Lyle B. Stewart, P.C.
3751 South Quebec Street
Denver, Colorado 80237
Telephone: 303-267-0920
Fax: 303-267-0922
May 12, 2000
United States Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549-1004
Re: Consolidated Capital of North America, Inc.
Commission File No. 0-21821
Definitive Proxy Material
Dear Sir or Madam:
On behalf of my client, Consolidated Capital of North America, Inc.
(the "Corporation"), and pursuant to Rule 101(a)(1)(iii) under Regulation S-T
promulgated by the U.S. Securities and Exchange Commission, we are filing
herewith the definitive copy of the Proxy Statement and form of Proxy Card
relating to the upcoming special meeting of the Corporation on June 5, 2000. The
form of Proxy Card is attached at the end of the enclosed definitive Proxy
Statement. The Corporation intends to release the definitive Proxy Statement to
its shareholders on or about May 12, 2000.
If you have any questions with respect to this filing or if comments
are to be made regarding the enclosed material, please contact the undersigned
at the telephone number above.
Very truly yours,
/s/ Lyle B. Stewart
-----------------------
Lyle B. Stewart
<PAGE>
SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential,for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a- I I (c) or ss.240.14a- 12
Consolidated Capital of North America, Inc.
-------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0- 11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0- 11 (Set forth in the
amount on which the filing fee is calculated and state how it
was determined)
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0- 11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
410 17th Street, Suite 400
Denver, Colorado 80202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on June 5, 2000
To the Shareholders of Consolidated Capital of North America, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting (the "Special Meeting") of
Shareholders of Consolidated Capital of North America, Inc., a Colorado
corporation (the "Company"), will be held at 4:00 p.m. local time, on June 5,
2000, at 410 17th Street, Suite 400, Denver Colorado, for the following
purposes:
(1) To approve the proposal of the Board of Directors to amend the Articles
of Incorporation of the Company to increase the number of the authorized
shares of the Company's common stock from 200,000,000 to 850,000,000; and
(2) To transact such other business as may properly come before the Special
Meeting and any adjournments thereof.
In accordance with the provisions of the Company's By-laws, the Board of
Directors has fixed the close of business on May 5, 2000 as the date for
determining the shareholders of record entitled to receive notice of, and to
vote at, the Special Meeting and any adjournments thereof. A list of
stockholders entitled to vote at the Special Meeting will be available for
inspection at the offices of the Company and at the Special Meeting.
SHAREHOLDERS ARE URGED TO FILL IN, DATE, SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY IN THE ACCOMPANYING PREPAID ENVELOPE.
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
the Company. All shareholders are cordially invited to attend the Special
Meeting in person. Whether you plan to attend or not, please date, sign and
return the accompanying proxy in the enclosed return envelope, to which no
postage need be affixed if mailed in the United States. The giving of a proxy
will not affect your right to vote in person if you attend the Special
Meeting.
May 10, 2000 By Order of the Board of Directors,
Donald R. Jackson, Secretary
<PAGE>
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
410 17th Street, Suite 400
Denver, Colorado 80202
(888) 313-8051
PROXY STATEMENT
Special Meeting of Shareholders
To Be Held on June 5, 2000
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Consolidated Capital of North
America, Inc. (the "Company") for use at the Company's Special Meeting of
Shareholders to be held at 4:00 p.m. local time, on June 5, 2000, at 410 17th
Street, Suite 400, and at any adjournment thereof (the "Special Meeting").
All shares represented at the Special Meeting by proxies will be voted
provided that such proxies are properly signed and dated. In cases where a
choice is indicated, the shares represented will be voted in accordance with the
specifications so made. In cases where no specifications are made, the shares
represented will be voted FOR the proposed amendment to the Articles of
Incorporation, and at the discretion of the proxy holders on any other matter
that may properly come before the meeting or any adjournment thereof.
Any shareholder executing and returning a proxy has the power to revoke
such proxy at any time prior to the voting thereof by: (a) written notice to the
Secretary of the Company at the Company's headquarters delivered prior to the
commencement of the Special Meeting, (b) providing a signed proxy bearing a
later date, or (c) appearing in person and voting at the Special Meeting.
