UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Preliminary Information Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the registrant| |
Check the appropriate box:
| | Preliminary information statement | | Confidential, for use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive information statement
| | Definitive additional materials
| | Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PROVIDENCE CAPITAL I, INC.
(Name of Registrant as Specified in its Charter)
<PAGE>
(Name of Person(s) Filing Information Statement, if Other Than the Registrant)
Not Applicable
Payment of Filing Fee(Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common
(2) Aggregate number of securities to which transaction applies:
1,500,000
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
(5) Total fee paid:
| | Fee paid previously with preliminary materials:
| | Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
(1) Amount Previously Paid:
Not Applicable
(2) Form Schedule or Registration Statement No.:
Not Applicable
(3) Filing Party:
Nadeau & Simmons, P.C.
1250 Turks Head Building
Providence, RI 02903
401-272-5800
(4) Date Filed:
August 7, 2000
<PAGE>
By Order of the Board of Directors
Mark T. Thatcher,
Secretary
Providence, Rhode Island
August 5, 2000
MANAGEMENT HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
YOUR COOPERATION WILL BE APPRECIATED.
STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY,
OTHERWISE YOUR VOTE WILL NOT BE COUNTED.
PROVIDENCE CAPITAL I, INC.
August 5, 2000
To the Shareholders of
PROVIDENCE CAPITAL I, INC.:
Dear Fellow Shareholders:
Attached please find a notice of annual meeting of the shareholders of
PROVIDENCE CAPITAL I, INC. (hereinafter referred to as "PROVIDENCE"
and/or the "Company"), that will be held at the Company headquarters,
1250 Turks Head Building, Providence, Rhode Island 02903, on August 15,
2000, at 10:00 a.m., Eastern Daylight Time ("EDT"). The purpose of this
meeting is to consider, discuss, vote and act upon the following:
(i) Restating and amending the Company's Articles of Incorporation in
order to change its name from PROVIDENCE CAPITAL I, INC. to "UNITED
AMERICAN COMPANIES, INC." ("name change");
(ii) Approving an Agreement and Plan of Merger and Reorganization (the
"Merger") whereby UNITED AMERICAN COMPANIES, INC. (hereinafter
referred to as "UAC") will be acquired by PROVIDENCE; and
<PAGE>
Page 2
Providence Shareholders
August 5, 2000
______________________
(iii) electing a new Board of Directors.
Certain officers, directors and affiliates of PROVIDENCE who own in
excess of 50.00% of the outstanding voting shares of the Company have
advised the Company that they intend to vote in favor of each item set
forth above. Consequently, the proposals will be approved at the annual
meeting of stockholders.
PROVIDENCE hereby offers its shareholders Dissenter's Rights as provided
for in Article 7-113-101 through 7-113-302 of the Colorado Business
Corporation Act ("CBCA"), as amended. If a PROVIDENCE shareholder elects
to exercise their Dissenter's Rights in accordance with Article 7-113-
204, said shareholder of PROVIDENCE will be paid the fair value thereof
as determined by the Board of Directors. The Board of Directors has
determined the fair value of each share of Common Stock to be $0.11. The
determination of the per share fair value was computed based on a number
of considerations including the following:
(i) the Company has had no operations for approximately two years;
(ii) the Company has negative book value and no assets as of June 30,
2000;
(iii)other similar public shell companies have in effect been sold in
the marketplace for cash consideration of $150,000 to $200,000 which
would result in a fully diluted per share value of approximately
$0.11 per share.
In the event a shareholder elects to exercise Dissenters' Rights, such
shareholder must comply with the applicable procedures set forth in
Sections 7-113-201 through 7-113-209 of the CBCA in order to receive
payment of the fair value of any Common Shares. In compliance with
Section 7-113-201 of the CBCA, a copy of Article 113 of the CBCA is set
forth at Item 3 of the accompanying Information Statement filed on
Schedule 14C (the "Information Statement") dated August 5, 2000.
<PAGE>
Page 3
Providence Shareholders
August 5, 2000
______________________
The Company is also including herewith a copy of its Registration
Statement on Form 10-SB, filed as an exhibit to the Information
Statement. If there are any questions or any further information is
required with respect to the meeting and the transactions contemplated
thereby, please contact me at (401) 272-5800 or Adam S. Clavell, Esq.,
Nadeau & Simmons, P.C., 1250 Turks Head Building, Providence, RI 02903
(401) 272-5800.
Warmest regards,
/s/ Mark T. Thatcher
MARK T. THATCHER, Secretary
DATED: August 5, 2000
<PAGE>
DEFINITIVE COPY
PROVIDENCE CAPITAL I, INC.
1250 TURKS HEAD BUILDING
PROVIDENCE, RHODE ISLAND 02903
--------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------------------------------------------------------------------
PROVIDENCE CAPITAL I, INC.
Dated as of August 5, 2000
To the Stockholders of Providence:
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned, being the Secretary of PROVIDENCE CAPITAL I, INC., provides
that:
________________________________________________________________________
Notice is hereby given that the annual meeting (the "Meeting") of the
stockholders of PROVIDENCE CAPITAL I, INC. (hereinafter referred to as
"PROVIDENCE" and/or the "Company"), a Colorado corporation, will be held
at the Company headquarters, 1250 Turks Head Building, Providence, Rhode
Island, on August 15, 2000, at 10:00 a.m., Eastern Daylight Time ("EDT").
________________________________________________________________________
The purpose of this meeting is to consider, discuss, vote and act upon
the following:
(i) Restating and amending the Company's Articles of Incorporation in
order to change its name from PROVIDENCE CAPITAL I, INC. to "UNITED
AMERICAN COMPANIES, INC." ("name change");
(ii) Approving an Agreement and Plan of Merger and Reorganization (the
"Merger") whereby UNITED AMERICAN COMPANIES, INC. (hereinafter
referred to as "UAC") will be acquired by PROVIDENCE; and
<PAGE>
(iii) electing a new Board of Directors.
Certain officers, directors and affiliates of PROVIDENCE who own in
excess of 50.00% of the outstanding voting shares of the Company have
advised the Company that they intend to vote in favor of each item set
forth above. Consequently, the proposals will be approved at the annual
meeting of stockholders.
PROVIDENCE hereby offers its shareholders Dissenter's Rights as provided
for in Article 7-113-101 through 7-113-302 of the Colorado Business
Corporation Act ("CBCA"), as amended. If any PROVIDENCE shareholder elects
to exercise their Dissenter's Rights in accordance with Article 7-113-
204, said shareholder of PROVIDENCE will be paid the fair value thereof
as determined by the Board of Directors.
The Board of Directors has determined the fair value of each share of
Common Stock to be $0.11. The determination of the per share fair value was
computed based on a number of considerations including the following:
(i) the Company has had no operations for approximately two years;
(ii) the Company has negative book value and no assets as of June 30, 2000;
(iii) other similar public shell companies have in effect been sold in the
marketplace for cash consideration of $150,000 to $200,000 which would
result in a fully diluted per share value of approximately $0.11 per
share.
In the event a shareholder elects to exercise Dissenters' Rights, such
shareholder must comply with the applicable procedures set forth in Sections
7-113-201 through 7-113-209 of the CBCA in order to receive payment of the
fair value of any Common Shares. In compliance with Section 7-113-201 of the
CBCA, a copy of Article 113 of the CBCA is set forth at Item 3 of the
accompanying Information Statement filed on Schedule 14 C (the "Information
Statement") dated August 5, 2000.
In order to obtain the fair value payment for PROVIDENCE shares, a shareholder
must mail or deliver their intention no later than August 15, 2000, to the
following address:
The Board of Directors
Providence Capital I, Inc.
1250 Turks Head Building
Providence, Rhode Island
02903
<PAGE>
The Board of Directors of the Company believe that the Merger will be in
the best interest of the PROVIDENCE shareholders. However, shareholders
are entitled to assert the above stated Dissenter's Rights (fair value of
$0.11 per share) no later than August 15, 2000, as a result of this
transaction as explained in Section 7-111 of the CBCA. We are not asking
you for a proxy in conjunction with this Meeting, but you are urged to
attend the Meeting to vote your shares in person.
Upon the approval of the Proposals, PROVIDENCE and UAC will immediately
file an appropriate Articles of Merger in accordance with Colorado law to
effect the Merger and file articles of amendment to the Articles of
Incorporation of PROVIDENCE in accordance with Colorado law to effect a
name change of PROVIDENCE. The Merger will become effective upon the
completion of the filing. At the completion of the proposed Merger, each
PROVIDENCE shareholder will maintain their current shares of PROVIDENCE
Common Stock. The Board of Directors of the Company believes that the
Proposals will be in the best interest of PROVIDENCE shareholders and
recommends their adoption.
The Company is also including herewith a copy of its Registration Statement
on Form 10-SB, filed as an exhibit to the Information Statement.
If there are any questions or further information is required with
respect to the Proposals, please contact Adam S. Clavell, Esq. at 1250
Turks Head Building, Providence, Rhode Island 02903 (401) 272-5800.
By order of the Board of Directors,
/s/ Mark T. Thatcher
MARK T. THATCHER, Secretary
DATED: August 5, 2000
<PAGE> 1
______________________________________
DEFINITIVE INFORMATION STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 15, 2000
______________________________________
PROVIDENCE CAPITAL I, INC.
1250 TURKS HEAD BUILDING
PROVIDENCE, RHODE ISLAND 02903
AUGUST 15, 2000
GENERAL INFORMATION
This Information Statement is furnished in connection with an Annual
Meeting of Stockholders called by the Board of Directors (the "Board") of
Providence Capital I, Inc. ("Providence"), to be held at 1250 Turks Head
Building, Providence, Rhode Island at 10:00 a.m. local time on August 15,
2000, and at any and all postponements, continuations or adjournments
thereof (collectively the "Meeting"). This Information Statement and the
accompanying Notice of Annual Meeting will be first mailed or given to
Providence's stockholders on or about August 5, 2000.
All shares of Providence's common stock, no par value per share (the
"Voting Shares"), represented in person will be eligible to be voted at
the Meeting.
WE ARE NOT ASKING FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
<PAGE> 2
ITEM 1. DATE, TIME AND PLACE INFORMATION
The enclosed information statement is provided by the Board of Providence
for use at the Annual Meeting of Stockholders to be held at the Company's
headquarters at 1250 Turks Head Building, Providence, Rhode Island at
10:00 a.m. on August 15, 2000, and at any adjournment or adjournments
thereof.
