BAP ACQUISITION CORP.
1051 FIFTH AVENUE NORTH,
NAPLES, FL 34102-5818
TEL: (941) 261-3396
FAX: (941) 261-5031
MARCH 31, 1998
Ms. Barbara Jacobs-Deputy Director
Mr. Ed. Loftus-Accountant
U.S Securities & Exchange Commission
Corporate & Finance Small Business Section,
Washington, DC
Please find form 10K-SB for Bap Acquisition Corp., for the Year ending
December 31, 1996. The financial statements included herein reflect no
changes from the preceding year in accounting principles or practices or
in the method of applying them.
Yours Truly,
Bap Acquisition Corp.
/s/ Garfield Ricketts
- ---------------------
Garfield Ricketts
BAP ACQUISITION CORP.
AND SUBSIDIARY
(A DELAWARE CORPORATION)
NAPLES, FLORIDA
--------------
TABLE OF CONTENTS
-----------------
Independent Auditor's Report 1
Consolidated Balance Sheets at December 31, 1996 and 1995. 2
Consolidated Statements of Changes in Stockholders' Equity
for the Years Ended December 31, 1996, 1995 and 1994. 3
Consolidated Statements of Operations for the Years Ended
December 31, 1996, 1995 and 1994. 4
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994. 5
Notes to the Consolidated Financial Statements 6-11
---------------------
<PAGE>
INDEPENDENT AUDITOR'S REPORTS
To the Board of Directors
and Stockholders
BAP Acquisition Corp.
and Subsidiary
(A Delaware Corporation)
Naples, Florida
We have audited the accompanying consolidated balance sheets of BAP
Acquisition Corp. and Subsidiary as of December 31, 1996 and 1995, and the
related consolidated statements of changes in stockholders' equity,
operations and cash flows for each of the three years in the period ended
December 31, 1996. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of BAP Acquisition Corp. and Subsidiary as of December 31, 1996 and 1995 and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ Rotenberg & Company LLP
Rochester, New York
October 22, 1997
<PAGE>
BAP ACQUISITION CORP.
AND SUBSIDIARY
(A Delaware Corporation)
Naples, Florida
CONSOLIDATED BALANCE SHEETS AT
DECEMBER 31, 1996 AND 1995
ASSETS
1996 1995
Assets ----------- -------------
Revenue Producing Assets -
Net of Accumulated Depreciation $ 238,004 $ 246,335
Land Held for Investment 24,000 24,000
Cash and Cash Equivalents 11,187 ---
Rents Receivable 1,380 4,396
Prepaid Expenses 512 ---
Tenant Escrow Account 20,404 14,812
Property and Equipment -
Net of Accumulated Depreciation 3,628 3,091
Organization Costs -
Net of Accumulated Amortization 36,511 45,833
---------- ----------
Total Assets $ 335,626 $ 338,467
----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Mortgages Payable-Due Within One Year $ 4,265 $ 3,869
Cash Overdraft --- 6,179
Accrued Expenses 1,307 320
Tenant Security Deposits Payable 20,404 14,812
Due to Stockholder - Within One Year 22,555 24,241
Mortgages Payable - Due After One Year 141,133 145,398
---------- ----------
Total Liabilities $ 189,664 $ 194,819
---------- ----------
Stockholders' Equity
Common Stock: $.001 Par;
20,000,000 Shares Authorized,
4,655,310 Shares Issued and
Outstanding 4,655 4,655
Additional Paid In Capital 336,381 336,381
Deficit (195,074) (197,388)
---------- ----------
Total Stockholders' Equity $ 145,962 $ 143,648
---------- ---------
Total Liabilities and
Stockholders' Equity $ 335,626 $ 338,467
---------- ----------
The accompanying notes are an integral part of this financial statement and
should be read in conjunction therewith.
<PAGE> BAP ACQUISITION CORP.
AND SUBSIDIARY
(A Delaware Corporation)
Naples, Florida
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994.
