SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended:
December 31, 1999 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 2 41703
Cassco Capital Corp.
(Exact name of registrant as specified in its charter)
Delaware 43 1594165
(State of incorporation) (I.R.S. employer identification number)
1999 Broadway, Ste. 3235, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
1999 Broadway, Ste. 3235, Denver, Colorado 80202
(Mailing address) (Zip Code)
Registrants telephone number: (303) 292 2992
Securities registered pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___ Indicate by check mark if
disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not
contained herein and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing: On
March 3, 2000, the closing inside bid and asked prices for the shares of common
stock of registrant, which is the sole voting stock outstanding of registrant,
were $.31 and $.50, respectively. On that date, there were approximately
3,000,000 shares of common stock outstanding. Affiliates held no shares of this
stock; thus, the aggregate market value of the voting stock held by
non-affiliates was $1,215,000.
Registrant had no revenues during fiscal 1999.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: As of March 6, 2000, there were
approximately 3,000,000 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the documents incorporated by reference and the Part of this Form
10-KSB into which the document is incorporated: None.
<PAGE>
PART I
Item 1. Description of Business.
Cassco Capital Corp. (Company) was incorporated as Anthony Kane Incorporated
under the laws of the State of Delaware on February 5, 1969, and became subject
to the reporting provisions of the Securities Exchange Act of 1934 on June 11,
1969, when a registration statement filed by the Company was declared effective
by the U.S. Securities and Exchange Commission. The Company, prior to 1999, had
engaged in a variety of acquisitions and businesses in the past, none of which
have proved successful.
The Company on December 1, 1999, entered into an agreement (Reorganization
Agreement) to acquire all of the outstanding capital stock of S&J (Chatteris)
Holdings Limited, a United Kingdom corporation (S&J Holdings). Pursuant to the
Reorganization Agreement, the Company agreed to acquire all of the outstanding
capital stock of S&J in exchange for 12,000,000 post split shares of Common
Stock. The Reorganization Agreement required S&J Holdings to perform certain
conditions, including the delivery of audited financial statements. These
conditions had not been fulfilled by February 14, 2000; therefore, the agreement
was rescinded and deemed to have been void and of no effect from the beginning
as if the acquisition had not occurred. All shares issued in the acquisition
were returned to treasury.
The Company is now engaged in the process of locating a merger and/or
acquisition candidate.
Facilities: The executive offices of the Company, as of the date of this report,
were located at 1999 Broadway, Ste. 3235, Denver, Colorado 80202. The telephone
number at this address is (303) 292 2992. The Company was receiving the use of
these offices free of charge.
Item 2. Description of Properties.
The Company owns no real or personal property.
Item 3. Litigation.
No material legal proceedings to which the Company (or any officer or director
of the Company, or any affiliate or owner of record or beneficially of more than
five percent of the Common Stock, to managements knowledge) is a party or to
which the property of the Company is subject is pending, and no such material
proceeding is known by management of the Company to be contemplated.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fourth
quarter of 1998.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
As of March 3, 2000, there were approximately 3,000,000 shares of Common Stock
issued and outstanding which were held of record by more than approximately 300
shareholders. The Common Stock is currently quoted on the Bulletin Board
maintained by the National Association of Securities Dealers, Inc., under the
symbol CSCA. The following table sets forth the range of high, low and closing
bid and asked prices per share of the Common Stock as reported by the National
Association of Securities Dealers, Inc., for the period indicated.
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<PAGE>
High Low Closing High Low Closing
Calendar Quarter Bid Bid Bid Ask Ask Ask
- ---------------- --- --- --- --- --- ---
March 31, 1997 0.4375 0.125 0.3125 0.5625 0.25 0.53125
June 30, 1997 0.34375 0.125 0.125 0.53125 0.25 0.25
September 30, 1997 0.21875 0.0625 0.0625 0.25 0.125 0.125
December 31, 1997 0.50 0.0625 0.19 0.59375 0.125 0.28
March 31, 1998 0.26 0.08 0.08 0.32 0.12 0.12
June 30, 1998 0.30 0.0625 0.20 0.475 0.09 0.30
September 30, 1998 0.27 0.02 0.03 0.38 0.04 0.06
December 31, 1998 0.075 0.02 0.03 0.95 0.025 0.04
March 31, 1999 0.05 0.02 0.045 0.09 0.025 0.065
June 30, 1999 0.335 0.035 0.07 0.26 0.05 0.09
September 30, 1999 0.11 0.03 0.055 0.13 0.055 0.08
December 31, 1999 2.50 0.02 2.125 4.125 0.025 3.00
The above prices represent inter-dealer quotations without retail mark-up,
mark-down or commission, and may not necessarily represent actual transactions.
Further, the above prices have been adjusted to reflect two previous reverse
share splits; however, with the exception of the quarter ended December 31,
1999, they have not been adjusted to reflect a reverse one for seventy (1:70)
share split which took place in the final quarter of 1999. On March 3, 2000, the
closing inside bid and asked prices for the Common Stock were $.31 and $.50,
respectively. On that date there were eight market makers.
Dividends: Since inception the Company has not paid any cash dividends on the
Common Stock. Any declaration in the future of any cash or stock dividends will
be at the discretion of the Board of Directors and will depend upon, among other
things, earnings, the operating and financial condition of the Company, capital
expenditure requirements, and general business conditions. There are no
restrictions currently in effect which preclude the Company from granting
dividends. It is the current intention of the Company, however, to retain any
earnings in the foreseeable future to finance the development of its business.
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion of financial condition and results of operations should
be read in conjunction with the Company's audited financial statements and notes
thereto appearing elsewhere in this report. The Company has had recurring losses
from operations since inception and had a net capital deficiency at year end,
each of which raise substantial doubts about the ability of the Company to
continue as a going concern. Accordingly, the auditors' report and opinion
included in this report contain an explanatory paragraph about these
uncertainties.
Results of Operations: The Company, as a result of the cessation of its business
and the failure of its proposed acquisitions, had no operations during the year;
thus, no meaningful comparison can be made to prior years.
Liquidity and Capital Resources: The Company, from inception has relied on
capital infusions from executive officers and directors and on credit from
vendors.
3
<PAGE>
Item 7. Financial Statements.
Halliburton, Hunter & Associates, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the Directors and Shareholders
Cassco Capital Corp. (a Development Stage Company)
We have audited the accompanying balance sheets of Cassco Capital Corp. a
development stage company, as of December 31, 1999 and 1998, and the related
statements of operations, stockholders deficit and cash flows for the years
ended December 31, 1999, December 31, 1998, and December 31, 1997. These
statements are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based on our audit and the report of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Cassco Capital Corp., a development stage company as
of December 31, 1999, and December 31, 1998, and the results of its operations
and cash flows for the years ended December 31, 1999, December 31, 1998, and
December 31, 1997, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B. to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Littleton, Colorado
March 10, 2000
4
<PAGE>
CASSCO CAPTAL CORP
(A Development Stage Company)
BALANCE SHEETS
December 31,
1999 1998
---- ----
ASSETS
Current Assets:
Cash -- --
Total Current Assets -- --
--------- ---------
Total Assets $ -- $ --
========= =========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Total Current Liabilities -- --
--------- ---------
Shareholders Equity (Deficit)
Common Stock, $.001 par value, 100,000,000
shares authorized, 240,000 and 3,000,000
issued and outstanding 3,000 75,981
Additional paid in capital 397,783 100,552
Retained earnings (deficit) (400,783) (176,533)
--------- ---------
Total Shareholders Equity (Deficit) -- --
--------- ---------
Total Liabilities and Shareholders Equity (Deficit) $ -- $ --
========= =========
The Auditors report and accompanying notes are
an integral part of these statements
5
<PAGE>
CASSCO CAPITAL CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Years ended December 31,
1999 1998 1997
---- ---- ----
Total Income -- -- --
--------- --------- ---------
General and administrative expenses:
Legal expenses 69,000 27,887 36,630
Consulting expenses 138,000 -- --
Officer's compensation 17,250 -- --
--------- --------- ---------
Total Expenses 224,250 27,887 36,630
--------- --------- ---------
Net income (loss) $(224,250) $ (27,887) $ (36,630)
========= ========= =========
The Auditors report and accompanying notes are
an integral part of these statements
6
<PAGE>
<TABLE>
<CAPTION>
CASSCO CAPITAL CORP.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDER'S EQUITY
Additional Total
Common Stock Paid in Accumulated Equity
Shares Amount Capital (Deficit) (Deficit)
------ ------ ------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 3,442,505 $ 11,464 $ 100,552 $ (112,016) $ --
Issuance of stock for services 11,000,000 36,630 -- -- 36,630
Net loss for the year ended
December 31, 1997 -- -- -- (36,630) (36,630)
---------- ----------- ----------- ----------- -----------
Balance, December 31, 1997 14,442,505 $ 48,094 100,552 (148,646) --
Issuance of stock for services 8,374,500 27,887 -- -- 27,887
Net loss for the year ended
December 31, 1998 -- -- -- (27,887) (27,887)
---------- ----------- ----------- ----------- -----------
Balance, December 31, 1998 22,817,005 $ 75,981 $ 100,552 $ (176,533) $ --
Return of shares to treasury (6,000,000) -- -- -- --
and retired
Reverse 70:1 share split (16,577,005) (75,741) 75,741 -- --
Issuance of stock for services 2,760,000 $ 2,760 $ 221,490 -- 224,250
Net loss for the year ended
December 31, 1999 -- -- -- (224,250) (224,250)
---------- ----------- ----------- ----------- -----------
Balance, December 31, 1999 3,000,000 $ 3,000 $ 397,783 $ (400,783) --
========== =========== =========== =========== ===========
The Auditors report and accompanying notes are
an integral part of these financial statements
7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASSCO CAPITAL CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Years ended December 31
1999 1998 1997
---- ---- ----
Cash (used) by operating activities:
<S> <C> <C> <C>
Net loss $(224,250) $ (27,887) $ (36,630)
Adjustments to reconcile net gain (loss) to
net cash provided by operating activities:
Issuance of stock 224,250 27,887 36,630
Net Cash Flows (used) by operating activities -- -- --
Increase (decrease) in Cash -- -- --
Cash at Beginning of the Period -- -- --
--------- --------- ---------
Cash at End of the Period -- -- --
========= ========= =========
The Auditors report and accompanying notes are
an integral part of these financial statements
8
</TABLE>
<PAGE>
CASSCO CAPITAL CORP.
