SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB
(Mark One)
_X_ Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the fiscal year ended June 30, 1999
___ Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from ____________ to _____________
Commission file number 000-13337
Northeast (USA) Corp. (formerly Celcor, Inc.)
(Name of Small Business Issuer in Its Charter)
Delaware 22-2497491
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
1800 Bloomsbury Ave., Ocean, N.J. 07712
(Address of Principal Executive Offices) (Zip Code)
732-922-3609
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Title Of Each Class Name Of Each Exchange
On Which Registered
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value per share
- --------------------------------------------------------------------------------
(Title of Class)
- --------------------------------------------------------------------------------
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and has been
subject to such filing requirements for the past 90 days. Yes ____ No _X_
<PAGE>
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will 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-KSB or any amendment to this Form 10-KSB.
State issuer's revenues for its most recent fiscal year. $834
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked prices of such common equity, as
of a specified date within the past 60 days. (See definition of affiliate in
Rule 12b-2 of the Exchange Act.).
As of August 31, 1999, the aggregate market value of the Registrant's
Common Stock (based on the closing bid price for the Common Stock as
reported by the National Quotation Bureau on such date held by
non-affiliates of the Registrant) was approximately $1,017,014. For the
purposes of this report, it has been assumed that all directors and
officers of the Registrant are affiliates of the Registrant. However, the
statements made herein shall not be construed as an admission for the
purpose of determining the affiliate status of any person. As of August 31,
1999, the Registrant had 7,008,187 shares of Common Stock issued and
outstanding.
Note. If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate
market value of the common equity held by non-affiliates on the basis of
reasonable assumptions, if the assumptions are stated.
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes________ No________
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 7,008,187 shares of Common
Stock, par value $.001 per share, at September 10, 1999.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).
Transitional Small Business Disclosure Format (check one):
Yes _____ No_____
<PAGE>
PART I
Item 1. Description of Business
General
Northeast (USA) Corp. (the "Company") was incorporated in Delaware on
January 16, 1984 as Cellufone Corporation. From 1984 to 1991, the Company and/or
its subsidiaries were involved in several different businesses, including the
reselling of cellular telephone service, radio paging (beeper) service, private
pay telephone manufacture and private network switching. The Company
subsequently changed its name to Celcor, Inc. Because growth and profitability
of these operations fell short of expectations, the Company had either ceased
operating or had sold off all its businesses by February, 1991.
Unable to obtain financing to repay debt or fund operations of any kind,
the Company, in April 1991, filed for protection under Chapter 11 of the United
States Bankruptcy Code. The Company was able to secure limited equity capital
from an investor and the Company emerged from bankruptcy in 1992 with virtually
no assets or liabilities.
The Company (then known as Celcor, Inc.) had virtually no operations from
1991 to early 1995 when it executed an Agreement and Plan of Merger with
Northeast (USA) Corp., a New York corporation ("Northeast NY"). Through this
merger, which became effective August 1, 1996, the Company changed its name from
Celcor, Inc. to Northeast (USA) Corp. and was the surviving entity in the
merger. The Company consummated the merger in order to bring the business of
Northeast NY into the Company. Northeast NY had a joint venture with the Chinese
government to manufacture and distribute vitamins and beauty products. While
limited production and sales were achieved, lack of funding caused cessation of
activities in early 1997. Because the necessary funding for this operation could
not be raised, the Company recently notified the Chinese that it was no longer
interested in pursuing the joint venture. During the fiscal years ending June
30, 1996 through 1998 the Company, domestically, generated limited revenues from
retail sales of a beauty supply line. Lack of funding for promotional
activities, and subsequently for fixed overhead costs, caused cessation of this
activity during the latter part of 1998.
Comprehensive filing
The Company did not file its Form 10-KSB or the other periodic reports
required by Section 13 of the Exchange Act, for the fiscal years ended June 30,
1996 through 1998. The Company, with limited resources, was unable to obtain any
GAAP compliant financial statements from its Chinese subsidiary, and did not
have the funds required to conduct an audit of its financial statements. The
limited operations conducted by the Company during the fiscal years ended June
30, 1996 through 1999 consisted of sales of vitamin products by its Chinese
subsidiary and domestic sales of beauty supply products. All of these operations
have since been discontinued and all Statements of Operations for these years,
included in the Financial Statements herein, reflect all operating results as
discontinued. The Company believes that because (i) its prior operations
provided only limited revenues and have been discontinued, and (ii) the Company
did not incur any expenses or recognize any revenues with respect to its new
business prior to June 30, 1999, its most recent fiscal year-end. It would be
more meaningful to shareholders to file a single Form 10-KSB describing all
material events affecting the Company since June 30, 1995, rather than
attempting to file all missing periodic reports.
<PAGE>
Current operating plan
In April 1999, Robert Edwards, the Company's initial founder and former
president approached the Company on the possibility of starting an Internet
retailing business. Pursuing this proposal, the Company's Board of Directors
approved a merger with Buy It Cheap.com, Inc. ("BUYC"), a start-up company
organized under Delaware law by Messrs. Edwards and Roman (each of whom is a
director of the Company). BUYC has raised approximately $70,000 in start-up
investment capital. BUYC has loaned the Company $21,700 as of September 15, 1999
and will continue to loan funds to the Company in preparation for the merger.
The Company will issue between 700,000 and 1,400,000 shares of its common stock
to shareholders of BUYC upon consummation of the merger, the number of shares
dependent on the number of shares of BUYC outstanding at the time of merger.
Investors in BUYC will receive 10,000 shares of the Company's Common Stock for
each share of BUYC stock held. Within 60 days after the merger is consummated,
the Company plans to operate a website "Buyitcheap.com" and change its corporate
name to Buy It Cheap.com, Inc. The consummation of the merger is dependent upon
the execution of a definitive merger agreement. Stockholders of BUYC have
already approved the merger. Approval of the merger by the Company's
shareholders is not required.
Internet Retailing - Buyitcheap.com
The Company plans to operate a virtual store that will be created under the
web address of "Buyitcheap.com" to retail various types of merchandise over the
Internet. Initial merchandise lines will consist of closeouts and specially
priced items. No merchandise will be bought or inventoried by the Company. The
Company will merely post merchandise from various vendors on its website, take
orders and collect the funds. The order will be routed to the applicable vendor
for shipment to the customer. Upon shipment, the Company remits the purchase
price to the vendor, less its commission. In keeping with the Company's website
name, the theme of its merchandise offerings will be to offer merchandise
at the lowest possible price. The Company will keep initial overhead low and
eventually seek a secondary public offering or private placement to raise funds
to expand the business.
