UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: June 1, 2000
BBJ ENVIRONMENTAL TECHNOLOGIES, INC.
--------------------------------------------------------------------------------
(Formerly known as Omega Development, Inc.)
Nevada 33-34200 13-3476854
--------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6802 Citicorp Blvd., Suite 500, Tampa, Florida 33619
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant"s telephone number, including area code: (813) 622-8550
---------------------------
8726 S. Florence Avenue, Tulsa, Oklahoma 74137
--------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 1. Change in Control of Registrant.
On January 31, 2000, Omega Development, Inc. ("Omega") entered into an
Agreement and Plan of Reorganization (the "Agreement") to acquire BBJ
Environmental Solutions, Inc. ("BBJ"). In accordance with the Agreement, the
following events occurred:
(1) Omega issued 12,410,666 shares of its Common Stock in exchange for
all the issued and outstanding capital stock of BBJ from 36 accredited
stockholders of BBJ in accordance with Rule 506 of Regulation D promulgated
under Section 4(2) of the Securities Act of 1933, as amended.
(2) Omega stockholders approved (a) a change in name to BBJ
Environmental Technologies, Inc. (the "Registrant"), (b) a reverse stock split
of one-for-three effective June 2, 2000, and (c) the election of BBJ"s appointed
nominees, namely Robert G. Baker, Chief Executive Officer of BBJ, Jerry V.
Schinella, President of BBJ, Michael J. Gordon, Vice President of BBJ, Frank P.
Ragano and Rebecca F. Walter, as directors of the Registrant to serve in such
capacity until their successors are elected and shall qualify.
(3) The sale of 3,465,000 shares of the Registrant"s Common Stock to
the Registrant at a purchase price of $.001 per share by Paul Shapansky, Herbert
Maxwell, Dennis Rendfish, Robert A. Schneider, Louis Shapiro, Shai Sasson,
Sidney Borenstein and Eric Bashford, thereby reducing the number of outstanding
shares of the Registrant"s Common Stock to 1,535,000 shares before the closing
of the Agreement.
(4) The resignations of all officers of the Registrant and the election
of Robert Baker as Chairman of the Board and Chief Executive officer of the
Registrant, Jerry V. Schinella as president and Chief Operating Officer of the
Registrant, and Michael J. Gordon as Vice president, Secretary and Treasurer of
the Registrant.
At the consummation of the Agreement on June 1, 2000, there were
13,945,666 shares outstanding. On June 1, 2000, an additional 100,000 shares of
the Registrant"s Common Stock were issued in exchange for $125,000. The
Registrant is currently attempting to complete a private placement of 1,600,000
shares at a price of $1.25 per share on a "best efforts" basis. No assurance can
be given that these efforts will be successful. The Registrant is dependent upon
the success of the private financing or other additional financing to survive as
a going concern.
2
<PAGE>
In accordance with the Agreement, the Registrant issued a total of
12,410,666 shares of its Common Stock including an aggregate of 9,606,990 shares
to four persons who may be deemed to be the new control group of the Registrant.
Of the 9,606,990 shares, 3,396,890 shares were issued to Robert G. Baker and his
wife (of which 177,000 shares of Common Stock were subsequently issued to ten
family members and friends as gifts from Mr. Baker and his wife), 3,396,890 were
issued to Jerry V. Schinella and his wife, (of which 37,000 shares of Common
Stock were subsequently issued to three family members and friends as gifts from
Mr. Schinella and his wife) 1,871,238 shares were issued to Michael J. Gordon
(of which 10,000 shares of Common Stock were subsequently issued to two friends
as gifts from Mr. Gordon), 701,972 shares were issued to Trusts controlled by
Michael J. Gordon as Trustee or Custodian for the benefit of a minor, and
240,000 shares were issued to Rebecca F. Walter. The following lists the name of
each new officer, director and 5% or greater shareholder of the Registrant after
the consummation of the Agreement, which may be deemed to constitute the new
control group of the Registrant. All addresses are c/o BBJ Environmental
Technologies, Inc., 6802 Citicorp Blvd., Suite 500, Tampa, FL 33619. The table
below does not include options of the Registrant that may be issued to the
persons named below in exchange for BBJ options that are currently outstanding
or for other business purposes.
