject to "penny
stock rules" that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 together with their
spouse). For transactions covered by these rules, the broker-dealer must make a
special suitability determination for the purchase of such securities and have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the "penny stock rules" require the delivery, prior to the transaction,
of a disclosure schedule prescribed by the Commission relating to the penny
stock market. The broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered representative and current quotations
for the securities. Finally, monthly statements must be sent disclosing recent
price information on the limited market in penny stocks. Consequently, the
"penny stock rules" may restrict the ability of broker-dealers to sell the
Company's securities. The foregoing required penny stock restrictions will not
apply to the Company's securities if such securities maintain a market price of
$5.00 or greater. There can be no assurance that the price of the Company's
securities will reach or maintain such a level.
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, upon effectiveness of the Agreement, the
Company became the successor issuer to Visual-Presentation Systems, Inc. for
reporting purposes under the Securities Exchange Act of 1934 and elects to
report under the Act effective March 21, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the terms of the aforementioned Agreement, the Registrant has
accepted the resignation of Kevin Halter and Kevin Halter, Sr, as the
Registrant's Director and Officer as of March 21, 2000, and appointed David I.
Brownstein as President and Director of the Registrant.
ITEM 7. FINANCIAL STATEMENTS
Financial statements for Visual Presentation Systems, Inc. are filed
herewith. The Registrant is required to file consolidated financial statements
by amendment hereto not later than 60 days after the date that this Current
Report on Form 8-K must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
AdPads has a December 31 fiscal year end. The fiscal year of Visual is
December 31. The Company will file a Transitional Report on Form 10-QSB, if
required.
EXHIBITS
2.1 Agreement and Plan of Reorganization between Visual and AdPads, dated
March 20, 2000.
2.2 Asset Purchase Agreement
*3.1 Articles of Incorporation of AdPads
*3.2 By-Laws of AdPads
*24.1 Consent of accountants
27.1 Financial Data Schedule for Visual Presentation Systems, Inc.
99.1 Financials for Visual Presentation Systems, Inc.
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*To be filed by amendment
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
By /s/ David I. Brownstein
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David I. Brownstein
President
Date: March 21, 2000
AGREEMENT AND PLAN OF REORGANIZATION
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AGREEMENT AND PLAN OF REORGANIZATION, dated March 21st, 2000, between
AdPads, Incorporated f/k/a Regents Road, Ltd., ("AdPads") a Colorado corporation
and Visual Presentation Systems, Inc. ("Visual"), a Delaware corporation.
PLAN OF REORGANIZATION
----------------------
The reorganization will comprise in general, the acquisition of Visual by Ad
Pads pursuant to an I.R.S. qualified tax free exchange whereupon Visual shall
become a wholly owned subsidiary of AdPads, all subject to the terms and
conditions of the agreement hereinafter set forth. For purposes of this
Agreement, the terms "shares", "stock" and/or "common capital stock" shall be
interchangeable.
AGREEMENT
---------
In order to consummate the foregoing Plan of Reorganization, and in
consideration of the premises and of the representations and undertakings herein
set forth, the parties agree as follows:
1. Transfer of shares. Upon and subject to the terms and conditions herein
stated, AdPads shall acquire from Visual's shareholders, whose signatures
appear below, whom shall transfer, assign, and convey to AdPads all of the
issued and outstanding shares of Visual's common stock to AdPads in
exchange for the sum of $100,000.00 together with 250,000 shares of AdPads
common capital stock. By virtue of the transaction, AdPads shall acquire
Visual as a going concern, including all of the properties and assets of
Visual of every kind, nature, and description, tangible and intangible,
wherever situated, including, without limiting the generality of the
foregoing, its business as a going concern, its goodwill, and the corporate
name (subject to changes referred to or permitted herein or occurring in
the ordinary course of business prior to the time of closing provided
herein). Upon, and immediately subsequent to, the aforementioned
acquisition, AdPads will merge into its wholly-owned subsidiary (Visual)
under Section 7-7106 of the Colorado Corporations Code.
2. Issuance and delivery of stock. In consideration of and in exchange for
the foregoing transfer, assignment, and conveyance, and subject to
compliance by Ad Pads and Visual with their warranties and undertakings
contained herein, AdPads shall issue and deliver to Visual the amount of
$100,000.00 together with one or more stock certificates registered in the
name of the undersigned shareholders of Visual, on a pro-rata basis
totaling 250,000 in exchange for 1,000,000 shares of Visual Common stock
constituting 100% of the issued and outstanding shares of Visual including
warrants, options, or claims regarding any other shares of Visual. All of
the shares exchanged shall, upon such issuance and delivery, shall be fully
paid and non-assessable.
3. Investment intent. 3.1 Each Visual Shareholder ("Subscriber")
understands and acknowledges that the AdPads Shares being acquired
hereunder have not been registered under the Securities Act of 1933 (the
"Act") or applicable state securities laws; (ii) the Subscriber cannot sell
such Stock unless such securities are registered under the Act and any
applicable state securities laws or unless exemptions from such
<PAGE>
registration requirements are available; (iii) a legend will be placed on
any certificate or certificates evidencing the Stock, stating that such
securities have not been registered under the Act and setting forth or
referring to the restrictions on transferability and sales of the
securities.
3.2 Such Subscriber (i) is acquiring the Shares solely for the Subscriber's
own account for investment purposes only and not with a view toward resale
or distribution, either in whole or in part; (ii) has no contract,
undertaking, agreement or other arrangement, in existence or contemplated,
to sell, pledge, assign or otherwise transfer the Shares to any other
person; (iii) agrees not to sell or otherwise transfer the Subscriber's
Shares unless and until such securities are subsequently registered under
the Act and any applicable state securities laws or unless an exemption
from any such registration is available.