Competition
The Internet retailing business is a highly competitive industry. The
Company, being a start-up in this business, will face competition from numerous
sources, including established Internet retailers with greater financial
resources and a longer operating history. However, the Company expects, in time,
to establish a niche as a retailer of quality merchandise obtained from
closeouts, surplus goods, odd lots, etc. offered at cheap prices, by which to
distinguish itself from other Internet retailers and thus, to effectively
compete in this industry. The Company's ability to successfully compete will be
dependent upon its future ability to raise substantial additional capital.
Supply of merchandise
The Company, through existing relationships developed by the Company's
management, will display merchandise from various vendors. There will be no
charge for displaying the merchandise on the Company's website, except for a
small (5 to 10%) commission on items sold through the website. There being no
real risk to the vendor/supplier, the Company believes it will not experience
any difficulty in obtaining merchandise for sale on its website. Several
suppliers have already expressed interest in permitting their merchandise to be
offered on the Company's website.
<PAGE>
Employees
The Company currently has no paid employees. Certain officers and directors
of the Company have agreed to temporarily work without pay.
Item 2. Description of Property
The Company neither owns nor leases any property. The Company, due to its
limited resources, maintains an office at 1800 Bloomsbury Ave., Ocean, N.J.
07712 at no cost to the Company. As the business expands, the Company will find
new office space, or begin to pay rent for the space it occupies.
Item 3. Legal Proceedings
From its prior operations in selling beauty products (1995-1997) the
Company is indebted to two suppliers who have filed suit against the Company.
These filed claims total approximately $89,000, of which $11,000 is disputed by
the Company. One of these creditors has obtained a judgement (with interest)
against the Company for approximately $60,000. The Company has attempted to
settle these claims with issuance of its Common Stock and convertible notes.
Depending on its financial status, the Company will attempt to settle these
claims in the coming months.
Details of these suits are as follows: Supreme Court of the State of New
York, County of Queens, filed July 15, 1997, plaintiff Laffon Design-Kree Plast
S.P.A., defendant Northeast (USA) Corp. (judgement entered); Supreme Court of
the State of New York, County of Queens, filed March 5, 1997, plaintiff R. P.
Scherer Corporation, defendant Northeast (USA) Corp.
If the Company is unable to resolve these claims, it may be unable to
proceed with its new business.
Item 4. Submission of Matters to a Vote of Security Holders
None during the Company's fiscal year ended June 30, 1999.
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company's Common Stock is traded on the OTC Bulletin Board, symbol
NEUC.
The following table shows the range of high and low bid or last trade
quotations for the Company's Common Stock as reported to the Company by the
National Quotation Bureau Incorporated. No review of the daily quotations as
provided by the OTC Bulletin Board has been undertaken by the Company. The
quotations reflect prices between dealers, without retail mark-ups, mark-downs
or commissions and may not necessarily represent actual transactions or be
indicative of prices at which the Company's Common Stock was traded.
Fiscal year Fiscal quarter ended Low bid High bid
1998 September 30, 1997 $ .28125 $.28125
December 31, 1997 .25 .28125
March 31, 1998 .25 .25
June 30, 1998 .125 .25
1999 September 30, 1998 .0625 .125
December 31, 1998 .0625 .09375
March 31, 1999 .0625 .0625
June 30, 1999 .0625 .1875
The number of record holders of the Company's Common Stock as of August 26,
1999 was 362. However, the Company believes that there are substantially more
beneficial owners of the Common Stock.
Sale of Unregistered Securities in the past three years
Date sold Number of Consideration Exemption Use of
or issued shares received relied upon proceeds
8/6/96 to
11/6/97 795,000 None (1) n/a n/a
7/11/97 118,000 $ 30,000 Sec. 4(2) (5) n/a (2)
7/11/97 321,405 86,838 (3) Sec. 4(2) (5) Working capital
8/26/97 316,666 95,000 Reg. D, R. 506 Working capital
11/6/97 342,283 96,267 Sec. 4(2) (5) n/a (4)
<PAGE>
(1) Conversion of Series C Convertible Preferred Stock.
(2) Shares issued to an officer/director in lieu of $25,000 compensation for
the fiscal year ended June 30, 1997 plus forgiveness of a $5,000 loan made
to the Company by such person.
(3) Shares issued in forgiveness loans made to the Company by a private
investor.
(4) Shares issued in lieu of dividends on Series C Convertible Preferred Stock.
(5) Section 4(2) of the Securities Act of 1933, as amended.
Dividend policy
The Company has never paid any dividends on its Common Stock. The Company
anticipates that in the foreseeable future, earnings, if any, will be retained
for use in the business or for other corporate purposes, and it is not
anticipated that cash dividends will ever be paid on its Common Stock.
Item 6. Management's Discussion and Analysis or Plan of Operation
The Company has had virtually no operations over the last two fiscal years,
and all operations which occurred prior to June 30, 1999 have been discontinued.
The loss for the year ended June 30, 1999 is the result of the creation of a
reserve against its investment in a Chinese joint venture. Lack of sufficient
funding and the inability of the joint venture partners to fulfill their
obligations to the joint venture has created significant doubt that the Company
will be able to recover this investment.
The Company has determined that it can enter the Internet retailing
business with a minimal initial investment. The Company, through the formation
of a separate entity by two of its directors, has been able to raise limited
start-up capital for an Internet retailing business. The Company plans to merge
this entity into itself in the near future and commence an Internet retailing
operation under the website "Buyitcheap.com." The Company must still arrange
settlement of its liabilities and raise substantial new investment capital in
order to develop this business.
Financial and operating plan for the next 12 months
The Company plans to operate over the next 12 months with little overhead.
Until there is positive cash flow from its Internet business, or the Company is
able to raise a substantial amount of new capital, there will be no paid
employees or rental expense (such being provided by certain officers and
directors without charge). The sales transactions, for the most part, are
handled automatically over the Internet requiring little labor or office space
requirements. The Company does not plan to purchase or inventory any items
itself and believes it can become a viable business within 12 months using
capital which has already been raised, or committed to it, by its merger
partner, Buy It Cheap.com, Inc. The objective of the Company will be to
establish the viability necessary to attract substantial new investment capital
to expand its business.