NOTES TO FINANCIAL STATEMENTS
A. Organization and Summary of Significant Accounting Policies:
Organization: The Company was incorporated as Anthony Kane Incorporated under
the laws of the State of Delaware on February 5, 1969, and became subject to the
reporting provisions of the Securities Exchange Act of 1934 on June 11, 1969,
when a registration statement filed by the Company was declared effective by the
U.S. Securities and Exchange Commission. The Company, in accordance with the
registration statement, offered and sold 65,000 shares of its common stock at a
price of $8.00 per share.
The name of the Company was changed to Maid Rite Ventures, Inc., on April 8,
1985, and to Grandee Corporation on September 23, 1985, on which date the
Company also increased its authorized shares of common stock from 25,000,000 to
75,000,000, concurrently effecting a decrease in par value per share from $.01
to $.00333.
In July, 1992, the Company entered into an agreement with K C Jakes BBQ & Grill,
Inc., for the purpose of acquiring this entity as a subsidiary. This agreement
was set aside by a court of competent jurisdiction in 1994, as previously
reported by the Company in a filing under the Securities Exchange Act of 1934 on
Form 8 KSB.
On January 10, 1995, the Company entered into an agreement with Epsitek, Inc., a
Delaware corporation to acquire two subsidiaries of Epsitek as wholly owned
subsidiaries of the Company. In conjunction with the acquisition, the Company
issued 6,000,000 shares of common stock to Epsitek, which also appointed new
directors and took control of the Company. Subsequently, Epsitek was unable to
complete the conditions imposed for and at closing. The acquisition, therefore,
did not occur and the shares issued in connection with the acquisition were
returned to treasury and the board members of the Company appointed by Epsitek
resigned.
The Company entered into an agreement (Reorganization Agreement) to acquire all
of the outstanding capital stock of S&J (Chatteris) Holdings Limited, a United
Kingdom corporation (S&J Holdings). Pursuant to the Reorganization Agreement,
the Company agreed to acquire all of the outstanding capital stock of S&J in
exchange for 12,000,000 post split shares of Common Stock. The Reorganization
Agreement required S&J Holdings to perform certain conditions, including the
delivery of audited financial statements. These conditions had not been
fulfilled by February 14, 2000; therefore, the agreement was rescinded and
deemed to have been void and of no effect from the beginning as if the
acquisition had not occurred. All shares issued in the acquisition were returned
to treasury.
The Company is now engaged in the process of locating a potential merger and/or
acquisition candidate.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
Cash: For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
and money market funds to be cash equivalents.
9
<PAGE>
Loss Per Share: Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS No. 128) Earnings Per Share. Basic
loss per share is computed by dividing losses available to common shareholders
by the weighted average number of common shares outstanding during the period.
Diluted loss per share reflects per share amounts that would have resulted if
dilutive common stock equivalents had been converted to common stock. At the
year ends reports, basic and dilutive loss per share are the same. The net loss
per share calculations reflect the effect of stock dividends and stock splits.
Income Taxes: Income taxes provide for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus deferred
taxes related primarily to net operating loss carryforwards and differences
between the basis of various assets for financial and income tax reporting. The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized.
1999 Stock option plan: During the final quarter of 1999, the Company's Board of
Directors adopted a stock option plan in which employees of the Company and its
subsidiaries are eligible to participate. The plan is being administered by the
Board, which may subsequently appoint a committee for this purpose. The plan
sets aside up to 3,000,000 shares of common stock to cover options to be granted
over the term of the plan. The plan has a ten year term . The company has filed
a registration statement under the act to cover the shares which are issued
under the plan. At year end, options to acquire 2,070,000 had been granted, all
of which had also been exercised. Subsequent to year end, options on the
remaining 930,000 shares available under the plan had been granted, but had not
been exercised as of the date of this report.
B. Going Concern: As shown in the accompanying financial statements, the Company
incurred net operating losses and liabilities exceeded assets. These factors as
well as the uncertainty regarding the Company's ability to raise capital creates
substantial doubt about the Companys ability to continue as a going concern.
10
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
On May 24, 1999, the Company appointed Halliburton, Hunter & Associates as the
independent accountant of the Company because the previous auditor had ceased
operations. The Company had no disagreement with its former accountant on any
matter of accounting principal or practice, financial statement disclosure or
auditing scope or procedure which would have caused the accountant to make
reference in its report upon the subject matter of the disagreement. Further,
the former principal accountant's report on the financial statements did not
contain an adverse opinion or a disclaimer of opinion or qualification as to
audit scope or accounting principle. The decision to appoint Halliburton, Hunter
& Associates was approved by the full Board of Directors since the Company has
no audit or similar committee.
PART III
Item 9. Directors and Executive Officers of the Registrant.
Table of Directors and Executive Officers:
The following table sets forth all current directors and executive officers of
the Company, as well as their ages, as of the date of the filing of this report:
Name Age Position
---- --- --------
Charles Stidham 57 Director, President, CEO, CFO and Treasurer
Profiles of Directors and Executive Officers:
Mr. Stidham has been in private business in the Dallas, Texas, metropolitan area
during the past five years. He graduated from Georgia Tech University in
Atlanta, Georgia, with a Bachelor of Science Degree in Mechanical Engineering in
1964 and from the University of Texas in Austin, Texas, in 1975 with a Juris
Doctorate.
No current director has any arrangement or understanding whereby they are or
will be selected as a director or as an executive officer. All directors will
hold office until the next annual meeting of shareholders and until their
successors have been duly elected and qualified, unless and until they earlier
resign or are removed from office. The executive officers of the Company are
elected by the Board of Directors at its annual meeting immediately following
the shareholders' annual meeting. The Company does not have any standing audit,
nominating or compensation committee, or any committee performing similar
functions.
Item 10. Executive Compensation.
No compensation was paid to executive officers in their capacities as cuh during
the years ended 1994 through 1999.
Item 11. Security Ownership of Management and Certain Others.
The following table sets forth certain information regarding the beneficial
ownership as of March 3, 2000, of the Common Stock by (1) each person known by
the Company to be the beneficial owner of more than five percent of the Common
Stock, (2) each director and executive officer of the Company, and (3) all
directors and executive officers as a group. Except as otherwise indicated, each
stockholder identified in the table possesses sole voting and investment power
with respect to its or his shares.
11
<PAGE>
Name of Number of Shares Percentage of
Beneficial Owner Beneficially Owned Ownership *
- ---------------- ------------------ -----------
Charles Stidham 0 (1) 0%
Robert G.M. Hind 690,000 23%
Barry J. Muncaster 690,000 23%
Mark S. Pierce 690,000 23%
All executive officers and
directors as a group (one person) -0-
* Based on approximately 3,000,000 shares of common stock outstanding on
March 3, 2000.
(1) Mr. Stidham, on February 16, 2000, was granted an option to acquire up to
930,000 shares of common stock at a price per share of the greater of $.05 or
the market price therefor on either the date of grant or exercise. Mr. Stidham,
also on February 16, 2000, was issued 1,000,000 preferred shares denominated
Series A Preferred Shares. These shares were valued at $1,000 and were issued to
Mr. Sitdham as compensation for his agreeing to serve as the sole executive
officer and director of the Company. This series bears no dividends, are
convertible on the basis of one preferred share for twenty common shares, have
one vote per convertible common share and vote as a class with the common, are
redeemable at the option of the Company at the price of $.25 per share, have no
sinking funds provisions and are otherwise subject to Nevada law.
Item 12. Certain Transactions: None.
Item 13. Exhibits and Reports on Form 8-K.: December 1, 1999 (S&J Acquisition)
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas the 15th day of March, 2000.
CASSCO CAPITAL CORPORATION
(Registrant)
By: /s/ Charles Stidham
- -----------------------
Charles Stidham, Chief Executive,
Financial and Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant in the
capacity indicated on the 15th day of March, 2000.
By: /s/ Charles Stidham
- -----------------------
Charles Stidham, Sole Director
13
<PAGE>
Exhibits:
Exhibit No. 1: Form 8 KSB dated December 1, 1999 (S&J Acquisition)
Exhibit No. 2: Preferred Stock Resolutions
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8 KSB
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
December 1, 1999
(Date of Report)
Cassco Capital Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0 41703 51 0356301
(Commission File Number) (IRS Employer Identification Number)
Number 1, Fenton Way Business Park, Fenton Way,
Chatteris, Cambridgeshire PE16 6US
(Address of principal executive offices including zip code)
(44) 01354.694.000
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 1. Change in Control of Registrant.
Acquisition of S&J (Chatteris) Holdings Limited as a Wholly Owned Subsidiary of
Registrant:
On December 1, 1999, Cassco Capital Corporation, a Delaware corporation
(Company), entered into an agreement (Reorganization Agreement) to acquire all
of the outstanding capital stock of S&J (Chatteris) Holdings Limited, a United
Kingdom corporation (S&J Holdings). Pursuant to the Reorganization Agreement,
the Company agreed to acquire all of the outstanding capital stock of S&J in
exchange for 12,000,000 post split shares of its common stock.
Background and Overview of S&J (Chatteris) Holdings, Ltd.:
S&J Holdings was formed as a United Kingdom (UK) corporation in 1998 for the
purpose of establishing its separate strategic divisions into corporate
subsidiaries and acquiring all of the outstanding shares of those businesses
which were not then wholly-owned. The significant UK subsidiaries are (1) S&J
(Chatteris) Cladding Limited - roofing and cladding projects to approximately
$7,500,000; (2) S&J (Chatteris) Steelwork Limited - structural steelwork; (3)
S&J (Chatteris) Construction Limited - project management and general building;
(4) S&J (Chatteris) Special Projects Limited - smaller roofing and cladding
projects to approximately $200,000; (5) Specialist Glazing Systems Limited -
roof and window glazing; and (6) Specialist Finishing Systems Limited -
finishing and refurbishment. These subsidiaries service all of the UK and assist
in the other operations of the group on an as needed basis.