3.3 Such Subscriber understands that an investment in the Shares involves
substantial risks and Subscriber recognizes and understands the risks
relating to this transaction and acquisition of the AdPads shares.
3.4 Such Subscriber has, either alone or together with the Subscriber's
Purchaser Representative (as that term is defined in Regulation D under the
Act), such knowledge and experience in financial and business matters that
the Subscriber is capable of evaluating the merits and risks of the
acquisition by AdPads.
4. Dissenting shares: None. Visual represents and warrants that there are no
dissenting shareholders with respect to the proposed merger or acquisition.
5. Place of closing. The closing of this agreement and all deliveries hereunder
shall take place via electronic closing by fax or e-mail.
6. Time of closing. The closing shall be 3:00 PM, Eastern Standard time (or such
other time as may be mutually agreed upon) on the closing date which shall be
March 21, 2000, unless extended by mutual agreement of the parties. The last
date fixed by mutual agreement of the parties or otherwise becoming effective
under this paragraph shall constitute the closing date.
7. Representations and warranties of Ad Pads. Ad Pads and its shareholders
represent and warrant to Visual that:
(a) Corporate status. Ad Pads is a corporation duly organized and existing under
the laws of the State of Colorado, intending to re-domicile in Delaware, with an
authorized capital stock consisting of 50,000,000 Common shares, of which
23,900,015 shares are currently issued and outstanding; and 5,000,000 Preferred
shares, of which none are issued or outstanding. Ad Pads has no subsidiary.
(b) Disposition of assets. On March 17, 2000, Regents Road, Ltd. acquired all of
the assets of AdPads, LLC, a New Jersey limited liability company, in a stock
for assets transaction. The audited financial statements of both Regents Road,
Ltd, through September 30, 1999, and the audited financial statements of AdPads,
LLC through December 31, 1999, are attached hereto. Since March 18, 2000, there
has been no material adverse change in the assets or liabilities or in the
condition, financial or other, of Ad Pads, except changes occurring in the
ordinary course of business and changes referred to or permitted herein.
<PAGE>
(c) Lawsuits and claims. Ad Pads is not a party to or threatened by any
litigation, proceeding, or controversy before any court or administrative agency
which might result in any change in the business or properties of Ad Pads or
which change would be substantially adverse taking into account the entire
business and properties of Ad Pads; Ad Pads is not in default with respect to
any judgment, order, writ, injunction, decree, rule, or regulation of any court
or administrative agency.
(d) Taxes. Ad Pads has filed with the appropriate governmental agencies all tax
returns required by such agencies to be filed by it and is not in default with
respect to any such filing. Ad Pads has paid all taxes claimed to be due by
state and local taxing authorities and has not been examined by representatives
of the United States Internal Revenue Service for federal taxes since inception.
8. Representations and warranties of Visual. Visual represents and warrants to
Ad Pads that:
(a) Corporate status. Visual is a Delaware corporation duly organized and
existing under the laws of the State of Delaware, with an authorized capital
stock consisting of 100,000,000 shares of common stock, .00001 par value, of
which One Million (1,000,000) shares have been duly issued and are outstanding
fully paid and non-assessable; and no shares of preferred stock, or any other
form of stock or security, of which no shares are issued or outstanding. Visual
has no subsidiary.
(b) Corporate authority. Visual and its shareholders have the corporate right
and authority to acquire and operate the properties and business now owned and
operated by it and to issue and deliver the number of shares of its Common stock
required to be issued hereunder to Ad Pads.
(c) Disposition of assets. Since December 31, 1999, there has been no material
adverse change in the assets or liabilities or in the condition, financial or
other, of Visual except changes occurring in the ordinary course of business and
changes referred to or permitted herein.
(d) Lawsuits and claims. Visual is not a party to or threatened by any
litigation, proceeding, or controversy before any court or administrative agency
which might result in any change in the business or properties of Visual or
which change would be substantially adverse, taking into account the entire
business and properties of Visual.
(e) Taxes. Visual has filed with the appropriate governmental agencies all tax
returns required by such agencies to be filed by it and is not in default with
respect to any such filing. Ad Pads has paid all taxes claimed to be due by
state and local taxing authorities and has not been examined by representatives
of the United States Internal Revenue Service for federal taxes during the past
three fiscal years.
9. Interim conduct of business by Visual. Until the time of closing, Visual will
conduct its business in the ordinary and usual course, and prior to the time of
closing it will not, without the written consent of AdPads, borrow any money,
incur any liability other than in the ordinary and usual course of business or
in connection with the performance or consummation of this agreement, encumber
or permit to be encumbered any of its properties and assets, dispose or contract
to dispose of any property except in the regular and ordinary course of
business, enter into any lease or contract for the purchase of real estate, form
or cause to be formed any subsidiary, pay any bonus or special remuneration to
any officer or employee, declare or pay any dividends, make any other
distributions to its shareholders, or issue, sell, or purchase any stock, notes,
or other securities.
<PAGE>
10. Access to information. From the date hereof each party shall allow the other
free access to its files and audits, including any and all information relating
to taxes, commitments, and contracts, real estate and personal property titles,
and financial condition. From the date hereof each party agrees to cause its
auditors to cooperate with the other in making available all financial
information requested, including the right to examine all working papers
pertaining to audits made by such auditors.
11. Conditions and obligations of Ad Pads. Unless at the time of closing the
following conditions are satisfied, Ad Pads shall not be obligated to make the
transfer, assignment and conveyance as set forth in Paragraph1 herein, and
otherwise to effectuate its part of the reorganization herein provided:
(a) The representations and warranties of Visual set forth herein, are, on the
date hereof and as of the time of closing, substantially correct.
(b) The directors of Visual have approved the consummation of this agreement and
the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the purpose of with
the probably effect of enjoining or preventing the consummation of this
agreement or which would materially affect Visual operation or its assets.