<PAGE>
Item 7. Financial Statements
The financial statements of the Company, the notes thereto, and the Report
of the Independent Auditors thereon required by this Item 7 appear in this
report on the pages indicated in the following index.
<TABLE>
Page
<S> <C>
Independent Auditors' Report ......................................................................F-1
Balance Sheet at June 30, 1999.....................................................................F-2
Statement of Income for the year ended June 30, 1999...............................................F-3
Statement of Stockholders' Equity for the year ended June 30, 1999.................................F-4
Statement of Cash Flows for the year ended June 30, 1999...........................................F-5
Notes to Financial Statements .....................................................................F-6 - F-9
Unaudited Financial Statements
Balance Sheets - June 30, 1996, 1997 and 1998 .....................................................F-10
Statements of Income - Years ended June 30, 1996, 1997 and 1998....................................F-11
Statements of Stockholders' Equity - Years ended June 30, 1996, 1997 and 1998 .....................F-12
Statements of Cash Flows - Years ended June 30, 1996, 1997 and 1998................................F-13
Notes to Financial Statements .....................................................................F-14
</TABLE>
Item 8. Changes in and Disagreements With Accountants or Accounting and
Financial Disclosure
None
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Directors are elected by the shareholders and serve until their successors
are elected and have qualified or until a director's earlier death, resignation
or removal. Directors were most recently elected on January 25, 1996 at the
special meeting of shareholders held at such time. Robert Edwards became a
director in May 1999. The remaining directors elected Mr. Edwards to fill a
seat left vacant by a previous director's resignation.
Set forth below are the names and ages of the directors and executive
officers of the Company, their positions with the Company, and their business
experience, including their principal occupations at present and during the past
five years.
Director of
Present the Company
Name Age Position since
Stephen E. Roman, Jr. (1) 51 Director and 1994
President
Jennifer Lo (2) 46 Director and 1996
Vice President
Michael Hsu (3) 59 Director 1996
David Chow (4) 39 Director 1993
Chin-Sung (Joe) Chen(5) 49 Director 1996
Robert Edwards (6) 77 Director 1999
(1) Stephen E. Roman, Jr. served as Vice President and Chief Financial Officer
of the Company for the period from April 1984 to June 1994. He has also served
as Secretary since 1994. From June 1994 to January 1996, and from May 1999 to
present, Mr. Roman has served as President of the Company. In January 1996, Ms.
Lo succeeded Mr. Roman as President and Mr. Roman became Vice President and
Chief Financial Officer. In May 1999, Ms. Lo resigned as President and was
succeeded by Mr. Roman. For the last five years, he has served on a part-time
basis. Mr. Roman is a certified public accountant and performs similar services
for other business entities.
(2) Jennifer Lo is a trained pharmacist and from February 1993 until May 1999
served as chairman and president of the Company. Ms. Lo is the sole stockholder
of Lyncroft Corp., which owns 223,630 shares of the Company.
<PAGE>
(3) Michael W. Hsu served as Vice President-Finance from June 1994 to January
1996 on a part-time basis. He served as Treasurer (part-time) from January 1996
to May 1999. He has been a self-employed certified public accountant for the
past ten years.
(4) David Chow is Managing Director of Center Laboratories, Taiwan, and has held
this position since 1980. He is also Managing Director of Center Pharmaceutical
Co., Ltd., People's Republic of China and has served in this capacity since
1992. Additionally, in 1993 Mr. Chow became Chairman of the Taiwan
Pharmaceutical Development Association and in 1995, Director of the GMP
Committee of the China Pharmaceutical Industrial Association.
(5) Chin-Sung (Joe) Chen is presently General Manager of Hyscios Pharmacy
International, Co., Ltd., a distributor of pharmaceutical and skin care products
based in Taipei, Taiwan, and has served in this capacity since 1994. Prior to
his association with Hyscios, Mr. Chen was employed for approximately 16 years
by Lederle, where he served in a variety of increasingly responsible positions.
From April 1991 to November 1993, Mr. Chen was national marketing manager of
Lederle, Taiwan.
(6) Robert Edwards is the original founder of the Company in 1984. He has not
been associated with the Company since 1992. Mr. Edwards was elected to the
Board in May 1999 by the remaining directors and has been involved in retailing
for the past five years.
The Board of Directors does not presently have an audit, compensation or
nominating committee. There was one meeting of the Board of Directors during the
fiscal year ended June 30, 1999.
No officer or director of the Company is currently involved in any legal
proceeding, nor is any officer or director also an officer or director of any
other publicly held company.
Section 16 Compliance
Based solely upon a review of Forms 3 and 4 and amendments thereto, as
well as Form 5 and amendments thereto, furnished to the Company during the
period from July 1, 1995 to the present, the Company believes the following to
be accurate and correct:
<TABLE>
<CAPTION>
Person or entity Form Reason filing Date on which
required to file required required filing was required Status of filing
<S> <C> <C> <C> <C>
David Chow Form 3 Elected a director February 1996 Filed, but not timely
Michael Hsu Form 3 Elected a director February 1996 Filed, but not timely
Mannion Consultants Form 3 Became a 10% or more September 1996 Did not file (2)
common shareholder
<PAGE>
Person or entity Form Reason filing Date on which
required to file required required filing was required Status of filing
Verchi Holdings Ltd. Form 3 Became a 10% or more September 1996 Did not file (2)
common shareholder (1)
Chin-Sung Chen Forms 3 Elected as director and February 1996 Did not file (2)
and 4 had a change in share and August 1997
ownership
Stephen E. Roman Form 4 Change in ownership August 1997 Timely filed
Jennifer Lo Form 4 Indirectly acquired September 1996 Filed, but not timely
securities (3)
Robert Edwards Form 3 Elected a director September 1999 Filed, but not timely
</TABLE>
(1) During the fiscal year ended June 30, 1997, entity's ownership was reduced
below 10%.
(2) Person or entity is a foreign entity domiciled outside the United States.
(3) Filing required by virtue of shares acquired by Lyncroft Corporation, a
corporation 100% owned by Ms. Lo.
Item 10. Executive Compensation
There was no compensation paid or accrued to any officer or director of the
Company for each of the fiscal years ended June 30, 1998 and 1999.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the number of shares of the Company's
$.001 par value Common Stock owned by each person who, as of August 31, 1999,
owns of record, or is known by the Company to own beneficially, more than 5% of
the Company's Common Stock, as well as the ownership of such shares by each
director and executive officer of the Company and the shares beneficially owned
by all officers and directors as a group.