Amount Beneficially Approximate Percent
Name Owned of Class
---- ----- --------
Robert G. Baker 3,219,890 23.1%
Jerry V. Schinella 3,359,890 24.1
Michael J. Gordon 2,563,210 18.5
Frank P. Ragano -0- -0-
Rebecca T. Walter 240,000 1.7
All officers and directors
as a group (5 persons) 9,382,990 67.4
The following table lists the names of the control group members, the
number of options of BBJ owned by each person and the number of shares of the
Registrant"s Common Stock into which the options shall be convertible after the
Registrant completes its intended exchange of Omega options for the Registrant"s
options.
Number of BBJ Number of New
Name Options Owned Registrant"s Options
---- ------------- --------------------
Robert G. Baker 469,379 938,758
Jerry V. Schinella 469,379 938,758
Michael J. Gordon 522,099 1,044,198
Frank P. Ragano -0- 100,000
Rebecca T. Walter -0- 100,000
All officers and directors
as a group (5 persons) (1) 1,460,857 3,121,714
------------------
(1) In the event that the Registrant exchanges its options for BBJ options
of the control group, the control group will beneficially own a total
of 12,504,704 shares, representing approximately 73% of the
Registrant"s issued and outstanding shares.
There are no agreements or understandings between members of the former
and new control groups and their associates with respect to the future election
of directors or other matters.
3
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On January 31, 2000, the Registrant entered into an Agreement and Plan
or Reorganization (the "Agreement") to acquire BBJ Environmental Solutions, Inc.
("BBJ"). In accordance with the Agreement, the following events occurred:
(1) The Registrant issued 12,410,666 shares of its Common Stock in
exchange for all the issued and outstanding capital stock of BBJ from 36
accredited stockholders of BBJ in accordance with Rule 506 of Regulation D
promulgated under Section 4(2) of the Securities Act of 1933, as amended.
(2) The Registrant stockholders approved (a) a change in name to BBJ
Environmental Technologies, Inc. (the "Registrant"), (b) a reverse stock split
of one-for-three effective June 2, 2000, and (c) the election of BBJ"s appointed
nominees, namely Robert G. Baker, Chief Executive Officer of BBJ, Jerry V.
Schinella, President of BBJ, Michael J. Gordon, Vice President of BBJ, Frank P.
Ragano and Rebecca F. Walter, as directors of the Registrant to serve in such
capacity until their successors are elected and shall qualify.
(3) The sale of 3,465,000 shares of the Registrant"s Common Stock to
the Registrant at a purchase price of $.001 per share by Paul Shapansky, Herbert
Maxwell, Dennis Rendfish, Robert A. Schneider, Louis Shapiro, Shai Sasson,
Sidney Borenstein and Eric Bashford, thereby reducing the number of outstanding
shares of the Registrant"s Common Stock to 1,535,000 shares before the closing
of the Agreement.
(4)The resignations of all officers of the Registrant and the election
of Robert Baker as Chairman of the Board and Chief Executive officer of the
Registrant, Jerry V. Schinella as President and Chief Operating Officer of the
Registrant, and Michael J. Gordon as Vice President, Secretary and Treasurer of
the Registrant.
The Registrant will operate through its newly acquired subsidiary, BBJ
Environmental Solutions, Inc. ("BBJ"). BBJ was formed under the laws of the
State of Florida in August 1993. BBJ develops, manufactures, and markets
products and devices that control contamination and air pollution in heating,
ventilation air-conditioning, and refrigeration systems of homes ("HVAC")
offices, health care facilities, schools, and public buildings. Consequently,
the Company's products are highly effective in promoting good Indoor Air Quality
("IAQ") and Indoor Environment Quality ("IEQ"). Management believes that its
leading product, BBJ MicroBiocide, is the only product registered by the U.S.
