SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20509
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
April 16, 1999
Date of Report
(Date of Earliest Event Reported)
TECON, INC.
(Exact Name of Registrant as Specified in its Charter)
Utah 2-97869-D 87-0419571
(State or other juris- (Commission File No.) (IRS Employer
diction of incorporation) I.D. No.)
4139 Via Marina, Suite 106
Marina Del Rey, California 90292
(Address of Principal Executive Offices)
818-340-2351
Registrant's Telephone Number
455 East 500 South #205
Salt Lake City, UT 84111
----------------------
(Former Name and Address of Principal Executive Offices)
Item 1. Changes in Control of Registrant.
(a) On April 16, 1999, the Registrant and Buyit.com, Inc., a
California corporation ("Buyit.com"), executed an Agreement and Plan of
Reorganization (the "Plan"), whereby the Registrant agreed to acquire 100% of
the outstanding securities and subscriptions to purchase securities of
Buyit.com from its stockholders and subscribers (collectively the "Buyit.com
Stockholders") as set forth on Exhibit A to the Plan. The exchange was
offered to Buyit.com Stockholders who were "accredited investors" and the
first 35 Buyit.com Stockholders who were "sophisticated investors." The
Registrant believes that all Buyit.com Stockholders are either "accredited
investors" or "sophisticated investors," based upon representations of and
documents provided by management of Buyit.com. The effective date of
Plan was April 16, 1999, and the combination of these entities was treated
as a purchase for accounting purposes.
The source of the consideration used by the Buyit.com
Stockholders to acquire their respective interests in the Registrant was the
exchange of issued and outstanding securities or subscriptions to acquire
securities of Buyit.com in accordance with the Plan.
The basis of the "control" by the Buyit.com Stockholders is
stock ownership.
The Plan provided:
1. For the acquisition of 100% of the outstanding securities and
subscriptions to purchase securities of Buyit.com;
2. The issuance of 8,500,000 "restricted securities" of
the Registrant's common stock for the outstanding securities of Buyit.com and
257,666 "restricted securities" of the Registrant's common stock for the
outstanding subscriptions;
3. The issuance of 1,621,621 shares of its "restricted securities"
pursuant to Subscription Agreements at a price of approximately $0.37 per
share, for an aggregate total of $600,000;
4. The Resignation of the directors and executive officers of the
Registrant;
5. The election of the directors and executive officers of Buyit.com
as directors and executive officers of the Registrant;
6. For the mailing of a Notice of Special Meeting of Stockholders to
the stockholders of the Registrant for the purpose of ratifying an amendment
to the Registrant's Articles of Incorporation to change the name of the
Registrant to "Buyit.com, Inc." (see Item 7, Exhibit 20); and
7. The issuance of 600,000 shares of common stock of the
Registrant to certain persons for services rendered for or on behalf of the
Registrant under an S-8 Registration Statement. See Item 7, S-8 Registration
Statement.
Prior to the completion of the Plan, there were 1,199,962 outstanding
shares. Following the issuance of the shares outlined above there will be
12,179,249 outstanding securities of the Registrant. Presently, persons
owning 6,875,000 shares of Buyit.com (80%) have executed and delivered the
Plan, and the Registrant will continue to acquire the remaining securities and
subscriptions to acquire securities of Buyit.com as soon as is practicable,
under the Plan and on the same terms and conditions.
A copy of the Plan, including all material exhibits and related
instruments, accompanies this Report, which, by this reference, is
incorporated herein; the foregoing summary is modified in its entirety by such
reference. See Item 7, Exhibit 2.
The former principal stockholders of the Registrant and their
percentages of ownership of the outstanding voting securities of the
Registrant prior to the completion of the Plan were: Sheryl Ross, former
President of the Registrant, 300,024 (25%); Bradley C. Burningham, former Vice
President of the Registrant, 300,024 (25%); Shelley Goff, former
Secretary/Treasurer of the Registrant, 300,000 (25%); Leonard W. Burningham,
Esq., counsel for the Registrant, 98,933 (8.25%); and Duane S. Jenson, 60,749
(5.1%).
(b) To the knowledge of management and based upon a review of the
stock ledger maintained by the Registrant's transfer agent and registrar, the
following table sets forth the beneficial ownership of persons who own more
than five percent of the Registrant's common stock as of the date hereof, and
the share holdings of new management, to wit:
Name Positions Held Shares Owned %*
Sandip Seth President and Director 500,000 4.1%
Peter A. Yollin Chairman, Secretary
Director 3,705,000 30.4%
Edgar Cayce Vice President and
Director 1,000,000 8.2%
Michael D. Reick Stockholder 1,000,000 8.2%
Communications
Technology
Investments Ltd. Stockholder 1,000,000 8.4%
Officers and
Directors
Collectively 5,205,000 42.7%
* Assumes the acquisition of all of the
outstanding securities and subscriptions
to acquire securities of Buyit.com under
the Plan.
Item 2. Acquisition or Disposition of Assets.
(a) See Item 1.
The consideration exchanged under the Plan was negotiated at "arms
length" and the Board of Directors of the Registrant used criteria used in
similar proposals involving the Registrant in the past, including the relative
value of the assets of the Registrant; its present and past business
operations; the future potential of Buyit.com; its management; and the
potential benefit to the stockholders of the Registrant. The Board of
Directors determined that the consideration for the exchange was reasonable,
under these circumstances.
No director, executive officer or controlling person of the
Registrant had any direct or indirect interest in Buyit.com prior to
the completion of the Plan.
(b) The Registrant intends to continue the business operations
conducted and intended to be conducted by Buyit.com, and which are
described below under the caption "Business."
Also see the Audited Financial Statements of Buyit.com as of March
31, 1999. See Item 7.
Management
Sandip Seth, President and Director. Mr. Seth is 35 years of age.
From November of 1995 to March of 1999, Mr. Seth was CEO and President of
GemNet, Inc., an exporter of all major brands of technology and office
products to markets in South Asia, Africa and the Middle East. From October,
1994 to November, 1995, he was CEO and Chairman of Independence Technologies,
Inc., a technology company based in the Silicon Valley specializing in on-line
transaction processing for high-end client/server systems.
Peter A. Yollin, Chairman, CEO, Secretary and Director. Mr. Yollin
is 46 years of age. From February, 1990, to November, 1996, Mr. Yollin was
President and CEO of Mondragon Yollin Creative, an advertising agency serving
both traditional fortune 1000 clients as well as the entertainment and motion
picture industry.
Edgar Cayce, Vice President and Director. Mr. Cayce is 28 years of
age. From September, 1998 to March, 1999, Mr. Cayce was employed by Network
Solutions International as a network engineer and programmer; from May 1998 to
September, 1998, he was employed by Network Magic Unlimited as a network
engineer and programmer; from May, 1997 to May, 1998, he was CIO, Network
Administrator and Senior Designer for Rival Internet Services, Inc.; and from
January 1994, to May, 1997, he was founder, Chairman and Senior Programmer of
VGS NetMedia Corp.
Business
The only product or service of the Company is "The BuyIt Auction,"
which was founded in 1997, and has been going through its final live beta
tests for the past several months.
The BuyIt Auction can best be described as being in the business
of conducting online person-to-person auctions. In recent times, key
strengths have been commitment to customer service and ability to provide
users with a simple, easy to operate auction site with the features and
functionality that are sorely missing from competitive products and services.
The BuyIt Auction's target market includes antique dealers,
collectibles dealers, collectors and the general public. The most typical
customers for services are individuals who are currently involved or have
interest in the areas of antiques and collectibles. The BuyIt Auction has over
1,000 categories of items for sale, including Antiques, Memorabilia, Disney,
Jewelry, Advertising, Housewares, Porcelain, Sports Trading Cards, Toys,
Beanie Babies, Barbie and Hot Wheels and many others, ensuring that there is
something to offer for almost anyone.
Item 3. Bankruptcy or Receivership.
None; not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
None; not applicable.
Item 5. Other Events.
See Item 1.
Item 6. Resignations of Registrant's Directors.
The pre-Plan directors and executive officers of the Registrant
resigned and designated the directors and executive officers of Buyit.com to
serve in the same capacities in which they served for Buyit.com, until the
next respective annual meetings of the stockholders and the Board of Directors
and until their respective successors are elected and qualified or until their
prior resignations or terminations.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
<PAGE>
BuyIt.com, Inc.
[A Development Stage Company]
Financial Statements and Independent Auditors' Report
March 31, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
BuyIt.com, Inc. [a development stage company]
We have audited the accompanying balance sheet of BuyIt.com, Inc. [a
development stage company] as of March 31, 1999, and the related statements of
operations, stockholders' deficit, and cash flows for the period ended March
31, 1999 and for the period from inception [January 20, 1999] through March
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 audits provide 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 BuyIt.com, Inc. [a
development stage company] as of March 31, 1999, and the results of operations
and cash flows for the period ended March 31, 1999, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has no current revenue
generating activities which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters
are also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/Mantyla McReynolds
Mantayla McReynolds
Salt Lake City, Utah
April 30, 1999
<TABLE>
BuyIt.com, Inc.
[A Development Stage Company]
Balance Sheet
March 31, 1999
<CAPTION>
ASSETS
<S> <C>
Assets
Property and equipment (net of depreciation of $ 63)
Notes l&6 $ 1,200
Organization costs (net of amortization of $ 50)
Note 1 950
Total Assets $ 2,150
LIABILITIES AND STOCKHOLDERS'DEFICIT
Liabilities:
Current Liabilities:
Payable to Officer/Stockholder - Note 4 12,067
Total Liabilities 12,067
Stockholders' Deficit:
Preferred Stock -- 10,000,000 shares authorized having -0-
no par value; 0 shares issued and outstanding
Capital Stock -- 40,000,000 shares authorized having no
par value; 8,500,000 shares issued
and outstanding - Note 5 -0-
Deficit accumulated during the development stage (9,917)
Total Stockholders' Deficit (9,917)
Total Liabilities and Stockholders' Deficit 2,150
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Buylt.com, Inc.
[A Development Stage Company]
Statements of Operations
For the Period Ended March 31, 1999 and for the
Period from Inception [January 20, 1999]
through March 31, 1999
<CAPTION>
Inception
through
March 31, March 31,
1999 1999
<S> <C> <C>
Revenues $ -0- $ -0-
General & Administrative Expenses 9,917 9,917
Operating Loss (9,917) (9,917)
Net Loss Before Income Taxes (9,917) (9,917)
Current Period Provision for Income Taxes -0- -0-
Net Loss $ (9,917) $ (9,917)
See accompanying notes to financial statements.