<TABLE>
<CAPTION>
Name and Address of Amount and nature of Percent
Beneficial Owner Beneficial Ownership of Class
<S> <C> <C>
Mannion Consultants, Ltd. 800,000 11.2
No 2, 4th Floor Alley 23
Lend 290
Chung Shon N. Road
Taipei, Taiwan
Majestic International Inc. 633,400 8.8
No 3 14th Floor
No 535
Cheng-Kuo
Third Road
Kaohszung, Taiwan ROC
Verchi Holdings Limited 550,000 7.7
Room 312, Entrance 3, Bldg. 14
Compound 3, Jingouhe Road
Wukesong-Haidian District
Beijing, People's Republic
of China
Fowler Holdings, Inc. 450,000 6.3
c/o Zhi-Yun Gao
504 Lake Court
Middle Island, N.Y. 11953
Shenyang Tianfa Social 450,000 6.3
Service Company
No. 37 Zhong Gong Bei Street
Tiexi District
Shenyang, People's Republic
of China
Stephen E. Roman, Jr. (officer and director) 134,153 1.9
25 Hillside Road
Shark River Hills, NJ 07753
David Chow (director) 0 0
Shinwi Road Section 2
No. 34, Taipei, Taiwan
Jennifer Lo (officer and director) 223,630 (1) 3.1
258-01 Pembroke Ave.
Great Neck, NY 11021
<PAGE>
Name and Address of Amount and nature of Percent
Beneficial Owner Beneficial Ownership of Class
Michael Hsu (director) 0 0
136-21 Roosevelt Ave
Flushing, NY 11354
Chin-Sung (Joe) Chen (director) 210,000 2.9
7th Floor
No 571
Ming Shui Road
Taipei, Taiwan
Robert Edwards (director) 0 (2) 0 (2)
256 Clearbrook Court
Little Silver, N.J. 07739
Current Executive officers and
Directors as a Group (6 persons) 567,783 7.9
</TABLE>
(1) Includes shares owned by Lyncroft Corp., a corporation of which Ms. Lo is
the sole shareholder.
(2) Excludes 200,000 shares held by Mr. Edwards' wife to which he disclaims
beneficial ownership.
The Company is not aware of any arrangements which may result in a change
of control of the Company.
Item 12. Certain Relationships and Related Transactions
Mr. Roman, the Company's President and Director, and Mr. Edwards, Company
Director, are the founders of Buy It Cheap.com, Inc., a corporation which the
Company has agreed will merge into it pending execution of a definitive merger
agreement. Mr. Roman and Mr. Edwards will receive 100,000 and 150,000 shares,
<PAGE>
respectively, of the Company's stock in the proposed merger for which they have
paid a nominal price (see Item 1 - Description of Business).
Buy It Cheap.com., Inc. has agreed to loan funds to the Company in
preparation for the proposed merger, and as of September 15, 1999 such loans
totaled $21,700.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits
2.1 Agreement and Plan of Merger among Celcor, Inc., Northeast (USA)
Corp., and the Stockholders of Northeast (USA) Corp. (5)
3.1.a Certificate of Incorporation, as amended, of the Company. (1)(2)(4)
3.1.b Amendments to the Certificate of Incorporation of the Company,
dated April 1987 and October 1996, respectively.
3.2 By-laws of the Company. (1) (3)
4.1 Certificate of Designations, Preferences and Rights of Series C
8% Convertible Preferred Stock of Celcor, Inc.
10.1 Promissory Notes between the Company and Buy It Cheap.com, Inc.
10.2 Joint Venture Contract between China Northeast Pharmaceutical
Company and U.S. Lyncroft Company (translated from the Chinese)
creating United Vitatech.
10.3 Contract of Shenyang United Vitatech Pharmaceutical Ltd. (translated
from the Chinese).
10.4 Regulations of Shenyang United Vitatech Pharmaceutical Ltd.
(translated from the Chinese).
10.5 Agreement dated December 26, 1993 between Mannion Consultants, Ltd.
and Northeast (USA) Corp.
(1) Incorporated by reference to the Company's Registration Statement
on Form S-1, No. 294663.
(2) Incorporated by reference to the Company's Form 10-K for the year
ended June 30, 1986 (File No. 000-13337).
(3) Incorporated by reference to the Company's 1986 Proxy Statement
dated November 7, 1986 (File No. 000-13337).
(4) Incorporated by reference to the Company's Registration Statement
on Form S-1, No. 3312084.
(5) Incorporated by reference to the Company's Form 10-K for the year
ended June 30, 1995 (File No. 000-13337).
(b) There were no reports on Form 8-K filed during the fiscal year ended June
30, 1999.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Northeast (USA) Corp.
(Registrant)
By /s/ Stephen E. Roman, Jr.
-------------------------
Stephen E. Roman, Jr.
Title: President and Director Date: October 13, 1999
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.
By /s/ Robert Edwards
-------------------------
Robert Edwards
Title: Director Date: October 13, 1999
By /s/ Jennifer Lo
-------------------------
Jennifer Lo
Title: Director Date: October 13, 1999
By /s/ Michael Hsu
-------------------------
Michael Hsu
Title: Director Date: October 13, 1999
<PAGE>
Independent Auditors' Report
To the Board of Directors of
Northeast (USA) Corp.
We have audited the accompanying balance sheet of Northeast (USA) Corp. (A
Delaware corporation) as of June 30, 1999 and the related statements of income,
stockholders' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Northeast (USA) Corp. at June
30, 1999, and the results of its operations and its cash flows for the year then
ended 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 the notes to the
financial statements, the Company has incurred losses, has no current sources of
revenue or funds and has a working capital deficit as of June 30, 1999. These
conditions raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters are also described in the
notes. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Rosenberg Rich Baker Berman & Company
-----------------------------------------
Bridgewater, New Jersey
August 5, 1999
<PAGE>
NORTHEAST (USA) CORP.