Common
Stock Additional Total
$.001 Par Paid-In Stockholders'
Shares Value Capital Deficit Equity
---------- ------- --------- --------- ------------
Balance
January 1,1994 ---- $ --- $--- $(184,876) $(184,876)
Recapitalization 3,500,000 3,500 --- --- 3,500
----------- ------ ---------- ----------- ------------
Adjusted Balance
January 1,1994 3,500,000 3,500 $--- $(184,876) $(181,376)
Issuance of Shares:
Initial Capitalization
August 30, 1994 11,553,100 11,553 --- --- 11,553
10 for 1 Reverse
Split (10,397,790) (10,398) 10,398 --- ---
Net Income, 1994 --- --- --- 4,865 4,865
----------- ---------- ----------- ---------- ----------
Balance
December 31,1994 4,655,310 $4,655 $10,398 $(180,011) $(164,958)
Non-Cash Capital
Contribution
of Stockholder ---- --- 325,983 --- 325,983
Net Loss-1995 --- --- --- (17,377) (17,377)
---------- ---------- ---------- ------------ -----------
Balance
December 31,1995 4,655,310 $4,655 $336,381 $(197,388) $ 143,648
Net Income-1996 --- --- --- 2,314 2,314
----------- ---------- -------- ------------ ------------
Balance
December 31,1996 4,655,310 $4,655 $336,381 $(195,074) $ 145,962
---------- --------- ----------- ----------- -------------
The accompanying notes are an integral part of this financial statement and
should be read in conjunction therewith
<PAGE> BAP ACQUISITION CORP.
AND SUBSIDIARY
(A Delaware Corporation)
Naples, Florida
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994.
Revenues 1996 1995 1994
---------- --------- ---------
Commissions $ 7,450 $ 1,650 $ 5,445
Management Services 25,860 29,705 29,993
Rental Income 58,946 27,623 ---
Interest and Other 577 298 250
---------- ---------- ---------
Total Revenues $ 92,833 $ 59,276 $ 35,688
----------- --------- ----------
Direct Expenses
Advertising $ 392 $ 450 $ 677
Bad Debts --- 8,529 474
Commission and Management Fees 3,351 675 975
Depreciation and Amortization 17,653 17,267 ---
Insurance 3,795 610 ---
Interest 15,885 8,600 ---
License and Filing Fees 1,747 972 280
Real Estate Taxes 9,063 1,795 ---
Repairs and Maintenance 6,375 6,700 ---
Utilities 4,034 1,322 ---
---------- --------- ----------
Total Direct Expenses $62,295 $46,920 $2,406
--------- --------- ----------
General and Administrative Expenses
Contributions $ 246 $ 150 $ 55
Depreciation 509 428 ---
Dues and Subscriptions 3,644 3,845 1,962
Occupancy Expenses 10,743 12,951 9,173
Office Supplies and Expense 4,645 6,684 7,833
Professional Fees 1,989 950 ---
Telephone 3,823 3,497 3,328
Travel and Entertainment 1,318 1,220 6,056
---------- ---------- ---------
Total General and Administrative
Expenses $ 26,917 $ 29,725 $ 28,407
--------- --------- ----------
Income (Loss)
Before Provision for Taxes $ 3,621 $(17,369) $ 4,875
Provision for Taxes 1,307 8 10
--------- ---------- ---------
Net Income (Loss) $ 2,314 $(17,377) $ 4,865
---------- ---------- ----------
1996 1995 1994
________ ________ ________
Income (Loss) per Common Share: $ --- $(.004) $ .001
________ _________ ________
Weighted Average Number
of Common Shares Outstanding 4,655,310 4,655,310 4,655,310
_________ _________ _________
<PAGE>
The accompanying notes are an integral part of this financial statement and
should be read in conjunction therewith.
BAP ACQUISITION CORP.