</TABLE>
<TABLE>
Buylt.com, Inc.
[A Development Stage Company]
Statement of Stockholders' Deficit
For the Period Ended March 31, 1999 and
for the Period from Inception [January 20, 1999)
through March 31, 1999
<CAPITON>
Net
Common Common Accumulated Stockholders'
Shares Stock Deficit Deficit
<S> <C> <C> <C> <C>
Balance, January 20, 1999, -0- $ -0- $ -0- $ -0-
date of Inception
Issued stock for technology
January 20, 1999 8,500,000 -0- -0-
Net loss for the period ended
March 31, 1999 (9,917) (9,917)
Balance, March 31, 1999 8,500,000 $ -0- $(9,917) $ (9,917)
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Buylt.com, Inc.
[A Development Stage Company]
Statements of Cash Flows
For the Period Ended March 31, 1999, and
for the Period from Inception [January 20, 1999]
through March 31, 1999
<CAPTION>
Inception
through
March 31, March 31,
1999 1999
<S> <C> <C>
Cash Flows Provided by/used for)
Operating Activities
Net Loss $ (9,917) $ (9,917)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 113 113
Organization costs (1,000) (1,000)
Shareholder loan 12,067 12,067
Net Cash Provided by Operating Activities 1,263 1,263
Cash Flows Used for Investing Activities
Purchase of equipment (1,263) (1,263)
Net Increase/(Decrease) in Cash -0- -0-
Beginning Cash Balance -0- -0-
Ending Cash Balance $ -0- $ -0-
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest $ -0- $ -0-
Cash paid during the year for income taxes $ -0- $ -0-
</TABLE>
See accompanying notes to financial statements.
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
BuyIt.com, Inc.("BuyIt" or "Company") incorporated under the laws of
the State of California in January, 1999. From inception through
March 31, 1999, the Company engaged in preliminary activities
related to the set up of an Internet auction business. On April 16,
1999, the Company entered into an Agreement and Plan of
Reorganization ("Plan") with Tecon, Inc. ("Tecon"), a Utah
Corporation, wherein all of the outstanding shares and subscriptions
(Note 5) of BuyIt were exchanged for 8,500,000 (for the outstanding
shares) shares of common stock of Tecon, and 257,666 (for the
outstanding subscriptions) shares of common stock of Tecon. At the
conclusion of all the transactions contemplated in the Plan, BuyIt
shareholders and subscribers owned 8,757,666 shares of total
outstanding shares of 12,179,249, or 71.9 %. The survivor in the
aforementioned combination is Tecon. However, the name of the
surviving company was changed to BuyIt.com, Inc, simultaneously with
the Plan. The combination of these two entities has been accounted
for as a purchase. The Company has not yet commenced its planned
principal operations of implementing an Internet auction business.
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles. The
following summarizes the more significant of such policies:
(b) Income Taxes
Effective January 20, 1999, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109 [the Statement],
Accounting for Income Taxes. The Statement requires an asset and
liability approach for financial accounting and reporting for income
taxes, and the recognition of deferred tax assets and liabilities
for the temporary differences between the financial reporting bases
and tax bases of the Company's assets and liabilities at enacted tax
rates expected to be in effect when such amounts are realized or
settled. The cumulative effect of this change in accounting for
income taxes as of March 31, 1999 is $0 due to the valuation
allowance established as described below.
(c) Statement of Cash Flows
For purposes of the statements of cash flows, the Company considers
cash on deposit in the bank to be cash. The Company had $0 cash at
March 31, 1999.
(d) Use of Estimates in Preparation of Financial Statements
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.
(e) Property and Equipment
The Company records property and equipment at cost. Depreciation
was computed principally by use of the straight line method.
Expenditures for maintenance and repairs are charged to expense as
incurred.
(f) Organization Costs
The Company incurred organizational costs at its inception, which
are amortized utilizing the straight line method over five years.
NOTE 2 LIQUIDITY/GOING CONCERN
The Company has no revenue generating activities at this time, which
raises substantial doubt about the Company's ability to continue as
a going concern.
Management plans include a combination with Tecon, as described in
Note 1, which as an integral part thereof includes the sale of
securities which will yield approximately $986, 499 (Note 5). With
this level of funding, the Company believes that it will be enabled
to launch its Internet auction business. The financial statements
do not include any adjustments that might result from the outcome of
this uncertainty.
NOTE 3 INCOME TAXES
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for Income
Taxes, as of January 20, 1999. No provision has been made for
income taxes in the financial statements because the Company has
accumulated losses since inception.
The tax effects of temporary differences that give rise to
significant portions of the deferred tax asset at March 31, 1999
have no impact on the financial position of the Company. A
valuation allowance is provided when it is more likely than not that
some portion of the deferred tax asset will not be realized.
Because of the lack of taxable earnings history, the Company has
established a valuation allowance for all future deductible
temporary differences. Net operating loss carry forward amounts
expire at in 2014.
NOTE 4 RELATED-PARTY TRANSACTIONS
During the period ended March 31, 1999, a shareholder and officer
paid expenses on behalf of the Company totaling $12,067. These
unsecured advances bear no interest and are due on demand.
NOTE 5 SUBSCRIPTIONS
The Company had subscriptions to issue 257,666 shares of its common
stock for consideration of $ 386,499 at the time of the Plan with
Tecon, which were contingent upon the consummation of the Plan with
Tecon. In addition, Tecon had subscriptions to issue 1,621,621
shares of its common stock for consideration of $600,000, which was
also contingent upon the consummation of the Plan. At the time of
the issuance of these financial statements, $ 837,241 had been
collected from the subscribers.
NOTE 6 PROPERTY AND EQUIPMENT
During the period of its existence, the Company purchased computer
equipment, which it is depreciating over a five year period
utilizing the straight line method. Depreciation expense for the
period ended March 31, 1999 is $63.
NOTE 7 COLOCATION AGREEMENT
The Company entered into an agreement for Internet web-site hosting
with an unrelated third party in February, 1999. The terms of the
agreement require that the Company pay fees of $3,000 per month for
a period of two years.
NOTE 8 EMPLOYMENT AGREEMENTS
The Company has entered into four executive employment agreements
with officers and employees of the Company, which were effective
April 1, 1999. The primary terms of such agreements follow:
# Initial Annual Expiration Date Initial Term Post - Initial Term
Base Salary Discretionary Discretionary
Termination Termination
[S]
1 $120,000 March 8, 2004 Base times 150% Base times 200%
2 $ 75,000 March 8, 2004 Base times 150% Base times 200%
3 $ 70,000 March 8, 2002 Base times 150% Base times 50%
4 $ 70,000 March 8, 2002 Base times 150% Base times 50%
* The Company may terminate these employees at its discretion during the
initial term of the agreement, but must pay to the terminated employee the
amount in this column upon termination.
** After the initial term of the employment agreement, the company may
terminate these employees at its discretion, but must pay the terminated
employee the amount in this column upon termination.
<PAGE>
(b) Pro Forma Financial Information.
<PAGE>
BuyIt.com, Inc.
(formerly Tecon, Inc.)
[A Development Stage Company]
Pro Forma Financial Statements
March 31, 1999
<PAGE>
<TABLE>
BuyIt.com, Inc.
formerly Tecon, Inc.
[A Development Stage Company]
Pro Forma Balance Sheet
March 31, 1999
(Unaudited)
<CAPTION>
Pro Forma
Giving Effect to
Reorganization
as of March 31,
ASSETS Buylt.com Tecon, Inc. Adjustments 1999
<S> <C> <C> <C> <C>
Current Assets:
Cash - Note 1 $ -0- $ -0- $ 986,499 $ 986,499
Total Current Assets -0- -0- 986,499 986,499
Property and Equipment
- - net 1,200 -0- -0- 1,200
Organization Costs 950 -0- -0- 950
TOTAL ASSETS $ 2,150 $ -0- $ 986,499 $ 988,649
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Payable to Stockholder$ 12,067 $ 5,568 $ -0- $ 17,635
Total Current
Liabilities 12,067 5,568 -0- 17,635
Stockholders' Equity:
Capital Stock - Note 1 -0- 1,200 10,979 12,179
Additional Paid-in
Capital -0- 2,114,138 975,520 3,089,658
Retained Earnings (9,917)(2,120,906) -0- (2,130,823)
Total Stockholders'
Equity (9,917) (5,568) 986,499 971,014
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,150 $ -0- $ 986,499 $ 988,649
</TABLE>
See accompanying notes and Independent Accountants' Report
<TABLE>
Buyit.com, Inc.
formerly Tecon, Inc.
[A Development Stage Company]
Pro Forma Statement of Operations
For the Year Ended March 31, 1999
(Unaudited)
<CAPTION>
Pro Forma
Giving Effect to
Reorganization
as of March 31,
Buylt.com Tecon, Inc. Adjustments 1999
<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
General and Administrative
Expenses 9,917 23,257 -0- 33,174
Net Loss Before Income Taxes (9,917) (23,257) (33,174)
Current Year Provision for
Income Taxes -0- 149 -0- 149
Net Loss $ (9,917) $(23,406) $ -0- $(33,323)
Loss Per Share $ (.01) $ (.02) $ .02 $ (.01)
Average Shares
Outstanding 8,500,000 1,199,962 2,479,287 12,179,249
</TABLE>
See accompanying notes and Independent Accountants' Report
Buyit.com, Inc.
formerly Tecon, Inc.
[A Development Stage Company]
Notes to Pro Forma Financial Statements
March 31, 1999
(unaudited)
Note 1 AGREEMENT AND PLAN OF REORGANIZATION
BuyIt.com, Inc. ("BuyIt" or "Company") incorporated under the laws
of the State of California in January, 1999. From its inception
through March 31, 1999, the Company engaged in preliminary
activities related to the set up of an Internet auction business.
On April 16, 1999, the Company entered into an Agreement and Plan
of Reorganization ("Plan") with Tecon, Inc. ("Tecon"), a Utah
Corporation, wherein all of the outstanding shares and
subscriptions of BuyIt were exchanged for 8,500,000 (for the
outstanding shares) shares of common stock of Tecon, and 257,666
(for the outstanding subscriptions) shares of common stock of
Tecon. At the conclusion of all the transactions contemplated in
the Plan, BuyIt shareholders and subscribers owned 8,757,666 shares
of total outstanding shares of 12,179,249, or 71.9 %. The
survivor in the aforementioned combination is Tecon. However, the
name of the surviving company was changed to BuyIt.com, Inc,
simultaneously with the Plan. The combination of these two
entities has been accounted for as a purchase.
