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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) NOVEMBER 27, 2000
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BOPPERS HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
NEVADA 0-30717 880409261
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
437 MADISON AVENUE, 39TH FLOOR, NEW YORK, NEW YORK 10022
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(Address of principal executive offices)
Registrant's telephone number, including area code 212-753-5711
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1801 EAST TROPICANA, SUITE 9, LAS VEGAS, NEVADA 89119
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(Former name or former address, if changed since last report.)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On October 20, 2000, Boppers Holdings, Inc., a Nevada
corporation (the "Company"), Boppers Acquisition Corp. a newly formed Nevada
corporation and wholly owned subsidiary of the Company ("BAC"), and e Smart
Systems, Inc., a Nevada corporation ("eSmart") and wholly owned subsidiary of
Intermarket Ventures, Inc., a Utah corporation ("IVI"), entered into an
Agreement and Plan of Merger (the "Agreement"). Pursuant to the terms of the
Agreement: (i) the Company acquired all of the issued and outstanding shares of
Common Stock of eSmart; (ii) BAC merged with and into eSmart such that eSmart
was the survivor; (iii) eSmart became a wholly owned subsidiary of the Company;
and (iv) IVI, the sole shareholder of eSmart, acquired control of the Company as
described below.
Prior to the consummation of the transactions contemplated by
the Agreement, the Company had 200,000,000 authorized shares of Common Stock,
par value $.001 per share (the "Common Stock"), 20,000,000 authorized shares of
Preferred Stock, par value $.001 per share and 3,501,000 issued and outstanding
shares of Common Stock. Pursuant to the Agreement, the Company: (i) issued
58,600,000 shares of its Common Stock to IVI in exchange for 58,600,000 shares
of eSmart's common stock, par value $.001 per share, owned of record by IVI; and
(ii) converted warrants to purchase an aggregate of 2,900,000 shares of the
Company's Common Stock at $10.00 per share (the "Warrants") into warrants to
purchase an aggregate of 2,900,000 shares of eSmart's common stock at $10.00 per
share and owned of record by IVI. The foregoing caused a change in the control
of the Company.
On November 27, 2000 (the "Effective Date"), T.J.Jesky and
Skyelan Rose resigned as directors and, respectively, the President and
Secretary of the Company and John D. Phelan was elected as the sole director and
officer of the Company on an interim basis as described below. Mr. Phelan is the
Vice President of Business Affairs at IVI and the son of Mary Grace, the
President of IVI.
Pursuant to the terms and conditions of a Cooperation
Agreement, dated August 27, 2000 (the "Cooperation Agreement"), by and among
eSmart, IVI and Sino- Overseas Construction Information Company, Ltd. ("SCI"), a
corporation organized under the laws of the People's Republic of China
(collectively, the "Parties"), the Parties agreed, inter alia, that when eSmart
merged with a publicly owned company, the board of directors of eSmart would
have nine members comprised as follows: three directors nominated by IVI; three
directors nominated by SCI; and three independent directors nominated jointly by
IVI and SCI. Upon the nomination and election of the individuals who will serve
on the nine member board of directors, which is anticipated to occur within the
next three months, Mr. Phelan will resign as the sole director and officer of
eSmart.
The following table sets forth certain information regarding
the beneficial ownership of the Company's Common Stock as of the Effective Date
by: (i) the sole director of the Company; (ii) the sole executive officer of the
Company (as that term is defined in item
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402(a)(3) of Regulation S-B); (iii) each person who will be the beneficial owner
of more than five percent of the Company's Common Stock; and (iv) the sole
director and sole executive officer as a group. All share ownership listed in
the table is direct, unless otherwise indicated.
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<CAPTION>
Name and Address
of Shares of Amount of Percent
Beneficial Owner Shares Owned of Class
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<S> <C> <C>
Intermarket Ventures, Inc. 58,600,000(1) 94.3(1)
7225 Bermuda Rd.
Suite C
Las Vegas, Nevada 89119
John D. Phelan
437 Madison Avenue
39th Floor
New York, New York 10022 0(2) 0%(2)
Sole Director and Sole Executive
Officer
as a group (1 Person) 0 0%
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(1) Pursuant to a Share Transfer Agreement dated August 27, 2000, as amended,
between SCI and IVI (the "Share Transfer Agreement"), IVI is obligated to
transfer to SCI 29,250,000 of its shares of Common Stock of the Company.