In addition to the UK subsidiaries, there are two subsidiaries which provide
direct oversight to project activity in Ireland and Poland. These are officed in
Belfast, Northern Ireland (S&J (Ireland) Limited), and Wroclaw, Poland (S&J
Polaska sp.zo.o). These subsidiaries were established to capitalize on the
economic development and construction opportunities present in Ireland and
Poland and were built on the previous work undertaken by the S&J Group directly
through its UK subsidiaries in these countries. They provide all of the services
provided in the UK and allow the group to offer hands on service to its foreign
clients. (S&J Holdings and its subsidiaries are collectively referred to as the
S&J Group).
The S&J Group traces its roots back to 1974 when it was a small, specialist,
industrial building company. The business to 1994 had focused on providing
specialty sub-contracting services to industrial building contractors in the UK.
Mr. Mark Langley joined the business in that year and immediately began the
process of changing the primary focus of the business to the direct provision of
a full panoply of building services rather than sub-contracting certain
specialty services. Mr. Langley then expanded the geographical focus of the
business beyond the UK and continued with the implementation of his vision so
that the business now provides complete design, manufacturing and building
services for industrial building projects throughout the UK, Ireland and Poland,
with the added ability to deliver these services throughout Europe and western
Africa. The diversification of operations by Mr. Langley, combined with building
a reputation for high quality performance, has provided the basis for the growth
the business has seen since Mr. Langley's association.
Consistent and steady growth have been the hallmarks of the S&J Group since Mr.
Langley's joining the firm. In 1994, the organization generated gross revenues
of approximately L1 million. By 1996 core business operations generated gross
revenues of in excess of L6 million. During 1997 and 1998, Mr. Langley
consolidated his ownership of the S&J Group and divided the corporate structure
of the group through the establishment of S&J Holdings and the constituent
subsidiaries comprising the S&J Group. The subsidiaries were formed by grouping
together the activities by the specialist area they operated in. Further, in
1998 a steel work fabrication center was established approximately 15 miles from
the head office which enabled the S&J Group to cover many facets of its business
which were previously conducted in disparate locations and the S&J Group
concentrated its operations in a purpose built headquarters at Chatteris. All of
the growth within the group has been internal. There have been no significant
external acquisitions.
These developments significantly disrupted management time and focus on the
day-to-day operations of the S&J Group, which impacted gross and net revenues,
but provided the impetus to move the business forward beyond 1998 to new levels
of activity and development; however, in spite of these disruptions, gross
2
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revenue rose to approximately L13.7 million in 1997, L17.5 million in 1998 and
is expected to rise to more than L32 million in 1999. This represents an average
annual growth of 65% in gross revenues over the last five years. In 1997 the S&J
Group was placed in 70th position in the London Sunday Times Fast Track 100
Companies, and then moved up to take 22nd place in 1998. Management are informed
that the S&J Group will again be in the listing, a record third straight time,
but have not been informed on their ranking.
Group Revenues:
To provide an indication of the relative scale of each section of the group's
operation, the gross revenues anticipated for 1999 are as follows:
Cladding L14.0 million
Construction L10.0 million
Special projects L3.3 million
Steelwork L2.6 million
Glazing L2.2 million
Cladding:
The roof and wall cladding business has been the main driver in the recent
revenue growth of the group. Operating in conjunction with the steelwork and
glazing subsidiaries, it offer clients a complete frame and external envelope
service. Having all the disciplines "in house" provides a single source
responsibility for integrated design and detailing. Roofing and cladding
contracts range generally from L100,000 to L5 million for national contractors,
project management companies, architects and direct clients.
The group works closely with the manufacturers of most of the leading high
quality roofing and cladding systems and are accredited installers for:
Hoogovens Aluminium Building Systems
Kingspan
Euro-Clad
Coseley Building Products
Ward Brothers
S&J has the latest generation of computerized design, estimating and cost
control systems.
Staffing at the Chatteris head office is as follows:
Commercial/estimators 5
Contract 6
Design 7
Surveyors 5
Purchasers 5
Administration 4
The installation teams are extensively trained through continuing development
programs. The training is both product specific and generic, with particular
attention to health and safety matters. The core teams are directly employed
personnel, augmented by bona fide sub-contractors.
Contracts have been completed in all parts of the United Kingdom. In the latter
part of 1998 an office was established in Sevenoaks, Kent, and now has a full
range of staff encompassing design, estimating, surveying and site supervision.
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Construction:
This has been the original and core business for twenty five years. With the
growth in demand for "design and build" contracts, it has emerged in recent
years in a key role as principal contractor, locally and nationally, for
projects up to a value of L5 million. It is then able to draw on the specialist
skills of its fellow-subsidiaries.
Great emphasis is placed on developing strong bonds with both clients and their
advisers to ensure that objectives are met. The head office team includes four
experienced project managers, as well as designers, buyers and surveyors. There
are five site managers and core teams of directly employed personnel. Recent
contracts include the design and build of a 90,000 sq. ft cold storage facility
in East Anglia for L3.6 million and a new stand at Worcester rugby club.
Special Projects:
Special projects was formed to deal specifically with industrial and commercial
roofing, cladding and refurbishment projects. Job values range from a few
thousand pounds to about L150,000. The clients are widespread, including local
authorities, building owners, main contractors, project managers and architects.
A free detailed survey and estimating service is offered to clients as the
company is able to provide impartial advice on material specifications. Quality
is the crucial feature, and the workforce is all directly employed. The
accreditation from high quality product suppliers is shared with the cladding
subsidiary.
The lower value jobs and the close relationships developed with clients over the
years have resulted in considerably higher margins than those obtainable on
larger cladding jobs. Revenue growth in the last year has been rising from about
L1 million in 1998 to almost L3 million in 1999. The company has a recently
formed subsidiary in Wickford, Essex, which is generating revenues in the South
East, based on the same range of services.
Steelwork:
Currently based at St Ives, Cambridgeshire, S&J (Chatteris) Steelwork Limited
specializes in the design, fabrication and installation of structural steelwork
and architectural metal works. As with the other subsidiaries in the group,
steelwork forms an integral part of the services mix that the group offers to
the building industry. It not only provides the cladding and roofing services
with marked competitive advantage, as it provides a true design and build
service to the client, but also forms a separate and valuable contribution to
the profitability of the group.
The present location, with a production facility of 15,000 sq. ft., is proving
too small for the potential of the business, and it is planned that it will be
re-located to a new, purpose built facility on land owned by the group on the
head office site by mid 2000.
Recent substantial investment has been made in state of the art CNC,
close-coupled sawing and drilling line, which links to a specialist CAD package
and allows accurate and efficient fabrication of all structural members. The
system marks all components with markings to enable quick and accurate erection.
This generates substantial labor cost savings and quality improvements on site.
Typical recent projects are:
The construction of eight steel frame buildings for the Ministry of
Agriculture and Foods at Addlestone, complete with overhead walkways,
balustrades and staircases, for a project value of L600,000.
Intricate structural steel framing for apartments and balconies to
nine-story luxury block in Docklands - project value L185,000.
Three office and industrial buildings in Byfleet, Surrey - project value
L220,000.
Internal steel structures and roof top conservatories at the new Harrods
Village development in Barnes, London - project value L700,000..
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Glazing:
Specialist Glazing Systems Limited, based at the head office at Chatteris, is
similar to the steelwork subsidiary in forming another key component of the
one-stop shop. The market for the company's products has three segments:
Industrial building applications linked to general cladding work
Business park developments, which have a very high glas content
Curtain wall systems which are almost entirely glazing.
A recent, major contract was the refurbishment of London's Charing Cross railway
station. The company is strengthened by approved dealerships for Vitral, Velfac,
Shucco, Technal and Senior Aluminium window, curtain wall and roof glazing
systems.
Ireland:
In recent years the group has completed several cladding contracts in Northern
Ireland. The economic environment in Eire has been buoyant for some time and the
peace process is likely to generate a significant influx of investment and
infrastructure funding - some of which is already underway. In order to be in
the best position to capture the potential it is necessary to have a local
office under the direction of an Irish manager. Earlier this year Mr. Victor
Elliott, who had been Hoogovens' representative in Northern Ireland agreed to
lead the establishment of S&J in Ireland. Offices just outside Belfast have been
leased and equipped, and operations are begun.
Poland:
S&J Polska Sp.zo.o. was incorporated in March, 1999, after research into the
Polish and central European market for cladding and roofing. The S&J Group
already had experience operating in Poland, having built a new Cadbury's factory
in Wroclaw. A pilot office has been set up in the city of Kalisw, which is
located between the major cities of Wroclaw, Poznan and Warsaw - ideally placed
to service the booming construction industry and to establish in central Europe.
Poland is experiencing unprecedented economic growth, and is likely to be the
next candidate for entry to the EU in 2004. It is also an excellent base for
activity in the Czech and Slovakian Republics and in Hungary, which are
experiencing similar growth.
Initially, S&J Polska is drawing on the technical services of the S&J head
office in order to service inquiries; however, it is setting up its own
estimating and design office. Staff have visited Chatteris for training and
there is a real expectation that the Polish office could soon support the
drawing and design function in the UK, where expansion is restricted by UK wide
skills shortages, at a fraction of the UK cost.
Negotiations are underway for the construction of a hypermarket for Tesco in
South East Poland, in co-operation with the subsidiary of a large UK contractor.
A very considerable area of growth for the company in Central Europe is not only
the construction of industrial and distribution centers, but also a need for
extensive refurbishment of existing buildings. These activities draw on all
aspects of S&J's expertise and exploit its competitive advantage to the full.
Other Projects:
S&J are currently in negotiations with a number of international contacts, which
are expected to result in a substantial international division being formed next
year. The concept of an international project management team is taking shape to
take advantage of the group's unique single source supply potential. Projects
receiving attention include the construction of a prestigious headquarters
building for a bank in Nigeria, and the refurbishment of an industrial "brorn
fields" site in central Europe, linked to EU funding.