The Company will pay all of the costs of preparing, assembling and
mailing the form of proxy, Proxy Statement and other materials which may be sent
to the shareholders in connection with this solicitation, as well as any costs
of soliciting proxies in the accompanying form. Solicitation will be made
through the mail, in person, and by telecommunications, by regularly employed
officers and other employees of the Company, who will receive no additional
compensation for such. The Company expects to request brokers and nominees who
hold stock in their names to furnish this proxy material to their customers and
to solicit proxies from them. The Company will reimburse such brokers and
nominees for their out-of-pocket and reasonable clerical expenses in connection
therewith. The Company may retain the services of a professional proxy
solicitation firm, in which case the Company will pay such firm its standard
fees for such services and reimburse such firm for its out-of-pocket expenses.
QUORUM AND VOTING RIGHTS
Voting rights at the Special Meeting of Shareholders are vested in the
holders of the Company's shares of common stock, par value $.0001 per share (the
"Common Stock"), with each share entitled to one vote. Only holders of record of
shares of Common Stock at the close of business on May 5, 2000 are entitled to
vote at the Special Meeting. On May 5, 2000, the Company had issued and
outstanding 200,000,000 shares of Common Stock. The holders of a majority of the
outstanding shares of Common Stock shall constitute a quorum, which is necessary
for the transaction of business at the Special Meeting. If a quorum is present,
the amendment to the Articles of Incorporation will be approved if the amendment
receives the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock. Where brokers have not received any instructions from
their clients on how to vote on a particular proposal, brokers are permitted to
vote on routine proposals but not on nonroutine matters. The absence of votes on
nonroutine matters are "broker nonvotes." Abstentions and broker nonvotes will
be counted as present for purposes of establishing a quorum, but will have the
effect of a "no" vote on the proposal to amend the Company's Articles of
Incorporation.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Set forth in the table below is information concerning the beneficial
ownership, as of the close of business on May 5, 2000, of the Company's Common
Stock by (i) each person who was known by the Company to be a beneficial owner
of more than 5% of the shares of Common Stock; (ii) by all directors; (iii) by
each of the executive officers, and (iv) by all directors and executive officers
of the Company as a group. "Beneficial ownership" is defined to include any
shares of Common Stock that could be issued within sixty days as a result of the
exercise or conversion of any warrant, option, convertible securities or other
rights.
<TABLE>
<CAPTION>
Percent of
Name Number of Shares Voting Securities
- -------------------------------------------- ---------------- -----------------
<S> <C> <C> <C>
Stone Pine Colorado, LLC(1) 26,390,617(2) 11.99%
Stone Pine Capital, LLC(1) 26,423,950(3) 12.00%
Stone Pine Atlantic Equities, LLC(1) 26,390,617(4) 11.99%
Stone Pine Financial Group, LLC(1) 22,934,166(5) 10.29%
ERB Acquisition Group, L.L.C.(1) 24,491,000(6) 10.91%
Thompson H. Rogers(7) 73,930,140(8) 27.65%
Stone Pine Venture Lending, LLC(1) 27,260,659(9) 13.30%
Security Income Trust L.P.(1) 78,271,650(12) 28.33%
Paul Bagley(1)(13)(14) 294,036,009(15) 63.68%
Richard D. Bailey(16)(13)(14) 3,333,333(17) 1.67%
Donald R. Jackson(1)(13)(14) 40,679,499(18) 18.63%
L. Wayne Harber(19)(13) 0 --
John D. McKey, Jr.(20)(13) 0 --
John P. Takacs(1) 40,647,859(21) 18.62%
Capital Fund Leasing, LLC(22) 37,701,286(23) 18.66%
U.S. Steel Group of USX Corporation(24) 13,556,617(25) 6.49%
LM Investment Group, Inc.(26) 11,788,175(27) 5.89%
All Directors and Executive Officers
as a group (5 persons) 297,392,982(28) 64.41%
</TABLE>
- ----------------------------
(1) The address for each person is 410 17th Street, Suite 400, Denver,
Colorado 80202.