The Pro Forma financial statements reflect all of the transactions
contemplated by the Plan, including subscriptions which were
subject to the completion of the Plan. Specifically, BuyIt had
257,666 common shares subscribed to at the time of the Plan, in
the approximate amount of $386,499; Tecon had 1,621,621 shares
subscribed to in the approximate amount of $600,000. The cash
balance shown in the Pro Forma financial statements reflects the
total cash as if it had been received by the combined entity as of
March 31, 1999.
<PAGE>
Exhibits
2 Agreement and Plan of Reorganization
Exhibit A- Stockholders and Subscribers
of Buyit.com, Inc.
Exhibit B- Tecon's Financial Statements for
the years ended 3/31/98 and 3/31/97 and
the period ended 12/31/98.
Exhibit C- Tecon's Exceptions.
Exhibit D- Assignment of certain proprietary rights
by Peter Yollin to Buyit.com.
Exhibit E- Buyit.com Exceptions.
Exhibit F- Investment Letter.
Exhibit G- Tecon's Compliance Certificate.
Exhibit H- Buyit.com Compliance Certificate.
3 Certificate of Amendment effecting the name change to
"Buyit.com, Inc."
13 Form 10-KSB Annual Report for the year ended March 31,
1999.*
20 Notice of Special Meeting of Stockholders.
99 S-8 Registration Statement.*
* Incorporated herein by reference.
Item 8. Change in Fiscal Year.
None; not applicable.
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 hereunto duly authorized.
TECON, INC.
Date: 5/5/99 By:/s/Sandip Seth
-------------------------------------
Sandip Seth,
President and Director
Date: 5/5/99 By:/s/Peter A. Yollin
--------------------------------------
Peter A. Yollin,
Chairman, Secretary and Director
Date: By:/s/Edgar Cayce
--------------------------------------
Edgar Cayce,
Vice President and Director
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") is made
this 16th day of April, 1999, among Tecon, Inc., a Utah corporation ("Tecon");
Buyit.com, Inc., a California corporation ("Buyit.com"); the initial Buyit.com
stockholders (the "Buyit.com Stockholders"); and the Buyit.com subscribers
(the "Buyit.com Subscribers") of common stock of Buyit.com; all of whom are
listed on Exhibit A hereto and who execute and deliver a copy of the Plan
(sometimes, collectively, the "Buyit.com Stockholders").
W I T N E S S E T H:
RECITALS
WHEREAS, the respective Boards of Directors of Tecon and Buyit.com
and the Buyit.com Stockholders have adopted resolutions pursuant to which
Tecon shall acquire and the Buyit.com Stockholders shall exchange 100% of the
outstanding common stock and subscriptions to purchase common stock of
Buyit.com; and
WHEREAS, the sole consideration for 100% interest in Buyit.com
shall be the exchange of $0.001 par value common stock of Tecon (which shares
are all "restricted securities" as defined in Rule 144 of the Securities and
Exchange Commission) as outlined in Exhibit A; and
WHEREAS, the Buyit.com Stockholders shall acquire in exchange the
"restricted securities" of Tecon in a reorganization within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, it is agreed:
Section 1
Exchange of Stock
1.1 Number of Shares. The Buyit.com Stockholders and the
Buyit.com Subscribers respectively agree to transfer to Tecon at the closing
(the "Closing") 100% of the outstanding securities and subscriptions to
purchase securities of Buyit.com, listed in Exhibit A, which is attached
hereto and incorporated herein by reference (the "Buyit.com Shares"), in
exchange, respectively, for 8,500,000 shares of common stock of Tecon (for the
outstanding securities of Buyit.com), and 257,666 shares of common stock of
Tecon (for the outstanding subscriptions in the approximate amount of
$386,499). Taking into account (i) these shares (collectively, 8,757,666
shares), (ii) the current outstanding shares of Tecon (1,199,962 shares),
(iii) 600,000 shares of common stock of Tecon registered with the Securities
and Exchange Commission for issuance on Form S-8 to certain consultants,
subject to the Closing of this Plan, and (iv) the 1,621,621 shares to be
issued in consideration of the sum of $590,000 and $10,000 credit for a prior
loan to Buyit.com at or simultaneous with the Closing as outlined in Section
1.5 hereof, there will be 12,179,249 outstanding shares on the completion of
the Plan. The exchange shall be on a basis of one share of Tecon for each of
the Buyit.com Shares; and the subscriptions of the Buyit.com Subscribers shall
be for the number of shares subscribed, as each subscription is subject to the
acceptance of Tecon.
1.2 Delivery of Certificates by Buyit.com Stockholders.
The transfer of the Buyit.com Shares by the Buyit.com Stockholders shall be
effected by the delivery to Tecon at the Closing of stock certificate or
certificates representing the transferred shares duly endorsed in blank or
accompanied by stock powers executed in blank, with all signatures witnessed
or guaranteed to the satisfaction of Tecon and with all necessary transfer
taxes and other revenue stamps affixed and acquired at the Buyit.com
Stockholders' expense. Since Buyit.com Shares have not been issued to the
Buyit.com Subscribers, who subscribed with the understanding that the Plan
would be completed and each would receive the number of shares subscribed for
in the reorganized Tecon, the signed Counterpart Signature Page to the Plan of
the Buyit.com Subscribers, together with Tecon's acceptance thereof at the
Closing, shall be sufficient to transfer the equity interest in Buyit.com of
the Buyit.com Subscribers to Tecon.
1.3 Further Assurances. At the Closing and from time to
time thereafter, the Buyit.com Stockholders and the Buyit.com Subscribers
shall execute such additional instruments and take such other action as Tecon
may request in order to exchange and transfer clear title and ownership in the
Buyit.com Shares to Tecon.
1.4 Resignations of Present Directors and Executive
Officers and Designation of New Directors and Executive Officers. On Closing,
the present directors and executive officers of Tecon shall designate the
directors and executive officers nominated by Buyit.com to serve in their
place and stead, until the next respective annual meetings of the stockholders
and the Board of Directors of Tecon, and until their respective successors
shall be elected and qualified or until their respective prior resignations or
terminations, who shall be: Sandip Seth, President, Secretary and a director;
Peter A. Yollin, Chairman, CEO and a director; and Edgar Evans Cayce, III,
Vice President and a director; and then, they shall resign, in seriatim.
1.5 Subscriptions Simultaneous with Closing. Tecon shall
have received subscriptions in the form satisfactory to Tecon for the purchase
of 1,621,621 shares of its "restricted securities" (common stock) at price of
approximately $0.37 per share, for an aggregate total of $600,000 ($10,000 of
which shall be a credit for a loan made to Buyit.com), at or simultaneous with
the Closing. In further consideration of these subscriptions, Tecon and
Buyit.com agree that (i) Tecon shall continue to file reports with the
Securities Exchange Commission under Sections 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, for so long as these subscribers own the
shares subscribed for, or for a period of two years from the Closing,
whichever is earlier; and (ii) that no stock option, incentive, bonus, pension
or other compensatory plan of any type or nature whatsoever shall be
considered by the Board of Directors of Tecon or Buyit.com for a period of
ninety (90) days from the date of the Closing of the Plan, and none will be
adopted from and after such ninety (90) day period until the expiration of one
year from the date of the Closing, without the prior written consent of 95% of
these subscribers.
1.6 Change of Name. Simultaneous with the Closing of this
Plan, the Board of Directors of Tecon, with the written consent of its
majority stockholders, shall have adopted the resolutions necessary to amend
Tecon's Articles of Incorporation to change its name to "Buyit.com, Inc."
1.7 Assets and Liabilities of Tecon at Closing. Tecon
shall have no material assets and no liabilities at Closing, and all costs
incurred by Tecon incident to the Plan shall have been paid or satisfied.
1.8 Limitation on Reverse Splits. Without the prior
written consent of the current members of the Board of Directors of Tecon, no
reverse split of the outstanding voting securities of Tecon shall be effected
following the Closing, for a period of not less than 12 months.
1.9 Closing. The Plan will be deemed to be closed on
receipt of the signatures of the Buyit.com Stockholders or the Buyit.com
Subscribers collectively owning or having rights to acquire not less that 80%
of the Buyit.com Shares; and Tecon and Buyit.com will use their "best efforts"
to acquire the remaining Buyit.com Shares under the Plan as soon as is
practicable.
1.10 Buyit.com 1999 Stock Option Plan. Effective on the
Closing, the 1999 Stock Option Plan of Buyit.com shall be declared void and of
no effect.
Section 2
Closing
The Closing contemplated by Section 1 shall be held at the offices
of Leonard W. Burningham, Esq., Suite 205 Hermes Building, 455 East 500 South,
Salt Lake City, Utah 84111, on or before ten days following the execution and
delivery of this Plan, unless another place or time is agreed upon in writing
by the parties. The Closing may be accomplished by wire, express mail or
other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of Tecon
Tecon represents and warrants to, and covenants with, the
Buyit.com Stockholders, the Buyit.com Subscribers and Buyit.com as follows:
3.1 Corporate Status. Tecon is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Utah and is licensed or qualified as a foreign corporation in all states in
which the nature of its business or the character or ownership of its
properties makes such licensing or qualification necessary (Utah only.) Tecon
is a publicly held company, having previously and lawfully offered and sold a
portion of its securities in accordance with applicable federal and state
securities laws, rules and regulations; it voluntarily files reports with the
Securities and Exchange Commission under Section 15(d) of the Securities
Exchange Act of 1934, as amended, and such reports which have been filed since
Tecon recommenced its developmental stage, are true and accurate in every
material respect.
3.2 Capitalization. The current pre-Plan authorized
capital stock of Tecon consists of 305,000,000 shares of $0.001 par value
capital stock, divided into 300,000,000 shares of common stock and 5,000,000
shares of preferred stock. There are 1,199,962 shares of common stock issued
and outstanding, all fully paid and non-assessable; no preferred stock is
outstanding. Except as otherwise provided herein, and except for 600,000
shares of common stock of Tecon registered with the Securities and Exchange
Commission for issuance on Form S-8 to certain consultants, subject to the
Closing of this Plan, there are no outstanding options, warrants or calls
pursuant to which any person has the right to purchase any authorized and
unissued common stock of Tecon.
3.3 Financial Statements. The financial statements of
Tecon furnished to the Buyit.com Stockholders and Buyit.com, consisting of
audited financial statements for the years ended March 31, 1998 and 1997, and
the period ended December 31, 1998, attached hereto as Exhibit B and
incorporated herein by reference, are correct and fairly present the financial
condition of Tecon at such dates and for the periods involved; such statements
were prepared in accordance with generally accepted accounting principles
consistently applied, and no material change has occurred in the matters
disclosed therein, except as indicated in Exhibit C, which is attached hereto
and incorporated herein by reference. Such financial statements do not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
3.4 Undisclosed Liabilities. Tecon has no liabilities of
any nature except to the extent reflected or reserved against in its balance
sheets, whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit C.