Stockholders of record at the close of business on August 5, 2000 (the
"Record Date") will be entitled to vote at the meeting or any adjournment
or adjournments thereof. On that date the Company had outstanding shares
of Common Stock entitled to one (1) vote per share (the "Voting Shares").
The affirmative vote of the holders of a majority of the Company's Voting
Shares is required to approve each of the Proposals.
The presence of the holders of a majority of the issued and outstanding
shares of Voting Shares voting as a single class, entitled to vote at the
meeting is necessary to constitute a quorum for the transaction of
business at the meeting.
BACKGROUND INFORMATION
An Agreement and Plan of Merger and Reorganization (the "Agreement") was
executed on July 26, 2000 by and among Providence and United American
Companies, Inc., ("UAC"), who joined in the execution of the Agreement
for the purpose of making certain covenants regarding the transaction
contemplated therein. Providence is a corporation duly organized and
validly existing under the laws of the state of Colorado, with its
registered office at 17 West Cheyenne Mountain Boulevard, Colorado
Springs, Colorado 80906 its principal executive office at 1250 Turks Head
Building, Providence, Rhode Island 02903, and its phone number is (401)
272-5800; UAC is a corporation duly organized and validly existing under
the laws of the State of North Carolina, with its registered office
located in the city of Charlotte, State of North Carolina, its principal
executive office at 8609 Wood Lake Court, Suite 206, Charlotte, North
Carolina 28210 and its phone number is (704) 556-7992.
The respective boards of directors of Providence and UAC deemed it
desirable and in the best interests of their respective corporations, for
Providence to acquire the outstanding capital stock of UAC in exchange
for 13,500,000 shares of the common stock of Providence and have
proposed, declared advisable and approved such exchange (the "Merger")
pursuant to this Agreement, which Agreement has been duly approved by
<PAGE> 3
resolutions of the respective boards of directors of Providence and UAC.
This Agreement requires that a shareholders' meeting be called by
Providence for the purposes of approving the Merger prior to closing.
PROPOSAL ONE AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors has unanimously approved, and recommends for
shareholder approval, the restatement and amendment of the Company's
Articles of Incorporation in order to change the Company's name to
"United American Companies, Inc.". Approval of the restatement and
amendment will not result in any other material amendment or change to
the Company's Articles of Incorporation. The restatement and amendment is
required to effect the Company's acquisition of UAC.
PROPOSAL TWO APPROVAL OF AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
The Board of Directors has unanimously approved, and recommends for
shareholder approval, an Agreement and Plan of Merger and Reorganization
(the "Merger"), whereby Providence will acquire all issued and
outstanding capital stock of UAC in exchange for 13,500,000 shares of the
Common Stock of Providence.
PROPOSAL THREE ELECTION OF DIRECTORS
At the Meeting, the successors to the current Board of Directors will be
elected for a term of office, such term to commence on the effective date
of the Merger. The nominee directors who are chosen to fill vacancies on
the Board shall hold office until the next election for which those
nominee directors are chosen, and until their successors are duly elected
by the stockholders.
The following table sets forth the ages of and positions and offices
presently held by each nominee director of the Company. For information
about ownership of the Company's Voting Securities by each nominee
director, see "BENEFICIAL OWNERSHIP OF VOTING SECURITIES."
<PAGE> 4
Date First
Became Positions and Offices
Name Age Director With the Company**
----------------- ----- ----------- ---------------------
Mark A. Craven 50 Chairman, Executive Vice President,
Secretary and Director
Arnold E. Pitoniak 37 CEO, President and Director
Michael Gilbert 59 Chief Financial Officer, Treasurer
and Director
William F. Ruth 65 Executive Vice President, Retail
Liquidation Services
Nicholas J. Coolidge 68 Director
Timothy A. Holly 51 Director
------------------------------------------------------------------------------
** Nominees for election at this meeting.
Please see personal biographies below and at Item. 7
ITEM 2. REVOCABILITY OF PROXY
Not Applicable
ITEM 3. DISSENTERS' RIGHT OF APPRAISAL
Providence hereby offers its shareholders Dissenter's Rights as provided
for in Article 7-113-101 through 7-113-302 of the CBCA. If a Providence
shareholder elects to exercise their Dissenter's Rights in accordance
with Article 7-113-204, said shareholder of Providence will be paid the
fair value thereof as determined by the Board of Directors.
The Board of Directors has determined the fair value of each share of
Common Stock to be $0.11. The determination of the per share fair value
was computed based on a number of considerations including the following:
(i) the Company has had no operations for approximately two years;
(ii) the Company has negative book value and no assets as of June 30,
2000; and
(iii)other similar public shell companies have in effect been sold in
the marketplace for cash consideration of $150,000 to $200,000 which
would result in a fully diluted per share value of approximately
$0.11 per share.
<PAGE> 5
The Board of Directors of the Company believe that the Merger will be in
the best interest of Providence shareholders. However, shareholders are
entitled to assert their Dissenter's Rights (fair market value of $0.11
per share) no later than August 15, 2000, as a result of this transaction
as explained in Section 7-111 of the CBCA.
In order to obtain the fair market value payment for Providence shares, a
shareholder must mail or deliver their intention to the following
address:
The Board of Directors
Providence Capital IV, Inc.
1250 Turks Head Building
Providence, RI 02903
Pursuant to Article 113 of the CBCA, each shareholder has the right and
is entitled to dissent from the completion of the Merger and receive
payment of the fair value of the Common Shares owned by any such
shareholder ("Dissenters' Rights"). In the event a shareholder elects to
exercise Dissenters' Rights, such shareholder must comply with the
applicable procedures set forth in Sections 7-113-201 through 7-113-209
of the CBCA, as summarized below, in order to receive payment of the fair
value of any Common Shares. In compliance with Section 7-113-201 of the
CBCA, a copy of Article 113 of the CBCA and its summary are set forth
below.
SUMMARY OF ARTICLE 113 OF THE CBCA
THE FOLLOWING IS ONLY A SUMMARY OF THE PROCEDURES FOR DISSENTING
SHAREHOLDERS PRESCRIBED BY SECTIONS 7-113-101 THROUGH 7-113-302 OF THE
CBCA AND IS QUALIFIED IN ITS ENTIRETY BY THE FULL TEXT OF ARTICLE 113 OF
THE CBCA AS SET FORTH BELOW
Section 7-113-102 of the CBCA provides that each record or beneficial
shareholder of the Company is entitled to dissent from the Merger and
demand payment of the fair value of the shares of Common Stock owned by
such shareholder. In accordance with Section 7-113-202 of the CBCA, in
order for a shareholder to exercise Dissenters' Rights, such shareholder
must, prior to the taking of the vote of the shareholders on the Merger,
deliver to the Company written notice of such shareholder's intent to
demand payment for shares in the event the Merger is approved and shall
not vote such shareholder's shares in favor of the Merger.
In accordance with Section 7-113-203 of the CBCA, within ten days after
the Merger is effected, the Company must deliver a written dissenter's
notice ("Dissenter's Notice") to all shareholders who satisfy the
requirements of Section 7-113-202 of the CBCA. The Dissenter's Notice
must state that the Merger was authorized and the effective date of the
Merger, set forth the address at which the Company will receive payment
demands and where stock certificates shall be deposited, supply a form
for demanding payment, which form shall request an address from the
dissenting shareholder to which payment is to be made, and set the date
by which the Company must receive the payment demand and stock
certificates, which date shall not be less than 30 days after the date
the Dissenter's Notice was delivered. Furthermore, the Dissenter's Notice
may require that all beneficial shareholders, if any, certify as to the
assertion of Dissenters' Rights, and be accompanied by Article 113 of the
CBCA.
<PAGE> 6
Pursuant to Section 7-113-204 of the CBCA, a shareholder receiving the
Dissenter's Notice must demand payment in writing and deposit such
shareholder's stock certificates in accordance with the terms of the
Dissenter's Notice. A shareholder who does not comply with the foregoing
requirements is not entitled to the fair value of such shareholder's
shares under Article 113 of the CBCA.
Upon the later of the effective date of the Merger, or upon receipt of a
demand for payment by a dissenting shareholder, the Company must pay each
dissenting shareholder who complies with Section 7-113-204 the amount the
Company estimates to be the fair value of such shares, plus accrued
interest in accordance with Section 7-113-206 of the CBCA. The payment
must be accompanied by (i) the Company's balance sheet as of the fiscal
year ending not more than sixteen months before the date of payment, an
income statement for that year, a statement of change in shareholders'
equity for that year, and the latest available interim financial
statement; (ii) a statement of the Company's estimate of the fair value
of the shares; (iii) an explanation by the Company of how the interest
was calculated; (iv) a statement of the dissenting shareholder's right to
demand payment under Section 7-113-209 of the CBCA; and (v) a copy of
Article 113 of the CBCA.
In the event a dissenting shareholder is dissatisfied with the Company's
payment or offer of payment, such dissenting shareholder, pursuant to
Section 7-113-209 of the CBCA, may notify the Company in writing within
30 days after the Company makes or offers to pay each dissenting
shareholder, of such shareholder's own estimate of the fair value of such
shares and the amount of interest due, and demand payment of such
shareholder's estimate, less any payment already made by the Company
under Section 7-113-206, or reject the Company's offer under Section 7-
113-208 and demand payment for the fair value of the shares and interest
due. A dissatisfied dissenting shareholder may effect the foregoing if:
(i) the dissenting shareholder believes that the amount paid or offered
is less than the fair value of the shares or that the interest due is
incorrectly calculated; (ii) the Company has failed to make payment
within 60 days after the date set for demanding payment; or (iii) the
Company does not return the deposited stock certificates within the time
specified by Section 7-113-207 of the CBCA. In the event a demand for
payment under Section 7-113-209 remains unresolved, the Company may
commence a court proceeding to determine the fair value of the shares and
accrued interest within 60 days after receiving the payment demand from a
dissenting shareholder.
<PAGE> 7
TITLE 7. COLORADO BUSINESS CORPORATION ACT
ARTICLE 113. DISSENTERS' RIGHTS
PART 1. RIGHT OF DISSENT - PAYMENT FOR SHARES
C.R.S. 7-113-101 (1996)
7-113-101. DEFINITIONS
For purposes of this article:
(1) "Beneficial shareholder" means the beneficial owner of shares held in
a voting trust or by a nominee as the record shareholder.
(2) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving or acquiring domestic or
foreign corporation, by merger or share exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 7-113-102 and who exercises that right at
the time and in the manner required by part 2 of this article.
(4) "Fair value", with respect to a dissenter's shares, means the value
of the shares immediately before the effective date of the corporate
action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action except to the extent
that exclusion would be inequitable.