(2) Stone Pine Colorado, LLC ("SP Colorado") directly owns 6,231,867 shares
of the Company's outstanding Common Stock and 317,500 shares of the
Company's Class B Preferred Stock. The original terms of the Class B
Preferred Stock provide that the Class B Preferred Stock is convertible
into Common Stock on a share-for-share basis. However, the Company has
offered to exchange shares of Common Stock for all of the Company's
outstanding debt and preferred stock. Pursuant to the terms of the
offer, SP Colorado has agreed to convert the 317,500 shares of Class B
Preferred Stock, along with the accrued but unpaid dividends, into
20,158,750 shares of Common Stock. (The 6,231,867 shares of outstanding
Common Stock directly owned by SP Colorado and the 20,158,750 shares of
Common Stock that are issuable from the conversion of the Class B
Preferred Stock are collectively referred to as the "SP Colorado
Shares".) The following persons are members of SP Colorado and each own
an equal voting interest in SP Colorado: Stone Pine Capital, LLC ("SP
Capital"), Stone Pine Atlantic Equities, LLC ("SP Atlantic Equities")
and Thompson H. Rogers. Paul Bagley is the designated voting person for
both SP Capital and SP Equities. SP Colorado, SP Capital, SP Atlantic
Equities, Paul Bagley and Thompson H. Rogers are referred to herein as
the "SP Colorado Reporting Persons". Each SP Colorado Reporting Person
may be deemed a member of a group that shares voting and dispositive
power over the SP Colorado Shares and accordingly may be deemed to
beneficially own the SP Colorado Shares.
2
<PAGE>
(3) This amount includes 33,333 shares of the Company's outstanding Common
Stock directly owned by SP Capital (the "SP Capital Shares") and the SP
Colorado Shares (see (2)).
(4) This amount represents the SP Colorado Shares (see (2)).
(5) Stone Pine Financial Group, LLC ("SP Financial") directly owns 76,666
shares of the Company's outstanding Common Stock and 360,000 shares of
the Company's Class A Preferred Stock. The original terms of the Class
A Preferred Stock provide that the Class A Preferred Stock is
convertible into Common Stock on a share-for-share basis. However, the
Company has offered to exchange shares of Common Stock for all of the
Company's outstanding debt and preferred stock. Pursuant to the terms
of the offer, SP Financial has agreed to convert the 360,000 shares of
Class A Preferred Stock, along with the accrued but unpaid dividends,
into 22,857,500 shares of Common Stock. (The 76,666 shares of
outstanding Common Stock directly owned by SP Financial and the
22,857,500 shares of Common Stock that are issuable from the conversion
of the Class A Preferred Stock are collectively referred to as the "SP
Financial Shares".) Messrs. Bagley and Rogers, as members of SP
Financial, share voting and dispositive power over the SP Financial
Shares and accordingly may each be deemed to beneficially own the SP
Financial Shares.
(6) ERB Acquisition Group, L.L.C. ("ERB") directly owns 110,000 shares of
the Company's outstanding Common Stock and 384,000 of the Company's
Class A Preferred Stock. The original terms of the Class A Preferred
Stock provide that the Class A Preferred Stock is convertible into
Common Stock on a share-for-share basis. However, the Company has
offered to exchange shares of Common Stock for all of the Company's
outstanding debt and preferred stock. Pursuant to the terms of the
offer, ERB has agreed to convert the 384,000 shares of Class A
Preferred Stock, along with the accrued but unpaid dividends, into
24,381,000 shares of Common Stock. (The 110,000 shares of outstanding
Common Stock directly owned by ERB and the 24,381,000 shares of Common
Stock that are issuable from the conversion of the Class A Preferred
Stock are collectively referred to as the "ERB Shares".) Messrs. Bagley
and Rogers, as members of ERB, share voting and dispositive power over
the ERB Shares and accordingly may each be deemed to beneficially own
the ERB Shares.
(7) The address for Mr. Rogers is 1625 Farnam Street, Suite 700, Omaha,
Nebraska 68102.
(8) This amount includes (i) 81,024 shares of the Company's outstanding
Common Stock directly owned by Mr. Rogers, (ii) the SP Colorado Shares
(see (2)), (iii) the SP Capital Shares (see (3)), (iv) the SP Financial
Shares (see (5)), and (v) the ERB Shares (see (6)).
(9) Stone Pine Venture Lending, LLC ("SP Venture Lending") directly owns
22,296,159 shares of the Company's outstanding Common Stock, a $75,000
Convertible Note issued by the Company and Warrants to acquire 325,000
shares of Common Stock at an exercise price of $0.20 per share. The
original terms of the Note provide that the Note is convertible into
Common Stock at a rate of $0.12 per share. However, the Company has
offered to exchange shares of Common Stock for all of the Company's
outstanding debt and preferred stock. Pursuant to the terms of the
offer, SP Venture Lending has agreed to convert the Note, along with
the accrued but unpaid interest, into 4,639,500 shares of Common Stock.