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New Management:
The Board of Directors, as a result of the S&J acquisition, now consists of one
member, Mr. Mark Langley, who, it is anticipated, will appoint additional
directors in the near future. Mr. Langley is also presently the sole executive
officer of the Company. The following table sets forth all those persons who are
now executive officers of the Company and S&J.
Name Position with Company and the S&J Group
---- ---------------------------------------
Mark Langley Chairman and Chief Executive Officer
David Rogers Director of S&J Holdings - Corporate Finance and Acquisitions
David Rowe Managing Director - Contracting
Steve Cutts Controller
Jamie McGinty Managing Director - Cladding
Harry Rose Managing Director - Construction
Robin Harris Managing Director - Special Projects
Tom Bently Managing Director - Steel
Neil Tolley Managing Director - Glazing
Victor Elliott Managing Director - Ireland
George Fokias Managing Director - Poland
(1) None of the above individuals has any arrangement or understanding whereby
they are or will be selected as a director or nominee of the Company or of S&J.
All directors and executive officers will hold office until the next annual
meeting of shareholders and until their successors have been elected and
qualified. All officers are elected by the Board of Directors at its annual
meeting immediately following the shareholders' annual meeting and hold office
until their death or until they earlier resign or are removed from office. There
are no written or other contracts providing for the election of directors or
term of employment of executive officers, all of whom serve on an at will basis.
Profiles of Directors and Executive Officers of the Company and S&J:
S&J Holdings:
Mark Langley, age 38, has been the President, Chief Executive Officer and
Chairman of the Board of Directors of the Company since December 1, 1999. He
holds similar positions with S&J Holdings and directs the operations of the S&J
Group, having held those positions since 1994. Mr. Langley began his technical
education more than 20 years ago as a laborer and has succeeded to management
through job promotions within the industry and lateral hires. He has built up a
broad range of experience including project management and contracting skills.
David Rogers, aged 53, has been with the group for approximately two years. He
is a chartered accountant with 18 years experience at Price Waterhouse. Mr.
Rogers has served and continues to serve as chairman and a director to several
manufacturing companies. He received a degree in Engineering Science from Exeter
University.
David Rowe, aged 48, has been with S&J Holdings since 1998 and oversees the
structuring and implementation of the financial operations of the various
subsidiaries of the S&J Group. He was previously a director of surveying at
another construction company. Mr. Rowe leads a team which has principally
established tight controls over contracts and cash collections while supervising
the implementation of formalized disciplines over all aspects of construction
contract work.
Steve Cutts, aged 40, has over 20 years experience as a financial controller and
cost accountant, ten of which have been in the construction industry. He is
responsible for the day-to-day oversight of the finance and accounting
departments of the S&J Group.
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Subsidiary Companies
Cladding: Jamie McGinty, aged 32, and has spent all his working life in the
roofing and cladding industry. After 11 years as a site worker, he joined the
S&J Group five years ago as site manager. Under the direction of Mr. Langley he
has made strong progress and is now responsible for all roofing and cladding
activity.
Construction: Harry Rose, aged 50, joined the S&J Group earlier this year and
brings extensive experience in the construction industry.
Special Projects: Robin Harris, aged 41,has led the development of this
operation. He spent thirteen years running the estimating and design offices of
roofing and cladding companies before joining Mr. Langley with the S&J Group.
Steelwork: Tom Bentley, aged 39, has developed the steelwork specialism over the
last three years with the S&J Group. Previously, he worked for one of the UK's
largest steelwork fabrication companies. He has an in-depth knowledge of
automated production. Mr. Bentley started out as a welder fabricator, progressed
rapidly to site erection of steel framed buildings and on to senior management.
Glazing: Neil Tolley, aged 35, has recently taken over the directorship of this
subsidiary. He started in the industry as an apprentice draughtsman, moved on to
being a design estimator and later a project manager.
Ireland: Victor Elliot leads development across Ireland. He has many years
experience in contracting work in Ireland. He was previously with Hoogoven's
Aluminum Building Systems in Ireland.
Poland: George Fokias is a British national and managing director of the Polish
subsidiary, S&J Polska Sp.zo.o. He has worked in Poland for three years.
Previously, he spent 18 years in mainland Europe, North Africa and the Middle
East in senior management positions with construction equipment marketing
companies. He is a member of the Institute of Chartered Accountants and also
holds a postgraduate diploma in industrial administration. He has gained a
wealth of experience in establishing industrial and construction subsidiary
companies for UK parent companies in places such as Saudi Arabia, The United
Arab Emirates, The Bahamas, Spain, Morocco and Poland.
Current Market for The S&J Group:
The UK and Europe remain the S&J Group's main focus for commercial activity. The
S&J Group enjoys Europe-wide project activity, and with the specialist focus of
each business within the group, management believes that clients are finding
more and more reason and opportunity to buy a complete construction package from
one source.
Management feels that the present is an ideal time in Europe for construction
companies to investigate other, more rapidly growing, markets. In response,
operations were recently expanded into Poland and Ireland where the group will
pursue the opportunities provided by these markets. As overseas activity
expands, management anticipates forming a specialist world-wide project team to
manage contracts and construction activity on a global basis. These projects
will see a number of different companies within the S&J Group working together
to provide the client with project management, design and build services.
The unique aspect which sets the S&J Group apart from its competitors is the
group's diversity of skills and its ability to provide a single source supply
point. Strategies for the future development of the group must be set against
market conditions prevalent in the UK, which constitutes our main market. Market
conditions embrace not only trends of building spend on the range of materials
or over the variety of buildings, but also the structural changes in the market.
Structural changes:
In 1998 the government set up a task force under the chairmanship of Sir John
Egan to review the way construction was undertaken in the UK and to suggest
improvements. The Egan Report identified five key drivers of change:
Committed leadership
A focus on the customer
Integrated processes and teams
A quality driven agenda
Commitment to people
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These changes will, and have already begun to, affect the S&J Group in the
following ways:
Less reliance on tendering and contracts
More effort required to develop and maintain relationships with customers
Integration of the design and construction processes
Greater involvement in the design and project management
Developing construction performance indicators to measure progress (bench
marking)
Elimination of waste
Better conditions for those who work in the industry
S&J is well placed to take advantage of these trends; particularly in the
integration of design and construction. S&J is further developing the skills and
techniques involved in gaining and maintaining relationships with key clients,
primarily through partnering arrangements. The objectives of partnering are:
To complete works for the client within budget, on time and to the quality
standards, with zero defects being the eventual objective
Safety - to ensure works are designed and carried out in a safe and
workmanlike manner without any Health and Safety concerns, no accidents or
injuries and aim for zero incidents
Build and maintain good working relationships based on trust, fairness,
honesty and open communication
Promote innovation, imagination and efficiency
Permit a positive cash flow, reasonable profitability and a willingness to
share savings arising from the above
When problems do occur, deal with them in a positive, proactive manner and
avoid traditional dispute procedures
Market Trends:
S&J has two sources of relevant market data: (1) MSI produces a survey of annual
trends in the roofing market each December; and (2) Construction Markets
produces a commissioned report for Hoogovens each quarter
The MSI figures show that the roofing market peaked in 1994 and declined by
about 3% in the following two years before recovering again in 1997 and 1998
back to 1994 levels, representing a total market of some L930 million - but this
is roofing alone and does not include cladding, nor the other S&J activities.
Factors driving the recovery are the relatively stable UK economy, the release
of government monies for public sector housing, the funding available from
lottery grants, private finance initiative schemes and the substantial
investment plans to renovate and refurbish stations. MSI forecast further growth
in 1999 and 2000 amounting to a further 4% before a flattening off. They warn
that new construction in the commercial and public non-housing sectors may
decline. Half the market is new work and the remainder repairs and maintenance.
S&J's specialty is high quality aluminum roofing and cladding. Metal roofing
currently represents about 30% of all roofing materials, but metal has grown by
6.5% over the last five years, whereas the market has been static for more
traditional materials. Within the metal roofing sector, aluminum usage has grown
by over 50% in the same period. Manufacturers of aluminum roofing, such as
Hoogovens, have actively marketed its environmental properties, especially its
ability to be recycled. MSI conclude that aluminum will continue to gain market
share as manufacturers heighten awareness of the material amongst specifiers.
8
<PAGE>
The Hoogovens statistics are more relevant to S&J because they include not only
roofing but also wall cladding. They are also more up to date. The wall cladding
market currently is about half the size of the roofing market, but is growing
more rapidly (by 7.3% in 1998 compared with the 2.6% for roofing).
Hoogovens' figures show the profiled metal and standing seam roofing to have
grown by 26% over the last five years, compared with 11% for traditional
materials. The market for walling has grown more quickly than that for roofing
because of the increasing use of high rise prestigious building as the UK
recession ended.
Hoogovens provides a very useful forecast of floor area for new build across the
various sectors. This shows a 6.6% rise in total for 1999 over 1998, which
itself represented a growth of 6.2% over the previous period. For 2000 the
overall figure is set to fall by 6.5%, but there is significant variation over
the sectors. Office building will continue to rise, by 7.5%, and public sector
building will also advance, but retail will decline by 15%, leisure by 12% and
industrial by 10%.
While S&J has benefited from being in the forefront of an increasing use of
aluminum in a reasonably buoyant market, its growth has comfortably exceeded
that of the market sector. The statistics suggest that an emphasis on office
buildings and other public sector developments holds the best prospect of
maintaining that growth.
The other message from the statistics is that now is an ideal time to seek out
other, more rapidly growing markets, and the developments in Poland and Ireland
appear timely.
Future Markets and Vision for the S&J Group:
Negotiations are underway with a number of international contacts which the S&J
Group anticipates will provide a substantial division being formed in the next
12 months. There can, however, be no assurance of this. One example has been a
request to provide proposals for the design and supply of the steel frame,
curtain wall and roof of a prestigious headquarters for a bank and housing
construction group in Nigeria, where the S&J Group has worked previously. This
project would see a number of different companies within the S&J Group working
together to provide the client with a project management, design and build
service.
S&J Group provides a diversity of skills under one roof, a significant
differentiation from its competitors. Also, the group has the ability to provide
a single source supply point which results in considerable savings in cost and
time and allows greater project control. This, management believes, will allow
the group to be competitive in these markets.