(d) Visual has complied with its agreements herein to be performed by it prior
to the time of closing.
12. Conditions of obligations of Visual. Unless at the time of closing the
following conditions are satisfied, Visual shall not be obligated to issue and
deliver the shares of its Common stock as set forth in Paragraph 1 herein, and
otherwise to effectuate its part of the reorganization herein provided:
(a) The representations and warranties of Ad Pads set forth in Paragraph 9 are,
on the date hereof and as of the time of closing, substantially correct subject
to any change made because of any action approved by Visual.
(b) The directors of Ad Pads have approved and the holders of all of the
outstanding shares of Ad Pads have voted in favor of the consummation of this
agreement and the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the purpose or with
the probable effect of enjoining or preventing the consummation of this
agreement or which would materially affect Ad Pads operation of the properties
and business to be acquired by it hereunder.
(d) Ad Pads has complied with its agreements herein to be performed by it prior
to the time of closing, including payment of the $100,000.00 to the undersigned
shareholders and agreement to deliver 250,000 common capital shares of AdPads,
Incorporated.
<PAGE>
13. Abandonment of agreement. If by reason of the provisions of Paragraphs 11 or
12 above either party is not obligated to effectuate the reorganization, then
either party which is not so obligated may terminate and abandon this agreement
by delivering to the other party written notice of termination prior to the time
of closing, and thereupon this agreement shall be terminated without further
obligation or liability upon either party in favor of the other.
14. Authorization by shareholders. Visual and Ad Pads shall promptly take such
action as may be necessary to call special meetings of their respective
shareholders to authorize the consummation of this agreement and the matters
herein provided, and each will recommend to its shareholders that this agreement
and the matters herein provided, and all other matters necessary or incident
thereto, be approved, authorized, and consummated.
15. Listing of AdPads stock issued to Visual. AdPads shall not be required to
prepare and file a registration statement under the Securities Act of 1933
covering the shares of Common stock to be delivered hereunder; however, it shall
prepare an 8-K filing providing the requisite information on the acquisition.
16. Brokers' fees. Neither party has incurred nor will incur any liability for
brokerage fees or agents' commissions in connection with the transactions
contemplated hereby.
17. Execution of documents. At any time and from time to time after the time of
closing, Ad Pads will execute and deliver to Visual and Visual will execute and
deliver to AdPads such further conveyances, assignments, and other written
assurances as Visual or AdPads shall reasonably request in order to vest and
confirm Visual's shareholders and AdPads, respectively, title to the shares
and/or assets to be and intended to be transferred, assigned, and conveyed
hereunder.
18. Parties in interest. Nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any person, firm, or corporation
other than the parties hereto any rights or remedies under or by reason hereof.
19. Completeness of agreement. This agreement contains the entire understanding
between the parties hereto with respect to the transactions contemplated hereby.
20. Survival of Representations and Warranties. Each of the parties hereto
hereby agrees that all representations and warranties made by or on behalf of
him or it in this Agreement or in any document or instrument delivered pursuant
hereto shall survive for a period of three (3) years following the Closing Date
and the consummation of the transactions contemplated hereby, except with
respect to the representation and warranties set forth in Sections 4 which shall
survive applicable statute of limitations period.
IN WITNESS HEREOF, the Parties hereto have hereunder set their hands and seals,
effective on the date above stated, as witnessed below:
ADPADS, INCORPORATED
A Colorado corporation
By:______________________________
David I. Brownstein, President
VISUAL PRESENTATION SYSTEMS, INC.
A Delaware corporation
By:_____________________________.
Kevin B. Halter, President
HALTER CAPITAL CORPORATION
By:_________________________________.
Kevin B. Halter, Shareholder
No. of Shares Owned: Two Hundred Fifty Thousand (250,000)
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made this 15th day of March, 2000,
among Regents Road, Ltd., a Colorado corporation ("Regents"); Ad Pads L.L.C., a
New Jersey limited liability company ("Ad Pads"); and David I. Brownstein, the
sole stockholder of Ad Pads ("Brownstein").
W I T N E S S E T H:
RECITALS
WHEREAS, Ad Pads owns various assets as set forth in Exhibit A hereto
(the "Ad Pads Assets"), all of which Ad Pads wishes to sell to Regents and
Regents wishes to acquire.
WHEREAS, the Board of Directors of Regents and the Board of Managers of
Ad Pads have adopted resolutions pursuant to which Regents shall acquire and Ad
Pads shall sell the Ad Pads Assets; and
WHEREAS, the sole consideration for the Ad Pads Assets shall be the
exchange of no par value common stock of Regents (which shares are all
"restricted securities" as defined in Rule 144 of the Securities and Exchange
Commission) as outlined in Exhibit B; and
WHEREAS, Ad Pads shall acquire in exchange the "restricted securities"
of Regents in a reorganization within the meaning of Section 368(a)(1)(C),
Section 351 or other tax exempt Sections, rules or regulations of the Internal
Revenue Code of 1986, as amended, to the extent any such Sections, rules or
regulations are applicable to this Agreement and the transactions contemplated
hereby;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, it is agreed:
Section 1
Exchange of Stock
1.1 Number of Shares. Regents shall issue 16,000,000 shares or an
amount equal to approximately eighty-nine percent (85.7%) of its post-Agreement
outstanding no par value common voting stock in exchange for the Ad Pads Assets,
subject to the assumption of liabilities related to the Ad Pads Assets as
carried on the books and records of Ad Pads and its financial statements
attached hereto as Exhibit E. All of the shares of Regents common stock to be
issued to Ad Pads shall be "restricted securities" as defined in Rule 144 of the
Securities and Exchange Commission, and shall be issued in accordance with and
subject to applicable securities laws, rules and regulations, and, when issued
for the consideration indicated, shall be deemed fully paid and non-assessable.