(5) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by
the corporation on its principal bank loans or, if none, at the legal
rate as specified in section 5-12-101, C.R.S.
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares that are registered in the name of a nominee to the extent such
owner is recognized by the corporation as the shareholder as provided in
section 7-107-204.
(7) "Shareholder" means either a record shareholder or a beneficial
shareholder.
<PAGE> 8
7-113-102. RIGHT TO DISSENT
(1) A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares
in the event of any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party
if:
(i) Approval by the shareholders of that corporation is required
for the merger by section 7-111-103 or 7-111-104 or by the
articles of incorporation; or
(ii) The corporation is a subsidiary that is merged with its parent
corporation under section 7-111-104;
(b) Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired;
(c) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of the corporation for which a
shareholder vote is required under section 7-112-102 (1); and
(d) Consummation of a sale, lease, exchange, or other disposition of
all, or substantially all, of the property of an entity controlled by the
corporation if the shareholders of the corporation were entitled to vote
upon the consent of the corporation to the disposition pursuant to
section 7-112-102 (2).
(1.3) A shareholder is not entitled to dissent and obtain payment, under
subsection (1) of this section, of the fair value of the shares of any
class or series of shares which either were listed on a national
securities exchange registered under the federal "Securities Exchange Act
of 1934", as amended, or on the national market system of the national
association of securities dealers automated quotation system, or were
held of record by more than two thousand shareholders, at the time of:
(a) The record date fixed under section 7-107-107 to determine the
shareholders entitled to receive notice of the shareholders' meeting
at which the corporate action is submitted to a vote;
(b) The record date fixed under section 7-107-104 to determine
shareholders entitled to sign writings consenting to the corporate
action; or
(c) The effective date of the corporate action if the corporate action is
authorized other than by a vote of shareholders.
<PAGE> 9
(1.8) The limitation set forth in subsection (1.3) of this section shall
not apply if the shareholder will receive for the shareholder's shares,
pursuant to the corporate action, anything except:
(a) Shares of the corporation surviving the consummation of the plan
of merger or share exchange;
(b) Shares of any other corporation which at the effective date of
the plan of merger or share exchange either will be listed on a
national securities exchange registered under the federal
"Securities Exchange Act of 1934", as amended, or on the national
market system of the national association of securities dealers
automated quotation system, or will be held of record by more
than two thousand shareholders;
(c) Cash in lieu of fractional shares; or
(d) Any combination of the foregoing described shares or cash in lieu
of fractional shares.
(2) (Deleted by amendment, L. 96, p. 1321, 30, effective June 1, 1996.)
(2.5) A shareholder, whether or not entitled to vote, is entitled to
dissent and obtain payment of the fair value of the shareholder's shares
in the event of a reverse split that reduces the number of shares owned
by the shareholder to a fraction of a share or to scrip if the fractional
share or scrip so created is to be acquired for cash or the scrip is to
be voided under section 7-106-104.
(3) A shareholder is entitled to dissent and obtain payment of the fair
value of the shareholder's shares in the event of any corporate action to
the extent provided by the bylaws or a resolution of the board of
directors.
(4) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this article may not challenge the corporate
action creating such entitlement unless the action is unlawful or
fraudulent with respect to the shareholder or the corporation.
<PAGE> 10
7-113-103. DISSENT BY NOMINEES AND BENEFICIAL OWNERS
(1) A record shareholder may assert dissenters' rights as to fewer than
all the shares registered in the record shareholder's name only if the
record shareholder dissents with respect to all shares beneficially owned
by any one person and causes the corporation to receive written notice
which states such dissent and the name, address, and federal taxpayer
identification number, if any, of each person on whose behalf the record
shareholder asserts dissenters' rights. The rights of a record
shareholder under this subsection (1) are determined as if the shares as
to which the record shareholder dissents and the other shares of the
record shareholder were registered in the names of different
shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to the
shares held on the beneficial shareholder's behalf only if:
(a) The beneficial shareholder causes the corporation to receive the
record shareholder's written consent to the dissent not later than the
time the beneficial shareholder asserts dissenters' rights; and
(b) The beneficial shareholder dissents with respect to all shares
beneficially owned by the beneficial shareholder.
(3) The corporation may require that, when a record shareholder dissents
with respect to the shares held by any one or more beneficial
shareholders, each such beneficial shareholder must certify to the
corporation that the beneficial shareholder and the record shareholder or
record shareholders of all shares owned beneficially by the beneficial
shareholder have asserted, or will timely assert, dissenters' rights as
to all such shares as to which there is no limitation on the ability to
exercise dissenters' rights. Any such requirement shall be stated in the
dissenters' notice given pursuant to section 7-113-203.
<PAGE> 11
7-113-201. NOTICE OF DISSENTERS' RIGHTS
(1) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is submitted to a vote at a shareholders' meeting, the
notice of the meeting shall be given to all shareholders, whether or not
entitled to vote. The notice shall state that shareholders are or may be
entitled to assert dissenters' rights under this article and shall be
accompanied by a copy of this article and the materials, if any, that,
under articles 101 to 117 of this title, are required to be given to
shareholders entitled to vote on the proposed action at the meeting.
Failure to give notice as provided by this subsection (1) shall not
affect any action taken at the shareholders' meeting for which the notice
was to have been given, but any shareholder who was entitled to dissent
but who was not given such notice shall not be precluded from demanding
payment for the shareholder's shares under this article by reason of the
shareholder's failure to comply with the provisions of section 7-113-202
(1).
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders
pursuant to section 7-107-104, any written or oral solicitation of a
shareholder to execute a writing consenting to such action contemplated
in section 7-107-104 shall be accompanied or preceded by a written notice
stating that shareholders are or may be entitled to assert dissenters'
rights under this article, by a copy of this article, and by the
materials, if any, that, under articles 101 to 117 of this title, would
have been required to be given to shareholders entitled to vote on the
proposed action if the proposed action were submitted to a vote at a
shareholders' meeting. Failure to give notice as provided by this
subsection (2) shall not affect any action taken pursuant to section 7-
107-104 for which the notice was to have been given, but any shareholder
who was entitled to dissent but who was not given such notice shall not
be precluded from demanding payment for the shareholder's shares under
this article by reason of the shareholder's failure to comply with the
provisions of section 7-113-202 (2).
<PAGE> 12
7-113-202. NOTICE OF INTENT TO DEMAND PAYMENT
(1) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is submitted to a vote at a shareholders' meeting and
if notice of dissenters' rights has been given to such shareholder in
connection with the action pursuant to section 7-113-201 (1), a
shareholder who wishes to assert dissenters' rights shall:
(a) Cause the corporation to receive, before the vote is taken, written
notice of the shareholder's intention to demand payment for the
shareholder's shares if the proposed corporate action is effectuated;
and
(b) Not vote the shares in favor of the proposed corporate action.
(2) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized without a meeting of shareholders
pursuant to section 7-107-104 and if notice of dissenters' rights has
been given to such shareholder in connection with the action pursuant to
section 7-113-201 (2), a shareholder who wishes to assert dissenters'
rights shall not execute a writing consenting to the proposed corporate
action.
(3) A shareholder who does not satisfy the requirements of subsection (1)
or (2) of this section is not entitled to demand payment for the
shareholder's shares under this article.
7-113-203. DISSENTERS' NOTICE
(1) If a proposed corporate action creating dissenters' rights under
section 7-113-102 is authorized, the corporation shall give a written
dissenters' notice to all shareholders who are entitled to demand payment
for their shares under this article.
(2) The dissenters' notice required by subsection (1) of this section
shall be given no later than ten days after the effective date of the
corporate action creating dissenters' rights under section 7-113-102 and
shall:
(a) State that the corporate action was authorized and state the
effective date or proposed effective date of the corporate action;
(b) State an address at which the corporation will receive payment
demands and the address of a place where certificates for certificated
shares must be deposited;
(c) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
<PAGE> 13
(d) Supply a form for demanding payment, which form shall request a
dissenter to state an address to which payment is to be made;
(e) Set the date by which the corporation must receive the payment demand
and certificates for certificated shares, which date shall not be less
than thirty days after the date the notice required by subsection (1)
of this section is given;
(f) State the requirement contemplated in section 7-113-103 (3), if such
requirement is imposed; and
(g) Be accompanied by a copy of this article.
7-113-204. PROCEDURE TO DEMAND PAYMENT
(1) A shareholder who is given a dissenters' notice pursuant to section
7-113-203 and who wishes to assert dissenters' rights shall, in
accordance with the terms of the dissenters' notice:
(a) Cause the corporation to receive a payment demand, which may be the
payment demand form contemplated in section 7-113-203 (2) (d), duly
completed, or may be stated in another writing; and
(b) Deposit the shareholder's certificates for certificated shares.
(2) A shareholder who demands payment in accordance with subsection (1)
of this section retains all rights of a shareholder, except the right to
transfer the shares, until the effective date of the proposed corporate
action giving rise to the shareholder's exercise of dissenters' rights
and has only the right to receive payment for the shares after the
effective date of such corporate action.
(3) Except as provided in section 7-113-207 or 7-113-209 (1)(b), the
demand for payment and deposit of certificates are irrevocable.
(4) A shareholder who does not demand payment and deposit the
shareholder's share certificates as required by the date or dates set in
the dissenters' notice is not entitled to payment for the shares under
this article.
<PAGE> 14
7-113-205. UNCERTIFICATED SHARES
(1) Upon receipt of a demand for payment under section 7-113-204 from a
shareholder holding uncertificated shares, and in lieu of the deposit of
certificates representing the shares, the corporation may restrict the
transfer thereof.
(2) In all other respects, the provisions of section 7-113-204 shall be
applicable to shareholders who own uncertificated shares.
7-113-206. PAYMENT
(1) Except as provided in section 7-113-208, upon the effective date of
the corporate action creating dissenters' rights under section 7-113-102
or upon receipt of a payment demand pursuant to section 7-113-204,
whichever is later, the corporation shall pay each dissenter who complied
with section 7-113-204, at.
7-113-302. COURT COSTS AND COUNSEL FEES
(1) The court in an appraisal proceeding commenced under section 7-113-
301 shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court
shall assess the costs against the corporation; except that the court may
assess costs against all or some of the dissenters, in amounts the court
finds equitable, to the extent the court finds the dissenters acted
arbitrarily, vexatiously, or not in good faith in demanding payment under
section 7-113-209.