Environmental Protection Agency ("EPA") for the control of bacterial and algae
growth in air-conditioning systems.
4
<PAGE>
The assets acquired by the Registrant include all the assets of BBJ
which it utilizes in its operations. These include primarily the following:
accounts receivable, inventory, furnishings, and equipment. The nature of the
business in which those assets were used by BBJ were for the sale of its EPA
approved products. The Registrant intends to continue to use such accounts
receivable, inventory, furnishings, and equipment.
As described above, the Registrant issued 12,410,666 shares to acquire
all the capital stock of BBJ through a stock for stock exchange which resulted
in the Registrant acquiring all the assets and liabilities of BBJ. The number of
shares issued to the former shareholders of BBJ was not based upon any
particular pricing formula and may, accordingly, be determined to be arbitrarily
determined by the parties to the Agreement based upon arms-length negotiations
between the Registrant and the former principal stockholders and officers and
directors of BBJ. Prior to the completion of the Registrant"s acquisition of
BBJ, there was no prior relationship between persons affiliated with BBJ and
persons affiliated with the Registrant.
Item 4. Changes in Registrant"s Certifying Accountant.
As a result of the transaction reported in Items 1 and 2 above, the
Registrant"s former principal independent accountant, Henderson Sutton & Co.,
P.C. was dismissed on June 1, 2000. The new principal independent accountant is
Kirkland, Russ, Murphy & Tapp.
The Registrant"s former accountant"s report on the financial statements
for either of the past two fiscal years, did not contain an adverse opinion or
disclaimer of opinion, and was not qualified or modified as to uncertainty,
audit scope or accounting principles.
The replacement of Henderson Sutton & Co, P.C. was approved by the
Board of Directors of the Registrant on June 1, 2000.
There were no disagreements with the former accountant on any matters
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.
The firm of Kirkland, Russ, Murphy & Tapp, was engaged as the new
certifying accountants on June 1, 2000.
There were no consultations within the purview of Rule 304(a)(2) of
Regulation S-B with the new accounting firm of Kirkland, Russ, Murphy & Tapp.
Letters addressed to the Securities and Exchange Commission from both
the former accountant and the new accountant stating their agreement with the
disclosures made in this filing are filed as exhibits hereto.
5
<PAGE>
Item 5. Other Events
NAME CHANGE: On May 31, 2000, the Registrant"s stockholders approved
the filing of an amendment to its Articles of Incorporation with the Secretary
of State of Nevada to change its name to BBJ Environmental Technologies, Inc.
REVERSE STOCK SPLIT. On May 31, 2000, the Registrant"s stockholders
approved the filing of an amendment to its Articles of Incorporation with the
Secretary of State of Nevada to effectuate a one-for-three reverse stock split
effective June 2, 2000.
INCREASE IN OUTSTANDING SHARES. As of June 1, 2000, the Registrant has
14,045,666 shares issued and outstanding after giving effect to the consummation
of the Agreement and the issuance of 100,000 shares for $125,000 in the
Registrant"s currently pending private placement.
Item 7. Financial Statements and Exhibits
(a) - (b) The financial statements of BBJ for the two years ended
December 31, 1999 and the pro-forma financial statements of BBJ and the
Registrant are filed herewith and follow this page.
(c) Exhibits. The following exhibits are furnished in accordance with
the provisions of Item 601 of Regulation S-B.
Exhibit No. Description
----------- -----------
2 Agreement and Plan of Reorganization between
Omega Development, Inc, and BBJ
Environmental Solutions, Inc., dated January
31, 2000. (2)
3 Amendment to Articles of Incorporation (1)
16.1 Letter on change in certifying accountant
from Henderson Sutton & Co., P.C. (1)
16.2 Letter on change in certifying accountant
from Kirkland, Russ, Murphy & Tapp (1)
--------------------------
(1) Filed herewith.