3.5 Interim Changes. Since the date of its balance
sheets, except as set forth in Exhibit C, there have been no (1) changes in
financial condition, assets, liabilities or business of Tecon which, in the
aggregate, have been materially adverse; (2) damages, destruction or losses of
or to property of Tecon, payments of any dividend or other distribution in
respect of any class of stock of Tecon, or any direct or indirect redemption,
purchase or other acquisition of any class of any such stock; or (3) increases
paid or agreed to in the compensation, retirement benefits or other
commitments to its employees.
3.6 Title to Property. Tecon has good and marketable
title to all properties and assets, real and personal, reflected in Tecon
balance sheets, and the properties and assets of Tecon are subject to no
mortgage, pledge, lien or encumbrance, except for liens shown therein or in
Exhibit C, with respect to which no default exists.
3.7 Litigation. There is no litigation or proceeding
pending, or to the knowledge of Tecon, threatened, against or relating to
Tecon, its properties or business, except as set forth in Exhibit C. Further,
no officer, director or person who may be deemed to be an affiliate of Tecon
is party to any material legal proceeding which could have an adverse effect
on Tecon (financial or otherwise), and none is party to any action or
proceeding wherein any has an interest adverse to Tecon.
3.8 Books and Records. From the date of this Plan to the
Closing, Tecon will (1) give to the Buyit.com Stockholders and Buyit.com or
their respective representatives full access during normal business hours to
all of Tecon offices, books, records, contracts and other corporate documents
and properties so that the Buyit.com Stockholders and Buyit.com or their
respective representatives may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Tecon as the Buyit.com
Stockholders and Buyit.com or their respective representatives may reasonably
request.
3.9 Tax Returns. Tecon has filed all federal and state
income or franchise tax returns required to be filed or has received currently
effective extensions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter
if there is no Closing), Tecon and its representatives will keep confidential
any information which they obtain from the Buyit.com Stockholders or from
Buyit.com concerning the properties, assets and business of Buyit.com. If the
transactions contemplated by this Plan are not consummated by April 21, 1999,
Tecon will return to Buyit.com all written matter with respect to Buyit.com
obtained by Tecon in connection with the negotiation or consummation of this
Plan.
3.11 Corporate Authority. Tecon has full corporate power
and authority to enter into this Plan and to carry out its obligations
hereunder and will deliver to the Buyit.com Stockholders and Buyit.com or
their respective representatives at the Closing a certified copy of
resolutions of its Board of Directors authorizing execution of this Plan by
Tecon's officers and performance thereunder, and that the directors adopting
and delivering such resolutions are the duly elected and incumbent directors
of Tecon.
3.12 Due Authorization. Execution of this Plan and
performance by Tecon hereunder have been duly authorized by all requisite
corporate action on the part of Tecon, and this Plan constitutes a valid and
binding obligation of Tecon and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Tecon.
3.13 Environmental Matters. Tecon has no knowledge of any
assertion by any governmental agency or other regulatory authority of any
environmental lien, action or proceeding, or of any cause for any such lien,
action or proceeding related to the business operations of Tecon or Tecon'
predecessors. In addition, to the best knowledge of Tecon, there are no
substances or conditions which may support a claim or cause of action against
Tecon or any of Tecon' current or former officers, directors, agents or
employees, whether by a governmental agency or body, private party or
individual, under any Hazardous Materials Regulations. "Hazardous Materials"
means any oil or petrochemical products, PCB's, asbestos, urea formaldehyde,
flammable explosives, radioactive materials, solid or hazardous wastes,
chemicals, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under any applicable federal or state laws or regulations.
"Hazardous Materials Regulations" means any regulations governing the use,
generation, handling, storage, treatment, disposal or release of hazardous
materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and
Recovery Act and the Federal Water Pollution Control Act.
3.14 Access to Information Regarding Buyit.com. Tecon
acknowledges that it has been delivered copies of what has been represented to
be documentation containing all material information respecting Buyit.com and
Buyit.com's present and contemplated business operations, potential
acquisitions, management and other factors; that it has had a reasonable
opportunity to review such documentation and discuss it, to the extent
desired, with its legal counsel, directors and executive officers; that it has
had, to the extent desired, the opportunity to ask questions of and receive
responses from the directors and executive officers of Buyit.com, and with the
legal and accounting firms of Buyit.com, with respect to such documentation;
and that to the extent requested, all questions raised have been answered to
Tecon's complete satisfaction.
Section 4
Representations, Warranties and Covenants of Buyit.com
and the Buyit.com Stockholders
Buyit.com and the Buyit.com Stockholders (Sections 4.1, 4.11,
4.12, 4.15 and 4.16 are the only representations of the thatlook.com
Stockholders) severally and not jointly, represent and warrant to, and
covenant with, Tecon as follows:
4.1 Ownership. Buyit.com Stockholders own the Buyit.com
Shares, free and clear of any liens or encumbrances of any type or nature
whatsoever, and each has full right, power and authority to convey the
Buyit.com Shares owned without qualification.
4.2 Corporate Status. Buyit.com is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California and is licensed or qualified as a foreign corporation in all
states or foreign countries and provinces in which the nature of Buyit.com's
business or the character or ownership of Buyit.com properties makes such
licensing or qualification necessary.
4.3 Capitalization. The current pre-Plan authorized
capital stock of Buyit.com consists of 50,000,000 shares of no par value
capital stock, divided into 40,000,000 shares of common stock and 10,000,000
shares of preferred stock. There are 8,500,000 shares of common stock issued
and outstanding, all fully paid and non-assessable; no preferred stock is
outstanding. Except for the subscriptions of the Buyit.com Subscribers
referred to elsewhere herein, and except for 2,810,000 shares of common stock
underlying options granted by Buyit.com under the Buyit.com 1999 Stock Option
Plan, which shall be declared void on the Closing as provided in Section 1.10
hereof, there are no outstanding options, warrants or calls pursuant to which
any person has the right to purchase any other securities of Buyit.com.
Buyit.com has received subscriptions in the total amount of approximately
$386,499, representing the agreement to purchase 257,666 post-Plan shares of
common stock of Tecon, which subscriptions are subject to the acceptance by
Tecon.
4.4 Financial Statements. There are no financial
statements of Buyit.com being furnished to Tecon, and Exhibit D attached
hereto and incorporated herein by reference is a copy of the only asset of
Buyit.com, being an Assignment of certain proprietary rights by Peter Yollin
to Buyit.com; except as set forth in Exhibit E attached hereto and
incorporated herein by reference, Buyit.com has no material liabilities other
than those incurred in the ordinary course of its business, and no debts of
any kind or nature whatsoever to any director, executive officer or
stockholder, excluding compensation due from employment arrangements.
4.5 Undisclosed Liabilities. Buyit.com has no material
liabilities of any nature except to the extent reflected or reserved against
in Exhibit E, whether accrued, absolute, contingent or otherwise, including,
without limitation, tax liabilities and interest due or to become due.
4.6 Interim Changes. Since its inception and as of the
Closing, except as set forth in Exhibit E, there have been no (1) changes in
the financial condition, assets, liabilities or business of Buyit.com, in the
aggregate, have been materially adverse; (2) damages, destruction or loss of
or to the property of Buyit.com, payment of any dividend or other distribution
in respect of the capital stock of Buyit.com, or any direct or indirect
redemption, purchase or other acquisition of any such stock; or (3) increases
paid or agreed to in the compensation, retirement benefits or other
commitments to their employees.
4.7 Title to Property. Buyit.com has good and marketable
title to all properties and assets, real and personal, proprietary or
otherwise, reflected in Exhibit D, and the properties and assets of Buyit.com
are subject to no mortgage, pledge, lien or encumbrance, except as reflected
in the balance sheet or in Exhibit E, with respect to which no default exists.
4.8 Litigation. There is no litigation or proceeding
pending, or to the knowledge of Buyit.com, threatened, against or relating to
Buyit.com or its properties or business, except as set forth in Exhibit E.
Further, no officer, director or person who may be deemed to be an affiliate
of Buyit.com is party to any material legal proceeding which could have an
adverse effect on Buyit.com (financial or otherwise), and none is party to any
action or proceeding wherein any has an interest adverse to Buyit.com.
4.9 Books and Records. From the date of this Plan to the
Closing, the Buyit.com Stockholders will cause Buyit.com to (1) give to Tecon
and its representatives full access during normal business hours to all of its
offices, books, records, contracts and other corporate documents and
properties so that Tecon may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Buyit.com as Tecon may
reasonably request.
4.10 Tax Returns. Buyit.com has filed all federal and
state income or franchise tax returns required to be filed or has received
currently effective extensions of the required filing dates.
4.11 Confidentiality. Until the Closing (and continuously
if there is no Closing), Buyit.com, the Buyit.com Stockholders and their
representatives will keep confidential any information which they obtain from
Tecon concerning its properties, assets and business. If the transactions
contemplated by this Plan are not consummated by April 21, 1999, Buyit.com and
the Buyit.com Stockholders will return to Tecon all written matter with
respect to Tecon obtained by them in connection with the negotiation or
consummation of this Plan.
4.12 Investment Intent. The Buyit.com Stockholders are
acquiring the shares to be exchanged and delivered to them under this Plan for
investment and not with a view to the sale or distribution thereof, and the
Buyit.com Stockholders have no commitment or present intention to liquidate
the Company or to sell or otherwise dispose of the Tecon shares. The
Buyit.com Stockholders shall execute and deliver to Tecon on the Closing an
Investment Letter attached hereto as Exhibit F and incorporated herein by
reference, (i) acknowledging the "unregistered" and "restricted" nature of the
shares of Tecon being received under the Plan in exchange for the Buyit.com
Shares, (ii) the receipt of certain material information regarding Tecon (its
annual and quarterly reports filed with the Securities and Exchange Commission
during the past 12 months and (iii) compromising any claims of any type or
nature whatsoever each may have against Buyit.com respecting the purchase of
any of the securities of Buyit.com or based upon any violation by Buyit.com of
any federal, state or foreign securities laws, rules or regulations up to and
including the date of the Closing.
4.13 Corporate Authority. Buyit.com has full corporate
power and authority to enter into this Plan and to carry out its obligations
hereunder and will deliver to Tecon or its representative at the Closing a
certified copy of resolutions of its Board of Directors authorizing execution
of this Plan by its officers and performance thereunder.