BALANCE SHEET
JUNE 30, 1999
Assets
Current Assets
Cash $ 1,031
---------
Total Current Assets 1,031
Investment in and net advances in joint venture 620,535
Reserve against investment in and net advances to joint venture (620,535)
---------
Total assets 1,031
=========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses 184,627
Due to officers and directors 5,559
---------
Total Current Liabilities 190,186
---------
Stockholders' Equity
Preferred stock - $.001 par value, 10
Authorized 2,000,000 shares
Issued and Outstanding - 10,000 shares
Common Stock - $.001 par 7,158
Authorized - 20,000,000 shares
Issued and outstanding - 7,158,407
Paid in capital 2,566,856
Treasury stock, 150,220 common shares at cost (751,100)
Retained deficit 2,012,079
---------
Total Stockholders' Equity (Impairment) (189,155)
Total Liabilities and Stockholders' Equity $ 1,031
==========
See notes to the financial statements.
<PAGE>
NORTHEAST (USA) CORP.
STATEMENT OF INCOME
YEAR ENDED JUNE 30, 1999
Loss from discontinued operations (net of income taxes of $600) $ (676,400)
------------
Net Loss $ 676,400
============
Weighted average number of shares outstanding 7,008,250
============
Loss Per Common Share $ (0.10)
============
Loss Per Common Share - Assuming dilution $ (0.10)
============
See notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
NORTHEAST (USA) CORP.
STATEMENT OF STOCKHOLDERS' EQUITY
PREFERRED STOCK COMMON STOCK TREASURY STOCK
PAID IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL SHARES AMOUNT DEFICIT TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1998 (Unaudited) 10,000 $ 10 7,158,407 $ 7,158 $2,566,856 150,220 $(751,100) $(1,335,679) $ 487,245
Net loss for the year ended
June 30, 1999 - - - - - - (676,400) (676,400)
------- ------- ---------- -------- ---------- -------- ---------- ------------ ----------
Balance at June 30, 1999 10,000 $ 10 7,158,407 $ 7,158 $2,566,856 150,220 $(751,100) $(2,012,079) $(189,155)
======= ======= ========= ======== ========== ======== ========== ============ ==========
</TABLE>
See notes to the financial statements.
<PAGE>
NORTHEAST (USA) CORP.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1999
Cash Flows From Operating Activities
Net Loss $(676,400)
Adjustments to Reconcile Net Loss to Net Cash
use by Operating Activities
Loss from abandonment of foreign subsidiary 49,529
Loss on reserve of investment in joint venture 620,535
Changes in Assets and Liabilities
Accounts payable 6,265
---------
Net Cash Used by Operating Activities (71)
Cash at beginning of period 1,102
---------
Cash at end of period $ 1,031
==========
See notes to the financial statements.
<PAGE>
Northeast (USA) Corp.
Notes to the Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Organization
Northeast (USA) Corp. (the "Company") is a Delaware corporation. The
Company has had limited business operations for the past 24 months.
Its current business plans include the seeking of business
opportunities through acquisitions, mergers, joint ventures and/or the
formation of operating subsidiaries.
The Company's financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business. The Company has incurred losses, has no current source of
revenues or funds and has a working capital deficit as of June 30,
1999. The Company plans to merge with Buy It Cheap.com, Inc. which has
raised start up capital through a private placement. Should the merger
take place, the Company will require additional funding to support
future operations. The Company's continued existence is dependent upon
its ability to secure adequate financing. The Company plans to raise
additional capital for the combined entity in the future; however
there are no assurances that such plan will be successful. The
financial statements do not include any adjustments that might result
from the outcome of these uncertainties.
Joint Venture
The Company, in 1992, formed a joint venture agreement with the
Northeast General Pharmaceutical Factory (NEGPF) a government owned
pharmaceutical concern in Shenyang, China, whereby both companies
established a joint venture company in China. Each of the Company and
NEGPF were to have contributed certain assets to the joint venture.
The Company was to have contributed $2.1 million in cash and $1.15
million in technology for a total capital contribution of $3.25
million. NEGPF was to have contributed $750,000 in cash and a land-use
right valued at $1.75 million for a total contribution of $2.5
million. Based upon the amount of contribution, the Company owned
56.52% of the joint venture and NEGPF owned 43.48%. To date, the
Company has contributed $1 million of cash and has contributed the
technology. NEGPF has contributed $750,000 of cash but has not
contributed the land-use right. The joint venture had only limited
start-up operations and operations effectively ceased in 1997 due to
lack of funding. The Company has communicated with NEGPF that it no
longer has any interest in the joint venture. As such the Company has
reserved $620,535 against the investment in and net advances to the
joint venture.
Income Taxes
Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently
due plus deferred taxes related primarily to differences between the
<PAGE>
basis of assets and liabilities 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. Deferred taxes also are recognized for operating losses
that are available to offset future federal and state income taxes.
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 expenses during the reporting period. Actual results
could differ from those estimates.
DUE TO OFFICERS AND DIRECTORS
Amounts due to Officers and Directors represent unsecured,
non-interest bearing loans, having no repayment terms.
<PAGE>
Northeast (USA) Corp.
Notes to the Financial Statements
INCOME TAXES
The income tax provision is comprised of the following:
Year Ended June 30, 1999
Current State Taxes $ 600
The Company's deferred tax asset is comprised of the following
temporary differences:
Net operating losses $ 424,000
Differences between basis of reporting for book and tax 670,250
Total $ 1,094,250
============
The reconciliation of reported income tax expense to the
amount of income tax expense that would result from applying
domestic federal statutory tax rates to pretax income is as
follows:
Tax (benefit) at the U.S. Federal Statutory rate (34%)
Valuation allowance - change (34%)
State income tax - net of federal tax benefit .1%
Provision for income taxes .1%
========
Deferred taxes are recognized for temporary differences between the bases of
assets and liabilities for financial statement and income tax purposes. The
differences relate primarily to the reserve against investment and net advances
to joint venture (deductible for financial statement purposes but not for income
tax purposes).
The Company's provision for income taxes differs from applying the statutory
U.S. federal income tax rate to income before income taxes. The primary
difference results from providing for state income taxes and from deducting
certain expenses for financial statement purposes but not for federal income tax
purposes.
<PAGE>
Northeast (USA) Corp.
Notes to the Financial Statements
INCOME TAXES - Continued
Those amounts have been presented in the Company's financial statements as
follows:
Deferred tax asset, noncurrent $ 164,090
Total valuation allowance recognized for deferred tax assets (164,090)
Net deferred tax assets $ -
The Company has available net operating loss carry forwards which may be used to
reduce Federal and State taxable income and tax liabilities in future years as
follows:
Federal State
Available Through
2004 $ - $ 191,664
2005 - 181,950
2006 - 50,064
2017 191,664 -
2018 181,950 -
2019 50,064 -
$ 423,678 $ 423,678
============= =============
LOSS PER SHARE
In accordance with Financial Accounting Standards Board No. 128 "Earnings
Per Share" basic earnings per share amounts are computed based on the
weighted average number of shares actually outstanding. The number of
shares used in the computations were 7,008,250.