(2) The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any dissenters if the court
finds the corporation did not substantially comply with the
requirements of part 2 of this article; or
(b) Against either the corporation or one or more dissenters, in favor of
any other party, if the court finds that the party against whom the
fees and expenses are assessed acted arbitrarily, vexatiously, or not
in good faith with respect to the rights provided by this article.
<PAGE> 15
(3) If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and
that the fees for those services should not be assessed against the
corporation, the court may award to said counsel reasonable fees to be
paid out of the amounts awarded to the dissenters who were benefited.
ITEM 4. PERSONS MAKING THE SOLICITATION
The enclosed information statement is distributed by the Board of
Directors (the "Board of Directors") of Providence. The cost of
distribution will be borne by the Company. In addition to the
distribution by mail, officers and employees of the Company may
distribute in person. The Company may reimburse brokers or persons
holding stock in their names, or in the names of their nominees, for
their expenses in sending the information statement to the beneficial
owners.
ITEM 5. INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Not Applicable
ITEM 6. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Except as otherwise indicated, the persons or entities listed below have
sole voting and investment power with respect to the shares beneficially
owned by them.
For purposes of this table, information as to the shares of common stock
is calculated based on 1,500,000 shares of common stock outstanding upon
the closing of the Transaction. For purposes of this table, "beneficial
ownership" is determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, pursuant to which a person or group of
persons is deemed to have "beneficial ownership" of any shares of common
stock that such person has the right to acquire within 60 days after the
date of this prospectus. For purposes of computing the percentage of
outstanding shares of common stock held by each person or group of
persons named below, any shares which such person or persons has the
right to acquire within 60 days after the date of this prospectus are
deemed to be outstanding but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person.
<PAGE> 16
COMMON SHARES OWNED
Name and Address Number of Percent of
Shares Owned Class Owned
Beneficially
Richard Nadeau, Jr. 250,000(1) 16.67%
1250 Turks Head Building
Providence, RI 02903
James R. Simmons 250,000(1) 16.67%
1250 Turks Head Building
Providence, RI 02903
Mark T. Thatcher 250,000(1) 16.67%
1250 Turks Head Building
Providence, RI 02903
James H. Brennan, III 250,000(1) 16.67%
735 Broad Street, Suite 800
Chattanooga, TN 37402
Doug Dyer 250,000(1) 16.67%
735 Broad Street, Suite 800
Chattanooga, TN 37402
All directors and executive
officers as a group
(3 persons) 750,000(1) 50.00%
(1) The persons listed are the sole officers and directors of the
Company.
Management has no plans to issue any additional securities to management,
promoters or their affiliates or associates and will do so only if such
issuance is in the best interests of shareholders of the Company and
complies with all applicable federal and state securities rules and
regulations.
Although the Company has a very large amount of authorized but unissued
common and preferred stock that may be issued without further shareholder
approval or notice, it is the intention of the Company to avoid
inhibiting certain transactions with prospective acquisition or merger
candidates, based upon the perception by such candidate that they may be
engaged in a rapidly expanding industry (i.e. Internet) and cannot afford
to proxy shareholders each time their management needs to authorize
additional shares.
<PAGE> 17
BENEFICIAL OWNERSHIP OF UAC SECURITIES
The following table sets forth certain information regarding beneficial
ownership of UAC Common Stock as of August 5, 2000 by (i) each person
known by UAC to own beneficially more than 5% of the outstanding Common
Stock, (ii) each director, and (iii) all executive officers and directors
as a group. Each person has sole voting and sole investment or
dispositive power with respect to the shares shown except as noted.
COMMON SHARES OWNED
Name and Address Number of Title of
Shares Owned Class Owned
Beneficially
Mark A. Craven 5,700,000 Common Shares
Arnold E. Pitoniak 5,600,000 Common Shares
William F. Ruth 600,000 Common Shares
Timothy A. Holly 1,500,000 Common Shares
-------------------------------------------------------
PRICE RANGE OF COMMON STOCK
Not Applicable
DIVIDENDS
The Company has never paid dividends with respect to the Common Stock and
currently does not have any plans to pay cash dividends in the future.
There are no contractual restrictions on the Company's present or future
ability to pay dividends. Future dividend policy is subject to the
discretion of the Board of Directors and is dependent upon a number of
factors, including future earnings, capital requirements and the
financial condition of the Company. The Colorado Corporation Code
provides that a corporation may not pay dividends if the payment would
reduce the remaining net assets of the corporation below the
corporation's stated capital plus amounts constituting a liquidation
preference to other security holders.
<PAGE> 18
ITEM 7. DIRECTORS AND EXECUTIVE OFFICERS
In 1998 and 1999, the Board of Directors met informally on a number of
occasions, voting on corporate actions by written consent.
THE DIRECTORS AND EXECUTIVE OFFICERS OF PROVIDENCE
The directors and executive officers of the Company, their ages and
positions held in the Company are as follows:
Name Age Positions Held and Tenure
------------------ ----- -------------------------
Richard Nadeau, Jr. 42 President and Director since
November 24, 1999
James R. Simmons 38 Vice President and Director since
November 24, 1999
Mark T. Thatcher 35 Secretary and Director since
November 24, 1999
The directors named above will serve until the first annual meeting of
the Company's stockholders. Thereafter, directors will be elected for
one-year terms at the annual stockholders' meeting. Officers will hold
their positions at the pleasure of the board of directors, absent any
employment agreement, of which none currently exists or is contemplated.
There is no arrangement or understanding between the directors and
officers of the Company and any other person pursuant to which any
director or officer was or is to be selected as a director or officer.
The directors and officers of the Company will devote their time to the
Company's affairs on an "as needed" basis. As a result, the actual amount
of time which they will devote to the Company's affairs is unknown and is
likely to vary substantially from month to month.
<PAGE> 19
BIOGRAPHICAL INFORMATION
RICHARD NADEAU, JR.--
In 1982, Mr. Nadeau became associated with the Providence law firm of
Wistow, Barylick & Bruzzi, where he was responsible for the majority of
the firm's commercial litigation. He started the Providence law firm of
Nadeau & Simmons, P.C. in 1985 and, since then, has engaged in a
successful practice concentrating in corporate law, commercial lending
and creditors' rights. He was also appointed Municipal Court Judge for
the Towns of Burrillville and North Smithfield in 1999.
Mr. Nadeau graduated magna cum laude from the University of Hartford in
1985 and received his law degree from Georgetown University in 1988.
After graduating from Georgetown, he was admitted to the District of
Columbia bar and became associated with King & Newmyer. Although he no
longer actively practices in Washington, he remains a member of the D.C.
Bar.
JAMES R. SIMMONS--
Before joining Nadeau & Simmons, P.C., a Providence corporate, banking
and real estate law firm, Mr. Simmons practiced with Tillinghast Collins
& Graham in its corporate, commercial and real estate departments. He
serves on the Banks and Trusts Committee of the Rhode Island Bar
Association and his practice is concentrated in the areas of corporate
law, banking and commercial law, mortgage lending and real estate,
bankruptcy, and creditors' rights.
Mr. Simmons is admitted to practice law in both Rhode Island and
Massachusetts. He graduated magna cum laude from the University of
Hartford in 1985 and received his law degree from George Washington
University in 1988.
MARK T. THATCHER--
Mr. Thatcher has participated as a business and legal advisor for a
number of public and privately held companies. He has been retained for
federal and state securities compliance, venture capital analysis, public
and private mergers and acquisitions and corporate
reorganization/restructuring.
He has served as General Counsel to Acadia Group, Inc. (OTC:BB "ANHS")
and CollegeLink.com (AMEX "APS"). He recently joined the Providence law
firm of Nadeau & Simmons, P.C. in an "of-counsel" capacity. He is an
honorary member of Alpha Kappa Delta, Sutton Award candidate, and
recipient of the E.V. Graham Scholarship Merit Award.
Mr. Thatcher attended the University of Denver where he earned his Juris
Doctor and Masters in business administration. He is presently a member
of the State Bar of Colorado; Court of Appeals, District of Columbia;
Committee Member of the Securities Forum, Colorado, Washington, D.C. and
the American Bar Association; and Member of the International Society of
Business Law.
---------------------------------------------------------------
<PAGE> 20
All directors of the Company will hold office until the next annual
meeting of the shareholders and until their successors have been elected
and qualified.
The officers of the Company are elected by the Board of Directors at the
first meeting after each annual meeting of the Company's shareholders,
and hold office until their successors are elected and shall have
qualified, or until resignation or removal from office.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act, requires the Company's officers,
directors and persons who beneficially own more than ten percent of the
Common Stock to file reports of securities ownership and changes in such
ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten percent beneficial owners also are
required by rules promulgated by the Securities and Exchange Commission
to furnish the Company with copies of all Section 16(a) forms they file.
Based solely upon review of the copies of such forms furnished to the
Company, or written representations that no Form 5 filings were required,
the Company believes that during 1999 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with.
COMMITTEES OF THE BOARD
Not Applicable
BOARD AND COMMITTEE ATTENDANCE
In 1999 and 2000, the Board of Directors met informally on a number of
occasions, voting on corporate actions by written consent. At the
Meeting, the successors to the current Board of Directors will be elected
for a term of office, such term to commence on the effective date of the
Merger. The nominee directors who are chosen to fill vacancies on the
Board shall hold office until the next election for which those nominee
directors are chosen, and until their successors are duly elected by the
shareholders.
<PAGE> 21
THE NOMINEE DIRECTORS
The following table sets forth the ages of and positions and offices
presently held by each nominee director of the Company. For information
about ownership of the Company's Securities by each nominee director, see
"BENEFICIAL OWNERSHIP OF UAC SECURITIES."
Date First
Became Positions and Offices
Name Age Director With the Company**
------------------- ---- ---------- ---------------------
Mark A. Craven 50 Chairman, Executive Vice President,
Secretary and Director
Arnold E. Pitoniak 37 CEO, President and Director
Michael Gilbert 59 Chief Financial Officer, Treasurer,
and Director
William F. Ruth 65 Executive Vice President, Retail
Liquidation Services
Nicholas J. Coolidge 68 Director
Timothy A. Holly 51 Director
-------------------------------------------------------
** Nominees for election at this meeting.
Please see personal biographies below and at Item. 7
PERSONAL BIOGRAPHIES
MARK A. CRAVEN
In 1971, Mr. Craven became associated with a family apparel firm, Arnold
Craven, Inc., located in High Point, North Carolina. While serving as
President until 1993, he was responsible for expanding the company into
several prominent well-respected retail apparel stores. In 1980, to
compliment the company's retail apparel stores, Mr. Craven formed a
direct marketing catalog business. In 1981, his national catalog won an
award for layout and design from the Direct Marketing Association. With
peak sales of $4,500,000 Mr. Craven sold the catalog's name and concept
in 1982. Since 1993, he has been involved in liquidations and consulting
services for retail, wholesale, and distribution firms. This has
resulted in a national reputation for excellence in liquidating inventory
and maximizing value for his clients.