-1-
<PAGE>
1.2 Further Assurances. At the Closing and from time to time
thereafter, Ad Pads shall execute such additional instruments and take such
other action as Regents may request in order to exchange and transfer clear
title and ownership in the Ad Pads Assets to Regents, without further
consideration.
1.3 Resignations of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. On Closing, the present
directors and executive officers of Regents shall designate the directors
nominated by Ad Pads to serve in their place and stead, until the next
respective annual meetings of the stockholders and the Board of Directors of
Regents, and until their respective successors shall be elected and qualified or
until their respective prior resignations or terminations, who shall be: David
I. Brownstein, Scott Einbinder and Joseph Drucker, Esq.; and then, the present
directors and executive officers of Regents shall resign, in seriatim.
1.4 Change of Name and Domicile. Following the Closing of this
Agreement, Regents shall amend its Articles of Incorporation to change its name
to "Ad Pads Incorporated" or some similar name selected by the newly designated
and constituted Board of Directors of Regents and to change its domicile from
the State of Colorado to the State of Delaware.
1.5 Assets and Liabilities. Regents shall have no assets or liabilities
immediately prior to Closing, and all costs incident to this Agreement shall
have been paid or provided for.
1.6 Closing. Closing shall take place on the exchange of duly executed
copies of this Agreement and any related exhibits by Regents and Ad Pads, and
the satisfaction or waiver of any required conditions to Closing of the parties
set forth in Sections 5 and 6 hereof.
Section 2
Closing
The Closing contemplated by Section 1 shall be held at the offices of
Leonard W. Burningham, Esq., Suite 205 Hermes Building, 455 East 500 South, Salt
Lake City, Utah 84111, on or before ten days following the execution and
delivery of this Agreement, unless another place or time is agreed upon in
writing by the parties. The Closing may be accomplished by wire, express mail or
other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of Regents
Regents represents and warrants to, and covenants with Ad Pads as follows:
3.1 Corporate Status. Regents is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado and is
licensed or qualified as a foreign corporation in all states in which the nature
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<PAGE>
of its business or the character or ownership of its properties makes such
licensing or qualification necessary (Colorado only). Regents is a publicly-held
company, having previously and lawfully offered and sold a portion of its
securities in accordance with applicable federal and state securities laws,
rules and regulations. Its common stock is nominally quoted on the OTC Bulletin
Board of the National Association of Securities Dealers, Inc. (the "NASD") under
the symbol "RGRD."
3.2 Capitalization. The current pre-Agreement authorized capital stock
of Regents consists of 50,000,000 shares of no par value common voting stock, of
which 1,500,015 shares are issued and outstanding, all fully paid and
non-assessable; and 5,000,000 shares of no par value preferred stock, of which
no shares are issued and outstanding. Except as otherwise provided herein, there
are no outstanding options, warrants or calls pursuant to which any person has
the right to purchase any authorized and unissued common or preferred stock of
Regents. None of these securities has been issued with or are subject to
"registration rights" of any type of nature.
3.3 Financial Statements. The financial statements of Regents furnished
to Ad Pads, consisting of audited financial statements for the year ended
December 31, 1998 and 1997, and the period ended September 30, 1999, attached
hereto as Exhibit C and incorporated herein by reference, are correct and fairly
present the financial condition of Regents at such dates and for the periods
involved; such statements were prepared in accordance with generally accepted
accounting principles consistently applied, and no material change has occurred
in the matters disclosed therein, except as indicated in Exhibit D, which is
attached hereto and incorporated herein by reference. Such financial statements
do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
3.4 Undisclosed Liabilities. Regents has no liabilities of any nature
except to the extent reflected or reserved against in its balance sheets,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit D.
3.5 Interim Changes. Since the date of its balance sheets, except as
set forth in Exhibit D, there have been no (1) changes in financial condition,
assets, liabilities or business of Regents which, in the aggregate, have been
materially adverse; (2) damages, destruction or losses of or to property of
Regents, payments of any dividend or other distribution in respect of any class
of stock of Regents, or any direct or indirect redemption, purchase or other
acquisition of any class of any such stock; or (3) increases paid or agreed to
in the compensation, retirement benefits or other commitments to its employees.
3.6 Title to Property. Regents has good and marketable title to all
properties and assets, real and personal, reflected in its balance sheets, and
the properties and assets of Regents are subject to no mortgage, pledge, lien or
encumbrance, except for liens shown therein or in Exhibit D, with respect to
which no default exists.
3.7 Litigation. There is no litigation or proceeding pending, or to the
knowledge of Regents, threatened, against or relating to Regents, its properties
-3-
<PAGE>
or business, except as set forth in Exhibit D. Further, no officer, director or
person who may be deemed to be an "affiliate" of Regents is party to any
material legal proceeding which could have an adverse effect on Regents
(financial or otherwise), and none is party to any action or proceeding wherein
any has an interest adverse to Regents.
3.8 Books and Records. From the date of this Agreement to the Closing,
Regents will (1) give to Ad Pads or its representatives full access during
normal business hours to all of Regents' offices, books, records, contracts and
other corporate documents and properties so that Ad Pads or its representatives
may inspect and audit them; and (2) furnish such information concerning the
properties and affairs of Regents as Ad Pads or its representatives may
reasonably request.
3.9 Tax Returns. To the extent required by applicable law, Regents has
filed all federal and state income or franchise tax returns required to be filed
or has received currently effective extensions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Regents and its representatives will keep confidential any information
which they obtain from Ad Pads concerning the properties, assets and business of
Ad Pads. If the transactions contemplated by this Agreement are not consummated
by March 31, 2000, Regents will return to Ad Pads all written matter with
respect to Ad Pads obtained by Regents in connection with the negotiation or
consummation of this Agreement.