(The 22,296,159 shares of outstanding Common Stock directly owned by SP
Venture Lending, the 4,639,500 shares of Common Stock that are issuable
from the conversion of the Note and the 325,000 shares of Common Stock
that would be received if the Warrants were exercised are collectively
referred to as the "SP Venture Lending Shares".) Paul Bagley, John P.
Takacs and Donald R. Jackson, as members of SP Venture Lending, share
voting and dispositive power over the SP Venture Lending Shares and
accordingly may each be deemed to beneficially own the SP Venture
Lending Shares. (Record title to a portion of the SP Venture Lending
Shares is held by Stone Pine Atlantic, LLC and SPIB Management, LLC
("SPIB Management"), as nominees for SP Venture Lending.)
3
<PAGE>
(10) SPIB Management holds a $131,494 receivable from the Company for fees
and expenses incurred on behalf of the Company. SPIB Management has
agreed to convert the receivable into 6,574,700 shares of Common Stock.
(The 6,574,700 shares of Common Stock that are issuable from the
conversion of the receivable are referred to as the "SPIB Management
Shares".) Messrs. Bagley, Takacs and Jackson, as members of SPIB
Management, share voting and dispositive power over the SPIB Management
Shares and accordingly may each be deemed to beneficially own the SPIB
Management Shares.
(11) SPIB 1999, LLC ("SPIB 1999") holds a $136,250 receivable from the
Company for fees and expenses incurred on behalf of the Company. SPIB
1999 has agreed to convert the receivable into 6,812,500 shares of
Common Stock. (The 6,812,500 shares of Common Stock that are issuable
from the conversion of the receivable are referred to as the "SPIB 1999
Shares".) Messrs. Bagley, Takacs and Jackson, as members of SPIB 1999,
share voting and dispositive power over the SPIB 1999 Shares and
accordingly may each be deemed to beneficially own the SPIB 1999
Shares.
(12) Security Income Trust L.P. ("SIT") directly owns 2,025,000 shares of
the Company's outstanding Common Stock and a $1,250,000 Note issued by
the Company. SIT has agreed to convert the Note, along with the accrued
but unpaid interest, into 76,246,650 shares of Common Stock. (The
2,025,000 shares of outstanding Common Stock directly owned by SIT and
the 76,246,650 shares of Common Stock that are issuable from the
conversion of the Note are collectively referred to as the "SIT
Shares".) Paul Bagley, as an indirect general partner of SIT, has
voting and dispositive power over the SIT Shares and accordingly may be
deemed to beneficially own the SIT Shares.
(13) Director.
(14) Executive Officer.
(15) Mr. Bagley directly owns 1,533,334 shares of the Company's outstanding
Common Stock and a $1,750,000 Convertible Note issued by the Company.
In addition, 5,000 shares of the Company's outstanding Common Stock are
held by Mr. Bagley's spouse and 3,000 shares of the Company's
outstanding Common Stock are held in Mr. Bagley's individual retirement
account. The original terms of the Note provide that the Note is
convertible into Common Stock at a rate of $0.20 per share. However,
the Company has offered to exchange shares of Common Stock for all of
the Company's outstanding debt and preferred stock. Pursuant to the
terms of the offer, Mr. Bagley has agreed to convert the Note, along
with the accrued but unpaid interest, into 99,726,050 shares of Common
Stock. (The above discussed 1,541,334 shares of outstanding Common
Stock and the 99,726,050 shares of Common Stock that are issuable from
the conversion of the Note are collectively referred to as the "Bagley
Shares".)
This amount includes (i) the Bagley Shares, (ii) the SP Colorado Shares
(see (2)), (iii) the SP Capital Shares (see (3)), (iv) the SP Financial
Shares (see (5)), (v) the ERB Shares (see (6)), (vi) the SP Venture
Lending Shares (see (9)), (vii) the SPIB Management Shares (see (10)),
(viii) the SPIB 1999 Shares (see (11)), and (ix) the SIT Shares (see
(12)).
(16) The address for Mr. Bailey is 77 Franklin Street, 3rd Floor, Boston,
Massachusetts 02110.