The effects of assuming the conversion of the Series C convertible
preferred stock as a common stock equivalent would be antidilutive.
<PAGE>
Northeast (USA) Corp.
Notes to the Financial Statements
LOSS PER SHARE - Continued
The following is a reconciliation of net loss to net loss per share -
basic and diluted.
Net Loss $ (676,400)
Less: Dividends on Preferred Stock net of tax benefit (2,040)
Loss Applicable to Common Shareholders - basic (678,800)
Loss Applicable to Common Shareholders - Assuming dilution (678,800)
Weighted Average Shares Outstanding 7,008,187
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash and equivalents, accounts payable and accrued
expenses approximates fair value because of the short maturity of these
instruments.
Limitations
Fair value estimates are made at a specific point in time, based on
relevant market information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and
matters of significant judgement and therefore cannot be determined
with precision. Changes in assumptions could significantly affect the
estimates.
PREFERRED STOCK
In May 1994, the Company sold 275,000 shares of its newly designated Series
C convertible stock, $.001 par value, for an aggregate amount of $825,000
to a group of private investors. Except for $30,000 (representing 10,000
shares) of the preferred stock, all had been converted according to their
terms prior to July 1, 1998. The Company has the right to redeem the shares
at $4.50 per share. The shares carry a stated dividend rate of 8% per
annum. Dividends are cumulative and are payable quarterly. No cash
dividends have ever been paid. Some former preferred shareholders (prior to
or simultaneous with their conversion) have accepted shares of the
Company's common stock in lieu of cash dividends. Those that did not accept
shares of common stock for dividends and those that did not convert their
preferred shares are owed a total of $101,590 of dividend arrearages.
<PAGE>
SUBSEQUENT EVENT
On August 5, 1999, the Company's Board of Directors agreed in
principle to merge with Buy It Cheap.com, Inc. ("BUY"). BUY is a start
up company formed by two directors of the Company as a means of
getting the Company into the Internet retailing business. BUY
stockholders would receive between 700,000 and 1,400,000 shares of the
Company's common stock, depending on the amount of the assets BUY is
able to provide to the Company, for all of the issued and outstanding
shares of BUY.
Subsequent to June 30, 1999, BUY loaned $13,300 to the Company.
These loans, evidenced by promissory notes, do not bear interest until
the original maturity date, November 30, 1999, at which time interest
would accrue at 10% per annum. The Company currently does not have the
necessary funds to repay the loan. However, should the merger take
place, the amount would become part of the value of BUY in the merger.
<PAGE>
<TABLE>
<CAPTION>
NORTHEAST (USA) CORP.
Balance Sheets (unaudited)
As of June 30,
Assets 1998 1997 1996
Current assets:
<S> <C> <C> <C>
Cash $ 1,102 $ 34,305 $ 1,466
Accounts receivable - 2,832 3,695
Inventory - 91,229 183,134
Other current assets - 8,031 1,469
----------- ---------- ---------
Total current assets 1,102 136,397 189,764
----------- ---------- ---------
Investment in subsidiary 49,529 49,529 49,529
Investment in and net advances to joint venture 620,535 618,536 618,536
Property, plant and equipment - 13,616 372,438
Other assets - 7,764 10,478
---------- ----------- ---------
Total assets $ 671,166 $ 825,842 $1,240,745
======= ======= ==========
Liabilities and Equity
Current liabilities:
Accounts payable $ 173,201 168,323 225,954
Loan payable-bank - - 200,000
Due to officers and directors 4,962 1,155 71,436
Loan payable 3,559 1,909 -
Other current liabilities - 70,458 21,627
Deposits payable - 35,300 42,500
Stock subscription - 116,838 -
----------- ---------- ----------
Total current liabilities 181,722 393,983 561,517
----------- ----------- ----------
Stockholders' equity:
Preferred stock - Series C, $.001 par 10 115 275
Authorized 2,000,000 shares
Issued and outstanding 10,000, 115,000 and
275,000 shares respectively
Common stock - $.001 par 7,158 6,062 5,265
Authorized 20,000,000 shares
Issued 7,158,407, 6,061,790 and
5,264,790 shares respectively
Paid in capital 2,566,856 2,451,009 2,356,646
Treasury stock (751,100) (751,100) (751,100)
Deficit (1,333,480) (1,274,227) (931,858)
------------- ------------ ------------
Total stockholders' equity 489,444 431,859 679,228
------------- ------------ ------------
Total Liabilities and Equity $ 671,166 $ 825,842 $1,240,745
=========== =========== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NORTHEAST (USA) CORP.
Statements of Loss (unaudited)
For the year ended June 30,
1998 1997 1996
<S> <C> <C> <C>
Loss from discontinued operations $ (59,253) $(342,367) $(401,102)
======= ========= =========
Net loss per common share $ (.01) $ (.06) $ (.08)
==== ==== ====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Northeast (USA) Corp.
Statements of Stockholders' Equity (unaudited)
Preferred Stock Common Stock Paid in Treasury Stock Retained
Shares Amount Shares Amount Capital Shares Amount Deficit Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at July 1, 1995 275,000 $275 5,264,790 $ 5,265 $2,356,646 150,220 $(751,100) $(530,756) $1,080,330
Net loss for the year ended
June 30, 1996 - - - - - - - (401,102) (401,102)
Balance at June 30, 1996 275,000 275 5,264,790 5,265 2,356,646 150,220 (751,100) (931,858) 679,228
Conversion of Preferred Stock (160,000) (160) 480,000 480 - - - - 320
Sale of Common Stock - - 316,931 317 94,363 - - - 94,680
Net loss for the year ended
June 30, 1997 - - - - - - - (342,369) (342,369)
--------- ------ --------- ------- ---------- ------- --------- ----------- ---------
Balance at June 30, 1997 115,000 115 6,061,721 6,062 2,451,009 150,220 (751,100) (1,274,227) (431,859)
Conversion of Preferred Stock (105,000) (105) 315,000 315 - - - - 210
Issuance of Common Stock in
lieu of cash dividend - - 342,281 342 - - - - 342
Issuance of Common Stock in
lieu of loan repayment - - 337,405 337 90,949 - - - 91,286
Issuance of Common Stock in
lieu of compensation - - 102,000 102 24,898 - - - 25,000
Net loss for the year ended
June 30, 1998 - - - - - - - (59,253) (58,253)
--------- ------ --------- ------- ---------- ------- --------- ----------- ---------
Balance at June 30, 1998 10,000 $ 10 7,158,407 $7,158 $2,566,856 150,220 $(751,100)$(1,333,480) $(489,444)
========= ==== ========= ======= ========== ======= ======== =========== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NORTHEAST (USA) CORP.