3.11 Corporate Authority. Regents has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to Ad Pads or its representatives at the Closing a
certified copy of resolutions of its Board of Directors authorizing execution of
this Agreement by Regents' officers and performance thereunder, and that the
directors adopting and delivering such resolutions are the duly elected and
incumbent directors of Regents.
3.12 Due Authorization. Execution of this Agreement and performance by
Regents hereunder have been duly authorized by all requisite corporate action on
the part of Regents, and this Agreement constitutes a valid and binding
obligation of Regents and performance hereunder will not violate any provision
of the Articles of Incorporation, Bylaws, agreements, mortgages or other
commitments of Regents.
3.13 Environmental Matters. Regents has no knowledge of any assertion
by any governmental agency or other regulatory authority of any environmental
lien, action or proceeding, or of any cause for any such lien, action or
proceeding related to the business operations of Regents or Regents'
predecessors. In addition, to the best knowledge of Regents, there are no
substances or conditions which may support a claim or cause of action against
Regents or any of Regents' current or former officers, directors, agents or
employees, whether by a governmental agency or body, private party or
individual, under any Hazardous Materials Regulations. "Hazardous Materials"
means any oil or petrochemical products, PCB's, asbestos, urea formaldehyde,
flammable explosives, radioactive materials, solid or hazardous wastes,
chemicals, toxic substances or related materials, including, without limitation,
-4-
<PAGE>
any substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," or "toxic substances"
under any applicable federal or state laws or regulations. "Hazardous Materials
Regulations" means any regulations governing the use, generation, handling,
storage, treatment, disposal or release of hazardous materials, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act and the Federal Water
Pollution Control Act.
3.14 Access to Information Regarding Ad Pads. Regents acknowledges that
it has been delivered copies of what has been represented to be documentation
containing all material information respecting Ad Pads and the Ad Pads Assets;
that it has had a reasonable opportunity to review such documentation and
discuss it, to the extent desired, with its legal counsel, directors and
executive officers; that it has had, to the extent desired, the opportunity to
ask questions of and receive responses from the directors and executive officers
of Ad Pads, and with the legal and accounting firms of Ad Pads, with respect to
such documentation; and that to the extent requested, all questions raised have
been answered to Regents' complete satisfaction.
Section 4
Representations, Warranties and Covenants of Ad Pads and Brownstein
Ad Pads and Brownstein represent and warrant to, and covenant with,
Regents as follows:
4.1 Ownership. Ad Pads owns the Ad Pads Assets, free and clear of any
liens or encumbrances of any type or nature whatsoever, and has full right,
power and authority to convey the Ad Pads Assets without qualification or
consents of any others.
4.2 Corporate Status. Ad Pads is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
New Jersey and is licensed or qualified as a foreign corporation in all states
or foreign countries and provinces in which the nature of Ad Pads's business or
the character or ownership of Ad Pads properties makes such licensing or
qualification necessary.
4.4 Financial Statements. The financial statements of Ad Pads furnished
to Regents, consisting of an audited balance sheet as of December 31, 1999, and
a related income statement for the period January 1, 1999 through December 31,
1999, attached hereto as Exhibit E and incorporated herein by reference, are
correct and fairly present the financial condition of Ad Pads as of these dates
and for the periods involved, and such statements were prepared in accordance
with generally accepted accounting principles consistently applied, and no
material change has occurred in the matters disclosed therein, except as
indicated in Exhibit F, which is attached hereto and incorporated herein by
reference. The Ad Pads Assets are properly booked on the balance sheet of Ad
Pads in accordance with generally accepted accounting principals. These
financial statements do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
-5-
<PAGE>
4.5 Confidentiality. Until the Closing (and continuously if there is no
Closing), Ad Pads and its representatives will keep confidential any information
which they obtain from Regents concerning its properties, assets and business.
If the transactions contemplated by this Agreement are not consummated by March
31, 2000, Ad Pads will return to Regents all written matter with respect to
Regents obtained by them in connection with the negotiation or consummation of
this Agreement.
4.6 Investment Intent. Ad Pads is acquiring the shares to be exchanged
and delivered to it under this Agreement for investment and not with a view to
the sale or distribution thereof, and Ad Pads has no commitment or present
intention to liquidate Regents or to sell or otherwise dispose of the Regents
shares. Ad Pads shall execute and deliver to Regents on the Closing an
Investment Letter attached hereto as Exhibit G and incorporated herein by
reference, acknowledging the "unregistered" and "restricted" nature of the
shares of Regents being received under the Agreement in exchange for the Ad Pads
Assets and receipt of certain material information regarding Regents.
4.7 Corporate Authority. Ad Pads has full power and authority to enter
into this Agreement and to carry out its obligations hereunder and will deliver
to Regents or its representative at the Closing a certified copy of resolutions
of its Board of Managers authorizing execution of this Agreement by its officers
and performance thereunder.
4.8 Due Authorization. Execution of this Agreement and performance by
Ad Pads hereunder have been duly authorized by all requisite action on the part
of Ad Pads, and this Agreement constitutes a valid and binding obligation of Ad
Pads and performance hereunder will not violate any provision of the agreements,
mortgages or other commitments of Ad Pads. With the exception of consents of its
members/interest holders or its Board of Managers, as may be required by
applicable law, no consents or authorizations of any type or nature whatsoever
are required to convey the Ad Pads Assets to Regents.
4.9 Access to Information Regarding Regents. Ad Pads acknowledges that
it has been delivered copies of what has been represented to be documentation
containing all material information respecting Regents and its present and
contemplated business operations, potential acquisitions, management and other
factors; that it has had a reasonable opportunity to review such documentation
and discuss it, to the extent desired, with its legal counsel, directors and
executive officers; that it has had, to the extent desired, the opportunity to
ask questions of and receive responses from the directors and executive officers
of Regents, and with the legal and accounting firms of Regents, with respect to
such documentation; and that to the extent requested, all questions raised have
been answered to its complete satisfaction.