The vision for the S&J Group is to be the UK's leading provider of building
frames and external envelopes, driven by a clear understanding of its partners'
needs. Already, its ability to provide a one-stop provision singles it out and
enables its clients to eliminate the traditional interface problems between
specialist subcontractors.
Much of the revenue growth will result from the balancing-up effect of being
responsible for the whole building frame and envelope. This will provide
significant growth opportunities for steelwork and window fabrication, but will
require enhanced manufacturing facilities in new buildings on the head office
site during the next year or two. Planning for the new facilities is well
advanced and the total cost is likely to be about L1.5 million.
Elsewhere, revenues are expected to rise more rapidly in strongly growing
economic environments, such as Poland and Ireland. Other overseas opportunities
are being researched and the concept of a worldwide project management team
developed.
Corporate Culture and Vision:
The business strives to provide a culture which positively fosters ambition
among the workforce. Mr. Langley leads by example with enthusiasm, flexibility
and a strong feeling for client feedback. Products have been created to meet
market demand, and a complete commitment to quality has earned the S&J Group a
good reputation and outstanding levels of customer retention. Mr. Langley and
his team recognize the need to examine what is required to keep pace in the
market and to forge ahead.
9
<PAGE>
The vision now is for the S&J Group to become the UK's leading provider of
building frames and external envelopes, driven by a comprehension of its
business partners' needs. The S&J Group is well placed and has provision to
expand significantly during the next five years.
The culture of the organization, epitomized by Mark Langley, is one of
enthusiasm and flexibility, of sensitivity to clients' reactions and of pride in
a job done well and on time. There is a strong work ethic and an environment in
which ambition is allowed to flourish. This culture has enabled the group to
grow, outstripping the growth in the underlying market, which itself has been
healthy.
The UK market is changing, driven by the Egan report, but with greater degree of
variability of growth rates for future building. Trends derived from the Egan
report favor companies who offer a high level of customer awareness and a
willingness to contribute project management skills, and a wide range of
building components. Commercial office building and publicly financed projects
offer the best prospects for future volumes.
The market is likely to be less strong in the next few years and the group will
only be able to grow at these rates and hold or increase margin if it commits
itself to clear strategies. Those strategies are in part general, affecting the
whole group, and in part specific, affecting one or more parts in particular.
Financial Control and Risk Management:
A comprehensive, integrated suite of computer programs which are specifically
designed for businesses operating in the construction industry are used for
financial planning and accounting. The programs also provide modern, in-depth
cost accounting abilities to the organization on a project-by-project basis so
as to allow day-to-day oversight of the construction process. Surveyors or
project managers and executive staff review the reports periodically so that any
deviation from the plan can be identified immediately. This is a valuable
management tool which allows for immediate assessment of the cost and margins
being generated by each job on a periodic basis.
Site management is an important aspect in the Group and is the direct
responsibility of site supervisors. Daily visits are made to smaller projects;
whereas larger projects have a member of staff on site full time. Time on site
is being measured as part of a focus on performance and a dedicated debriefing
takes place with each client at the completion of a project. Maintaining first
class client relationships is seen as a major part of the business and client
perception surveys are being introduced as a routine operation.
The S&J Group has not experienced customer bad debts, but considerable
investment has been made in insuring against aggregate bad debt in excess of
L100,000 annually.
Facilities:
The head office of the UK operations is Number One, Fenton Way Business Park,
Fenton Way, Chatteris, Cambridgeshire, U. K. The telephone number at this
address is 01354.694.000. The group also maintains leased operations in
Sevenoaks, Kent, Wickford, and Essex. The office in Ireland is located in
Belfast at 20 Comber Road, Newtownards, County Down BT23 4RX. The office in
Poland is in Kalisz at Ul Czestochowska 25, 62-800. The web site address for the
S&J Group is www.sjgroup.co.uk.
The Company, as of the date of this report, owned no real or personal property,
tangible or intangible, other than its ownership of all of the issued and
outstanding common shares of S&J. Conversely, the Company had no liabilities
which had not either been paid in their entirety or fully provided for.
The head office and base for most of the S&J Group's activities is a freehold
building in Chatteris constructed by the group in 1998 for about L700,000 and
occupied from September 1998. The building is an open floor plan comprising
approximately 12,000 sq. ft. of office space, comfortably accommodating the head
office team of about 70, together with 6,000 sq. ft of light industrial space
which houses the window manufacturing facility.
10
<PAGE>
Fifteen miles away, in St. Ives, are two adjacent industrial units amounting to
approximately 15,000 sq. ft which house the steelwork fabrication business. The
steelwork business is growing quickly, mainly as a result of new business linked
to cladding contracts, and needs additional space. The premises in St. Ives are
held on short leases and there is the opportunity to vacate them during 2000.
Plans are well advanced to build a specially designed facility for steelwork
with a floor area of 30,000 sq. ft on freehold land immediately next to the head
office building. It is anticipated that the shell of this building will be
completed towards the end of this year and ready for occupation by June of next
year.
In addition the Cladding subsidiary has an office in Kent and Special Projects
has an office in Essex.
The facility for producing glazing units in house was set up in 1998 and
includes a variety of state of the art saws, jigs and materials handling
equipment, sufficient to deal with more than double the present output.
Present Capital Structure:
The Company's equity capitalization presently consists of two classes of stock,
common and preferred. There are 100,000,000 shares of Common Stock, par value
$.001 per share, and 10,000,000 shares of Preferred Stock, par value $.01 per
share, which are authorized to be issued. All outstanding shares of Common Stock
are fully paid for and nonassessable. A holder of Common Stock is entitled to
one vote per share on all matters submitted for action by the stockholders. A
quorum for the transaction of business at any meeting of the holders of Common
Stock is one third of the shares outstanding. All shares of Common Stock are
equal to each other with respect to the election of directors; therefore, the
holders of more than 50% of the outstanding Common Stock present at a meeting at
which a quorum is present and at which directors are being elected can, if they
choose to do so, elect all of the directors. Thus, the holders of as little as
16.51% of the outstanding Common Stock could elect directors. The terms of the
directors are not staggered. Directors are elected annually to serve until the
next annual meeting of stockholders and until their successor is elected and
qualified. There are no preemptive rights to purchase any additional shares of
Common Stock or other securities of the Company, nor is cumulative voting
applicable to the election of the Board of Directors. The shares of Common Stock
have those dividend rights prescribed by the laws of the State of Delaware, are
not convertible into any other security, do not have sinking fund provisions
applicable to them and are not subject to redemption or to any restrictions on
transfer.
As of December 3, 1999, the transfer ledgers maintained by the Company's stock
transfer agent, including individual participants in security position listings,
indicated that there were approximately 15,000,000 shares of Common Stock issued
and outstanding.
The Articles of Incorporation vest the Board of Directors with the authority to
divide the Preferred Stock into series and to fix and determine the relative
rights and preferences of the shares of any preferred series established to the
full extent permitted by the laws of the State of Delaware and the Articles of
Incorporation with respect to, among other things, (a) the number of shares to
constitute a series and the distinctive designation thereof, (b) the rate and
preference of dividends, if any, the time of payment of dividends, whether
dividends are cumulative and the date from which any dividends begin accruing,
(c) whether shares may be redeemed and, if so, the redemption price and the
terms and conditions of redemption, (d) the liquidation preferences payable in
the event of involuntary or voluntary liquidation, (e) sinking fund or other
provisions, if any, for the redemption or purchase of shares, (f) the terms and
conditions upon which shares may be converted, if convertible, and (g) voting
rights, if any. The Company, as of December 1, 1999, had no Preferred Stock
outstanding.
Signature Stock Transfer, 14675 Midway Rd., Ste. 221, Dallas, Texas 75224 has
been engaged by the Company to serve as the transfer agent for the Common Stock.
No dividends have been declared on the Common Stock by the Company since
inception, and no dividends are planned in the foreseeable future; however,
there are no restrictions at present on the declaration or payment of dividends.
11
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements, as defined in the
Private Securities Litigation Reform Act of 1995, and information relating to us
that are based on the beliefs of our management, as well as assumptions made by
and information currently available to our management. When used in this
prospectus, the words estimate, project, believe, anticipate, intend, expect and
similar expressions are intended to identify forward-looking statements. These
forward-looking statements reflect our current views with respect to future
events and are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in these forward-looking
statements, including those risks discussed under Risk Factors. You are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date on this prospectus. We have no obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
Item 2. Acquisition or Disposition of Assets: See Item 1, above.
Item 3. Bankruptcy or Receivership: Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant: Not Applicable.
Item 5. Other Events. Not Applicable.
Item 6. Resignation of Registrant's Directors: Not Applicable.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits:
Pursuant to the terms and conditions of the Reorganization Agreement, the
financial statements required will be filed within the time limitations set
forth in applicable regulations.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CASSCO CAPITAL CORPORATION
(Registrant)
By: /s/ Mark Langley
- --------------------
Mark Langley, Chief Executive Officer
Date: December 3, 1999
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EXHIBIT 1
Plan and Agreement of Reorganization
PLAN AND AGREEMENT OF REORGANIZATION
UNDER
SECTION 368(b) OF THE INTERNAL REVENUE CODE
CASSCO CAPITAL CORPORATION
AND
S&J (CHATTERIS) HOLDINGS, LIMITED
CHATTERIS, CAMBRIDGESHIRE, UNITED KINGDOM
(DECEMBER 1, 1999)
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement" and "Reorganization,"
either of which may be used in the alternative) has been entered into on
December 1, 1999 ("Closing Date"), and is between Cassco Capital Corporation, a
publicly-held and traded Delaware corporation ("CSCA"), S&J (Chatteris)
Holdings, Limited, a privately-held United Kingdom corporation ("S&J"), and the
sole shareholder of S&J, Mr. Mark Langley ("Mr. Langley").