AND SUBSIDIARY
(A Delaware Corporation)
Naples, Florida
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
__________ _________ ________
Cash Flows from Operating Activities
Net Income (Loss) $ 2,314 $(17,377) $ 4,865
Adjustments to Reconcile
Net Income to Net Cash Flows
from Operating Activities:
Amortization 9,322 12,422 ---
Depreciation 8,840 5,273 ---
Bad Debts --- 8,529 474
Changes in Assets and Liabilities:
Rents Receivable 3,016 (8,661) ---
Prepaids and Escrows (512) 1,104 ---
Current Liabilities (5,192) (23,406) 5,492
________ _________ _________
Net Cash Flows from
Operating Activities $ 17,788 $(22,116) $ 10,831
_________ ________ _________
Cash Flows from Investing Activities
Acquisition of Fixed Assets $ (1,046) $ (1,006) $ ---
Change in Due to Stockholder (1,686) 24,241 (18,045)
__________ _________ _________
Net Cash Flows from
Investing Activities $ (2,732) $ 23,235 $(18,045)
_________ _________ _________
Cash Flows from Financing Activities
Repayment of Mortgages $ (3,869) $ (1,119) $ ---
---------- --------- ---------
Net Cash Flows from
Financing Activities $ (3,869) $ (1,119) $ ---
__________ _________ _________
Net Increase (Decrease)
in Cash and Cash Equivalents $ 11,187 $ --- $ (7,214)
Cash and Cash Equivalents
Beginning of Year --- --- 7,214
_________ _________ _________
Cash and Cash Equivalents -
End of Year $ 11,187 $ --- $ ---
_________ _________ _________
<PAGE>
1996 1995 1994
---------- --------- ----------
Supplementary Disclosures
Interest Paid $ 15,885 $ 8,600 $ ---
Income Taxes Paid --- 18 ---
---------- --------- ----------
NON-CASH INVESTING AND FINANCING ACTIVITIES
Capital Contribution of Stockholder
on June 30, 1995 (See Note H) $ 329,483
The Accompanying notes are an integeral part of this financial statement and
should be read in conjunction therewith
BAP ACQUISITION CORP.
AND SUBSIDIARY
(A DELAWARE CORPORATION)
Naples, Florida
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Summary of Transaction
The consolidated financial statements for all periods presented reflect
the Plan of Reorganization which was effected as of November 21, 1995,
pursuant to which Ricketts Enterprises International, Inc. became a wholly-
owned subsidiary of BAP Acquisition Corp. The business combination is
accounted for as a recapitalization.
All references to the "Corporation" herein include BAP Acquisition Corp.
and its wholly-owned subsidiary, Ricketts Enterprises International, Inc.,
individually or collectively.
Note B-Nature of Operations and Summary of Significant Accounting Policies
BAP Acquisition Corp.
The Corporation was formed on August 24, 1994 under the laws of the
state of Delaware. On November 21, 1995, the Corporation acquired 100%
of the issued and outstanding shares of common stock of Ricketts
Enterprises International, Inc., a Florida corporation (hereinafter "REI").
The transaction was treated as a reverse acquisition of the Corporation by
REI. Prior to the reverse acquisition, the Corporation had not engaged in
any form of business activity and as a result had no operating history.
The principal business of the Corporation is currently carried on through
its wholly-owned subsidiary, REI.
<PAGE>
Ricketts Enterprises International, Inc.
REI is a duly licensed real estate corporation in the state of Florida
and is presently active in the ownership, management, and sale of residential
real estate in the states of Florida, Texas, and New York. The acquisition
of REI by BAP Acquisition Corp. has been accounted for as a recapitalization,
resulting in the historical operations of REI being treated as the historical
operations of the Corporation. Accordingly, the accompanying historical
financial statements of REI have been restated to reflect the financial
position, results of operations, and cash flows for all years presented as
if the reorganization had occurred at the beginning of the earliest period
presented.
Segment Data, Geographic Information, and Significant Customers
The Corporation operates in one industry segment and receives rental
revenues from third party tenants located in Florida and Texas.
Approximately 65% of revenues are from rental operations, 35% from
commissions and management fees, and less than 1% from interest and other
income.
Method of Accounting
The Corporation maintains its books and prepares its financial statements
on the accrual basis of accounting.
Use of 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 the reported amounts of revenues and expense during the
reporting period. Actual results can differ from those estimates.
Concentrations of Credit Risk
Financial instruments which potentially expose the Corporation to
significant concentrations of credit risk consist principally of bank
deposits and rents receivable. Cash is placed primarily in high quality
short term interest bearing financial instruments. The Corporation performs
evaluations of its clients' financial condition and timely collection
procedures on rents receivable.
Cash and Cash Equivalents
Cash and cash equivalents include time deposits, certificates of deposit,
and all highly liquid debt instruments with original maturities of three
months or less. The company maintains cash and cash equivalents at financial
institutions which periodically may exceed federally insured amounts.