Pursuant to the terms and conditions of the Share Transfer Agreement, the share
transfer is contingent upon: (i) the establishment of the joint venture between
SCI and IVI hereinafter described (the "Venture"); (ii) the Venture being issued
a business license by an authorized entity of the People's Republic of China;
and (iii) the Venture complying with the other terms and conditions of the Share
Transfer Agreement. There can be no assurance that all of the terms and
conditions will be satisfied. In addition, SCI and IVI agreed that (i) all
shares of the Company's Common Stock owned by either of them shall be restricted
from sale, transfer or hypothecation for a period of three years from the date
of receipt by SCI and (ii) neither SCI nor IVI will acquire shares of the
Company on the market without the advance written consent of the other party.
(2) On November 6, 2000, the Company filed a Schedule 14f-1 in which it
incorrectly reported that John D. Phelan owned 200,000 options to purchase
shares of Common Stock of the Company and had a .003% percent interest in the
Company. Mr. Phelan (i) owns no shares of Common Stock of the Company, (ii) owns
no convertible securities to purchase shares of Common Stock of the Company and
(iii) disclaims beneficial ownership of the shares of Common Stock of the
Company owned by IVI. On November 1, 2000, Mr. Phelan
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was granted a five (5) year option to purchase 200,000 shares of Common Stock of
IVI at an exercise price of $4 per share.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On the Effective Date, the Company consummated the acquisition of
eSmart in a merger transaction in accordance with the Agreement described in
Item 1 above. Pursuant to the Agreement, (i) the Company acquired all of the
issued and outstanding shares of Common Stock of eSmart in consideration for
issuing 58,600,000 shares of the Common Stock of the Company to the sole
stockholder of eSmart and (ii) eSmart became a wholly owned subsidiary of the
Company. See Item 1 above for additional information regarding this transaction.
The following is a brief description of the Company's new business.
GENERAL
The Company, through its newly acquired, wholly-owned subsidiary,
eSmart , is the exclusive licensee of technology utilized in a multi-application
smart card system for use in the territory of the Peoples Republic of China
("China"). The smart card technology was developed by, and is licensed from,
IVI, formerly the sole stockholder of eSmart (and currently a principal
stockholder of the Company).
The licensed smart card technology is an highly secure, end-to-end
system based upon a number of proprietary techniques and centered around a
unique, network enabled, multi-application, multi-processor smart card with an
on-card, bio-metric sensor that reads a user's fingerprint before authorizing a
transaction or transferring information (the "eSmart Technology" or the "eSmart
Card"). Unlike other smart cards that have finger print sensors on board, the
eSmart Card fingerprint sensor is not effected by either dry conditions or wet
conditions and will give an equally accurate reading in the middle of a desert
or in a driving rainstorm. eSmart believes that the eSmart Technology is not
subject to credit card type fraud and that for all practical purposes, the
eSmart Card is counterfeit proof.
The eSmart Card works with a reader that requires a physical contact or
with a reader that works without physical contact (wireless). The eSmart
Technology has many other security advantages over ordinary systems including
true end to end use of a digital ID for each user that can be activated only by
the proper fingerprint of the correct user. This system affords true protection
of confidential personal user information, protecting it at all times while in
transit from unauthorized eyes.
In addition, the eSmart Card is a multi-application smart card that,
among other things, enables a consumer to use one card to conduct numerous types
of transactions. The eSmart Card can function as a standalone electronic purse
or a network connected, bank debit card and
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a credit card. The card can be used for, among other things: payment of retail
purchases, in person, or over the internet; payment of taxi and public
transportation fares (buses and subways); electricity, water and gas (utility)
payments; the payment of car parking fees, telephone call charges, and tickets
to public events; as well as for payment of medical services, and fines. In
addition, the eSmart Card can function as a door security access key, an
identification card, a medical records file and a driver's license. In fact, the
eSmart Card can function in just about any situation that calls for payment or
identification or access to an area or a data base.
The eSmart Technology to be implemented by the Company is designed to
enable consumers across China to handle their daily transactions with one card -
the eSmart Card - permeating and simplifying as many aspects of daily life as
possible.
China's government, central and local, is actively encouraging the
development of such a one-card pass system.
CHINA JOINT VENTURE
The Company is a 50% shareholder in a Chinese joint venture created to
institute the eSmart Technology throughout China. This joint venture is being
implemented through what is known as "a Sino-Foreign Joint Venture Company" that
has been newly formed in China and named "e-Smart City Card Co., Ltd." ("eSmart
China"). By complying with the provisions of the Chinese Sino-Foreign Joint
Ventures Laws, the Company is afforded many legal protections in China for its
investment in China as well as the ability to repatriate its capital and its
profits in accordance with such laws.