4.14 Due Authorization. Execution of this Plan and
performance by Buyit.com hereunder have been duly authorized by all requisite
corporate action on the part of Buyit.com, and this Plan constitutes a valid
and binding obligation of Buyit.com and performance hereunder will not violate
any provision of the Articles of Incorporation, Bylaws, agreements, mortgages
or other commitments of Buyit.com.
4.15 Environmental Matters. Buyit.com and the Buyit.com
Stockholders have no knowledge of any assertion by any governmental agency or
other regulatory authority of any environmental lien, action or proceeding, or
of any cause for any such lien, action or proceeding related to the business
operations of Buyit.com or its predecessors. In addition, to the best
knowledge of Buyit.com, there are no substances or conditions which may
support a claim or cause of action against Buyit.com or any of its current or
former officers, directors, agents, employees or predecessors, whether by a
governmental agency or body, private party or individual, under any Hazardous
Materials Regulations. "Hazardous Materials" means any oil or petrochemical
products, PCB's, asbestos, urea formaldehyde, flammable explosives,
radioactive materials, solid or hazardous wastes, chemicals, toxic substances
or related materials, including, without limitation, any substances defined as
or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," or "toxic substances" under any applicable federal or
state laws or regulations. "Hazardous Materials Regulations" means any
regulations governing the use, generation, handling, storage, treatment,
disposal or release of hazardous materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Federal Water Pollution Control
Act.
4.16 Access to Information Regarding Tecon. Buyit.com and the
Buyit.com Stockholders acknowledge that they have been delivered copies of
what has been represented to be documentation containing all material
information respecting Tecon and its present and contemplated business
operations, potential acquisitions, management and other factors; that they
have had a reasonable opportunity to review such documentation and discuss it,
to the extent desired, with their legal counsel, directors and executive
officers; that they have had, to the extent desired, the opportunity to ask
questions of and receive responses from the directors and executive officers
of Tecon, and with the legal and accounting firms of Tecon, with respect to
such documentation; and that to the extent requested, all questions raised
have been answered to their complete satisfaction.
Section 5
Conditions Precedent to Obligations of Buyit.com
and the Buyit.com Stockholders
All obligations of Buyit.com and the Buyit.com Stockholders under
this Plan are subject, at their option, to the fulfillment, before or at the
Closing, of each of the following conditions:
5.1 Representations and Warranties True at Closing. The
representations and warranties of Tecon contained in this Plan shall be deemed
to have been made again at and as of the Closing and shall then be true in all
material respects and shall survive the Closing.
5.2 Due Performance. Tecon shall have performed and
complied with all of the terms and conditions required by this Plan to be
performed or complied with by it before the Closing.
5.3 Officers' Certificate. Buyit.com and the Buyit.com
Stockholders shall have been furnished with a certificate signed by the
President of Tecon, in such capacity, attached hereto as Exhibit G and
incorporated herein by reference, dated as of the Closing, certifying (1) that
all representations and warranties of Tecon contained herein are true and
correct; and (2) that since the date of the financial statements (Exhibit B
hereto), there has been no material adverse change in the financial condition,
business or properties of Tecon, taken as a whole.
5.4 Opinion of Counsel of Tecon. Buyit.com and the
Buyit.com Stockholders shall have received an opinion of counsel for Tecon,
dated as of the Closing, to the effect that (1) the representations of
Sections 3.1, 3.2 and 3.11 are correct; (2) except as specified in the
opinion, counsel knows of no inaccuracy in the representations in 3.5, 3.6 or
3.7; and (3) the shares of Tecon to be issued to the Buyit.com Stockholders
under this Plan will, when so issued, be validly issued, fully paid and
non-assessable.
5.5 Assets and Liabilities of Tecon. Unless otherwise
agreed, Tecon shall have no assets and no liabilities at Closing, and all
costs, expenses and fees incident to the Plan shall have been paid.
5.6 Resignation of Directors and Executive Officers and
Designation of New Directors and Executive Officers. The present directors
and executive officers of Tecon shall resign, and shall have designated
nominees of Buyit.com as outlined in Section 1.4 hereof as directors and
executive officers of Tecon to serve in their place and stead, until the next
respective annual meetings of the stockholders and Board of Directors of
Tecon, and until their respective successors shall be elected and qualified or
until their respective prior resignations or terminations.
5.7 Name Change of Tecon and Issuance of Subscribed and
Compensation Shares. Simultaneous with the Closing of this Plan, (i) Tecon
and its majority stockholders shall have adopted such resolutions as are
necessary for the purpose of amending its Articles of Incorporation to change
the name of Tecon to "Buyit.com, Inc."; (ii) and to cause the shares of
common stock outlined in Section 1.5 hereof, to be issued as fully paid and
non-assessable shares.
5.8 Buyit.com Stockholders' Approval. Persons
collectively owning or having rights to acquire not less that 80% of the
Buyit.com Shares shall have adopted, executed and delivered the Plan.
Section 6
Conditions Precedent to Obligations of Tecon
All obligations of Tecon under this Plan are subject, at Tecon's
option, to the fulfillment, before or at the Closing, of each of the following
conditions:
6.1 Representations and Warranties True at Closing. The
representations and warranties of Buyit.com and the Buyit.com Stockholders
contained in this Plan shall be deemed to have been made again at and as of
the Closing and shall then be true in all material respects and shall survive
the Closing.
6.2 Due Performance. Buyit.com and the Buyit.com
Stockholders shall have performed and complied with all of the terms and
conditions required by this Plan to be performed or complied with by them
before the Closing.
6.3 Officers' Certificate. Tecon shall have been
furnished with a certificate signed by the President of Buyit.com, in such
capacity, and personally, attached hereto as Exhibit H and incorporated herein
by reference, dated as of the Closing, certifying (1) that all representations
and warranties of Buyit.com and the Buyit.com Stockholders contained herein
are true and correct; and (2) that since the date of the financial statements
(Exhibit D), there has been no material adverse change in the financial
condition, business or properties of Buyit.com, taken as a whole.
6.4 Stockholders' Approval. Persons collectively owning
or having rights to acquire not less that 80% of the Buyit.com Shares shall
have adopted, executed and delivered the Plan.
6.5 Subscriptions. The Subscription Documents covering
the subscriptions provided in Section 1.5 hereof shall have been delivered and
accepted by Tecon, subject only to the release of funds being held in escrow
for the payment of these subscriptions by the firm of Kaplan, Gottbetter &
Levenson, LLP, of New York, New York.
6.6 Books and Records. The Buyit.com Stockholders or the
Board of Directors of Buyit.com shall have caused Buyit.com to make available
all books and records of Buyit.com, including minute books and stock transfer
records; provided, however, only to the extent requested in writing by Tecon
at Closing.
Section 7
Termination
Prior to Closing, this Plan may be terminated (1) by mutual
consent in writing; (2) by either the directors of Tecon or Buyit.com and the
Buyit.com Stockholders if there has been a material misrepresentation or
material breach of any warranty or covenant by the other party; or (3) by
either the directors of Tecon or Buyit.com and the Buyit.com Stockholders if
the Closing shall not have taken place, unless adjourned to a later date by
mutual consent in writing, by the date fixed in Section 2.
Section 8
General Provisions
8.1 Further Assurances. At any time, and from time to
time, after the Closing, each party will execute such additional instruments
and take such action as may be reasonably requested by the other party to
confirm or perfect title to any property transferred hereunder or otherwise to
carry out the intent and purposes of this Plan.
8.2 Waiver. Any failure on the part of any party hereto
to comply with any of Tecon obligations, agreements or conditions hereunder
may be waived in writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties
hereunder that no broker or finder has acted for it in connection with this
Plan, and agrees to indemnify and hold harmless the other parties against any
fee, loss or expense arising out of claims by brokers or finders employed or
alleged to have been employed by he/she/it.
8.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been given if
delivered in person or sent by prepaid first-class registered or certified
mail, return receipt requested, as follows:
If to Tecon: Suite 205, Hermes Building
455 East 500 South
Salt Lake City, Utah 84111
With a copy to: Leonard W. Burningham, Esq.
455 East 500 South, #205
Salt Lake City, Utah 84111
If to Buyit.com: 4139 Via Marina, Suite 106
Marina Del Rey, California 90292
With a copy to: Leib Orlanski, Esq.
Eighth Floor, East Tower
9100 Wilshire Blvd.
Beverly Hills, California 90212
Stockholders: To the addresses listed on Exhibit A
8.5 Entire Agreement. This Plan constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
8.6 Headings. The section and subsection headings in
this Plan are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Plan.
8.7 Governing Law. This Plan shall be governed by and
construed and enforced in accordance with the laws of the State of Utah,
except to the extent pre-empted by federal law, in which event (and to that
extent only), federal law shall govern.
8.8 Assignment. This Plan shall inure to the benefit of,
and be binding upon, the parties hereto and their successors and assigns.
8.9 Counterparts. This Plan may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
8.10 Default. In the event of any default hereunder, the
prevailing party in any action to enforce the terms and provisions hereof
shall be entitled to recover reasonable attorney's fees and related costs.
IN WITNESS WHEREOF, the parties have executed this Agreement
and Plan of Reorganization effective the day and year first above written.
TECON, INC.
Date: 4/14/99 By /s/Sheryl Ross, President
BUYIT.COM, INC.
Date: 4/15/99 By /s/Sandip Seth, President
BUYIT.COM, INC.
STOCKHOLDERS
Date: 4/15/99 /s/ Tony Yollin
Date: 4/16/99 /s/ Michael D. Reick
Date: 4/15/909 /s/ Peter A. Yollin
Date: 4/15/99 /s/ Sandip Seth
Date: 4/15/99 /s/ Sanjiv Seth
Date: 4/15/99 /s/ Edgar Cayce
Date: 4/15/99 /s/ Brad J. Frederick
EXHIBIT A
STOCKHOLDERS OF BUYIT.COM, INC.