(17) This amount represents 3,333,333 shares of the Company's outstanding
Common Stock directly owned by Mr. Bailey (the "Bailey Shares").
(18) Mr. Jackson directly owns 26,640 shares of the Company's outstanding
Common Stock. In addition, 5,000 shares of the Company's outstanding
Common Stock are held in Mr. Jackson's individual retirement account.
(The above discussed 31,640 shares of outstanding Common Stock are
collectively referred to as the "Jackson Shares".)
This amount includes (i) the Jackson Shares, (ii) the SP Venture
Lending Shares (see (9)), (iii) the SPIB Management Shares (see (10)),
and (iv) the SPIB 1999 Shares (see (11)).
(19) The address for Mr. Harber is 4 Moraine Point, Victor, New York 14564.
4
<PAGE>
(20) The address for Mr. McKey is 2081 East Ocean Boulevard, 2nd Floor,
Stuart, Florida 34996.
(21) This amount includes (i) the SP Venture Lending Shares (see (9)), (ii)
the SPIB Management Shares (see (10)), and (iii) the SPIB 1999 Shares
(see (11)).
(22) The address for Capital Fund Leasing, LLC ("Capital Fund Leasing") is
c/o Frederick M. Luper, 1200 LeVeque Tower, 50 West Broad Street,
Columbus, Ohio 43215-3374.
(23) Capital Fund Leasing is the registered owner of 35,651,286 shares of
the Company's outstanding Common Stock and Warrants to acquire
2,050,000 shares of Common Stock at an exercise price of $0.20 per
share.
(24) The address for U.S. Steel Group of USX Corporation ("USX") is 600
Grant Street, Pittsburgh, Pennsylvania 15219-2749.
(25) USX is the registered owner of 4,784,689 shares of the Company's
outstanding Common Stock. In addition, USX holds a $1,833,333
Convertible Note, which is convertible by its original terms into
8,771,928 shares of the Company's Common Stock. However, the Company
has offered to exchange shares of Common Stock for all of the Company's
outstanding debt and preferred stock. If USX, or an assignee of USX,
were to accept the offer, 45,833,325 shares of Common Stock would be
issuable upon the conversion of the Note (not including shares issuable
with respect to the related accrued but unpaid interest).
(26) The address for LM Investment Group, Inc. ("LMI") is 523 N.E. 47th
Street, Boca Raton, Florida 33431.
(27) LMI is the registered owner of 11,788,175 shares of the Company's
outstanding Common Stock.
(28) This amount includes (i) the SP Colorado Shares (see (2)), (ii) the SP
Capital Shares (see (3)), (iii) the SP Financial Shares (see (5)), (iv)
the ERB Shares (see (6)), (v) the SP Venture Lending Shares (see (9)),
(vi) the SPIB Management Shares (see (10)), (vii) the SPIB 1999 Shares
(see (11)), (viii) the SIT Shares (see (12)), (ix) the Bagley Shares
(see (15)), (x) the Bailey Shares (see (17)), and (xi) the Jackson
Shares (see (18)).
THE COMPANY
Current Strategy
The Company's three operating subsidiaries, Angeles Metal Trim Co.
("Angeles"), Capitol Metals Co. ("CMC"), and TPSS Acquisition Corp. ("TPSS") are
being liquidated at the direction of their senior creditors with the
acquiescence of the Company. TPSS has been placed in the hands of a receiver
under the jurisdiction of an Ohio court. Angeles and CMC have both made an
assignment of their respective assets for the benefit of creditors. In all three
cases, the assets have been substantially liquidated by the respective
liquidators, and no assets remain to be distributed to the Company as the sole
equity owner. The Company has no other source of income, and has therefore
ceased operations. At September 30, 1999, as reported in its last Form 10-QSB
for the third quarter of 1999, the Company had a negative net worth of
$20,923,749.
Management of the Company believes that the most likely prospect for
the Company's financial revival at this time is to attempt to negotiate a merger
or other combination of the Company with a private business that desires to
become publicly traded in the U.S. securities market through the acquisition of
a U.S. "public shell corporation". However, this strategy is not expected to
succeed unless the Company is free of any significant contingent liabilities
such as litigation, claims or material creditors that have not reached agreement
with the Company to exchange their debt obligations for equity in the Company. A
prior effort to combine with a private business, which was announced on December
1, 1999, was not successful because the Company's earlier attempt to exchange
debt, preferred stock and other rights for equity was not successful. Creditors
holding a substantial amount of Company debts did not respond to the offer.