On or about September 12, 2000, the prospective joint venture received
the "Certificate of Approval for the Establishment of Enterprises with Foreign
Investment in the People's Republic of China" from the Beijing branch of the
China Ministry of Foreign Trade and Economic Cooperation (MOFTEC) and on
September 21, 2000, eSmart China received a temporary business license (the
"Business License") (pending completion of all financial and legal formalities)
permitting it to commence legal operations from the China State Industrial and
Commercial Administration. The Business License allows eSmart China to engage in
the following operations: "Development and production of smart cards, readers
and intelligent digital software and hardware; smart card application system
integration; technology development, support and training for network and
e-commerce; system integration, operation and management of smart card data
centers; sale of self-produced production, providing after-sale service and
maintenance, technical support and training."
eSmart China is owned as follows:
o ESMART: eSmart, a wholly-owned subsidiary of the Company,
holds a 50% share in eSmart China.
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o SINO-OVERSEAS CONSTRUCTION INFORMATION, CO. LTD. ("SCI"): SCI
owns a 25% share in eSmart China. It is a Chinese company
primarily owned and directly subordinated to the Ministry of
Construction ("MOC"), one of the largest ministries in China.
MOC is the regulator of all smart cards and applications used
in China's construction areas and has appointed SCI as the
implementing company to promote the use of smart cards
throughout China.
o INTERMARKET VENTURES INC. ("IVI"): IVI holds a 25% share in
eSmart China. IVI developed the technology licensed to eSmart
for use in the Super Smart Card System and, at present, owns
over 90% of the issued and outstanding stock of the Company.
(For more information about the ownership of the Company, see
footnote 1 to the beneficial ownership table in Item 1 above.)
The three owners of eSmart China; eSmart, SCI and IVI are parties to a
Joint Venture Contract dated August 27, 2000 (the "JV Agreement") which sets
forth each party's rights and obligations with respect to the capital,
development and management of eSmart China.
Pursuant to the terms of the JV Agreement, eSmart is obligated to
contribute $22 million dollars (the "eSmart Capital")and IVI is obligated to
contribute $7 million dollars (the "IVI Capital") to eSmart China. All of the
eSmart Capital, as well as the IVI Capital is being provided by IVI. IVI is
funding both of these obligations through the sale of securities held in its
portfolio.
In addition to the capital contributions to eSmart China, eSmart and
IVI will (i) provide technical and other support to eSmart China for research,
development, production and marketing, (ii) assist with the selection and
installation of equipment, (iii) assist with the selection and purchase of raw
and other materials, (iv) train personnel recruited by eSmart China and (v)
cooperate in all relevant matters required for the operation of eSmart China.
SCI will not make a cash capital contribution to eSmart China but will
contribute valuable intangible rights such as marketing channels, experience and
reputation. SCI has been marketing smart card concepts throughout China for
several years. eSmart China will be the beneficiary of this marketing effort.
Moreover, SCI's parent, the MOC, has arranged for companies that implement its
smart card program to receive favorable lines of credit from one of China's
largest commercial banks to pay for the goods, software and services required to
install smart card technology. By virtue of the joint venture, eSmart China will
benefit from these lines of credit as such lines will finance the installation
of the eSmart Technology by its customers up to an aggregate total of the
equivalent of U.S.$ 650 million.
In addition, the JV Agreement provides that SCI will perform the
following specific services for eSmart China: (i) assist to lease office space
and equipment, (ii) assist in the design and the construction of engineering
facilities and the purchase of manufacturing equipment for these facilities,
(iii) assist in the purchase of raw and other materials, (iv) provide
communication and transportation services, (v) apply for all licenses,
certificates, registrations and other
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necessary governmental approvals, (vi) recruit managerial, technical and other
personnel and assist foreign personnel with obtaining necessary work licenses,
(vii) negotiate agreements with third parties and (viii) devote all resources at
its disposal for the implementation of the eSmart Technology in China.
The JV Agreement specifies that the board of directors of eSmart China
(the "eSmart China Board") will have eight (8) members, four (4) members
appointed by SCI and four (4) members appointed by IVI. The Articles of
Association (similar to the By-Laws of a U.S. Company) of eSmart China provide,
among other things, that: (i) certain enumerated fundamental issues, such as
amendments to the Joint Venture Agreement or the disposition of property outside
the normal course of business or any transfer of ownership in eSmart China, and
other similar fundamental issues, can only be changed by unanimous consent of
the eSmart China Board, (ii) all other resolutions of the eSmart China Board
require the consent of at least six (6) directors to pass and (iii) the chief
financial officer of eSmart China will be appointed by IVI and appointed by the
eSmart China Board.