Number of Shares of
Number of Shares Tecon's
Owned of to be
Name and Address Buyit.com, Inc. Received in Exchange
Tony Yollin 300,000 300,000
831 Venezia
Venice, CA 90291
Diana Brookes 40,000 40,000
P.O. Box 570337
Tarzana, CA 91357
Mitch Reiner 16,667 16,667
11150 W. Olympic #1160
Los Angeles, CA 90064
Brad Frederick 100,000 100,000
4139 Via Marina #104
Marina Del Rey, CA 90292
Dick Khatchikian 33,333 33,333
C/O Peter Yollin
4139 Via Marina #106
Marina Del Rey, CA 90292
Edgar Cayce 1,000,000 1,000,000
4139 Via Marina #104
Marina Del Rey, CA 90292
Evans & Valarie Cayce 25,000 25,000
540 Highland Crest
Hurst TX 76054
Diane Taylor & Davidson Cayce 50,000 50,000
917 S. Oriole Circle #101
Virginia Beach, VA 23451
Christopher Cayce 25,000 25,000
(c/o Evans Cayce)
540 Highland Crest
Hurst, TX 76054
Edgar & Kathryn Cayce 10,000 10,000
1565 Michigan Ave.
Virginia Beach, VA 23453
Walter & Phyllis Davidson 10,000 10,000
2604 Boush Qtr
Virginia Beach, VA 23452
Margaret Taylor 10,000 10,000
7933 Pebblebrook Dr.
Watauga, TX 76148-1520
Joseph & Gayle Schwatzer 10,000 10,000
(c/o Edgar Cayce
1565 Michigan Ave
Virginia Beach, VA 23453
Jacklynn Hudson 50,000 50,000
241 South Doheny, #1
Beverly Hills, CA 90211
Daniel & Pamela Davidson 10,000 10,000
2030 Jewell Hollow
Luray VA 22835
Michael D. Reick 1,000,000 1,000,000
4139 Via Marina #104
Marina Del Rey, CA 90292
Harold W. Reick 100,000 100,000
1653 Beard Drive SE
Grand Rapids, MI 49506
Kristen L. Reick 100,000 100,000
211 Delia Place
Rear Apartment
Cliffside Park, NJ 07010
Peter A. Yollin 3,705,000 3,705,000
4139 Via Marina #106
Marina Del Rey, CA 90292
Sanjiv Seth 270,000 270,000
c/o Coutts & Co.
440 Strand
London WC2R OQS
England
Loreena Yollin 100,000 100,000
1828 12th Street #4
Manhattan Beach, CA 90266
Maxwell Yollin 25,000 25,000
4139 Via Marina #106
Marina Del Rey, CA 90292
Matt Seegers 10,000 10,000
12553 Venice Blvd, Unit B
Los Angeles, CA 90066
Sandip Seth 500,000 500,000
17 Bell Canyon
Bell Canyon, CA 91307
Communication Technology 1,000,000 1,000,000
Investments Ltd.
P. O. Box 860
11 Bath Street
St. Helier, Jersey AE4 0YZ
Channel Islands, U.K.
Total: 8,500,000 8,500,000
<PAGE>
SUBSCRIBERS OF BUYIT.COM, INC.
Number of Subscribed Shares
of Tecon to be
Received
Subscriber in Exchange
Ann Marie Lee 1,000
1244 N. Hill Avenue
Pasadena, CA 91104
Christopher R. Jacobs 10,000
10277 Orion Avenue, Suite #2
Los Angeles, CA 90064
Sonya Edelson 3,333
178 Altamont Avenue
Tarrytown, NY 10591
Alaka Kapoor 6,667
245 W. Loraine Street #241
Glendale, CA 91202
Alexia Baum 1,333
72 Norman Avenue
Brooklyn, NY 11222
Alice A. Wheatley 1,700
15820 Loma Vista Avenue
Los Gatos, CA 95032
Andrea Evenson 333
749 Oxford Avenue
Marina Del Rey, CA 90392
Ardavan Davaran 666
1900 Drake Street
Oakland, CA 94611
Arjun Khosla 5,333
c/o Coutts & Co.
440 Strand
London WC2R 0QS England
Avinash & Priya Vazirani 10,000
5 Wentwoth Road
London NW11 England
Bruce & Sarah Tamlyn 3,000
P. O. Box 2652
Silver Bay, NY 12874
Carolyn Currier 1,000
221 7th Street
Manhattan Beach, CA 90266
Cary Filsinger 2,500
950 N. Kings Road #254
Los Angeles, CA 90069
Catherine Lawrence 2,000
3 Santa Rosa Court
Manhattan Beach, CA 90266
Charley Lang 1,000
1671 Angelus Avenue
Los Angeles, CA 90026
Colleen McClain & Jeremy 1,000
817 Crestmore Place
Venice, CA 90292
Couldip Lala 10,000
Hilda Investments, Ltd.
3rd Floor, Les Cascades
Port Louis, Mauritius
Craig Moore 10,000
P. O. Box 3053
La Habra, CA 90632
Craig Wasserman 16,667
11711 Broken Bough Circle
Houston, TX
Cynthia Yelvington Sher 1,335
34 Appaloosa Lane
Bell Canyon, CA 91307
David Harvey 667
72 Norman Avenue
Brooklyn, NY 11222
Debra Jo Berman 500
6205 Ocean Front Walk
Play Del Rey, CA 90293
Diane Hogan 333
725 S. Barrington #104
Los Angeles, CA 90049
Eric Lehman 1,000
1200 N. Doheny Drive
Los Angeles, CA 90069
Elaine Spierer & Robert W. Douroux 6,667
217 Windward Avenue
Venice, CA 90291
Gary W. Nugent 6,667
411 Linnie Canal
Venice, CA 90291
Gaspar La Duca 1,000
1117 S. Stanley Avenue
Los Angeles, CA 90019
Greg Zakharin 2,000
710 Wilshire Blvd., #225
Santa Monica, CA 90401
Gwenn & Luciano Guerrero 200
6623 Craner Avenue
North Hollywood, CA 91606
Herschel Weisman 500
5504 Calhoun Avenue
Sherman Oaks, Ca 91401
James H. Ring, Jr. 1,000
2657 Larmar Road
Los Angeles, CA 90068
James Mellon 2,000
4244 Bluebell Avenue
Studio City, CA 91604
Jan Osenberg 3,333
2503 Eastern Canal
Venice, CA 90291
Nourie Enterprise 12,250
2501 Broadway
Santa Monica, CA 90404
Jean Albright 200
6847 Haskel #4
Van Nuys, CA 91406
Jeff & Jessie Marin 1,000
13508 Moorpark Street #1
Sherman Oaks, CA 91423
John Berkson 1,000
1060 S. Orangegrove Avenue
Los Angeles, CA 90019
Josi Mariposa 5,000
809 1/2 Coeur D'Alene
Venice, CA 90291
Karl & Audrey Osterlund 3,000
38 Pine Plain Road
Wellesley, MA 02481
Katherine Paspalis 2,000
2324 32nd Street
Santa Monica, CA 90404
Kathryn McGuire 600
12843 Walsh Avenue
Los Angeles, CA 90066
Kevin & Jean Byrne 666
160 Adams Avenue
River Edge, NJ 07661
Ken Adam 1,000
225 S. Sepulveda #250
Manhattan Beach, CA 90266
Lillian Roth 2,000
403 Euclid Street
Santa Monica, CA 90402
Lissa Mitchell 670
27320 Escondido Beach Road
Malibu, CA 90265
Lucille Chaille 400
708 Fairview Avenue
South Pasadena, CA 91030
Mark Tessier 333
700 Palms Blvd.
Venice, CA 90291
Martin Anderson 3,000
993 Woodlawn Drive
Thousand Oaks, CA 91360
Mary Hogan 1,000
4139 Via Marin #306
Marina Del Rey, CA 90292
Matt Goeglien 1,333
500 Maryland Street
El Segundo, CA 90245
Mayra Weisman 3,500
1259 Tamaris K Lane
Boulder City, NV 89005
Michael E. Nondaraske 5,000
11150 W. Olympic Blvd. #1160
West Los Angeles, CA 90064
Michael Shapiro 2,000
75 Walnut Road
North Kingstown, RI 02852
Mitchel Wallman 5,000
10631 Buterfield Road
Los Angeles, CA 90064
Mitchell Reiner 10,000
11150 W. Olympic #1160
Los Angeles, CA 90064
Nancy Danno 667
7605 Pomelo Drive
West Hills, CA 91304
Neal & Kim Sullivan 300
2616182nd Place
Redondo Beach, CA 90278
Neelu & Bisham Matai 5,000
17 Bell Canyon
Bell Canyon, CA 91307
Niaz Ali Khan 8,000
P. O. Box 747
Woodland Hills, CA 91365
Pandro Socolow 8,000
11664 National Blvd. #326
Los Angeles, CA 90064
Pat Kandel 500
7528 W 85th Street
Playa Del Rey, CA 90293
Paul & Dina Walsleben 2,000
4169 Vinton Avenue
Culver City, CA 90232
Peter Bergman 667
460 Howland Canal
Venice, CA 90291
Phil Canazzaro 1,000
1064 Angelo Drive
Beverly Hills, CA 90210
Raymond Albright 200
6847 Haskell Avenue #4
Van Nuys, CA 91406
Richard L. Johnson 5,000
289 So Barrington #309
Los Angeles, CA 90049
Richard Tamlyn 2,000
14820 McCorrmick St.
Sherman Oaks, CA 91411
Robert J. LaDuca 1,000
2657 Larmar Road
Los Angeles, CA 90068
Robert Scott Hite 1,000
3214 Cardiff Avenue
Los Angeles, CA 90034
Roberta Bennett 1,700
11835 Olympic Blvd. #1155
Los Angeles, CA 90064
Ronald & Mae Mitchell 1,000
1993 Calle Bogota
Rowland Heights, CA 91748
Ronda West 1,000
2917 Manhattan Avenue
Manhattan Beach, CA 90266
S.M. Styczenski 200
7141 Delongpre #5
Los Angeles, CA 90046
Scott Storey 700
428 Linnie Canal
Venice, CA 90291
Shan P. Albert 300
515 F Tenth Avenue N.
Lake Worth, FL 33460
Stephen Koch 2,000
319 Euclid
Santa Monica, CA 90402
Stephen Mallard 10,000
539 24th Street
Manhattan Beach, CA 90266
Stephen Reissman 5,000
Reissman Family Trust
4551 Glencoe Avenue
Marina Del Rey, CA 90292
Stephen Staso 5,000
414 2nd Street, #313
Hermosa Beach, CA 90254
Susan Newman 667
11472 Rancho Pocono Drive
Riverside, CA 92505
Susan Vaughan 1,000
1621 Centinella #8
Santa Monica, CA 90404
Theresa Conrow 700
13078 Mindanao Way #106
Marina Del Rey, CA 90292
Thomas Strain 2,000
409 Winnemac
Park Forrest, IL
Tom Steuer 2,000
1245 N. Doheny Drive
Los Angeles, CA 90069
Tony Danno 379
831 Venezia
Venice, CA 90292
Tyrone Bergman 2,000
2409 Cloy Avenue
Venice, CA 90291
Yatin Mody 1,000
29310 Oakpark Drive
Agoura Hills, CA 91301
Yuman Pirzada 10,000
P. O. Box 7052
Alhambra, CA 91802
<PAGE>
EXHIBIT B
TECON, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1998 AND 1997
AND THE PERIOD ENDED DECEMBER 31, 1998
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Tecon, Inc.[a development stage company]
We have audited the accompanying balance sheet of Tecon, Inc. [a development
stage company] as of March 31, 1998, and the related statements of operations,
stockholders' deficit, and cash flows for the years ended March 31, 1998 and
1997, and from the Period of Reactivation [January 18, 1994] through March 31,
1998. 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 audits provide 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 Tecon, Inc. [a development
stage company] as of March 31, 1998, and the results of operations and cash
flows for the years ended March 31, 1998 and 1997, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has accumulated losses from
operations, has no assets, and has a net working capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Mantyla, McReynolds and Associates
Salt Lake City, Utah
July 15, 1998
<TABLE>
Tecon,Inc.