Statements of Cash Flows (unaudited)
For the year ended June 30,
1998 1997 1996
Cash flows from operating activities:
<S> <C> <C> <C>
Net loss from discontinued operations $ (59,253) $ (342,367) $ (401,102)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Depreciation and amortization 5,009 31,536 7,973
Loss on abandonment of inventory 88,559 75,000 -
Loss on sale or abandonment of
fixed assets 8,607 26,947 90,000
Changes in assets and liabilities
Accounts receivable 2,832 863 15,782
Inventory 2,670 16,905 (62,910)
Other current assets 8,031 (6,562) 3,775
Accounts payable and other
current liabilities (60,122) (8,800) 58,806
Other assets 5,764 - -
Other liabilities (35,300) (7,200) -
------------ ------------ --------
Net cash used by operating activities (33,203) (213,678) (287,676)
------------ ------------ ---------
Cash flows from financing activities:
Bank loan (repayment) - (200,000) 200,000
Officer/director loan (repayment) - (70,281) 71,436
Sale of Common Stock - 95,000 -
Stock subscription - 116,838 -
Other borrowings - 1,909 -
Reduction on advances to subsidiaries - - 28,899
------------ ------------ ----------
Net cash from financing activities - (56,534) 300,335
------------ ------------ ----------
Cash flows from investing activities:
Net book value of assets sold - 316,669 -
Purchase of fixed assets - - (42,654)
------------ ------------ ----------
Net increase (decrease) in cash (33,203) 32,839 (29,996)
Cash at beginning of period 34,305 1,466 31,462
------------ ------------ ----------
Cash at end of period $ 1,102 $ 34,305 $ 1,466
============ ============ ==========
</TABLE>
<PAGE>
Northeast (USA) Corp.
Notes to Financial Statements
Financial Statements
The balance sheets, statements of operations, statements of stockholders'
equity and statements of cash flows for all periods reported herein have
been prepared by Northeast (USA) Corp. (the "Company") without audit. In
the opinion of management, all adjustments necessary to present fairly
these financial statements, have been made.
Nature of Business
Northeast (USA) Corp. is a Delaware corporation. The Company has had
limited business operations for the past 24 months. Its current business
plans include the seeking of business opportunities through acquisitions,
mergers, joint ventures and/or the formation of operating subsidiaries.
All prior operations have been classified as discontinued.
Summary of Significant Accounting Policies
Basis of Presentation
The Company's financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
has incurred losses and has no current source of revenues or funds and has
a working capital deficit as of June 30, 1998. In addition, the Company
plans to acquire Buy It Cheap.com, Inc. ("BUY") (see note on Subsequent
Event) which will require additional funds to finance the combined
operations. The Company's continued existence is dependent upon its
ability to secure adequate financing. Should the acquisition take place,
the Company plans to raise capital for the combined entity in the future;
however, there are no assurances that such plan will be successful. The
financial statements do not include any adjustments that might result
from the outcome of these uncertainties.
Joint Venture
The Company in 1992 formed a joint venture agreement with the Northeast
General Pharmaceutical Factory ("NEGPF"), a government owned pharmaceutical
concern in Shenyang, China, whereby both companies established a joint
venture company in China. Each of the Company and NEGPF were to have
contributed certain assets to the joint venture. The Company was to have
contributed $2.1 million in cash and $1.15 million in technology for a
total capital contribution of $3.25 million. NEGPF was to have contributed
$750,000 in cash and a land-use right valued at $1.75 million for a total
contribution of $2.5 million. Based upon the amount of contribution, the
Company owned 56.52% of the joint venture and NEGPF owned 43.48%. To date,
the Company has contributed $1 million of cash and has contributed the
technology. NEGPF has contributed $750,000 of cash but has not contributed
the land-use right. The joint venture had only limited start-up operations
and operations effectively ceased in 1997 due to lack of funding.
The Company has communicated with NEGPF that it no longer has any interest
in the joint venture. As such the Company has reserved $620,535 against the
investment in and net advances from the joint venture.
Net Loss Per Common Share
The weighted average number of common shares outstanding used in computing
net loss per common share was 5,265,000 in 1996, 5,663,500 in 1997 and
6,610,000 in 1998. The weighted average number of common shares used in
computing the net loss per common share does not include any shares
issuable upon the assumed conversion of the preferred stock, since the
effect would have been to decrease net loss per common share for the
period.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred
taxes related primarily to differences between the basis of assets and
liabilities 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 or
liabilities are recovered or settled. Deferred taxes also are recognized
for operating losses that are available to offset future federal and state
income taxes. The Company has a net operating loss carryforward of $373,614
which expires in years through 2018.
<PAGE>
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 expenses
during the reporting period. Actual results could differ from those
estimates.
Preferred Stock
In May 1994, the Company sold 260,000 shares of its newly designated Series
C convertible preferred stock, $.001 par value, for an aggregate amount of
$780,000 to a group of private investors. Except for $10,000 (representing
10,000 shares) of the preferred stock, all had been converted according to
their terms prior to July 1, 1998. The Company has the right to redeem the
shares at $4.50 per share. The shares carry a stated dividend rate of 8%
per annum. Dividends are cumulative and are payable quarterly. No cash
dividends have ever been paid. Some former preferred shareholders (prior to
or simultaneous with their conversion) have accepted shares of the
Company's stock in lieu of cash dividends. Those that did not accept shares
of stock for dividends and those that did not covert their preferred shares
are owed a total of $99,000 of dividend arrearages at June 30, 1998.
Subsequent Event
On August 5, 1999, the Company's Board of Directors agreed in principle to
acquire Buy It Cheap.com, Inc. BUY is a start up company formed by two
directors of the Company as a means of getting the Company into the
Internet retailing business. BUY stockholders would receive between 700,000
and 1,400,000 shares of the Company's common stock, depending on the amount
of assets BUY is able to provide to the Company, for all of the issued and
outstanding shares of BUY.