5
<PAGE>
Management will continue to attempt to obtain the exchange of
substantially all of the Company's debt, preferred stock and other rights for
common stock, in order to be able to proceed with the strategy discussed above
if another opportunity presents itself. The Company can not give any assurance
that it will be able to reach an agreement with substantially all of its
creditors to accept shares of common stock in the Company, which is expected to
be required before the management of the Company could carry out the strategy
discussed above. If substantially all creditors don't reach an agreement to
exchange their debt for shares of common stock of the Company, the merger or
combination strategy is not likely to be successful.
Inability to File with the SEC
The Company did not have the financial resources necessary to obtain
audited financial statements for 1999 and to file its Form 10-KSB for 1999 with
the Securities and Exchange Commission by the due date for such filing, March
30, 2000. The failure to file its Form 10-KSB in a timely manner will lead to
the loss of eligibility to have trading prices for the Company's common stock
reported on the Over The Counter Bulletin Board (OTCBB), after a 30 day grace
period. However, the common stock would still be eligible to be traded in the
"pink sheets." Until the currently delinquent filing and other required filings
in the future are made, certain holders of restricted and control securities
will not be able to sell their Company securities under Rule 144. In addition,
the Company would not be able to register any securities with the SEC for sale
to the public until its financial statements are audited and all delinquent
filings have been made.
Recent Developments
The Company has been informed by two unaffiliated parties that they
both separately have offered to purchase the outstanding debt and other claims
of certain substantial creditors of the Company, who did not respond to the
earlier offer of the Company. Each of such parties has informed the Company that
if it is successful in its sole determination, it may make an offer for a
combination with the Company as described above. The Company has no direct
knowledge of the financial resources of either party, or the amount of debt or
other claims it intends to purchase. The Company has been informed that LM
Investment Group, Inc. has purchased certain outstanding debt of the Company.
Such party has also agreed to purchase certain Company debt held by an affiliate
of the Company, if such funds are used to retain a firm designated by such party
to audit the Company's 1999 financial statements. Such firm has been retained.
If such audit is completed, the Company would be in a position to file its
delinquent 1999 Form 10-KSB and any other delinquent filings with the Securities
and Exchange Commission.
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors has determined that it is in the best interest
of the Company to amend the Company's Articles of Incorporation to increase the
number of authorized shares of the Company's Common Stock from 200,000,000 to
850,000,000. The text of the proposed Articles of Amendment is attached hereto
as Exhibit A. As of May 5, 2000, all 200,000,000 shares of the Company's
authorized Common Stock are issued and outstanding. As of May 5, 2000, the
Company had entered into commitments to issue (i) 450,000 shares of its Common
Stock upon the exercise of outstanding options, (ii) 7,625,000 shares of its
Common Stock upon the exercise of outstanding warrants, and (iii) 12,458,428
shares of its Common Stock upon the conversion of outstanding preferred stock
and convertible debt of the Company. In addition, the Company's Board of
Directors has extended and renewed an offer to exchange shares of Common Stock
for outstanding debt of, and other claims against, the Company. Such offer could
result in the issuance of up to 500,000,000 additional shares of Common Stock.
The above commitments and/or the exchange offer, in the aggregate, could
obligate the Company to issue up to 508,075,000 shares of the Company's Common
Stock, while it has no shares of authorized and unissued Common Stock out of
which it can satisfy any such obligations.
6
<PAGE>
In addition to satisfying the Company's current commitments as
described above, the Company may be required to raise additional capital to
finance its operations if and when a feasible business opportunity is presented
to the Company. Currently, the Company has no income, no assets, and no
operations, although the Board of Directors continues to look for business
opportunities on behalf of the Company. The purpose of the proposed Amendment
includes providing the Company with greater flexibility for entering into any
opportunity that might be presented to it. Currently, the Company is restricted
in its financing options due to the lack of authorized but unissued shares of
Common Stock provided for in its Articles of Incorporation.