Born and raised in High Point, North Carolina, the world's furniture
capital, Mr. Craven has cultivated long-standing contacts in the apparel,
textile and furniture industries. To capitalize on these relations, he
developed several entities to cover all aspects of the liquidation
industry. High Point Furniture Liquidators, LLC, Craven & Ruth
Promotions, LLC and The Craven Companies, LLC. Mr. Craven graduated from
Hargrave Military Academy, majored in Business Administration at Wake
Forest University (1968 - 1971), and studied at New York University's MRA
Institute of Retailing. He is a member of the Turnaround Management
Association.
<PAGE> 22
ARNOLD E. PITONIAK
Mr. Pitoniak has 17 years experience as an entrepreneur, investment
banker and merchant banker. While a senior at Wake Forest University, he
formed his first company, and has since formed, developed, bought or sold
over 10 companies. Mr. Pitoniak has over three years as an investment
banker specializing in mergers and acquisition advisory services, as well
as general corporate finance where he raised equity and debt for real
estate developers and other businesses particularly public furniture and
textile companies. His significant entrepreneurial and banking expertise
brings a unique perspective as well as substantial financial and
analytical skills with the ability to negotiate and structure
transactions that will help United American Companies in becoming a
fully-integrated asset management and disposition company.
Mr. Pitoniak attended Southern Methodist University and graduated in 1985
from Wake Forest University with a Bachelor of Arts degree in Economics.
He is a member of the Turnaround Management Association.
WILLIAM F. RUTH
Mr. Ruth has over 40 years of diversified retail experience. His long
career began in 1957 with Belk Stores, Inc., one of the country's largest
department store chains. With Belk he held numerous responsible
positions including floor manager, buyer, merchandiser, divisional
merchandise manager, general merchandise manager, and area merchandise
manager.
After leaving Belk Stores, Mr. Ruth spent three years operating his own
apparel store in Winston-Salem, North Carolina. He also held a position
in sales with Pine Apparel, an apparel distributor. Mr. Ruth's
experience in merchandising, buying, managing apparel of retail inventory
has provided him the sound base from which he has provided liquidation
consulting services to retailers, wholesalers, and distributors since
1993. Mr. Ruth graduated with Western Carolina University with a degree
in Business Administration.
MICHAEL H. GILBERT
Michael H. Gilbert is a Certified Public Accountant. From October 1997
to October 1999, he was Chief Financial Officer, Secretary and Treasurer
of The Prima Group International, Inc., a Charlotte, North Carolina,
holding company. Previously from May 1986 to September 1997 was a
shareholder, officer, and director of Hitchner, Whitt & Co., P.A., a firm
of certified public accountants.
NICHOLAS J. COOLIDGE
Nicholas J. Coolidge is President of Jefferson Worldwide Group Ltd. He
is a graduate of Harvard College (1954) and Harvard Law School (1959) and
spent two years as a lieutenant in the United States Marine Corps. From
1959 to 1969 he was associated with the New York Law firm of Sullivan &
Cromwell, where he worked for investment banking clients on debt and
equity financings, both domestic and international, investment company
matters and mergers and acquisitions. In 1965 he left the practice of
law and became a member of the Corporate Finance Department of Kidder,
Peabody & Co. Incorporated in New York City. While there, he served as a
Vice President, Director and Stockholder, with sixteen professionals
under his direction. He had responsibility for the firm's project
finance, leasing, real estate and Canadian activities. He was active in
public offerings, private placements, international transactions and
mergers and acquisitions. While at Kidder, Peabody he and his staff
originated and carried out in excess of 200 separate financings for new
clients involving over two billion dollars of securities. In 1978 he
left Kidder, Peabody and formed Coolidge Securities Corporation, an
<PAGE> 23
investment banking firm engaged in a broad range of financing activities
for corporate and government clients. More recently, he formed Jefferson
Worldwide Group Ltd., a member of the National Association of Securities
Dealers, Inc. (NASD), specializing in private placements for clients.
Jefferson Worldwide Group, Ltd. is also an investment advisor registered
with the District of Columbia.
TIMOTHY A. HOLLY
Mr. Holly, has extensive expertise and substantial skills in investment
analysis and management, international finance, foreign commercial
intelligence, and strategic planning. He is currently Chief Executive
Officer of Jefferson Acquisition Group, Inc., a merchant banking firm,
that recently acquired All Points Telecom, Inc., a manufacturing firm
making the world's only solar-powered wireless pay phones with internet
capability. From 1994 to 1998, Mr. Holly was the Chairman of Stone
Harbor Holdings, Ltd (an offshore venture capital fund).
From 1987 to 1994, Mr. Holly headed Royal Overseas Investment Group,
Ltd., which included Royal Asset Management Company, a registered
investment advisory firm managing the assets of high-net worth
individuals and institutions from the Middle East and Europe. Prior to
1987, he was lead analyst for two private banks, with responsibility for
structuring foreign direct investments in the United States, advising on
over $2.3 billion of investments of foreign capital. He continues to
advise certain members of the Saudi Royal Family.
Also, active in education, Mr. Holly was on the faculties of both the
University of Massachusetts and the City Colleges of Chicago; the
research staff of the Investment Negotiation Center at the Institute for
International and Foreign Trade Law; the Board of the Association of
Schools of International Affairs; and General Editor of THE FLETCHER
FORUM; A JOURNAL OF INTERNATIONAL AFFAIRS.
Mr. Holly received his undergraduate education in Political Science at
Indiana University; and graduate studies in Comparative Systems,
University of Notre Dame, and law at Georgetown University. He was also
a Compton Foundation Fellow working towards a Ph.D. in International
Business and Finance at the Fletcher School of Law and Diplomacy
(administered by Harvard University and Tufts University).
ITEM 8. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
At inception of the Company, its Directors, Richard Nadeau, Jr., James R.
Simmons and Mark T. Thatcher each received one hundred thousand (100,000)
shares of Common Stock valued at $0.0038 per share in consideration of
pre-incorporation services rendered to the Company related to
investigating and developing the Company's proposed business plan and
capital structure, and completion of the incorporation and organization
of the Company. No officer or director has received any other
remuneration. Although there is no current plan in existence, it is
possible that the Company will adopt a plan to pay or accrue compensation
to its sole officers and directors for services related to seeking
business opportunities and completing a merger or acquisition
transaction. See "Certain Relationships and Related Transactions." The
Company has no stock option, retirement, pension, or profit-sharing
programs for the benefit of directors, officers or other employees, but
the Board of Directors may recommend adoption of one or more such
programs in the future.
<PAGE> 24
It is possible that, after the Company successfully consummates a merger
or acquisition with an unaffiliated entity, that entity may desire to
employ or retain one or more members of the Company's management for the
purposes of providing services to the surviving entity, or otherwise
provide other compensation to such persons. However, the Company has
adopted a policy whereby the offer of any post-transaction remuneration
to members of management will not be a consideration in the Company's
decision to undertake any proposed transaction. Each member of management
has agreed to disclose to the Company's Board of Directors any
discussions concerning possible compensation to be paid to them by any
entity which proposes to undertake a transaction with the Company and
further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is
offered compensation in any form from any prospective merger or
acquisition candidate, the proposed transaction will not be approved by
the Company's Board of Directors as a result of the inability of the
Board to affirmatively approve such a transaction.
No member of management of the Company will receive any finders fee,
either directly or indirectly, as a result of their respective efforts to
implement the Company's business plan outlined herein. Also, there are no
plans, proposals, arrangements or understandings with respect to the sale
or issuance of additional securities by the Company prior to the location
of an acquisition or merger candidate. Please also see Item I,
Description of Business-General for information regarding the seeking out
and selection of a target company, addressing matters such as the manner
of solicitation of potential investors, the approximate number of persons
who will be contacted or solicited, their relationships to the Company's
management, etc.
INDEMNIFICATION AND LIMITATION OF LIABILITY
The Company's Articles of Incorporation include provisions which
eliminate or limit the personal liability of the Company's directors
except in situations when a director shall be liable for (i) a breach of
Section 7-5-114 of the Colorado Business Corporation Act, including
liability for improper dividends or distributions; (ii) a breach of
loyalty; (iii) failure to act in good faith; (iv) intentional misconduct
or knowing violation of the law; or (v) obtaining an improper personal
benefit. In addition, the Articles of Incorporation allow for the
indemnification of any director or officer to the fullest extent
permitted by the Colorado Corporation Code as in effect at the time of
the conduct of such person.
No employee of the Company receives any additional compensation for his
services as a director. The Company has no retirement, pension or profit
sharing program for the benefit of its directors, officers or other
employees. The Board of Directors may recommend one or more such programs
for adoption in the future.
<PAGE> 25
SUMMARY COMPENSATION TABLE FOR UAC
SUMMARY COMPENSATION TABLE
Long Term Compensation
____________________________________________________________________________
Annual Compensat. Awards Payouts
____________________________________________________________________________
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Rest. All
Name and Annual Stock LTIP Other
Principal Calend. Comp. Award Opt. P/out Comp.
Position Year Salary Bonus ($) ($) ($) SARs(#) ($)
_____________________________________________________________________________
Director
Craven, 2000 $150,000
Mark (annualized)
1999
Director
Pitoniak, 2000 $125,000
Arnold (annualized)
1999
Director
Gilbert, 2000 $ 75,000
Michael (annualized)
1999
Executive
Vice
President,
Retail
Liquidatn
Ruth, 2000 $ 85,000
William F. (annualized)
1999
ITEM 9. INDEPENDENT PUBLIC ACCOUNTANTS
Not Applicable
ITEM 11. AUTHORIZATION OR ISSUANCE OF SECURITIES OTHERWISE THAN
FOR EXCHANGE
Not Applicable
<PAGE> 26
ITEM 12. MODIFICATION OR EXCHANGE OF SECURITIES
No action is to be taken by the Company with respect to the modification
of any class of securities of the Company, or the issuance or
authorization for issuance of securities of the Company in exchange for
outstanding securities of the Company.