Rents Receivable
The Corporation performs evaluations of its clients' financial conditions
and collectibility of rents receivable. No allowance for uncollectable
accounts has been provided, as management believes that all accounts are
collectable.
<PAGE>
Revenue Producing Assets and Depreciation
Revenue Producing Assets consist of land and buildings which are stated
at cost, less the buildings' accumulated depreciation computed on the
straight line method over the estimated useful lives of 28 years.
Renewals and improvements are charged to property accounts. Costs of
maintenance and repairs that do not improve or extend asset lives are
charged to expense. The cost of property retired or otherwise disposed of
and the related accumulated depreciation are removed from the accounts.
The Revenue Producing Assets are considered long-lived assets and are
reviewed for impairment whenever events or changes in circumstances indicate
that the related carrying amount may not be recoverable. In performing the
review for recoverability, the Corporation estimates the future cash flows
expected to result from the use of the assets and their eventual disposition
in determining their fair value. When required, impairment losses on assets
to be held and used are recognized based on the difference between the fair
value and the carrying amount of the assets. Long-lived assets to be
disposed of are reported at the lower of carrying amount or fair value less
cost to sell.
Property, Equipment and Depreciation
Property and equipment are stated at cost, less accumulated depreciation
computed using the straight line method over the estimated useful lives as
follows:
Office Equipment 5 - 10 Years
Office Furniture 15 Years
Maintenance and repairs are charged to expense. The cost of the assets
retired or otherwise disposed of and the related accumulated depreciation
are removed from the accounts.
Organization Costs and Amortization
Organization costs have been capitalized and are being amortized over
a life of five years.
Revenue Recognition
Revenues from commissions and management services are recognized as
services are rendered. Revenues from rental properties are recognized
monthly based on agreed upon payments in annual lease term agreements.
Income Taxes
The corporation provides for income taxes based on income reported in the
Financial statements. Deferred taxes are recognized on the differences between
financial statement income and taxable income are attributable to depreciation
and entertainment expenses.
Note C - Land Held for Investment
The Corporation owns three building lots zoned for duplexes on which it
plans to build rental properties as soon as construction and permanent
financing can be arranged. The land is recorded at cost on the balance sheet
of $24,000.
<PAGE>
Note D - Revenue Producing Assets
Revenue Producing Assets consisted of the following at December 31, 1996
and 1995:
1996 1995
___________ ___________
Land $ 33,670 $ 33,670
Apartment Buildings 233,315 233,315
---------- -----------
$ 266,985 $ 266,985
Less: Accumulated Depreciation 28,981 20,650
---------- ------------
Net Revenue Producing Assets $ 238,004 $ 246,335
---------- ------------
Depreciation expense for the years ended December 31, 1996, 1995, and
1994 was $8,331, $4,845, and $0, respectively.
Note E - Property and Equipment
Property and equipment are recorded at cost and consisted of the following
at December 31, 1996 and 1995:
1996 1995
----------- ----------
Office Equipment $ 5,827 $ 4,781
Office Furniture 5,671 5,671
----------- ----------
$ 11,498 $ 10,452
Less: Accumulated Depreciation 7,870 7,361
---------- ----------
Net Property and Equipment $ 3,628 $ 3,091
---------- ----------
Depreciation expense for the years ended December 31, 1996, 1995, and
1994 was $509, $428, and $0, respectively.
Note F - Organization Costs
Organization costs are being amortized over 5 years and consisted of the
following at December 31, 1996 and 1995:
1996 1995
--------- -----------
BAP Acquisition Organization Costs $ --- $ 11,553
Legal Fees $ 40,000 $ 40,000
Property Transfer Fees 6,702 6,702
--------- ---------
$ 46,702 $ 58,255
Less: Accumulated Amortization (10,191) (12,422)
----------- -----------
Net Organization Costs $ 36,511 $ 45,833
---------- -----------
Amortization expense for the years ended December 31, 1996, 1995, and
1994 was $9,322, $12,422, and $0, respectively.