Through August 5, 1999, BUYC had loaned $13,300 to the Company. These
loans, evidenced by a promissory notes, do not bear interest until the
original maturity date, November 30, 1999, at which time interest would
have accrued at 10% per annum. The Company currently does not have the
necessary funds to repay the loan, however, should the merger take place
the amount would become part of the value of BUY in the merger.
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CELCOR, INC.
Celcor, Inc., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Celcor, Inc.
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
attached hereto as Exhibit A.
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware, at which meeting the necessary number
of shares as required by stature were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Celcor, Inc. has caused this Certificate to be
signed by Jennifer Lo Wu, its President, and Stephen E. Roman, Jr., its
Secretary, this 25th day of October, 1996.
By:/s/Jennifer Lo Wu
Jennifer Lo Wu, President
ATTEST: /s/Stephen R. Roman, Jr.
Stephen R. Roman, Jr. Secretary
<PAGE>
EXHIBIT A
RESOLVED, that it is advisable that Article FIRST of the Certificate
of Incorporation of the Corporation be deleted in its entirety and replaced with
the following:
FIRST: The name of the corporation (hereinafter called the
"corporation") is Northeast (USA) Corp.
RESOLVED, that is advisable that Article FOURTH of the Certificate of
Incorporation of the Corporation be deleted and replaced with the following:
FOURTH: The total number of shares of all classes of stock which
the corporation shall have authority to issue is twenty two million
(22,000,000), of which two million (2,000,000) shares are to be Preferred
Stock, par value one mil ($.001) per share ("Preferred Stock"), and twenty
million (20,000,000) shares are to be Common Stock, par value one mil
($.001) per share ("Common Stock"). The Board of Directors shall have the
right to divide the preferred stock into one or more series, each
containing the number of shares and the relative powers, designations,
preferences and relative, participating, optional or other rights, and
qualifications, limitations or restrictions as may be determined by the
board from time to time, each such series to be distinctly designated.
For purposes of illustration only, the foregoing power of the board
includes, but is not limited to, the determination of: (i) the number of shares
constituting each series; (ii) the rate and time at which, and the terms and
conditions on which, dividends on shares of a series will be paid, and whether
the dividends are cumulative or non-cumulative or are participating or
non-participating; (iii) the voting rights of the holder of shares of the
series, including whether the shares shall have no voting rights, or multiple,
full, limited, or special voting rights; (iv) the right, if any, of the holder
of shares of a series to convert their shares into, or exchange them for, share
of other classes or series of stock of the corporation, and the terms and
conditions of the conversion or exchange, including provisions for adjustment of
the conversion price or rate in such events as the board shall determine; (v)
the right, if any, of the corporation or the holder of the shares to cause the
shares of the series to be redeemed, and the redemption price or prices and the
time or times at which, and the terms and conditions on which, shares of the
series may be redeemed; (vi) the rights of the holders of shares of the series
upon the voluntary or involuntary dissolution, liquidation or winding-up of the
corporation and whether those rights are limited or participating; and (vii) the
obligation, if any, of the corporation to establish a sinking fund for the
purchase of redemption of the shares of the series, the amounts and time of
payments to that fund, and the other terms and conditions of that fund.
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CELCOR, INC.
Pursuant to Section 242 of the General Corporation Law
of the State of Delaware
CELCOR, INC. (the "Corporation"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware
("GCL"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation by unanimous
written consent, filed with the minutes of the Board, duly adopted resolutions
setting forth a proposed amendment to the Certificate of Incorporation of the
Corporation declaring its advisability and calling for action on the amendment
to be taken by written consent of stockholders followed by written notice to
stockholders pursuant to Section 228 of the GCL. The resolution setting forth
the proposed amendment is as follows:
"RESOLVED, that it is advisable that the first sentence of Article
FOURTH of the Certificate of Incorporation of the Corporation be amended to read
as follows:
"FOURTH: The total number of shares of all classes of stock which
the corporation shall have the authority to issue is twenty two million
(22,000,000), of which two million (2,000,000) shares are to be Preferred
Stock, par value one mill ($.001) per share ("Preferred Stock"), and twenty
million (20,000,000) shares are to be Common Stock, par value one mill
($.001) per share ("Common Stock")."
SECOND: That thereafter, pursuant to the resolution of its Board of
Directors, the stockholders of the Corporation approved the amendment by written
consent and notice pursuant to Section 228 of the GCL.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the CGL.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
signed by Robert Edwards, its President, and attested by Joe Ellis, its
Secretary, this 31st day of March, 1987.
CELCOR, INC.
By: /s/Robert Edwards
President
Attest:
/s/Joe Ellis
Secretary
PROMISSORY NOTE
Dated: July 28, 1999
For value received, Northeast (USA) Corp., promises to pay Buy It Cheap.com,
Inc. the sum of $10,000 (Ten thousand dollars) on November 30, 1999. No interest
shall accrue through this date. If this Note is not paid at maturity, interest
shall be payable at the rate of 10% per annum, accruing from December 1, 1999
until the Note plus interest is paid.
NORTHEAST (USA) CORP.
/s/Stephen E. Roman, Jr.
Stephen E. Roman, Jr.
President
<PAGE>
PROMISSORY NOTE
Dated: August 5, 1999
For value received, Northeast (USA) Corp., promises to pay Buy It Cheap.com,
Inc. the sum of $3,300 (Three thousand three hundred dollars) on November 30,
1999. No interest shall accrue through this date. If this Note is not paid at
maturity, interest shall be payable at the rate of 10% per annum, accruing from
December 1, 1999 until the Note plus interest is paid.
NORTHEAST (USA) CORP.
/s/Stephen E. Roman, Jr.
Stephen E. Roman, Jr.
President
<PAGE>
PROMISSORY NOTE
Dated: September 10, 1999
For value received, Northeast (USA) Corp., promises to pay But It Cheap.com,
Inc. the sum of $9,913.40 (Nine thousand nine hundred and thirteen dollars and
forty cents) on November 30, 1999. No interest shall accrue through this date.
If this Note is not paid at maturity, interest shall be payable at the rate of
10% per annum, accruing from December 1, 1999 until the Note plus interest is
paid.
NORTHEAST (USA) CORP.
/s/Stephen E. Roman, Jr.
Stephen E. Roman, Jr.
President