ITEM 13. FINANCIAL AND OTHER INFORMATION
The Company and UAC hereby provides the information as required by
paragraph (a) of this Item as follows:
<PAGE> F-1
FINANCIAL STATEMENTS
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
PERIOD ENDED DECEMBER 31, 1999
<PAGE> F-2
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Providence Capital I, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of PROVIDENCE CAPITAL I,
INC. (a development stage company) as of December 31, 1999 and the related
statements of operations, stockholders' equity and cash flows for the period
from November 24, 1999 to December 31, 1999. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
As discussed in Note 1 to the financial statements, the Company was
incorporated on November 24, 1999 and is in the development stage and had no
operations to date.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of PROVIDENCE CAPITAL
I, INC. as of December 31, 1999, and the results of its operations and its
cash flows for the period from November 24, 1999 to December 31, 1999 in
conformity with generally accepted accounting principles.
Providence, Rhode Island
July 26, 2000
/s/ Cayer Prescott Clune & Chatellier, LLP
<PAGE> F-3
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Total assets $ 0
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 15,625
Stockholders' deficit:
Common stock, $.001 par value; 50,000,000 shares
authorized, 734,000 shares issued and outstanding 734
Paid in capital 2,055
Preferred stock, $.001 par value, 50,000,000 shares
authorized, no shares outstanding
Deficit accumulated during the development stage ( 18,414)
Total stockholders' deficit ( 15,625)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 0
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> F-4
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 1999
Revenue $ 0
Expenses:
Professional fees 15,525
Organization costs 2,789
Total expenses 18,414
Net loss $( 18,414)
Loss Per Common Share $ (.03)
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> F-5
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIT
PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 1999
Common
Stock
Shares Amount Deficit
Balance at November 24, 1999 0 $ 0 $ 0
Issuance of common stock:
Stock issued for services rendered at 2,789
inception 734,000
Net loss for the period from November 24,
1999 through December 31, 1999 ( 15,625)
Balance at December 31, 1999 734,000 $2,789 $( 15,625)
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> F-7
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 1999
Cash flows from operating activities:
Net loss $ ( 18,414)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Services performed in exchange for stock 2,789
Increase in accounts payable 15,625
Net cash provided by operating activities 0
Increase in cash and cash equivalents 0
Cash and cash equivalents, beginning of period 0
Cash and cash equivalents, end of period $ 0
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> F-8
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Development Stage Operations
The Company was incorporated on November 24, 1999, in the State of
Colorado. The Company is in the development stage and its intent is to
operate as a capital market access corporation and to acquire one or more
existing businesses through merger or acquisition. The Company has had no
significant business activity to date. The Company has selected the calendar
year as its fiscal year. Costs associated with organization have been
expensed in accordance with SOP 98-5.
Stock-Based Compensation
The Company accounts for stock-based compensation under Statement of
Financial Accounting Standards ("SFAS") No. 123 "Accounting for Stock-Based
Compensation". The Company accounts for stock-based compensation based on the
fair value of the consideration received or the fair value of the stock
issued, whichever is more reliably measurable.
Estimates
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results could differ
from those estimates.
2. STOCKHOLDERS' EQUITY
On November 24, 1999, the Company issued seven hundred thirty-four
thousand (734,000) shares of its $0.001 par value common stock for services
valued at their fair market value of $2,789. The shares were issued pursuant
to Rule 701 of the Securities Act of 1933 (the "Act") and are restricted
securities within the meaning of Rule 144 of the Act.
The Company authorized 50,000,000 shares of Series A convertible
preferred stock with a par value of $0.001 per share. Currently, there are no
shares outstanding. Each share of preferred stock can be converted into one
share of common stock and each share is entitled to one vote, voting together
with the holders of shares of common stock.
3. RELATED PARTY TRANSACTIONS
The accounts payable of $15,625 was for legal services rendered in connection
with business planning and compliance. Those legal services were rendered by
shareholders of the Company.
As described in footnote #2 the Company issued common stock for services
provided by related parties that are valued at the fair market value of
$2,789.
(CONTINUED)
<PAGE> F-9
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
4. INCOME TAXES
Due to the current period's operating loss, the Company has no provision for
income taxes for 1999.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company's net
deferred tax asset balances are attributable to net operating loss
carryforwards. At December 31, 1999, the Company's deferred tax asset
consisted of the following:
Deferred tax asset $ 5,500
Valuation allowance ( 5,500)
Net deferred tax assets recognized on the
accompanying balance sheets $ 0
The components of the income tax provision (benefit) consisted of the
following for the year ended December 31, 1999.
Current $ 0
Deferred 5,500
Tentative tax provision (benefit) 5,500
Change in valuation allowance ( 5,500)
Net income tax provision (benefit) $ 0
The Company has a net operating and economic loss carryforward of
approximately $15,625 available to offset future federal and state taxable
income through 2019 as follows:
Year of Expiration Amount
2019 $ 15,625
(CONCLUDED)
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<PAGE>
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000
AND THE PERIOD FROM NOVEMBER 24, 1999
(DATE OF INCEPTION) TO MARCH 31, 2000 AND
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
REVIEW REPORT
<PAGE> F-2
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT
To the Board of Directors
Providence Capital I, Inc.
(A Development Stage Company)
We have reviewed the accompanying balance sheet of Providence Capital III, Inc.
(a development stage company) as of March 31, 2000, and the related statements
of operations, stockholders' equity, and cash flows for the three month period
then ended and the period from November 24, 1999 (inception) to March 31, 2000.
These financial statements are the responsibility of the company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
statements consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. 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,
we do not express such an opinion.
Based on our review, we are 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.
Providence, Rhode Island
July 26, 2000
/s/ Cayer Prescott Clune & Chatellier, LLP
<PAGE> F-3
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
BALANCE SHEET
MARCH 31, 2000
(UNAUDITED)
ASSETS
TOTAL ASSETS $ 0
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 16,825
Stockholders' deficit:
Common stock, $.001 par value;
50,000,000 shares authorized,
734,000 shares issued and
outstanding 734
Paid in capital 2,055
Preferred stock, $.001 par value,
50,000,000 shares authorized,
no shares outstanding
Deficit accumulated during the development stage ( 19,614)
Total stockholders' deficit ( 16,825)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 0
SEE NOTES TO FINANCIAL STATEMENTS AND
INDEPENDENT CERTIFIED ACCOUNTANTS' REVIEW REPORT.
<PAGE> F-4
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000
AND THE PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION)
TO MARCH 31, 2000
(UNAUDITED)
Three Months November 24, 1999
Ended (Inception) to
March 31, 2000 March 31, 2000
Revenue $ 0 $ 0
Expenses:
Professional fees 1,200 16,825
Organization costs 2,789
Total expenses 1,200 19,614
Net loss $ (1,200) $( 19,614)
Loss Per Common Share $ (.001) $ (.028)
SEE NOTES TO FINANCIAL STATEMENTS AND
INDEPENDENT CERTIFIED ACCOUNTANTS' REVIEW REPORT.
<PAGE> F-5
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIT
THREE MONTHS ENDED MARCH 31, 2000
AND THE PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION)
TO MARCH 31, 2000
(UNAUDITED)
Common
Stock
Shares Amount Deficit
Balance at November 24, 1999 0 $ 0 $ 0
Issuance of common stock:
Stock issued for services
rendered at inception 734,000 2,789
Net loss for the period from
November 24, 1999 through
December 31, 1999 ( 18,414)
Balance at December 31, 1999 734,000 $ 2,789 ( 18,414)
Net loss for the three months
ended March 31, 2000 (1,200)
Balance at March 31, 2000 734,000 $ 2,789 $( 19,614)
SEE NOTES TO FINANCIAL STATEMENTS AND
INDEPENDENT CERTIFIED ACCOUNTANTS' REVIEW REPORT.
<PAGE> F-6
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000
AND THE PERIOD FROM NOVEMBER 24, 1999 (DATE OF INCEPTION)
TO MARCH 31, 2000
(UNAUDITED)
Three Months November 24, 1999
Ended (Inception) to
March 31, 2000 March 31, 2000
Cash flows from operating activities:
Net loss $ (1,200) $ ( 19,614)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Services performed for stock 2,789
Increase in accounts payable 1,200 16,825
Net cash provided by
operating activities 0 0
Increase in cash and cash equivalents 0 0
Cash and cash equivalents,
beginning of period 0 0
Cash and cash equivalents, end of period $ 0 $ 0
SEE NOTES TO FINANCIAL STATEMENTS AND
INDEPENDENT CERTIFIED ACCOUNTANTS' REVIEW REPORT.
<PAGE> F-7
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Development Stage Operations
Providence Capital I, Inc. (a Development Stage Company) (the Company) was
incorporated on November 24, 1999, in the State of Colorado. The Company is in
the development stage and its intent is to operate as a capital market access
corporation and to acquire one or more existing businesses through merger or
acquisition. The Company has had no significant business activity to date.
The Company has selected the calendar year as its fiscal year. Costs
associated with organization have been expensed in accordance with SOP 98-5.
Stock-Based Compensation
The Company accounts for stock-based compensation under Statement of
Financial Accounting Standards ("SFAS") No. 123 "Accounting for Stock-Based
Compensation". The Company accounts for stock-based compensation based on the
fair value of the consideration received or the fair value of the stock issued,
whichever is more reliably measurable.
Estimates
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results could differ from
those estimates.
2. STOCKHOLDERS' EQUITY
On November 24, 1999, the Company issued seven hundred thirty-four thousand
(734,000) shares of its $.001 par value common stock for services, rendered by
related parties, valued at their fair market value of $2,789. The shares were
issued pursuant to Rule 701 of the Securities Act of 1933 (the "Act") and are
restricted securities within the meaning of Rule 144 of the Act.
The Company authorized 50,000,000 shares of Series A convertible preferred
stock with a par value of $.001 per share. Currently, there are no shares
outstanding. Each share of preferred stock can be converted into one share of
common stock and each share is entitled to one vote, voting together with the
holders of shares of common stock.
3. RELATED PARTY TRANSACTIONS
$16,525 of the accounts payable balance was for legal services rendered in
connection with business planning and compliance. Those legal services were
rendered by shareholders of the Company.
As described in footnote #2 the Company issued common stock for services
provided by related parties that are valued at the fair market value of
$2,789.
SEE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REVIEW REPORT.
(CONTINUED)
<PAGE> F-8
PROVIDENCE CAPITAL I, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
4. INCOME TAXES
Due to the current period's operating loss, the Company has no provision for
income taxes.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company's net
deferred tax asset balances are attributable to net operating loss carry-
forwards. At March 31, 2000, the Company's deferred tax asset consisted of
the following:
Deferred tax asset $ 5,800
Valuation allowance ( 5,800)
Net deferred tax assets recognized on
the accompanying balance sheets $ 0
The components of the income tax provision (benefit) consisted of the following
for the period ended March 31, 2000.