[A Development Stage Company]
Balance Sheet
March 31,1998
<CAPTION>
ASSETS
<S> <C>
Assets $ -0-
Total Assets $ -0-
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Current Liabilities:
Payable to Stockholders - NOTE 8 1,962
Total Liabilities 1,962
Stockholders' Deficit:
Capital Stock -- 300,000,000 shares authorized having a
par value of $.001 per share; 1,199,962 shares issued
and outstanding - NOTE 9 1,200
Additional Paid-in Capital 2,114,138
Accumulated Deficit (2,117,300)
Total Stockholders' Deficit (1,962)
Total Liabilities and Stockholders' Deficit $ -0-
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Tecon,lnc.
[A Development Stage Company]
Statements of Operations
For the Years Ended March 31, 1998 and 1997
<CAPTION>
Reactivation
through
March 31,
1998 1997 1998
<S> <C> <C> <C>
Revenues $ -0- $ -0- $ -0-
General & Administrative Expenses 2,286 276 10,862
Operating Loss (2,286) (276) (10,862)
Net Loss Before Income Taxes (2,286) (276) (10,862)
Current Year Provision for Income Taxes -0- -0- -0-
Net Loss $2,286) $(276) $(10,862)
Loss Per Share $ (.01) $ (.01) $ (.01)
Weighted Average Shares Outstanding 799,962 599,962 483,711
</TABLE>
See accompanying note to financial statements.
<TABLE>
Tecon,lnc.
[A Development Stage Company]
Statements of Stockholders' Deficit
For the Years Ended March 31, 1998 and 1997
<CAPTION>
Additional Net
Common Common Paid-in Accumulated Stockholders'
Shares Stock Capital Deficit Deficit
<S> <C> <C> <C> <C> <C>
Balance, January 18,
1994, date 7,498,701 $ 7,499 $2,098,939 $(2,106,438) $ -0-
of Reinstatement
Issued stock for cash
and services, January
20, 1994 8,000,000 8,000 8,000
Net loss for the
Year Ended March
31, 1994 (8,000) (8,000)
Balance, March 31,
1994 15,498,701 $15,499 $2,098,939 $(2,114,438) $ -0-
Net loss for the
Year Ended
March 31, 1995 -0- -0-
Balance, March 31,
1995 15,498,701 $15,499 $2,098,939 $(2,114,438) $ -0-
Reverse split
(51.662 for 1),
November 20,1995 (15,198,739)(15,199) 15,199 -0-
Issued 300,000
shares of
common stock
to directors for
services (3/4/96) 300,000 300 300
Net loss for the
Year Ended
March 31, 1996 (300) (300)
Balance, March 31,
1996 599,962 $ 600 $2,114,138 $(2,114,738) $ -0-
Net loss for the
Year Ended
March 31, 1997 (276) (276)
Balance, March 31,
1997 599,962 600 2,114,138 (2,115,014) (276)
Issued 300,000
shares of common
stock to directors for
services (9/18/97) 300,000 300 300
Issued 300,000
shares of common
stock to directors for
services (1/14/98) 300,000 300 300
Net loss for the Year
Ended March 31, 1998 (2,286) (2,286)
Balance, March 31,
1998 1,199,962 $1,200 2,114,138 $(2,117,300) $(1,962)
</TABLE>
See accompanying notes to financial statements.
<TABLE>
Tecon,lnc.
[A Development Stage Company]
Statements of Cash Flows
For the Years Ended March 31, 1998 and 1997
<CAPTION>
Reactivation
through
March 31,
1998 1997 1998
<S> <C> <C> <C>
Cash Flows Provided by(Used for)
Operating Activities
Net Loss $(2,286) $ (276) $ (10,862)
Adjustments to reconcile net
income to net cash provided by
operating activities:
Issued stock for director
and legal fees 600 7,400
Increase in shareholder loan 1,686 276 1,962
Net Cash Used for
Operating Activities -0- -0- (1,500)
Cash Flows Provided by Financing
Activities
Issued stock for cash 1,500
Net Increase/(Decrease)
in Cash -0- -0- -0-
Beginning Cash Balance -0- -0- -0-
Ending Cash Balance $ -0- $ -0- $ -0-
Supplemental Disclosure of
Cash Flow Information:
Cash paid during the year
for interest $ -0- $ -0- $ -0-
Cash paid during the year
for income taxes $ -0- $ -0- $ -0-
</TABLE>
See accompanying notes to financial statements.
Tecon, Inc.
[A Development Stage Company]
Notes to Financial Statements
March 31, 1998
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
Tecon, Inc. [formerly known as B. U. D. Corp.] incorporated under
the laws of the State of Utah in 1985. The Company changed its
name to Tecon, Inc. after acquiring Tecon, Inc., a Washington
corporation in August 1986. The company engaged in research,
development, assembly, and sale of computer video imaging, multi-
user multi-tasking systems and computer board products. In 1992,
the Company assigned all of its assets to Precision Digital
Images, Corporation [PDI], a creditor, in partial satisfaction of
debts owed and ceased all operations. Since that time the Company
was left dormant until January 18, 1994 when it was reactivated.
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles. The
following summarizes the more significant of such policies:
(b) Income Taxes
Effective April 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109 [the
Statement], Accounting for Income Taxes. The Statement requires
an asset and liability approach for financial accounting and
reporting for income taxes, and the recognition of deferred tax
assets and liabilities for the temporary differences between the
financial reporting bases and tax bases of the Company's assets
and liabilities at enacted tax rates expected to be in effect when
such amounts are realized or settled. The cumulative effect of
this change in accounting for income taxes as of March 31, 1998 is
$0 due to the valuation allowance established as described below.
(c) Net Loss Per Common Share
Net loss per common share is based on the weighted-average number
of shares outstanding.
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company
considers cash on deposit in the bank to be cash. The Company had
$0 cash at March 31, 1998.
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[continued]
(e) Use of Estimates in Preparation of Financial Statements
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.
NOTE 2 LIQUIDITY/GOING CONCERN
The Company has accumulated losses since inception through March
31, 1998 amounting to $2,117,300, has no assets, and has a net
working capital deficiency at March 31, 1998. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
Management plans include finding a well-capitalized merger
candidate to recommence its operations. The consolidated
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE 3 INCOME TAXES
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for
Income Taxes, as of April 1, 1993. Prior years' consolidated
financial statements have not been restated to apply the
provisions of the Statement. No provision has been made for
income taxes in the consolidated financial statements because the
Company has accumulated substantial losses since inception.
The tax effects of temporary differences that give rise to
significant portions of the deferred tax asset at March 31, 1998
have no impact on the financial position of the Company. A
valuation allowance is provided when it is more likely than not
that some portion of the deferred tax asset will not be realized.
Because of the lack of taxable earnings history, the Company has
established a valuation allowance for all future deductible
temporary differences.
NOTE 4 RELATED-PARTY TRANSACTIONS
During the fiscal years ended March 31, 1998, and 1997, a
shareholder and consultant paid general and administrative
expenses on behalf of the Company totaling $1,686 and $276,
respectively. The unsecured loan bears no interest and is due on
demand.
NOTE 5 ISSUANCE OF COMMON STOCK
For the year ended March 31, 1998, the Company issued 600,000
shares of common stock as payment for fees for its directors.
<PAGE>
<TABLE>
TECON, INC.
BALANCE SHEET
December 31, 1998
<CAPTION>
12/31/98
[Unaudited]
<S> <C>
ASSETS
Total Current Assets $ 0
Total Assets $ 0
LIABILITIES & EQUITY
Current Liabilities:
Loans from stockholders $ 4,807
Total Liabilities 4,807
Stockholders' Deficit:
Capital Stock--300,000,000 shares
authorized having a par value of
$.001 per share; 1,199,962
shares issued and outstanding 1,200
Additional Paid-in Capital 2,114,138
Accumulated Deficit (2,120,145)
Total Stockholders' Deficit (4,807)
Total Liabilities and Stockholders'
Deficit 0
</TABLE>
NOTE TO FINANCIAL STATEMENTS:
Interim financial statements reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results for the periods.
These financial statements conform with the requirements for interim financial
statements and consequently do not include all the disclosures normally
required by generally accepted accounting principles.
<TABLE>
TECON, INC.
STATEMENTS OF OPERATIONS
For the Three and Nine Month Periods Ended December 31, 1998 and 1997
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
12/31/98 12/31/97 12/31/98 12/31/97
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
REVENUE
Revenue from
Operations $ 0 $ 0 $ 0 $ 0
Total Revenue 0 0 0 0
General and
Administrative
Expenses 493 869 2,516 1,334
Net Income
Before Taxes (493) (869) (2,516) (1,334)
Income/Franchise Taxes 149 0 149 0
Net Loss (642) (869) (2,665) (1,334)
Loss Per Share (0.01) (0.01) (0.01) (0.01)
Weighted Average
Shares Outstanding 1,199,962 899,962 1,199,962 899,962
</TABLE>
<TABLE>
TECON, INC.
STATEMENTS OF CASH FLOWS
For the Three and Nine Month Periods Ended December 31, 1998 and 1997
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
12/31/98 12/31/97 12/31/98 12/31/97
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
Cash Flows Used For
Operating Activities
Net Loss $ (642) $ (869) $ (2,665) $ (1,334)
Adjustments to
reconcile net
loss to net cash
used in operating
activities:
Issued stock to
directors 0 300
Increase/(Decrease)
in loans from
shareholder 642 869 2,665 1,034
Net Cash Used For
Operating Activities 0 0 0 0
Cash Flows Provided by
Financing Activities 0 0 0 0
Net Increase
In Cash 0 0 0 0
Beginning
Cash Balance 0 0 0 0
Ending Cash
Balance $ 0 $ 0 $ 0 $ 0
</TABLE>
<PAGE>
EXHIBIT C
None.