THE FOLLOWING PREMISES ARE AN INTEGRAL PART OF THIS AGREEMENT: 1. CSCA, solely
in exchange for 12,000,000 post one for 70 (1:70) reverse split common shares of
CSCA ("CSCA Shares"), desires to acquire from Mr. Langley 100% of the
outstanding capitalization of S&J (collectively, the "S&J Shares"). 2. This
acquisition will make S&J a wholly-owned subsidiary of CSCA. 3. Mr. Langley
desires to acquire the CSCA Shares solely in exchange for the S&J Shares. 4. The
S&J Shares constitute 100% of the outstanding capital of S&J. 5. The CSCA Shares
constitute no less than 80% of the outstanding share capitalization of CSCA
after the transfer and conveyance of the S&J Shares to CSCA. 6. The governing
bodies of CSCA and S&J have found it advisable for the benefit of each
corporation and their respective stockholders that CSCA acquire S&J as a
wholly-owned subsidiary and, therefore, have approved this Agreement and the
corresponding Reorganization.
THE PARTIES ADOPT THIS AGREEMENT AS A TAX-FREE REORGANIZATION UNDER SECTION
368(b) OF THE INTERNAL REVENUE CODE AND AGREE AS FOLLOWS:
ARTICLE I
TRANSFER AND CONVEYANCE OF THE S&J AND CSCA SHARES; RESIGNATIONS
1.1. Transfer and Conveyance. Subject to all of the terms, conditions,
representations, warranties and covenants set forth in this Agreement, Mr.
Langley has transferred and conveyed (without reservation and free and clear
from all encumbrances) to CSCA the S&J Shares on the Closing Date.
Correspondingly, CSCA has transferred and conveyed (without reservation and free
and clear from all encumbrances) to Mr. Langley the CSCA Shares.
1.2. Resignation of CSCA Directors and Officers. The current member of the board
of directors of CSCA has appointed those individuals to the board designated by
Mr. Langley and has resigned as a director and executive officer without claim
to compensation of any kind no matter how arising. There are no executive or
other officers of CSCA at the Closing Date.
ARTICLE II
REPRESENTATIONS, WARRANTIES, COVENANTS
2.1. Representations, Warranties and Covenants of CSCA to S&J and Mr. Langley.
CSCA represents and warrants to S&J and Mr. Langley, jointly and severally, on
the Closing Date as follows: (a) Authority: All necessary action has been taken
to make this Agreement a legal, valid and binding obligation of CSCA enforceable
in accordance with its terms and conditions. (b) No Breach or Violation: The
execution and delivery of this Agreement and the performance by CSCA of its
obligations will not result in any breach or violation of or default under any
<PAGE>
agreement, indenture, lease, license, mortgage, instrument, or understanding,
nor result in any violation of any law, rule, regulation, statute, order or
decree of any kind, to which CSCA or any of its affiliates is a party or by
which they or any of their property is or may be or become subject, nor in the
violation of the articles or bylaws governing the conduct of CSCA. (c)
Non-Assessable CSCA Shares: The CSCA Shares have each been validly issued and
are fully paid for and nonassessable. (d) No Liens on CSCA Shares: The CSCA
Shares are not and shall not be or become subject to any lien, encumbrance,
security interest or financing statement whatsoever through any act of CSCA or
its affiliates; further, the CSCA Shares are not the subject of any agreement
other than this Agreement. (e) Capital Percentage; Outstanding Commitments: The
CSCA Shares represent no less than 80% of the outstanding proprietary interest
of CSCA; further, there are no outstanding commitments (direct or indirect)
which would cause the issuance or transfer out of treasury of any additional
proprietary interest of CSCA, whether by common stock, preferred stock, option,
warrant, debt or otherwise, other than pursuant to those contracts which have
been disclosed to Mr. Langley and which he has acknowledges receipt of. In this
regard, the outstanding capital stock and commitments for the same do not exceed
3,000,000 post-split shares in amount. (f) SEC and Tax Reports; Filings: CSCA
has delivered to S&J and Mr. Langley its annual report on Form 10-KSB for the
year ended December 31, 1998, and its quarterly reports on Form 10-QSB for the
fiscal quarters ended March 31, 1999, June 30, 1999, and September 30, 1999, all
of which were true and correct as of the date of filing and remain true and
correct. CSCA has provided to S&J and Mr. Langley full access to any and all
information either of them desired concerning the business and operations of
CSCA, and CSCA has made available S&J and Mr. Langley such personnel as has been
requested to answer any and all questions which S&J and/or Mr. Langley may have
had concerning their investment in CSCA. CSCA is current in all of its required
reports under the Securities Exchange Act of 1934. CSCA is current in its
filings with all federal and state taxing agencies, including, without
limitation, the Internal Revenue Service. CSCA has delivered to S&J and Mr.
Langley its annual report on Form 1040, which was true and correct as of the
date of filing and remains true and correct. No taxes are due any federal or
state agency. (g) No Undisclosed Liabilities or Obligations. CSCA has no
obligations or liabilities of any nature (absolute, accrued, contingent or
otherwise, and whether due or to become due, herein "liabilities") except
liabilities fully reflected or reserved in the balance sheet filed as a part of
the Form 10-QSB dated September 30, 1999; further, CSCA has no assets. (h)
Litigation. There is no legal, administrative, arbitration or other proceeding,
claim or action of any nature or investigation pending or threatened against or
involving CSCA, or which questions or challenges the validity of this Agreement,
or any action to be taken by CSCA pursuant to this Agreement or in connection
with the transactions contemplated hereby, and CSCA does not know or have any
reason to know of any valid basis for any such legal, administrative,
arbitration or other proceeding, claim or action of any nature or investigation;
further, CSCA is not subject to any judgment, order or decree entered in any
lawsuit or proceeding which has an adverse effect on its business practices or
on its ability to acquire any property or conduct its business in any area. (i)
Compliance with Law. CSCA is in compliance with all laws, regulations and orders
applicable to its business; further, CSCA has not received any notification that
it is in violation of any law, regulation or order and no such violation exists.
(j) Disclosure. No representations or warranties by CSCA in this Agreement
contain any untrue statement of fact or omit to state any fact necessary in
order to make the statements herein or therein, in light of the circumstances
under which they were made, not misleading; further, there are no facts known to
CSCA which (either individually or in the aggregate) could or would materially
and adversely affect or involve any substantial possibility of having a
material, adverse effect on the condition (financial or otherwise), results of
operations, assets, liabilities or businesses of CSCA which have not been
disclosed in this Agreement.
2.2. Representations, Warranties and Covenants of S&J and Mr. Langley to CSCA.
S&J and Mr. Langley each represents and warrants, jointly and severally, to CSCA
on the Closing Date as follows: (a) Authority: All necessary action has been
taken to make this Agreement a legal, valid and binding obligations of S&J and
Mr. Langley enforceable in accordance with its terms and conditions. (b) No
Breach or Violation: The execution and delivery of this Agreement and the
performance by S&J and Mr. Langley of their respective obligations will not
result in any breach or violation of or default under any material agreement,
indenture, lease, license, mortgage, instrument, or understanding, nor result in
any violation of any law, rule, regulation, statute, order or decree of any
kind, to which any of S&J, Mr. Langley and/or any of their respective affiliates
is a party or by which they or any of them or any of their property is or may be
or become subject, nor in the violation of any documents governing the conduct
of either S&J or Mr. Langley. (c) Non-Assessable S&J Shares: The S&J Shares have
each been validly issued and are fully paid for and nonassessable. (d) No Liens
on S&J Shares: The S&J Shares are not and shall not be or become subject to any
lien, encumbrance, security interest or financing statement whatsoever through
any act of S&J and/or Mr. Langley; further, the S&J Shares are not the subject
of any agreement. (e) Capital Percentage; Outstanding Commitments: The S&J
<PAGE>
Shares represent 100% of the outstanding proprietary interest of S&J; further,
there are no outstanding commitments (direct or indirect) which would cause the
issuance or transfer out of treasury of any additional proprietary interest of
S&J, whether by common stock, preferred stock, option, warrant, debt or
otherwise. (f) Audited Financial Statements and Tax Reports: S&J and Mr. Langley
have delivered or will forthwith deliver within the time periods set forth in
Form 8-KSB to CSCA audited financial statements of S&J as of and for the yearly
periods ended December 31, 1998, which statements include an audit opinion,
balance sheets as of December 31, 1998, and December 31, 1997, operating and
cash flow statements as of December 31, 1998, December 31, 1997, and December
31, 1996, a statement of changes in shareholders' equity from inception through
December 31, 1998, and footnotes. The audit opinion is or will be unqualified
and states or will state that these financial statements were audited to comply
with the United Kingdo s Companies Act 1985 as well as an unqualified opinion
stating that the aforesaid statements have been or will be presented in
accordance with Auditing Standards issued by the United Kingdom's Auditing
Practices Board. S&J has also delivered or will forthwith deliver within the
time periods set forth in Form 8-KSB to CSCA unaudited financial statements as
of and for the nine month period ended September 30, 1999, which statements
include a balance sheet as of September 30, 1999, and statements and operations
and cash flows for the nine month period ended September 30, 1999. All of the
foregoing financial statements were or will be true and correct as of the date
of preparation, remain or will remain true and correct and comply or will comply
with Regulation S-X under the Securities Exchange Act of 1934. S&J and Mr.
Langley have provided to CSCA full access to any and all information which
either of them desired concerning the business and operations of S&J and/or Mr.
Langley. S&J and Mr. Langley have made available to CSCA such personnel as has
been requested to answer any and all questions which CSCA may have had
concerning its investment in S&J. S&J is current in all of its required reports
with all governmental and local taxing agencies. No taxes are due any
governmental or local agency. S&J and Mr. Langley have provided to CSCA full
access to any and all information it desired concerning the business and
operations of S&J. S&J and Mr. Langley have made available to CSCA such
personnel as has been requested to answer any and all questions which CSCA may
have had concerning its investment in S&J. (g) No Undisclosed Liabilities or
Obligations. S&J has no obligations or liabilities of any nature (absolute,
accrued, contingent or otherwise, and whether due or to become due, herein
"liabilities") except liabilities fully reflected or reserved in the balance
sheet dated September 30, 1999. (h) Litigation. There is no legal,
administrative, arbitration or other proceeding, claim or action of any nature
or investigation pending or threatened against S&J and/or Mr. Langley, or which
questions or challenges the validity of this Agreement or any action to be taken
by S&J and/or Mr. Langley pursuant to this Agreement or in connection with the
transactions contemplated hereby, and S&J and Mr. Langley do not know or have
any reason to know of any valid basis for any such legal, administrative,
arbitration or other proceeding, claim or action of any nature or investigation.