<PAGE>
Note G - Mortgages Payable
Mortgages payable consisted of the following at December 31, 1996 and
1995:
1996 1995
------------ -----------
1st Nationwide Mortgage
First mortgage due December, 2020, payable
in monthly payments of $307 including
principal and interest at 10.00%. $ 26,247 $ 27,254
Lloyd G. Sheehan
First mortgage due December, 2025, payable
in monthly payments of $353 including
principal and interest at 10.00%. 38,248 38,637
Lloyd G. Sheehan
First mortgage due December, 2020, payable
in monthly payments of $241 including
principal and interest at 8.75%. 21,066 22,065
Fleet Mortgage Group
First mortgage due December, 2020, payable
in monthly payments of $256 including
principal and interest at 9.50%. 22,279 23,187
Chase Manhattan Mortgage Corporation
First mortgage due December, 2020, payable
in monthly payments of $426 including
principal and interest at 12.00%. 37,558 38,124
------------ -----------
Total Mortgages Payable $ 145,398 $ 149,267
Less: Amount Due Within One Year 4,265 3,869
------------ ---------
Amount Due After One Year $ 141,133 $ 145,398
----------- ---------
Note G - Mortgages Payable - continued
Aggregate annual maturities of mortgages as of December 31, 1996 are as
follows:
1997 $ 4,265
1998 4,705
1999 5,191
2000 5,729
2001 6,322
2002 and Thereafter 119,186
-------------
Total $ 145,398
-------------
Interest expense for the years ended December 31, 1996, 1995, and 1994
was $15,885, $8,600, and $0, respectively.
<PAGE>
Note H - Related Party Transactions
The Corporation provides real estate management services for Garfield
Ricketts, a 60% stockholder, which include the collection of rents for his
personal rental properties and the disbursement of related expenses. The
Corporation receives 10% of the gross rents collected for this service. The
balance sheet item titled Due To Stockholder-Within One Year, represents the
net amount collected on behalf of Garfield Ricketts.
The Corporation rents the office building located in Naples, Florida for its
corporate headquarters, for $575 per month based on a month to month agreement
from Garfield Ricketts, a 60% stockholder. Rent expense in the amount of
$6,900 for each of the years ended December 31, 1996, 1995 and 1994 is
included in occupancy expenses.
The land held for investment and revenue producing assets owned by the
corporation to date resulted from the transfer of the properties to REI in
June, 1995, which were previously owned by Garfield Ricketts, the President
of the Corporation and REI. REI managed the properties prior to the transfer
and acquired the portfolio at the carrying value from Garfield Ricketts,
based on the assumption of the existing outstanding mortgages of the
properties. The transaction resulted in a non-cash capital contribution from
Garfield Ricketts as shown below.
The following transactions occurred in June, 1995 and resulted in non-cash
capital contributions from Garfield Ricketts, a 60% stockholder:
Additional
Common Stock Paid-In-Capital
------------- ----------------
Transfer of ownership of Land Held for
Investment and Revenue Producing Assets
at cost less accumulated depreciation to
Ricketts Enterprises International, Inc. $ --- $ 275,180
Transfer of respective mortgages on
Revenue Producing Assets to Ricketts
Enterprises International, Inc. --- (148,148)
Cash paid by Garfield Ricketts for
Organization Costs --- 46,702
Converted loan payable to Garfield Ricketts
to Common Stock and Additional
Paid-in-Capital 3,500 152,249
------------ ------------
Total Non-Cash Contributions $ 3,500 $ 325,983
----------- ------------
Note I - Other Matters
REI has an agreement represented by a Letter of Intent dated January 15,
1996 to acquire an additional 26 residential rental properties and one
commercial office property held by the former REI shareholders.
The properties are valued at approximately $2.5 million, based on Multiple
Listing Service's market analysis which tracks sales prices of comparable
properties within the area. The acquisition will be completed when permanent
financing can be arranged. Financial data of the properties consisted of
the following for the years ended December 31, 1996 and 1995.
<PAGE>
1996 1995
---------- ---------
Rental Income $ 266,932 $ 253,097
Comparable Expenses 118,478 113,583
---------- ----------
Subtotal 148,454 139,514
Non-Comparable Expenses 169,565 165,825
----------- ----------
Net Loss $ (21,111) $ (26,311)
---------- -----------
Non-comparable expenses includes mortgage interest and depreciation.