Section 5
Conditions Precedent to Obligations of Ad Pads
All obligations of Ad Pads under this Agreement are subject, at their
option, to the fulfillment, before or at the Closing, of each of the following
conditions:
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<PAGE>
5.1 Representations and Warranties True at Closing. The representations
and warranties of Regents contained in this Agreement shall be deemed to have
been made again at and as of the Closing and shall then be true in all material
respects and shall survive the Closing.
5.2 Due Performance. Regents 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.
5.3 Officers' Certificate. Ad Pads shall have been furnished with a
certificate signed by the President of Regents, in such capacity, attached
hereto as Exhibit H and incorporated herein by reference, dated as of the
Closing, certifying (1) that all representations and warranties of Regents
contained herein are true and correct; and (2) that since the date of the
financial statements (Exhibit C hereto), there has been no material adverse
change in the financial condition, business or properties of Regents, taken as a
whole.
5.4 Assets and Liabilities of Regents. Unless otherwise agreed, Regents
shall have no assets and no liabilities at Closing, and all costs, expenses and
fees incident to the Agreement shall have been paid or provided for..
5.5 Resignation of Directors and Executive Officers and Designation of
New Directors and Executive Officers. The present directors and executive
officers of Regents shall have designated nominees of Ad Pads as outlined in
Section 1.4 hereof as directors and executive officers of Regents to serve in
their place and stead, until the next respective annual meetings of the
stockholders and Board of Directors of Regents, and until their respective
successors shall be elected and qualified or until their respective prior
resignations or terminations; and then, such directors and executive officers of
Regents shall resign, in seriatim.
5.7 Name Change and Change of Domicile. Following the Closing of this
Agreement, Regents shall amend its Articles of Incorporation to change its name
to "Ad Pads Incorporated" or some similar name selected by the newly designated
and constituted Board of Directors of Regents and to change its domicile from
the State of Colorado to the State of Delaware.
Section 6
Conditions Precedent to Obligations of Regents
All obligations of Regents under this Agreement are subject, at
Regents' option, to the fulfillment, before or at the Closing, of each of the
following conditions:
6.1 Representations and Warranties True at Closing. The representations
and warranties of Ad Pads contained in this Agreement shall be deemed to have
been made again at and as of the Closing and shall then be true in all material
respects and shall survive the Closing.
-7-
<PAGE>
6.2 Due Performance. Ad Pads shall have performed and complied with all
of the terms and conditions required by this Agreement to be performed or
complied with by them before the Closing.
6.3 Officers' Certificate. Regents shall have been furnished with a
certificate signed by the President of Ad Pads, in such capacity, attached
hereto as Exhibit I and incorporated herein by reference, dated as of the
Closing, certifying (1) that all representations and warranties of Ad Pads
contained herein are true and correct; and (2) that since the date of the
financial statements (Exhibit E), there has been no material adverse change in
the financial condition, business or properties of Ad Pads, taken as a whole.
6.4 Prior Issued Common Stock of Regents. All pre-Agreement outstanding
common stock of Regents shall not be subject to any challenge by Ad Pads or the
newly designated directors and executive officers regarding the authorization,
issuance or fully paid status thereof or otherwise, as Closing of this Agreement
shall be evidence of their satisfaction of the lawful issuance of these
securities, based upon the representations of Regents set forth in Section 3.2
hereof.
Section 7
Termination
Prior to Closing, this Agreement may be terminated (1) by mutual
consent in writing; (2) by either the directors of Regents or the managers of Ad
Pads if there has been a material misrepresentation or material breach of any
warranty or covenant by the other party; or (3) by either the directors of
Regents or the managers of Ad Pads if the Closing shall not have taken place,
unless adjourned to a later date by mutual consent in writing, by the date fixed
in Section 2.
Section 8
General Provisions
8.1 Further Assurances. At any time, and from time to time, after the
Closing, 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.
8.2 Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties hereunder that
no broker or finder has acted for it in connection with this Agreement, and
agrees to indemnify and hold harmless the other parties against any fee, loss or
expense arising out of claims by brokers or finders employed or alleged to have
been employed by it.
-8-
<PAGE>
8.4 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:
Regents: 1004 Depot Hill Road, Suite 1-E
Broomfield, Colorado 80020
With a copy
to: Leonard W. Burningham, Esq
Suite 205, 455 E. 500 S.
Salt Lake City, UT 84111
Ad Pads: 1000 Highway 34
Matawan, New Jersey 07747
With a copy
to. Joseph Drucker, Esq.
1299 State Highway #33
Farmingdale, New Jersey 07727
8.5 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.
8.6 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.
8.7 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Utah; except for
corporate matters, which shall be governed by the laws of the State of Colorado;
and except to the extent pre-empted by federal law, in which event (and to that
extent only), federal law shall govern; all actions to enforce this Agreement
shall be brought in the courts of the State of Utah or the United States
District Courts situated in the State of Utah, only.
8.8 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns.
8.9 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.
8.10 Default. In the event of any default hereunder, the prevailing
party in any action to enforce the terms and provisions hereof shall be entitled
to recover reasonable attorney's fees and related costs.
-9-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement effective the day and year first above written.
REGENTS ROAD, LTD.