S&J and Mr. Langley are not subject to any judgment, order or decree entered in
any lawsuit or proceeding which has an adverse effect on their business
practices or on their ability to acquire any property or conduct their business
in any area. (i) Compliance with Law. S&J is in compliance with all laws,
regulations and orders applicable to its business and neither S&J nor Mr.
Langley have received any notification that they are in violation of any law,
regulation or order and no such violation exists. (j) Disclosure. No
representations or warranties made by S&J and/or Mr. Langley contain any untrue
statement of fact or omit to state any fact necessary in order to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading; further, there are no facts known to S&J and/or Mr.
Langley which (either individually or in the aggregate) could or would
materially and adversely affect or involve any substantial possibility of having
a material, adverse effect on the condition (financial or otherwise), results of
operations, assets, liabilities or businesses of S&J which have not been
disclosed in this Agreement.
2.3. Understandings of Mr. Langley. Mr. Langley acknowledges, understands and
agrees that: (a) Certificate. The certificate representing the CSCA Shares will
bear a legend restricting their transfer under Rule 144 of the Securities Act of
1933 and will be issued solely in his name. (b) No Securities Act Registration.
The CSCA Shares have not been registered under the Securities Act of 1933 or any
applicable state law (collectively, the "Securities Act"). The CSCA Shares may
not be sold, offered for sale, transferred, pledged, hypothecated or otherwise
disposed of except in compliance with the Securities Act. CSCA has no
obligation, and does not intend, to cause the CSCA Shares to be registered under
the Securities Act, or to comply with any exemption under the Securities Act
that would permit a sale or sales of all or any portion of the CSCA Shares. The
<PAGE>
legal consequences of the foregoing mean that Mr. Langley must bear the economic
risk of his investment in the CSCA Shares for an indefinite period of time. If
he desires to sell or transfer all or any part of the CSCA Shares within the
restricted period, CSCA may require Mr. Langley's counsel to provide a legal
opinion that the transfer may be made without registration under the Securities
Act. (c) Lack of Agency Findings. No federal or state agency has made any
findings or determination as to the fairness of an investment in CSCA or any
recommendation or endorsement of this investment. (d) No Market for CSCA Shares.
There is presently only an extremely limited market for the CSCA Shares and no
market may exist in the future for any sale or sales of all or any portion
thereof. (e)Commitments to Investments. Mr. Langley's commitment to investments
that are no readily marketable is not disproportionate to his net worth and his
investment in the CSCA shares will not cause his commitment to become excessive.
(f) Financial Ability. Mr. Langley has the financial ability to bear the
economic risks of this investment, has adequate means of providing for his
current needs, and has no need for liquidity in this investment. (g) High Risk
of Investment. Mr. Langley has evaluated the high risks of investing in the CSCA
Shares and has such knowledge and experience in financial and business matters
in general and in particular with respect to this type of investment that he is
capable of evaluating the merits and risks of an investment in the CSCA Shares.
(h) Opportunity to Investigate Investment. Mr. Langley has been given the
opportunity to ask questions of and receive answers from CSCA concerning the
terms and conditions of this investment and to obtain additional information
necessary to verify the accuracy of the information it desired in order to
evaluate his investment. In evaluating the suitability of an investment in the
CSCA Shares, he has not relied upon any representations or other information
(whether oral or written) other than that furnished to him by CSCA or the
representatives of CSCA. (i) Opportunity to Consult Professionals. Mr. Langley
has had the opportunity to discuss with his professional, legal, tax and
financial advisers the suitability of an investment in the CSCA Shares for his
particular tax and financial situation and all information that he has provided
to CSCA concerning himself and his financial position is correct and complete.
(j) Reliance. In making the decision to purchase the CSCA Shares Mr. Langley has
relied solely upon independent investigations made by him or on his behalf.
(k)Investment Purpose. Mr. Langley is acquiring the CSCA Shares solely for his
own account, for investment purposes only, and is not purchasing with a view to,
or for, the resale, distribution, subdivision or fractionalization thereof.
ARTICLE III
REMEDY FOR BREACH OF REPRESENTATIONS, WARRANTIES, COVENANT
3.1. Breach of Representations, Warranties and/or Covenants by CSCA: CSCA agrees
and accepts that, in the event of it being or becoming in material breach of any
or all representations, warranties or covenants given by it pursuant to ARTICLE
II Section 2.1 hereof, whether by purposeful act, negligence, accident on its
part or for no reason or otherwise, it has and will have no means or assets with
which to remedy such breach; therefore, in such circumstances, this Agreement
shall be rescinded forthwith upon such breach being evident and the S&J Shares
shall be returned to Mr. Langley without cost or penalty, and S&J and Mr.
Langley shall forthwith and forever be relieved of any and all obligations
undertaken by them, either individually or joint and severally, in entering into
and executing this Agreement after returning to CSCA the CSCA Shares.
3.2. Breach of Representations, Warranties and/or Covenants by S&J and/or Mr.
Langley: S&J and Mr. Langley agree and accept that, in the event of their being
or becoming in material breach of any or all representations, warranties or
covenants given by either of them pursuant to ARTICLE II Section 2.2 hereof,
whether by purposeful act, negligence, accident on either of their parts or for
no reason or otherwise, the former management of CSCA may elect to notify S&J
and Mr. Langley of CSCA's rescision of this Agreement and this Agreement shall
be deemed rescinded forthwith and the S&J Shares shall be returned to Mr.
Langley without cost or penalty, and S&J and Mr. Langley shall forthwith and
forever be relieved of any and all obligations undertaken by them, either
individually or joint and severally, in entering into and executing this
Agreement after returning to CSCA the CSCA Shares.
ARTICLE IV
MISCELLANEOUS
4.1. Entire Agreement. This Agreement sets forth the entire agreement between
the parties with respect to the subject matter and supersedes all prior
agreements, understandings, promises, warranties, covenants and representations
made by any party to the other concerning the subject matter and terms.
4.2. Modification. This Agreement may not be released, discharged, amended or
modified in any manner except by an instrument in writing signed by duly
authorized representatives of all parties.
<PAGE>
4.3. Severability. The invalidity or unenforceabilty of any one or more of the
provisions of this Agreement shall not affect the validity or enforceability of
any one or more of the other provisions, and this Agreement shall be construed
in all respects as if such invalid or unenforceable provisions are omitted.
4.4. Governing Law. This Agreement shall be deemed to have been entered into and
shall be construed and enforced in accordance with the laws of the State of
Colorado.
4.5. Waivers. The failure of any party to insist on the performance of any of
the terms, conditions and/or covenants or to otherwise exercise any right shall
not be construed as a waiver of the future performance of any such term,
condition and/or covenant. Waiver on one occasion is not a waiver on any other
occasion.
4.6. Headings. The headings in the articles, sections and paragraphs are
included for convenience only and are not to be used in construing or
interpreting this Agreement.
4.7. Notice. All notices, demands, or requests shall be in writing and served
either personally, by certified mail, return receipt requested, by Federal
Express or other reputable overnight courier, or by facsimile, as follows:
If to CSCA: Cassco Capital Corporation
c/o R. Nicholas Palmer, Esq.
1999 Broadway, Ste. 3235
Denver, CO 80202
(303) 292-2882: FAX
If to S&J and/or Mr. Langley:: Mr. M. S. Langley
c/o S&J (Chatteris) Holdings Limited
Number One Fenton Way Business Park
Fenton Way
Chatteris, Cambridgeshire PE16 6US
United Kingdom
011-44-1354-692255: FAX
4.8. Successor and Assigns. This Agreement shall be binding on and inure to the
benefit of the parties, their respective successors, successors-in-title, heirs
and permitted assigns, if any, and each and every successor-in-interest to any
party, whether such successor acquires such interest by way of gift, purchase,
foreclosure, or by any other legal method, who shall hold such interest subject
to all the terms and conditions of this Agreement.
4.9. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all counterparts shall together
constitute one and the same instrument.
4.10. Attorneys' Fees. In the event of any dispute, the prevailing party shall
be entitled to receive a reimbursement of their reasonable attorneys' fees and
such other costs and expenses as are reasonably incurred in resolving the
dispute.
4.11. Expenses. Each party shall pay the expenses incurred by them under or in
connection with this Agreement, including counsel fees and the expenses of their
respective representatives.
4.12. Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants shall survive execution and closing,
and shall be unaffected by any investigation made by any party at any time.
4.13. Further Assurances. At any time and from time to time after the Closing
Date, all parties shall execute such additional instruments and take such other
and further action as may be reasonably requested by any other party to carry
out the intent and purpose of this Agreement.
<PAGE>
4.14. Brokers. No party has engaged or is otherwise liable for any amount due or
to become due to any broker or sales agent in regards of the transactions giving
rise to and/or evidenced by this Agreement. In the event that any claim is
asserted by any person claiming a commission and/or finder's fee with respect to
this Agreement arising from any act, representation or promise of a party or
their representative(s), such party shall indemnify, save, defend and hold every
other party harmless from and against any and all such claims, as well as
against all related costs and expenses, including attorneys' fees and costs.
THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE EXECUTED AND DELIVERED ON THE DATE
FIRST ABOVE WRITTEN TO BECOME EFFECTIVE, IF AT ALL, AT CLOSING.
CASSCO CAPITAL CORPORATION, a Delaware corporation ("CSCA")
By: /s/ Richard Gregory
- -----------------------
Richard Gregory, President
S&J (Chatteris) HOLDINGS LIMITED, a United Kingdom corporation ("S&J")
By: /s/ Mark Langley
- --------------------
Mark Langley, Managing Director
SOLE SHAREHOLDER OF S&J: MARK LANGLEY
/s/ Mark Langley
- ----------------
Mark Langley, Individually and
as the majority shareholder of S&J
<PAGE>
Schedule A
to
Plan and Agreement of Reorganization
By and Between
Cassco Capital Corporation and S&J (Chatteris) Holdings, Limited
Disclosure and Exception to Representations, Warranties and Covenants of CSCA to
S&J and Mr. Langley contained in Section 2.1.