The Company's shareholders will have no appraisal rights under Colorado
law with respect to the Amendment or any equity financing that the Company may
undertake after its adoption. In addition, shareholders do not have any
preemptive rights to participate in any future issuance of Common Stock, and
therefore will suffer dilution of ownership upon such issuance. The issuance of
additional shares could also have the effect of diluting the earnings per share
and book value of existing shares of Common Stock. Although the authorization of
the additional shares is not intended as an anti-takeover device, the additional
shares could be used to dilute the stock ownership of persons seeking to gain
control of the Company, which could preclude existing shareholders from taking
advantage of such a situation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE 'FOR' THE ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION. SUCH AMENDMENT SHALL BE APPROVED IF A MAJORITY OF THE
OUTSTANDING SHARES OF COMMON STOCK VOTE IN FAVOR OF THE AMENDMENT.
OTHER MATTERS
Management knows of no other matters to be submitted to the Special
Meeting. If any other matters properly come before the Special Meeting, it is
intended that the person named in the enclosed form of Proxy will vote such
Proxy in accordance with his reasonable judgment.
By Order of the Board of Directors
DATED: May 10, 2000
7
<PAGE>
ARTICLES OF AMENDMENT Exhibit A
TO
ARTICLES OF INCORPORATION
OF
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
Pursuant to the provisions of the Colorado Business Corporation Act,
as amended (the "Act"), Consolidated Capital of North America, Inc., a
corporation organized under the laws of the State of Colorado, by its
Secretary and Treasurer, does hereby certify as follows:
1. The name of the Corporation is Consolidated Capital of North
America, Inc.
2. The Board of Directors of said Corporation has consented to,
authorized by unanimous written consent and passed resolutions declaring that
the amendment to the Articles of Incorporation contained herein is advisable
and decided to present such amendment to the shareholders of the Corporation
at the Special Meeting of shareholders.
3. Upon notice given to each shareholder of record entitled to vote
on such amendment to the Articles of Incorporation in accordance with the
requirements of the Act, the Special Meeting of the shareholders of the
Corporation was held on June 5, 2000, at which meeting holders representing
quorum power were present in person or represented by proxy, and the number of
votes cast for the amendment by each voting group entitled to vote separately
on the amendment was sufficient for approval by the voting group.
4. The amendment approved was as follows:
Section I of Article IV of the Corporation's Articles of
Incorporation is amended in its entirety to read as follows:
"Section 1. Authorized Capital. The total number of shares of all
classes which the Corporation shall have authority to issue is
850,000,000, of which 10,000,000 shall be Preferred Shares, par value
$.01 per share, and 840,000,000 shall be Common Shares, par value
$.0001 per share, and the designations, preferences, limitations and
relative rights of the shares of each class are as set forth in the
following paragraphs."
IN WITNESS WHEREOF, Consolidated Capital of North America, Inc. has
caused these Articles of Amendment to Articles of Incorporation to be signed
by its Secretary and Treasurer, effective as of the date of filing of these
Articles of Amendment to Articles of Incorporation with the Secretary of State
of the State of Colorado.
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
By:
--------------------------------
Donald R. Jackson
Its Secretary and Treasurer
8
<PAGE>
[PROXY CARD]
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
410 17th Street, Suite 400
Denver, Colorado 80202
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
June 5, 2000
.
The undersigned hereby appoints each of Paul Bagley and Donald R. Jackson,
individually, as proxy and attorney-in-fact for the undersigned, with full
power of substitution, to vote on behalf of the undersigned at the
Company's Special Meeting of Shareholders to be held on June 5, 2000 and at
any adjournment(s) or postponement(s) thereof, all shares of the Common
Stock, $.0001 par value, of the Company standing in the name of the
undersigned or which the undersigned may be entitled to vote as follows:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" ITEM 1. In their discretion, the proxies are authorized
to vote upon such other business as may properly come before the Special
Meeting or any adjournments or postponements thereof, in accordance with
their reasonable judgment. This proxy when duly executed revokes any proxy
or proxies heretofore given by the undersigned.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
1. To approve the proposal of the Board of Directors to amend the Articles
of Incorporation to increase the authorized number of shares of common
stock of the Company from 200,000,000 to 850,000,000:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- -------------------------------------------------------------------------------
[Reverse Side]
Please sign exactly as name
appears at left:
Signature:______________________________________
Signature (if held jointly):____________________
Date: __________________________________________
When shares are held by joint tenants, both must sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in the corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