MISSION
The mission of eSmart China is to create "digital cities" that utilize
the convergence of telecommunications networks and the new service possibilities
created therefrom to enhance the quality of life of ordinary people through the
unifying medium of the "eSmart Card". To accomplish this mission, eSmart China
will build upon the years of ground work already made by SCI to bring its eSmart
Technology to China and through the medium of its China Joint Venture, together
with the help of its partners, integrate and manage the eSmart Card System, city
by city, across China.
eSmart China anticipates generating revenue by presenting a
comprehensive and user-friendly transaction system to the public, that uses one
card - the eSmart Card - to perform numerous everyday transactions and tasks.
The Company believes that the tremendous convenience offered by the eSmart Card
will be very attractive to Chinese consumers. Waiting in lines to pay bills,
carrying a lot of cash, forgetting your pin number, needing 10 different cards
and remembering which card is for which function; all of these problems are
eliminated by the eSmart Card. Upon full implementation of the eSmart system,
China will have what is perhaps the most advanced and secure payment system in
general use in the world today.
eSmart China will have three (3) principal sources of revenues:
- Hardware and Software: system integration and equipment sales
(e.g. cards, card readers, software, management systems,
etc.)and system maintenance; and
- Transaction: a reasonable percentage will be charged upon each
transaction of each card; and
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- Ancillary Business: advertisement, interest income.
Specifically, revenues may be generated from the following sources:
1. SYSTEM INTEGRATION. Integration of the system for various entities
in different cities such as public transportation agencies (e.g. buses and
subways), private transportation entities (taxi cab companies), parking lots,
hospitals, banks, etc.
2. CARD SALES. Sales of eSmart Cards to be distributed to consumers.
3. CARD READER SALES. Sales of Card readers for distribution to all
places where the eSmart Card is used.
4. SERVICE FEES. Fees earned to maintain the eSmart Card System from
each participating agency and company.
5. TRANSACTION FEES. Fees charged for each transaction conducted
through the eSmart Card System.
6. ADVERTISEMENT. Fees for use of the "Pocket Billboard", that is use
of eSmart Cards' physical surfaces for advertisement.
MARKETING PLAN
eSmart China by virtue of its association with SCI and the MOC enjoys a
unique business model for a newly established company. eSmart China intends to
capitalize on the market channels already established in 17 cities by SCI by
supplying these cities with the eSmart Technology on a roll out schedule
mutually agreeable to all parties. Despite this jump start, eSmart China's
management team considers marketing and promotion to be its most important task
and an important accelerator of its business success. eSmart China's marketing
team is focusing on signing agreements with as many cities as possible in order
to establish the broadest possible transaction network in the shortest possible
time.
For the consumer, the more cities and the more industries participating, the
greater the consumer's convenience. Because the Super Smart Card is
trans-industry and trans-area, management believes that convenience to consumers
will be a significant factor in attracting more users. The Company's success is
dependent upon eSmart China's success and profitability. After the payment of
all proper expenses, taxes and the retention of prudent reserves, eSmart China
intends to distribute excess profits, if any, to the Joint Venture Partners. The
Company, through eSmart, will receive 50% of cash distributions of eSmart China
if, as and when they occur.
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ITEM 7. FINANCIAL STATEMENTS, PRO-FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements. The Financial Statements relating to the
transaction described in Items 1 and 2 are not included herewith and will be
filed as an amendment to this report on or before February 12, 2001.
(b) Pro Forma Financial Information. The pro forma financial
information relating to the transaction described in Items 1 and 2 is not
included herewith and will be filed as an amendment to this report on or before
February 12, 2001.
(c) The following exhibits are filed herewith:
Exhibit 2 - Merger Agreement*
Exhibit 99.1 - Joint Venture Contract
Exhibit 99.2 - Articles of Association
Exhibit 99.3 - Exclusive Use Agreement
Exhibit 99.4 - Cooperation Agreement
Exhibit 99.5 - Share Transfer Agreement
Exhibit 99.6 - Supplementary Agreement to the Stock Transfer
Agreement and Cooperation Agreement
* Previously Filed
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BOPPERS HOLDINGS, INC.
By:/s/ JOHN D. PHELAN
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John D. Phelan, President
Dated: December 13, 2000
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