By_________________________________
Melissa K. Ladakis, President
AD PADS, INCORPORATED
By_________________________________
David I. Brownstein, President
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0001100362
<NAME> Visual Presentation Systems, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 65
<SECURITIES> 0
<RECEIVABLES> 1500
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1565
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1565
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 1564
<TOTAL-LIABILITY-AND-EQUITY> 1565
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
<PAGE>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
CONTENTS
Page
----
Report of Independent Certified Public Accountants F-3
Financial Statements
Balance Sheets as of June 30, 1999, December 31, 1998 and 1997 F-4
Statements of Operations and Comprehensive Income
for the six months ended June 30, 1999 and
for the years ended December 31, 1998 and 1997 F-5
Statement of Changes in Stockholder's Equity
for the six months ended June 30, 1999 and
for the years ended December 31, 1998 and 1997 F-6
Statements of Cash Flows
for the six months ended June 30, 1999 and
for the years ended December 31, 1998 and 1997 F-7
Notes to Financial Statements F-8
F-2
<PAGE>
S. W. HATFIELD, CPA
certified public accountants
Member: American Institute of Certified Public Accountants
SEC Practice Section
Information Technology Section
Texas Society of Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors and Stockholders
Visual Presentation Systems, Inc.
We have audited the accompanying balance sheets of Visual Presentation Systems,
Inc. (a Delaware corporation and a wholly-owned subsidiary of Halter Capital
Corporation) as of June 30, 1999, December 31, 1998 and 1997 and the related
statements of operations and comprehensive income, changes in stockholders'
equity and cash flows for the six months ended June 30, 1999 and for each of the
years ended December 31, 1998 and 1997, respectively. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Visual Presentation Systems,
Inc. as of June 30, 1999, December 31, 1998 and 1997, and the results of its
operations and its cash flows for the six months ended June 30, 1999 and each of
the years ended December 31, 1998 and 1997, respectively, in conformity with
generally accepted accounting principles.
S. W. HATFIELD, CPA
Dallas, Texas
September 14, 1999
Use our past to assist your future sm
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 [email protected]
F-3
<PAGE>
<TABLE>
<CAPTION>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
BALANCE SHEETS
June 30, 1999, December 31, 1998 and 1997
June 30, December 31, December 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
------
Current Assets
Cash on hand and in bank $ 65 $ 65 $ 615
Advances to parent company 1,500 1,500 1,000
------------ ------------ ------------
Total Assets $ 1,565 $ 1,565 $ 1,615
============ ============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Liabilities $ -- $ -- $ --
------------ ------------ ------------
Commitments and Contingencies
Stockholder's Equity
Preferred stock - $0.00001 par value
10,000,000 shares authorized; none
issued and outstanding -- -- --
Common stock - $0.00001 par value
10,000,000 shares authorized
100,000 issued and outstanding 1 1 1
Additional paid-in capital 999 999 999
Accumulated deficit 565 565 615
------------ ------------ ------------
Total stockholders' equity 1,565 1,565 1,615
------------ ------------ ------------
Total Liabilities and Stockholder's Equity $ 1,565 $ 1,565 $ 1,615
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Six months ended June 30, 1999 and
Years ended December 31, 1998 and 1997
Six months Year Year
ended ended ended
June 30, December 31, December 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Revenues $ -- $ -- $ --
------------ ------------ ------------
Expenses
General and administrative expenses -- 50 286
------------ ------------ ------------
Net Loss -- (50) (286)
Other Comprehensive Income -- -- --
------------ ------------ ------------
Comprehensive Income $ -- $ (50) $ (286)
============ ============ ============
Net loss per weighted-average
share of common stock
outstanding, calculated on
Net Loss - basic and fully diluted nil nil nil
=== === ===
Weighted-average number of shares
of common stock outstanding 100,000 100,000 100,000
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
Six months ended June 30, 1999 and
Years ended December 31, 1998 and 1997
Common Stock Additional
----------------- paid-in Accumulated
Shares Amount capital deficit Total
------- ------- ---------- ----------- -------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1997 100,000 $ 1 $ 999 $ 901 $ 1,901
Net loss for the year -- -- -- (286) (286)
------- ------- ---------- ----------- -------
Balances at December 31, 1997 100,000 1 999 615 1,615
Net loss for the year -- -- -- (50) (50)
------- ------- ---------- ----------- -------
Balances at December 31, 1998 100,000 1 999 565 1,565
Net loss for the period -- -- -- -- --
------- ------- ---------- ----------- -------
Balances at June 30, 1999 100,000 $ 1 $ 999 $ (565) $(1,565)
======= ======= ========== =========== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF CASH FLOWS
Six months ended June 30, 1999 and
Years ended December 31, 1998 and 1997
Six months Year Year
ended ended ended
June 30, December 31, December 31
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net loss for the period $ -- $ (50) $ (286)
Adjustments to reconcile net loss to
net cash provided by operating activities -- -- --
------------ ------------ ------------
Net cash used in operating activities -- (50) (286)
------------ ------------ ------------
Cash Flows from Investing Activities -- -- --
------------ ------------ ------------
Cash Flows from Financing Activities
Cash advanced to parent -- (500) --
------------ ------------ ------------
Net cash used in financing activities -- (500) --
------------ ------------ ------------
Decrease in Cash -- (550) (286)
Cash at beginning of period 65 565 901
------------ ------------ ------------
Cash at end of period $ 65 $ 65 $ 565
============ ============ ============
Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid for the period $ -- $ -- $ --
============ ============ ============
Income taxes paid for the period $ -- $ -- $ --
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE A - Organization and Description of Business
The Company was incorporated on March 10, 1993 under the laws of the State of
Delaware. The Company since inception through December 31, 1996 was in the
business of marketing electronic imaging displays for office presentation
purposes. The Company did not produce enough revenues to warrant the
continuation of said business, and it ceased this business, liquidating its
inventory and fully paying all of its liabilities. Since that time until the
present period, the Company has not had any operations.