Future estimated taxable operating results of the properties would
approximate the results as shown above if the Corporation assumes the
existing outstanding mortgages. Results could differ based on the financing
structure used to acquire the properties. The Corporation does not intend to
pay cash distributions from any positive cash flow that may be generated from
the properties.
ITEM 4: CHANGES IN DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
From the inception of the Company through the acquisition of REI and to
December 31, 1996 its accountants were Rotenberg & Company, LLP of Rochester
New York. At no time have there been any disagreements with prior or current
accountants, regarding any matter of accounting principles or practices,
financial disclosures, or auditing scope or procedure.
PART 111
ITEM 1: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Directors and Executive Officers of the Company and their ages are
as follows.
NAME AGE POSITION
------ ---- --------
Garfield H. Ricketts 67 President/CEO/Director
Karen Ricketts 36 Vice President/Director
Una M. Ricketts 64 Secretary/Treasurer/Director
Dan McCaslin (REI Only) 32 V.P. Sales/Director
All Company Directors were elected upon the closing of the acquisition of
REI on November 21, 1995, and were re-elected unanimously by a majority
of the shareholders represented in person and by proxy in the Company's
annual meeting held at the Company's Principal place of business on
December 16, 1996, at 10:30 AM, and will remain in office until the next
annual meeting of the stockholders, and until their successors have been
duly elected and qualified. There are no agreements with respect to the
election of Directors. The Company has not compensated its Directors for
service on the Board of Directors and/or any committee thereof or
reimbursed for expenses incurred for attendance at meetings of the Board
of Directors. Officers are appointed annually by the Board of Directors
and each executive officer serves at the discretion of the Board of Directors
Directors: The Company does not have any standing committees.
None of the Officers and/or Directors of the Company are Officers or
Directors of any other publicly traded corporation, nor have any of the
Officers, Directors, Affiliates or Promoters of the Company filed any
bankruptcy petition, been convicted of or have been the subject of any
criminal proceedings, or the subject of any order, judgment, or decree
involving the violation of any state or federal securities laws within
the past five years.
At present all the Officers and Directors of the Company serve without
compensation in their capacity as Officers and/or Directors.
All authorized out of pocket expenses incurred by an Officer or Director
on behalf of the Company is subject to reimbursement upon receipt by the
Company of the required documentation substantiating such expense.
There are no current plans nor at present does the Company have any current
or future obligation to compensate its Officers and Directors, except for
Mr. McCaslin who earns a commission from sales, as the broker of record for
the Company.
<PAGE>
Compensation of Officers and Directors of the Company is at the discretion
of the Board of Directors and the current circumstances may change in the
future where the Officers and Directors of the Comapny receive compensation.
The business experience of each of the persons listed above during the
past five years is is follows:
Garfield H. Ricketts was Educated in Jamaica, West Indies at Excelsior
College, and Kingston Technical School, and studied further at the
Thomas Edison State College of New Jersey. He has been President, Chief
Executive Officer and a Director of REI since February 1993 at which time
he founded REI. He is Licensed by the Federal Cummunications Commission as a
Broadcast Engineer since March 1958 and was employed in Radio Broadcasting
From 1958 to 1966.
He joined the National Broadcasting Co.Inc.(NBC),in March 1966 as an
engineer and was promoted to Field Technical Supervisor, in 1976, a
Managerial Position, then to Manager of Electronic Journalism in 1979.
Later he was promoted to Manager of Field Operations and to many other
positions until retirement in January, 1989. Mr. Ricketts began building
and managing a portfolio of Real Estate property in 1983 prior to his
retirement.
He has been Licensed as a Real Estate Broker in the State of New York
since 1989. Although he currently lives in Florida, he continues to maintain
license in New York.
Una M. Ricketts was Educated in Jamaica West Indies in all phases of
Business (Accounting) and has been employed as bookkeeper for the past 43
years rising to the position of Chief Accountant with Merchant's Importing
Company of New York. Mrs Ricketts retired in July of 1993. She has been
the Chief Accountant for Ricketts Enterprises International Inc., since
its inception in February 1993.