Current $ 0
Deferred 5,800
Tentative tax provision (benefit) 5,800
Change in valuation allowance ( 5,800)
Net income tax provision (benefit) $ 0
The Company has a net operating and economic loss carryforward of
approximately $16,525 available to offset future federal and state taxable
income through 2019 as follows:
Year of Expiration Amount
2019 $ 16,525
SEE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REVIEW REPORT.
(CONCLUDED)
<PAGE> 27
UAC MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and related notes thereto to be filed subsequently.
PLAN OF OPERATION
UAC does not currently have any external sources of working capital.
UAC's Management has not entered into any commitments for significant
capital expenditures. Furthermore, there are no plans to hire additional
employees unless Management is successful in securing a substantial
capital infusion.
On July 26, 2000 UAC entered into the Agreement with Providence (the
"Transaction"). This Transaction will be structured as a Merger whereby
the existing shareholders of UAC will obtain control of Providence. Upon
completion of this transaction, there can be no assurance that the
combined companies will have sufficient funds to undertake any
significant development, marketing and operating activities. Accordingly,
the combined companies will be required to either seek additional debt or
equity financing or obtain funding from third parties, in exchange for
which the combined companies might be required to issue a substantial
equity position. There is no assurance that the combined companies will
be able to obtain additional financing on terms acceptable to the
combined companies. If Management is successful in obtaining additional
funding, these funds will be used primarily to provide working capital
needed for repayment of outstanding notes payable, operations, sales and
marketing expense and to finance research, development and advancement of
intellectual property concerns. A description of the UAC business is
provided in ITEM 14.
LIQUIDITY AND CAPITAL RESOURCES
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity. The Company's balance sheet as of March 31, 2000,
reflects a current asset value of $0.00, and a total asset value of $0.00
in the form of cash and capitalized organizational costs.
The Company will carry out its plan of business as discussed below.
<PAGE> 28
RESULTS OF OPERATIONS
During the period from November 24, 1999 (inception) through June 30,
2000, the Company has engaged in no significant operations other than
organizational activities, acquisition of capital and preparation for
reporting as a registrant under Section 12 of the Securities Exchange Act
of 1934, as amended. No revenues were received by the Company during this
period.
NEED FOR ADDITIONAL FINANCING
The Company believes that its existing capital will be sufficient to meet
the Company's cash needs, including the costs of compliance with the
continuing reporting requirements of the Securities Exchange Act of 1934,
as amended, for a period of approximately two years.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS 109") issued by the Financial Accounting Standards Board ("FASB"),
under which deferred tax assets and liabilities are provided on
differences between the carrying amounts for financial reporting and the
tax basis of assets and liabilities for income tax purposes using the
enacted tax rates. Under SFAS 109, deferred tax assets may be recognized
for temporary differences that will result in deductible amounts in
future periods. A valuation allowance is recognized, if on the weight of
available evidence, it is more likely than not that some portion or the
entire deferred tax asset will not be realized.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" ("SFAS 121") issued by the FASB, is effective for financial
statements for fiscal years beginning after December 15, 1995. The
standard establishes new guidelines regarding when impairment losses on
long-lived assets, which include plant and equipment, certain
identifiable intangible assets, and goodwill, should be recognized and
how impairment losses should be measured.
The Company does not expect adoption to have a material effect on its
financial position or results of operations. Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123") issued by the FASB, is effective for specific transactions
entered into after December 15, 1995. The disclosure requirements of SFAS
123 are effective for financial statements for fiscal years beginning no
later than December 15, 1995. The new standard established a fair value
method of accounting for stock-based compensation plans and for
transactions in which an entity acquires goods or services from non-
employees in exchange for equity instruments. The Company does not expect
adoption to have a material effect on its financial position or results
of operations.
<PAGE> 29
FEDERAL INCOME TAX ASPECTS OF INVESTMENT IN THE COMPANY
The discussion contained herein has been prepared by the Company and is
based on existing law as contained in the Code, amended United States
Treasury Regulations ("Treasury Regulations"), administrative rulings and
court decisions as of the date of this Registration Statement. No
assurance can be given that future legislative enactments, administrative
rulings or court decisions will not modify the legal basis for statements
contained in this discussion. Any such development may be applied
retroactively to transactions completed prior to the date thereof, and
could contain provisions having an adverse affect upon the Company and
the holders of the Common Stock. In addition, several of the issues dealt
with in this summary are the subjects of proposed and temporary Treasury
Regulations. No assurance can be given that these regulations will be
finally adopted in their present form.
Y2K COMPLIANCE
UAC has conducted an assessment of issues related to the Year 2000 and
determined that all its computer driven systems and software in use are
able to recognize, calculate, and display data-related dates correctly
after the year 1999. UAC can not determine the impact the Year 2000 will
have on its key suppliers. However, if UAC's key suppliers do not convert
their systems to become Year 2000 compliant, UAC may be adversely
impacted.
FORWARD LOOKING STATEMENT
This Management's Discussion and Analysis of Financial Condition and
Results of Operations includes a number of forward-looking statements
that reflect Management's current views with respect to future events and
financial performance. Those statements include statements regarding the
intent, belief or current expectations of UAC and members of its
management team as well as the assumptions on which such statements are
based.
Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risk and
uncertainties, and that actual results may differ materially from those
contemplated by such forward-looking statements.
The Company undertakes no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of
unanticipated events or changes in the future operating results over
time. The Company believes that its assumptions are based upon reasonable
data derived from and known about its business and operations and the
business and operations of UAC. No assurances are made that actual
results of operations or the results of the Company's future activities
will not differ materially from its assumptions.
<PAGE> 30
ITEM 14. MERGERS, CONSOLIDATIONS, ACQUISITIONS AND SIMILAR MATTERS
An Agreement and Plan of Merger and Reorganization was executed on July
26, 2000, by and among Providence and UAC, who joined in the execution of
the Agreement for the purpose of making certain covenants regarding the
Transaction contemplated therein. Providence is a corporation duly
organized and validly existing under the laws of the state of Colorado,
with its registered office at 17 West Cheyenne Mountain Blvd., Colorado
Springs, Colorado 80906, its principal executive office at 1250 Turks
Head Building, and its phone number is (401) 272-5800; UAC is a
corporation duly organized and validly existing under the laws of the
state of North Carolina, with its registered office located in the city
of Charlotte, State of North Carolina, its principal executive office at
8609 Wood Lake Court, Suite 206, Charlotte, North Carolina 28210, and its
phone number is (704) 556-7992.
The respective boards of directors of Providence and UAC deemed it
desirable and in the best interests of their respective corporations, for
Providence to acquire the outstanding capital stock of UAC in exchange
for the issuance of shares of the common and preferred stock of
Providence and have proposed, declared advisable and approved such merger
(the "UAC Merger") pursuant to this Agreement, which Agreement has been
duly approved by resolutions of the respective boards of directors of
Providence and UAC.
This Agreement requires that a shareholders' meeting be called by
Providence for the purposes of approving the UAC Merger prior to closing.
The UAC Merger shall become effective on the "Effective Date", such date
being the later upon which (i) amended Articles of Incorporation are
filed with the Secretary of State of Colorado and (ii) a Certificate of
Merger is filed with the Secretary of State of North Carolina. The
"Closing Date" will be on or within one (1) business day of the date the
Agreement is approved by the shareholders of Providence.
The UAC Merger is intended to qualify as an I.R.C. 368(b) tax-free
reorganization. At the Closing, (a) UAC shall deliver to Providence a
statement (in such form as may be reasonably requested by counsel to
Providence) conforming to the requirements of Section 1.897-2(h)(1)(i) of
the United States Treasury Regulations, and (b) UAC shall deliver to the
IRS the notification required under Section 1.897-2(h)(2) of the United
States Treasury Regulations.
<PAGE> 31
EFFECT OF UAC MERGER
In all other respects, the identity, existence, purposes, powers,
objects, franchises, rights, and immunities of Providence shall continue
unaffected and unimpaired by the UAC Merger.
The laws of Colorado shall continue to govern Providence. On and after
the Effective Date, the articles of incorporation of UAC shall be the
articles of incorporation of Providence until further amended in the
manner provided by law and in such articles of incorporation (the
"Articles"). On the Effective Date, the bylaws of UAC shall be the bylaws
of Providence (the "Restated Bylaws") until altered, amended, or
repealed, or until new bylaws shall be adopted in accordance with the
provisions of law, the Articles, and the Restated Bylaws.
CONVERSION OF UAC'S STOCK AND OTHER SECURITIES
UAC shareholders will surrender one hundred percent (100%) of their
issued and outstanding common and preferred shares to Providence on the
date of execution of this Agreement. In exchange for receipt of one
hundred percent (100%) of UAC shares, Providence, on the terms and
subject to the conditions herein set forth, shall issue and deliver to
UAC shareholders:
On the Closing Date, 13,500,000 Common Shares, no par value
("Providence Common Stock"), of Providence, on a share-for-share
basis, registered in the name of each UAC shareholder or its nominee.
--Providence Common Stock
None of the currently issued and outstanding shares of Providence
Common Stock, no par value, issued and outstanding at the effective
time of the UAC Merger shall be converted as a result of the UAC
Merger;
--Fractional Interests
No fractional shares of preferred or common stock of Providence or
certificate or scrip representing the same shall be issued. In lieu
thereof each holder of UAC shares having a fractional interest arising
upon such conversion will be rounded up into one full additional share
of common stock of Providence;
--Status of Common Stock
All shares of common stock of Providence into which UAC shares are
converted as herein provided shall be fully paid and non-assessable
and shall be issued in full satisfaction of all rights pertaining to
such Providence Common Stock;
--Status of Preferred Stock
All shares of preferred stock of Providence into which UAC shares are
converted as herein provided shall be fully paid and non-assessable
and shall be issued in full satisfaction of all rights pertaining to
such Providence Preferred Stock;
<PAGE> 32
--Independent Appraisal, Right to Dissent and Obtain Payment for Shares
Procedures for Protection of Dissenter's Rights. In order to establish
a "fair value" for the UAC shares which are paid in cash in lieu of
conversion into the shares of Providence, as provided in this Article
VI, the Board of Directors of UAC shall establish the value of UAC
shares prior to the UAC Merger, and shall afford to such shareholders
of UAC all of the rights, and implement the procedures for protection
of dissenters' rights, pursuant to the provisions of the North
Carolina Business Corporation Act, as amended, the terms and
provisions of which are hereby incorporated by reference and made a
part hereof.