The Company is fully dependent upon its current management and/or significant
stockholders to provide sufficient working capital to preserve the integrity of
the corporate entity during this phase. It is the intent of management and
significant stockholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
The Company has a year end of December 31 and follows the accrual method of
accounting.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
2. Income taxes
------------
The Company provides deferred income taxes, where material, based on the
asset and liability method under the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". At December
31, 1998 and 1997, respectively, the deferred tax asset and deferred tax
liability accounts, consisting solely of temporary differences in
accumulated depreciation, were not material to the financial statements and
no valuation allowance was provided against deferred tax assets.
The Company files its income tax returns as a component of its parent
company's consolidated tax return. Accordingly, all net operating losses
are offset against the tax liabilities of the Company's parent. No net
operating loss carryforwards exist as of December 31, 1998 and 1997,
respectively.
F-8
<PAGE>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B - Summary of Significant Accounting Policies - Continued
3. Loss per share
--------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of June 30, 1999, December 31, 1998 and
1997, the Company has no warrants and/or options issued and outstanding.
NOTE C - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
NOTE D - Related Party Transactions
As of June 30, 1999, December 31, 1998 and 1997, respectively, the Company had
advanced funds totaling $1,500, $1,500 and $1,000 to Halter Capital Corporation,
the Company's parent. The advances are due upon demand and are non-interest
bearing.
F-9
<PAGE>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
BALANCE SHEETS
September 30, 1999 and 1998
(Unaudited)
1999 1998
------ ------
ASSETS
------
Current Assets
Cash on hand and in bank $ 65 $ 65
Advances to parent company 1,500 1,500
------ ------
Total Assets $1,565 $1,565
====== ======
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Liabilities $ -- $ --
------ ------
Commitments and Contingencies
Stockholder's Equity
Preferred stock - $0.00001 par value
10,000,000 shares authorized; none
issued and outstanding -- --
Common stock - $0.00001 par value
10,000,000 shares authorized
100,000 issued and outstanding 1 1
Additional paid-in capital 999 999
Accumulated deficit 565 565
------ ------
Total stockholders' equity 1,565 1,565
------ ------
Total Liabilities and Stockholder's Equity $1,565 $1,565
====== ======
The accompanying notes are an integral part of these financial statements.
F-10
<PAGE>
<TABLE>
<CAPTION>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Nine and Three months ended September 30, 1999 and 1998
(Unaudited)
Nine months Nine months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
------------- ------------- ------------- -------------
Expenses
General and administrative expenses -- 50 -- --
------------- ------------- ------------- -------------
Net Loss -- (50) -- --
Other Comprehensive Income -- -- -- --
------------- ------------- ------------- -------------
Comprehensive Income $ -- $ (50) $ -- $ --
============= ============= ============= =============
Net loss per weighted-average
share of common stock
outstanding, calculated on
Net Loss - basic and fully diluted nil nil nil nil
=== === === ===
Weighted-average number of shares
of common stock outstanding 100,000 100,000 100,000 100,000
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-11
<PAGE>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF CASH FLOWS
Nine months ended September 30, 1999 and 1998
(Unaudited)
Nine months Nine months
ended ended
September 30, September 30,
1999 1998
------------- -------------
Cash Flows from Operating Activities
Net loss for the period $ -- $ (50)
Adjustments to reconcile net loss to
net cash provided by operating activities -- --
------------- -------------
Net cash used in operating activities -- (50)
------------- -------------
Cash Flows from Investing Activities -- --
------------- -------------
Cash Flows from Financing Activities
Cash advanced to parent -- (500)
------------- -------------
Net cash used in financing activities -- (500)
------------- -------------
Decrease in Cash -- (550)
Cash at beginning of period 65 565
------------- -------------
Cash at end of period $ 65 $ 65
============= =============
Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid for the period $ -- $ --
============= =============
Income taxes paid for the period $ -- $ --
============= =============
The accompanying notes are an integral part of these financial statements.
F-12
<PAGE>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE A - Organization and Description of Business
The Company was incorporated on March 10, 1993 under the laws of the State of
Delaware. The Company since inception through December 31, 1996 was in the
business of marketing electronic imaging displays for office presentation
purposes. The Company did not produce enough revenues to warrant the
continuation of said business, and it ceased this business, liquidating its
inventory and fully paying all of its liabilities. Since that time until the
present period, the Company has not had any operations.
The Company is fully dependent upon its current management and/or significant
stockholders to provide sufficient working capital to preserve the integrity of
the corporate entity during this phase. It is the intent of management and
significant stockholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
The Company has a year end of December 31 and follows the accrual method of
accounting.
During interim periods, the Company follows the accounting policies set forth in
its annual audited financial statements contained elsewhere in this document.
The information presented herein does not include all disclosures required by
generally accepted accounting principles and the users of financial information
provided for interim periods should refer to the annual financial information
and footnotes contained in its annual audited financial statements contained
elsewhere in this document when reviewing the interim financial results
presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 1999.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F-13
<PAGE>
VISUAL PRESENTATION SYSTEMS, INC.
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
2. Income taxes
------------
The Company provides deferred income taxes, where material, based on the
asset and liability method under the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". At September
30, 1999 and 1998, respectively, the deferred tax asset and deferred tax
liability accounts, consisting solely of temporary differences in
accumulated depreciation, were not material to the financial statements and
no valuation allowance was provided against deferred tax assets.
The Company files its income tax returns as a component of its parent
company's consolidated tax return. Accordingly, all net operating losses
are offset against the tax liabilities of the Company's parent. No net
operating loss carryforwards exist as of September 30, 1999 and 1998,
respectively.
3. Loss per share
--------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of September 30, 1999 and 1998, the
Company has no warrants and/or options issued and outstanding.
NOTE C - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
NOTE D - Related Party Transactions
As of September 30, 1999 and 1998, respectively, the Company had advanced funds
totaling $1,500 to Halter Capital Corporation, the Company's parent. The
advances are due upon demand and are non-interest bearing.
F-14