Karen Ricketts obtained her Bachelor of Arts Degree in Communications
from the State University of New York, Buffalo in 1982. In 1989 she
completed an Associate Degree from Adelphi University and is a certified
Paralegal. After graduation in 1989 as a Paralegal, Ms. Ricketts joined
the law firm of Levey Phillips & Koningsberg, New York, New York, as a
Legal Assistant where she continues in the same capacity today.
Dan McCaslin is a U.S.Army veteran, and graduated from California State in
Bakersfield, California, in Criminology in 1983. He became licensed as a
Real Estate Broker in the State of California in 1986, and in the State of
Florida in 1990. He was appointed Vice President of Ricketts Enterprises
International Inc., in June of 1983. In addition to being the designated
Broker for REI,he has been President/CEO and sole stockholder of Naples
Landscape Inc., since 1994. Mr. McCaslin is an officer and director of the
subsidiary REI only and not of the Company.
ITEM 2 EXECUTIVE COMPENSATION
At present the Company does not maintain any form of bonus, profit sharing,
or deferred compensation plan for the benefit of any Officers or
Directors. The Board of Directors is currently considering a package of
benefits and will present a plan at the Company's next annual meeting.
There are no employment contracts with any individuals working for or
associated with the Company or its subsidiary.
<PAGE>
Since the acquisition of REI the Company has paid no compensation to its
Officers and Directors. REI was previously organized as a Sub-Chapter "S"
Corporation and the net income of REI was distributed to its Stockholders on
an annual basis.
Name and Annual Other Annual All Other
Principal Position Year Salary Bonus Compensation Compensation
------------------ ---- ------ ----- ------------ ------------
Garfield Ricketts 1993 $2,693.00 0 0 0
President & CEO 1994 $2,355.50 0 0 0
1995 0 0 0 0
1996 0 0 0 0
Una Ricketts 1993 $2,693.00 0 0 0
Secretary/Treasurer 1994 $2,355.50 0 0 0
1995 0 0 0 0
1996 0 0 0 0
Karen Ricketts 1995 0 0 0 0
V.P/Director 1996 0 0 0 0
Dan McCaslin
V.P/Director 1993 0 0 0 0
1994 $ 975.00 0 0 0
1995 0 0 0 0
1996 0 0 0 0
The Officers and Directors of the Company, after the acquisition of REI,
have not received any form of cash or other compensation. Mr. Dan McCaslin
who served as the Real estate broker of record from February 1993 to the
present, did receive commissions on the sale or purchase of real estate
properties in his capacity as the designated Corporate Real Estate Broker
for REI only.
In the future the Company may establish with each Company Officer and/or
Director some form of compensation. Said compensation may include a
situation wherein an Officer and/or Director could receive shares of the
Company's Common Stock in lieu of cash until such time that the Company
can sustain such expensess. In the event shares of the Company's Common
Stock are delivered to an Officer and/or Director as compensation, the
value of the shares delivered will be based on one or more of the following
criteria: the then current market value of the shares as traded on a public
exchange, the then current Book Value of the shares, or as determined by the
Company's Board of Directors.
The dollar amount of compensation due each Officer and/or Director and a
formulae for valuing the shares of the Company's Common Stock in order to
determine the number of shares to be issued as compensation will be
determined by the Board of Directors prior to the issuance of any shares
of the Company's Common Stock. No dollar amount of Officer/Director
compensation or formulae for determining the value of the shares of the
Company's Commons Stock has been determined at this time and the Board of
Directors has no plans to make such a determination in the near future.
<PAGE>
ITEM 3 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, information with respect to (1) any
person, management or otherwise, known by the Company to own beneficially more
than five percent (5%) of the Company's stock, (2) the shares of Common
stock beneficially owned by each Officer and Director of the Company, and (3)
the total of the Company's Common Stock beneficially owned by Company's
Officers and Directors as a group. Each stockholder holds the sole voting and
investment power with regard to the shares owned beneficially by such
stockholder.
Name and Address of Amount and Nature of Percent of
Beneficial owner Beneficial Ownership Class (1)
- -------------------- -------------------- ----------
Garfield H Ricketts 2,800,000 (2) 60%
4010 Royal Wood Blvd.
Naples, FL 34112
Una M. Ricketts 700,000 (2) 15%
4010 Royal Wood Blvd.
Naples, FL 34112
Karen Ricketts 0 (3) 0
13 Terrace Circle,
Great Neck NY 11021
All Directors and Executive
Officers as a group (3 Persons) 3,500,000 75%
Notes: Unless otherwise indicated in the footnotes below, the Company
has been advised that each person above has sole voting power over the
shares indicated.