UAC SHAREHOLDER DISSENTER'S RIGHTS
The Board of Directors of UAC shall establish the value of UAC's shares
prior to the UAC Merger, and shall afford to the shareholders of UAC all
of the rights, and implement the procedures for protection of dissenters'
rights, pursuant to the provisions of the North Carolina Business
Corporation Act. The capital surplus and retained earnings accounts of
UAC shall be determined, in accordance with generally accepted accounting
principles, by the board of directors of UAC. Nothing herein shall
prevent the board of directors of UAC from making any future changes in
its accounts in accordance with law.
INVESTMENT REPRESENTATION LETTER
At the Closing, each of the UAC shareholders shall execute and deliver to
UAC an investment representation letter statement in such form as may be
reasonably requested by counsel.
<PAGE> 33
UAC CORPORATION-
DESCRIPTION OF THE BUSINESS
UNITED AMERICAN COMPANIES, INC.
United American Companies, Inc. ("UAC"), is a newly formed North Carolina
corporation. Its primary purpose is to become a public company
specializing in asset evaluation, acquisition, liquidation, management
and financing by seizing undervalued opportunities in the retail,
wholesale, distribution and manufacturing sectors with the strategy of
UAC being two-fold; creating high current returns and income by
liquidating assets and creating equity value over a period of time by
purchasing operating companies at value and increasing that value over
time and selling those companies for a significant return on investment.
This purpose is partly based upon the following factors:
* Domestic retail capacity is four times the level needed for US
consumers
* Periodic declines in consumer spending result in more retail
failures
* Dominant retailers like Wal-Mart and Home Depot accelerate the
pace of retail failures
* E-commerce and e-tailing will increase failures of traditional
retailers
* Middle Market default rates indicate higher defaults among retailers
* In 1999, major principal liquidations exceeded an estimated $15
Billion
* Brands like London Fog and Bonwit Teller have been liquidated and
are therefore gone from the retail market
* In 1999, assets of companies filing bankruptcy exceeded $30
billion.
* Opportunities exist for brand licensing and exporting of liquidated
assets.
* Opportunities exist for purchasing old world economy companies
applying new world economy strategies and e-commerce at below
enterprise value.
To realize the opportunities from conditions in the economic market place
and to effectively enter the comprehensive asset management industry, UAC
is acquiring in an exchange of common stock, either complete ownership or
control of several entities comprising the Craven Companies (the "Craven
Group" or "Craven") -- a nationally recognized liquidator of consumer
product inventories, thereby making UAC a fully-integrated asset
management company.
<PAGE> 34
The Craven Group has antecedents dating back to 1994. However, Craven
senior management and principals have been active in the retail industry
and in the retail inventory liquidation industry since 1957. In the last
five years, the Craven Group has liquidated over $1 billion in assets.
The Craven Group has served over 2,000 clients that include:
* Bonwit Teller
* Montaldo's
* Tapp's Department Stores
* Leder Bros. Department Stores
* Hess Shoes
* Skinner's Furniture Stores
To become a full-service asset acquisition, liquidation management firm,
and turnaround company, in November 1999, the Craven Group's activities
were structured as several Delaware limited liability companies -- each
containing the name "Fox." However, this designation was recently changed
to "Craven" to reflect certain internal changes and to take advantage of
the widely known and respected name of the Craven Chairman -- Mark
Craven, an established expert in the liquidation of retail inventories.
The Craven Group is comprised of the following affiliate entities:
* Craven and Ruth, Inc. - merchandise sales, factoring, distribution
* Craven and Ruth Promotions, LLC. - retail and wholesale liquidations
* High Point Furniture Liquidators, LLC - retail and wholesale
liquidations
* Craven Advisory Group, LLC - business consulting services
* Craven Valuation Services, LLC - retail inventory valuations and
appraisals
* Craven Capital Partners, LLC - principal purchasers of retail
inventory and assets from distressed retailers (inventory liquidated
by other Craven entities)
* Promo Services, LLC - provider of sign materials and promotion
advertising preparation and placement of advertising
* CrossStone Capital Group, LLC - investment and merchant banking.
The Craven Group employs five full-time professionals who have extensive
financial, retail, and liquidation experience. Craven also has 50
professionals who are affiliated with the group on a retainer basis.
These contracted human resources assist with appraisals and evaluations,
liquidations, and marketing activities. As additional support, Craven has
an adequate back-office staff of four to handle the collective activities
of the group.
<PAGE> 35
Craven uses a proprietary financial model and analysis to value
inventories. The model incorporates many variables including US economic
indicators and industry information such as gross profit margins,
turnover, age, product mix, distribution channels, computability,
seasonality, and market values, then compares the results to data of
competitive retailers, manufacturers, or wholesales. In the past, the
Craven model has been applied in its "fee-based liquidation" business -
i.e., where clients retain Craven to conduct liquidation sales and
promotions. While Craven will continue operating a fee-based practice, it
intends to become an "equity" liquidator - i.e., where Craven, as a
principal, acquires the assets and then determines the most appropriate
means of liquidation, disposition, or positioning of the assets.
Though Craven, as an equity liquidator, would initially be the smallest
of 8 national liquidators of consumer products inventories, the potential
returns are expected to be quite significant - far surpassing the income
potential of fee-based business. In many instances, the larger
liquidators form joint ventures to acquire large inventories (at
auctions, in bankruptcies, etc.). These arrangements reduce competition
and, in turn, improve profit potential. To date, Craven has lacked the
necessary capital to participate as a principal in such transactions.
However, UAC is presently preparing a private placement of $100,000,000
in preferred stock and or secured revolving credit. To date, in
preliminary discussions with institutional funders, UAC's proposal has
been very well received, and each source is anxiously awaiting the
private placement memorandum.
UAC shall have has its initial directors:
* Mark Craven, Chairman of the Board of Directors
* Arnold E. Pitoniak, Chief Executive Officer
* William F. Ruth, Executive Vice President,
Retail Liquidation Services
* Michael Gilbert, Chief Financial Officer and Treasurer
of UAC
* Timothy A. Holly, Director of UACI
* Nicholas J. Coolidge, Director of UACI
<PAGE> 36
The Craven Companies LLC and Affiliates
12 Months Post Closing
Total Revenues $ 49,997,684
Operating Costs/Expenses 38,262,826
EBITDA 11,734,854
UAC currently derives its income via fee-based litigation consulting,
small "equity" liquidation transactions where the company, as a
principal, acquires the assets and then determines the most appropriate
means of liquidation, disposition or positioning of those assets, and
consulting fees from services to liquidation clients including
valuations, financing, marketing and advertising. However, with a large
line of credit facility which the company is currently negotiating of
$100,000,000, UAC would be able to participate in much larger "equity"
principal liquidation transactions. Although there is no guarantee of
this funding, several institutional investors have expressed a strong
interest in a preferred offering or debt instrument financing in the form
of a secured line of credit.
As well, UAC through one of the Craven affiliates, CrossStone Capital
Group, LLC has executed the purchase contract of an acquisition of a
manufacturing concern which provided UAC closes on this transaction,
would increase the pro forma revenues post-closing by twenty million
($20,000,000) with an EBITDA increase to UAC of $1,500,000 on an annual
basis and as well CrossStone Capital Group, LLC has extended two offers
on two other operating companies. The balance sheet of UAC would show
net tangible assets exceeding $10,000,000 with these acquisitions.
However, these pro forma numbers post-closing reflect certain financings
and other assumptions which are not the control of management or the
company. Certain statements, estimates and forward-looking projections
prepared by the company may not be representative of future outcome. The
company makes no representation as to their attainability, nor can any
such representation be implied. In addition, because the estimates and
assumptions underlying such projections are inherently subject to
significant economic, market, and regulatory uncertainty and
contingencies, which are difficult or impossible to predict accurately
and are beyond the company's control, there is significant risk that the
projections will not be realized. Accordingly, actual results may be
materially different from those projected.
ITEM 15. ACQUISITION OR DISPOSITION OF PROPERTY
No action is to be taken by the Company with respect to the acquisition
or disposition of any property.
<PAGE> 37
ITEM 16. RESTATEMENT OF ACCOUNTS
No action is to be taken by the Company with respect to the restatement
of any asset, capital, or surplus account of the Company.
ITEM 17. ACTION WITH RESPECT TO REPORTS
No action is to be taken by the Company with respect to any report of the
Company or of its directors, officers, or committees or any minutes of a
meeting of its security holders.
ITEM 18. MATTERS NOT REQUIRED TO BE SUBMITTED
No action is to be taken by the Company with respect to any matter which
is not required to be submitted to a vote of security holders. Management
does not know of any other matters which may come before this meeting.
However, if any other matters are properly presented to the meeting, it
is the intention of the officers and directors named in the accompanying
information statement to vote, or otherwise act, in accordance with their
judgment on such matters.
<PAGE> 38
ITEM 19. AMENDMENT OF ARTICLES, BYLAWS OR OTHER DOCUMENTS
Action will be taken by the Company with respect to the restatement and
amendment of articles of the Company, whereby the name of the company
will be changed from "Providence Capital I, Inc." to "United American
Companies, Inc.", the Company's Articles of Incorporation will be amended
to Copies of the proposed Restated and Amended Articles of Incorporation
are available upon request by contacting the Company in writing at 1250
Turks Head Building, Providence, Rhode Island 02903.
ITEM 20. OTHER PROPOSED ACTION
No action is to be taken by the Company on any matter not specifically
referred to in this Schedule 14C.
ITEM 21. VOTING PROCEDURES
The Board of Directors has fixed August 5, 2000 as the record date for
the determination of shareholders entitled to vote at the meeting. At the
close of business on that date there were outstanding and entitled to
vote 1,500,000 shares of Common Stock entitled to one (1) vote per share
(the "Voting Shares"). The affirmative vote of the holders of a majority
of the Company's Voting Shares is required to approve each of the
Proposals.
The directors, officers and affiliates of the Company as a group own or
may be deemed to control 1,250,000 shares of Common Stock constituting
eighty- three percent (83%) of the outstanding shares of Voting Shares.
Each of the directors, nominated directors and officers has indicated his
or her intent to vote all shares of Voting Shares owned by him or her in
favor of each item set forth herein.
ITEM 22. INFORMATION REQUIRED IN INVESTMENT COMPANY PROXY STATEMENT
Not applicable
THIS INFORMATION STATEMENT IS PROVIDED TO YOU
FOR INFORMATION PURPOSES ONLY.
NO ACTION ON YOUR PART IS SOUGHT OR REQUIRED.