I. The following are the only compensation arrangements outstanding and to be
paid as of December 1, 1999.
A. Contracts with Consultants Barry J. Muncaster and Graham Hind dated July 15,
1999.
B. Legal Services contract with Mark S. Pierce dated March 1, 1999.
II. CSCA has disclosed that 4,000,000 shares of its common stock pre-split
(57,143) post-split have not been accounted for and are issued in the names of
Norman and Brandon Woods. CSCA takes the position that said shares are not
validly issued or outstanding and has placed a stop transfer order with its
transfer agent, but this position has not been confirmed in a final judgment by
a court of competent jurisdiction and the certificates are unaccounted for by
CSCA.
<PAGE>
Schedule B
to
Plan and Agreement of Reorganization
By and Between
Cassco Capital Corporation and S&J (Chatteris) Holdings, Limited
Disclosure and Exception to Representations, Warranties and Covenants of CSCA to
S&J and Mr. Langley contained in Section 2.2.
I. Financial Statements. S&J was formed during 1998. No financial statements for
any period prior to this date exist as of December 1, 1999. Subsection 2.2(f) is
understood by the parties to refer to financial statements that will be prepared
and it is not understood to refer to currently existing financial statements.
II. Taxes Due. The parties acknowledge and understand that taxes are due to
governmental and local agencies not withstanding the language of Subsection
2.2(f) including the following: (I) payroll and net income contributions for
current periods; (ii) value added and property taxes for current periods; and
(iii) up to 750,000 of payroll tax arreages to be settled in installments
commencing November 30, 1999.
III. Undisclosed liabilities and obligations. The parties acknowledge and
understand that there are obligations entered into in the normal course of
business by S&J that have not individually been disclosed.
IV. Litigation. The parties acknowledge and understand that litigation and other
dispute resolution proceedings affecting S&J and its subsidiaries are in
progress, totaling in the aggregate less than 50,000 pounds sterling.
V. Collection Proceedings for Payroll Tax Arrearages. The parties acknowledge
and understand that proceedings by tax collection authorities have been
instituted for the collection of the payroll tax arrearages referenced in
paragraph II above.
EXHIBIT No. 2
SERIES A: CONVERTIBLE, REDEEMABLE PREFERRED STOCK
CERTIFICATE SETTING FORTH RESOLUTIONS
BY THE BOARD OF DIRECTORS FOR CASSCO CAPITAL CORPORATION
(Pursuant to the Delaware Corporation Code)
We, the undersigned, as the President and Secretary of Cassco Capital
Corporation, a Delaware corporation, the Articles of Incorporation of which are
on file in the office of the Secretary of State for the State of Delaware, DO
EACH HEREBY CERTIFY AND VERIFY: that the Board of Directors of Cassco Capital
Corporation, in accordance with said articles and pursuant to the laws of the
State of Nevada, duly adopted on February 16, 2000, the preambles and
resolutions attached hereto.
IN WITNESS WHEREOF: We have set our hands and the corporate seal this 16th day
of February, 1999.
CASSCO CAPITAL CORPORATION
By: /s/ Richard Gregory
- -----------------------
Richard Gregory, President
[SEAL]
Attest:
Mark S. Pierce, Secretary
<PAGE>
UNANIMOUS CONSENT IN LIEU OF SPECIAL MEETING
BOARD OF DIRECTORS
FOR
CASSCO CAPITAL CORPORATION
(February 16, 2000)
Pursuant to the provisions of the Delaware Corporation Code, which provide that
action required or permitted by said code to be taken at a meeting of the board
of directors of a corporation may be taken without a meeting with the same force
and effect as a unanimous vote of said board if the action is (i) evidenced by
one or more written consents describing the action taken, (ii) signed by each
director and (iii) delivered to the secretary of the corporation for filing with
the corporate records the undersigned, being the sole member of the board of
directors of Cassco Capital Corporation (the Board of Directors and the Company,
respectively), does hereby waive any and all notice which may be required to be
given with respect to a meeting of the Board of Directors and do hereby take,
ratify, confirm and approve the following action this 16th day of February,
2000.
WHEREAS, the Company entered into a Reorganization Agreement with S&J
(Chatteris) Holdings on December 1, 1999; WHEREAS, the Reorganization Agreement
required S&J to perform certain conditons; WHEREAS, S&J did not perform under
the Reorganization Agreement and did not perform the aforesaid conditions;
WHEREAS, Mr. Gregory, deeming such to be in the best interests of the Company
instructed counsel to forward a letter to S&J on behalf of the Company informing
S&J of the Company's election to rescind the Reorganization Agreement; WHEREAS,
the Reorganization Agreement has now been rescinded and the shares of common
stock issued thereunder returned to treasury; WHEREAS, the Company has been
informed by Mr. Gregory that he no longer desires to be an officer or a director
of the Company; WHEREAS, Mr. Charles Stidham has agreed to serve as the sole
officer and director of the Company; WHEREAS, the Board of Directors finds the
appointment of Mr. Stidham as aforesaid and on such terms and conditions as have
previously been discussed to be in the best interests of the Company; WHEREAS,
as a part of Mr. Stidham's compensation, it is necessary to grant an option
under the Company's previously adopted ISOP and create a class of preferred
stock; and WHEREAS, the Articles of Incorporation governing the Company permit
the issuance of preferred shares in series with such designations, preferences
and relative participating option or other rights and qualifications,
limitations and restrictions as may be fixed by the Board of Directors,
including, without limitation, the rate of dividends and redemption and
conversion prices, all of which are to be determined after giving consideration
to the financial and general condition of the Company and to the condition of
the securities' markets, if any, existing at the time of issuance;
<PAGE>
NOW, THEREFORE, BE IT RESOLVED,
(1) The actions of Mr. Gregory in rescinding the Reorganization Agreement are
hereby confirmed, ratified and approved effective February 14, 2000, including,
but not limited to, his instructing counsel to prepare notification of such. (2)
Mr. Stidham is hereby appointed to the Board of Directors and is hereby elected
to serve as President, Chief Executive Officer, Treasurer and Chief Financial
and Accounting Officer. (3) Mr. Stidham, as partial consideration for his
agreeing to serve as an officer and director of the Company, is hereby granted
an option under the ISOP to acquire up to 930,000 shares of common stock at the
greater of market price or $.05 at either the date of grant or exercise. (4) The
Board of Directors hereby authorizes the Company to issue and deliver for the
purpose of engaging Mr. Stidham One Million (1,000,000) shares of its Series A:
Convertible, Redeemable Preferred Stock valued at $1,000 in the aggregate, which
series shall have the following features: (a) Dividends - the series shall not
pay a dividend; (b) Conversion the series shall be convertible on five day's
prior, written notice in whole or in part at any time and from time to time on
the basis of one preferred share for twenty (20) common shares and without the
payment of any additional consideration; (c) Redemption - the Company may redeem
all or any part of the preferred shares at any time and from time to time after
30 days' prior, written notice, payment of $.25 per preferred share in cash and
prior to conversation; (d) Liquidation Preference - the holders of the series
shall be entitled to a liquidation preference over any existing or subsequently
established class or series of outstanding stock of the Company in the amount of
$.25 per share; (e) Sinking Fund - the holders of this series shall not be
entitled to the establishment of any sinking fund for the purpose or retiring
the shares of the series or for any other purpose; (f) Voting Rights - the
series shall vote as a class with the common shares and shall have twenty (20)
votes per preferred share; (g) Additional Provision - the series shall be
issued, upon compliance with the laws of the State of Delaware, in accordance
with those terms set forth on Exhibit A hereto, which is specifically
incorporated herein by this reference and adopted as the act of the Company. (5)
The President be, and he hereby is, authorized to take any and all action
reasonable and necessary under the circumstances to effectuate the foregoing.
IN WITNESS WHEREOF, the undersigned, being the sole member of the Board of
Directors, have hereunto set their hands effective as of the date first
specified above.
/s/ Richard Gregory
- -------------------
Richard Gregory, Director
<PAGE>
EXHIBIT A
SERIES A: REDEEMABLE, CONVERTIBLE PREFERRED STOCK PROVISIONS
The Series A: Convertible, Redeemable Preferred Stock (the Preferred Stock or
the Series A Preferred Stock) shall consist of one (1) series of One Million
(1,000,000) shares of the preferred stock of Cassco Capital Corporation (the
Company), with each share to be identical to every other in all respects. The
following sets forth the provisions of the Series A Preferred Stock.
Part 1: Dividends - The holders of the issued and outstanding Preferred Stock
shall not be entitled to receive dividends.
Part 2: Conversion - The holders of the Preferred Stock shall be entitled on
five day's previous, written notice to convert at any time and from time to time
all or any portion of the Preferred Stock into common shares of the Company on
the basis of one preferred share for 20 common shares. No additional
consideration shall be paid by a holder of Preferred Stock on conversion. This
conversion right shall expire at the close of business on February 16, 2001.
Part 3: Redemption - The Company may, on 30 days' prior, written notice, elect
to redeem all or any part of the preferred stock at any time and from time to
time on payment of the price of $.25 per share. A Preferred Stock holder may
elect to convert at any time prior to redemption. This redemption right shall
expire at the close of business on February 16, 2002.
Part 4: Liquidation - The Preferred Stock shall be entitled to preferential
liquidation rights over any other class or series of stock previously or which
may subsequently be issued by the Company in the amount of $.25 per share.
Part 5: Sinking Fund - The Preferred Stock shall not be entitled to the
establishment of any sinking fund for any purpose.
Part 6: Voting Rights - The Preferred Stock shall vote as a class with the
common stock of the Company. Each share of Preferred Stock shall have twenty
(20) votes.
Part 7: Additional Provisions - The Preferred Stock may not be subordinated in
any respect to the terms and provisions of the Common Stock and to the terms and
provisions of any other series of the outstanding preferred stock of the Company
which may be issued and become outstanding subsequent to the Preferred Stock.
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
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0
0
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<OTHER-SE> (78,741)
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<INCOME-CONTINUING> (224,250)
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