<PAGE>
EXHIBIT D
BUYIT.COM, INC.
LIST OF ONLY ASSETS OF BUYIT.COM
[Letterhead of Peter Yollin]
March 31, 1999
To: BuyIt.com, Inc.
The undersigned, Peter Yollin, hereby assigns to BuyIt.com, Inc., a California
corporation, all of his right, title and interest in and the technology
related to a system for establishing an Internet Auction Business.
Very truly yours,
/s/ Peter A. Yollin
<PAGE>
EXHIBIT E
None.
<PAGE>
EXHIBIT F
Tecon, Inc.
Suite 205, 455 East 500 South
Salt Lake City, Utah 84111
Re: Exchange of common stock and subscriptions to purchase
common stock of Buyit.com, Inc., a California
corporation ("Buyit.com"), for shares of Tecon, Inc.,
a Utah corporation ("Tecon" or the "Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Agreement and Plan of Reorganization (the
"Plan") between the undersigned, Buyit.com, the other equity interest holders
of Buyit.com and Tecon, I acknowledge that I have approved this exchange; that
I am aware of all of the terms and conditions of the Plan; and that I have
received and personally reviewed a copy of the Plan and any and all material
documents regarding the Company, including, but not limited to its 10-KSB
Annual Report, its 10-QSB Quarterly Reports and its S-8 Registration
Statement, all filed with the Securities and Exchange Commission during the
past 12 months. I represent and warrant that I have sufficient knowledge and
experience to understand the nature of the exchange and am fully capable of
bearing the economic risk of the loss of my entire cost basis.
I further understand that immediately prior to the completion of
the Plan, Tecon had no assets and no liabilities, of any measurable value, and
that in actuality, the completion of the Plan and the exchange of my shares of
Buyit.com for shares of Tecon results in a decrease in the actual percentage
of ownership that my shares of Buyit.com represented in Buyit.com prior to the
completion of the Plan.
I understand that you have and will make books and records of your
Company available to me for my inspection in connection with the contemplated
exchange of my shares, options or warrants, and that I have been encouraged to
review the information and ask any questions I may have concerning the
information of any director or officer of the Company or of the legal and the
accounting firms for the Company.
I also understand that I must bear the economic risk of ownership
of any of the Tecon shares for a long period of time, the minimum of which
will be one (1) year, as these shares are "unregistered" shares and may not be
sold unless any subsequent offer or sale is registered with the United States
Securities and Exchange Commission or otherwise exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), or other
applicable laws, rules and regulations.
I intend that you rely on all of my representations made herein
and those in the personal questionnaire (if applicable) I provided to
Buyit.com for use by Tecon as they are made to induce you to issue me the
shares of Tecon under the Plan, and I further represent (of my personal
knowledge or by virtue of my reliance on one or more personal
representatives), and agree as follows, to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the phrase
"for investment purposes and not with a view toward further distribution";
3. That I understand the meaning of "unregistered" shares and
know that they are not freely tradeable;
4. That any stock certificate issued by you to me in connection
with the shares being acquired shall be imprinted with a legend restricting
the sale, assignment, hypothecation or other disposition unless it can be made
in accordance with applicable laws, rules and regulations;
5. I agree that the stock transfer records of your Company
shall reflect that I have requested the Company not to effect any transfer of
any stock certificate representing any of the shares being acquired unless I
shall first have obtained an opinion of legal counsel to the effect that the
shares may be sold in accordance with applicable laws, rules and regulations,
and I understand that any opinion must be from legal counsel satisfactory to
the Company and, regardless of any opinion, I understand that the exemption
covered by any opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the shares,
options or warrants being acquired except as may be pursuant to any applicable
laws, rules and regulations;
7. I fully understand that my shares which are being exchanged
for shares of the Company are "risk capital," and I am fully capable of
bearing the economic risks attendant to this investment, without
qualification; and
8. I also understand that without approval of counsel for
Tecon, all shares of Tecon to be issued and delivered to me in exchange for my
shares of Buyit.com shall be represented by one certificate only and which
such certificate shall be imprinted with the following legend or a reasonable
facsimile thereof on the front and reverse sides thereof:
The shares, options or warrants of stock represented
by this certificate have not been registered under the
Securities Act of 1933, as amended, and may not be
sold or otherwise transferred unless compliance with
the registration provisions of such Act has been made
or unless availability of an exemption from such
registration provisions has been established, or
unless sold pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder setting forth all
relevant facts relating to the request. Tecon will attempt to accommodate any
stockholders' request where Tecon views the request is made for valid business
or personal reasons so long as in the sole discretion of Tecon, the granting
of the request will not facilitate a "public" distribution of unregistered
shares of Tecon.
You are requested and instructed to issue a stock certificate as
follows, to-wit:
Date: 4/15/99 /s/ Tony Yollin
300,000 shares
Date: 4/16/99 /s/ Michael D. Reick
1,000,000 shares
Date: 4/15/909 /s/ Peter A. Yollin
3,705,000 shares
Date: 4/15/99 /s/ Sandip Seth
500,000 shares
Date: 4/15/99 /s/ Sanjiv Seth
270,000 shares
Date: 4/15/99 /s/ Edgar Cayce
1,000,000 shares
Date: 4/15/99 /s/ Brad J. Frederick
100,000 shares
<PAGE>
EXHIBIT G
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Tecon, Inc., a Utah corporation
("Tecon"), represents and warrants the following as required by the Agreement
and Plan of Reorganization (the "Plan") between Tecon and Buyit.com, Inc., a
California corporation ("Buyit.com"), and the Buyit.com Stockholders, to-wit:
1. That the undersigned is the President of Tecon and has been
authorized and empowered by its Board of Directors to execute and deliver this
Certificate to Buyit.com and the Buyit.com Stockholders;
2. Based upon the personal knowledge, information and belief of
the undersigned and opinions of counsel for Tecon regarding the Plan:
(i) All representations and warranties of Tecon contained
within the Plan are true and correct;
(ii) Tecon has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of Tecon as set forth in its
audited financial statements for the years ended March
31, 1998 and 1997, and the period ended December 31,
1998, except as set forth in Exhibit C to the Plan.
TECON, INC.
By /s/ Sheryl Ross, President
<PAGE>
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Buyit.com, Inc., a California
corporation ("Buyit.com"), represents and warrants the following as required
by the Agreement and Plan of Reorganization (the "Plan") between Buyit.com,
the Buyit.com Stockholders and Tecon, Inc., a Utah corporation ("Tecon"), to-
wit:
1. That he is the President of Buyit.com and has been
authorized and empowered by its Board of Directors to execute and deliver this
Certificate to Tecon;
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of Buyit.com
contained within the Plan are true and correct;
(ii) Buyit.com has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of Buyit.com, which has only one
asset as described in Exhibit D, and no liabilities
except as set forth in Exhibit E to the Plan.
BUYIT.COM, INC.
By /s/ Sandip Seth, President
/s/ Sandip Seth, Personally
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
TECON, INC.
Pursuant to the provisions of Section 16-10a-1006 of the Utah
Revised Business Corporation Act, the undersigned corporation hereby adopts
the following Articles of Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is Tecon, Inc. (the
"Corporation").
SECOND: The following amendment to the Articles of
Incorporation of the Corporation was duly adopted by the stockholders of the
Corporation at a meeting held May 3, 1999, in the manner prescribed by the
Utah Revised Business Corporation Act, to-wit:
ARTICLE I
The name of this Corporation is "BUYIT.COM, INC."
THIRD: The amendment does not provide for any
reclassification of the outstanding securities of the Corporation.
FOURTH: The amendment changing Article I to the Articles of
Incorporation was adopted by the stockholders at the meeting held May 3, 1999,
in accordance with the Utah Revised Business Corporation Act.
FIFTH: This amendment was not adopted by the incorporators or
the Board of Directors without stockholder action.
SIXTH: (a) The designation and number of outstanding shares
of each class entitled to vote thereon as a class were as follows, to-wit:
CLASS NUMBER OF SHARES
Common 8,074,962
(b) The number of shares voted for the amendment to
change the name of the Corporation was 8,074,962, with none opposing and none
abstaining.
IN WITNESS WHEREOF, the undersigned President and Secretary,
having been thereunto duly authorized, have executed the foregoing Articles of
Amendment for the Corporation under the penalties of perjury this 3rd day of
May, 1999.
TECON, INC.
By /s/ Sandip Seth, President
Attest:
/s/ Peter A. Yollin, Secretary
TECON, INC.
May 6, 1999
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
TECON, INC.
TO BE HELD MAY 3, 1999
TO ALL STOCKHOLDERS:
NOTICE is hereby given that a special meeting of the stockholders
of Tecon, Inc. has been called to be held on May 3, 1999, at the principal
executive offices of the Company at 4139 Via Marina, Suite #106, Marina Del
Rey, California 90292 (Telephone: 310-827-1728), at the hour 10:00 o'clock
a.m., local time, for the following purposes:
1. To amend the Articles of Incorporation of the Company to
change the name of the Company to "Buyit.com, Inc.," and to allow the Company
to take advantage of the provisions of the Utah Revised Business Corporation
Act respecting the taking of action by written consent of stockholders in lieu
of a meeting where the consenting holders of outstanding shares having not
less than the minimum number of votes that would be necessary to authorize or
take the action at a meeting at which all shares entitled to vote thereof were
present and voted had consented in writing to the action.
2. To conduct such other business as may properly come before
the meeting.
The Board of Directors of Tecon, Inc. has set 5:00 o'clock p.m. on
April 23, 1999, as the record date for the purpose of determining the
stockholders of the Company who shall be entitled to notice of the meeting.
No proxies are being solicited and none are requested. Current members of
management and others who own sufficient voting securities to ensure the
adoption of items 1 and 2 have agreed to vote in favor of their adoption.
The Company recently completed a reorganization pursuant to which
it will acquire all of the outstanding voting securities of Buyit.com, Inc., a
California corporation ("Buyit.com"), which owns certain technology to
establish an online Internet auction business. An 8-K Current Report dated
April 16, 1999, describing the reorganization and providing information
regarding new management and Buyit.com will be filed with the Securities and
Exchange Commission on or about May 3, 1999, which may be viewed on the
Securities and Exchange Commission's web site, www.sec.gov, or a copy of which
may be obtained from the Company.
Marina Del Rey, California
TECON, INC.
BY ORDER OF THE BOARD OF DIRECTORS