Note 1: Based upon the 4,655,310 shares of Common Stock being issued and
outstanding on December 31, 1996, there are no outstanding options for the
purchase of shares of the Company's Stock.
Note 2: Garfield Ricketts and Una M Ricketts are related by marriage since
February 1952. Neither claims a beneficial interest in the other's shares of
Common Stock.
Note 3: Karen Ricketts is the daughter of Garfield and Una Ricketts.
ITEM 4 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the Company's last two fiscal years, there have been no arrangements
between the Company and any of its current or previous Officers, Directors.
or nominees for election as a Director, or any shareholder owning greater
than five percent (5%) of the Company's outstanding shares, nor any member
of the above referenced individuals'immediate family except as set forth
herein.
<PAGE>
The Company acquired 100 % of the issued and outstanding Shares of
Ricketts Enterprises International, Inc. on November 21, 1995 from Garfield
and Una Ricketts, husband and wife, in exchange for 3,500,000 shares of
Common Stock of the Company. Prior to the acquisition of REI by the Company
Garfield and Una Ricketts, husband and wife, sold to REI a portfolio of
Real Estate involving ten real estate properties (see item 1, Business
Description for details). The carrying value of the properties was considered
to be $275,180. As part of the transaction REI assumed first mortgages on the
properties in the amount of $148,148. Mr. & Mrs. Ricketts contributed their
equity of $127,032 to stockholder equity of REI. In addition Mr. & Mrs
Ricketts paid transaction costs associated with the transfer of the
properties and the acquisition of REI by the Company in the amount of
$46,702. In addition Mr. Ricketts converted a loan due him in the amount of
$152,249 to common stock and additional paid in capital.
The acquisition of additional income producing commercial and residential
real estate properties may occur as a result of a January 15, 1996 Letter
of Intent the Company entered into with Mr. Garfield Ricketts, President
of the Company. The terms of said Letter of Intent call for the Company
to assume, refinance or payoff $1,322,102 as of December 31, 1996, less any
further debt reduction, in existing debt in the form of first mortgages on
the existing 27 properties being acquired for a total cost of $2,482,800.
The balance is due Mr. Ricketts in the form of cash, a note, or at his option
additional shares of restricted Common Stock in the Company.
The purchase price of $2,482,800 was determined by the lower of the cost or
current market value of each property based on General Market Analysis as
determined from information provided by the Multiple Listing Services of
Naples, Florida, and Houston, Texas.
Before the Company proceeds under the Letter of Intent each property
will be the subject of a current appraisal, by a licensed Real Estate
Appraiser, to determine the value of each of the subject properties at
the time that the Letter of Intent is exercised, and if any material
changes have occurred the Company will negotiate a more favorable
purchase price. The Company is currently contemplating undertaking a
new offering of its debt and/or equity in order to achieve its business
objectives over the next 12 months. Unless the Company is able to raise
additional capital from borrowing (refinance of the existing properties
being acquired) or the sale of corporate debt and/or equity securities
for which there is no assurance, the Company will accomplish its business
objectives.
The Company and its subsidiary REI currently occupy office facilities of
approximately 1000 square feet (an office Condominium) that is owned by
Mr. Garfield Ricketts, President of the Company. The Company pays $575
monthy plus all costs of mainting the facility. There is no written lease
agreement between the Company or its subsidiary, REI and Mr. Ricketts. The
Company is considered to be a month to month tenant.
The Company currently does not have in force or effect any policies,
procedures or control with respect to entering into future transactions
with its Officers, Directors, Affiliates or a Related Party.
<PAGE>
PART IV
ITEM 1
EXKIBITS AND REPORTS ON FORM 8-k
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunder duly authorized.
Dated March 31, 1998
BAP ACQUISITION CORP.
BY /S/ Garfield Ricketts by /s/ Una M. Ricketts
- ------------------------- -----------------------------
Garfield Ricketts-President Una M. Ricketts-Secretary/Treasurer