(2) Incorporated by reference to Exhibit 3 to the Company's Schedule 14C
Information Statement filed on May 10, 1999
6
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Financial Statements
December 31, 1999 and 1998
(including cumulative amounts since
inception on August 25, 1993)
(With Independent Auditors' Report Thereon)
7
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of BBJ Environmental Solutions, Inc.
We have audited the accompanying balance sheets of BBJ Environmental Solutions,
Inc. as of December 31, 1999 and 1998, and the related statements of operations,
stockholders' deficit, and cash flows for the years then ended and for the
period from August 25, 1993 (inception) to December 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BBJ Environmental Solutions,
Inc. as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for the years then ended and for the period from August 25, 1993
(inception) to December 31, 1999 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that BBJ
Environmental Solutions, Inc. will continue as a going concern. The Company's
recurring losses from operations and its net working capital deficiency during
its development stage 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 11. The financial statements do not include any adjustments relating to
the recoverability and classification of reported asset amounts or the amounts
and classification of liabilities that might result from the outcome of this
uncertainty.
KIRKLAND, RUSS, MURPHY & TAPP
By: /s/ Bruce Murphy
------------------------
Bruce Murphy
(Authorized officer)
February 4, 2000
8
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Balance Sheets
December 31, 1999 and 1998
<TABLE>
<CAPTION>
ASSETS
------
1999 1998
-------------- ------------
<S> <C> <C>
Current assets:
Cash $ 19,189 711
Accounts receivable 25,753 18,547
Inventory 30,942 31,012
Prepaids 3,371 3,371
------------ ------------
Total current assets 79,255 53,641
Property and equipment, net 88,754 125,644
Security deposits 4,418 4,418
------------ ------------
$ 172,427 183,703
============ ============
9
<PAGE>
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
1999 1998
------------ ------------
Current liabilities:
Accounts payable and accrued expenses $ 131,165 122,567
Bank line of credit 24,869 25,000
Current portion of bank loan and capital lease
obligations 21,127 23,052
Advances from stockholders 35,000 --
----------- ------------
Total current liabilities 212,161 170,619
Bank loan, less current portion -- 2,567
Capital lease obligations, less current portion 36,925 55,485
Convertible debentures 230,000 100,000
Advances from stockholders -- 30,200
----------- ------------
Total liabilities 479,086 358,871
----------- ------------
Stockholders' deficit:
Convertible preferred stock, $2.00 par value, 5,000,000
shares authorized, 271,875 shares issued and outstanding 543,750 --
Common stock, $.0005 par value, 30,000,000 shares
authorized, 5,323,333 and 4,950,000 shares issued
and outstanding, respectively 2,662 2,475
Additional paid-in capital 556,735 551,327
Accumulated deficit during development stage (1,409,806) (728,970)
----------- ------------
Net stockholders' deficit (306,659) (175,168)
----------- ------------
$ 172,427 183,703
=========== ============
</TABLE>
See accompanying notes to financial statements
10
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Statements of Operations
Years Ended December 31, 1999 and 1998
and Cumulative Amounts from Inception
<TABLE>
<CAPTION>
Cumulative Amounts
from inception to
1999 1998 December 31, 1999
---------- ---------- ------------------
<S> <C> <C> <C>
Sales, net $ 253,975 285,809 1,408,863
Cost of sales 69,196 87,536 266,127
---------- ---------- ----------
Gross margin 184,779 198,273 1,142,736
---------- ---------- ----------
Operating expense:
Sales and marketing 353,465 225,224 978,505
General and administrative 427,613 383,917 1,399,868
Research and development 84,537 47,846 174,169
---------- ---------- ----------
Total operating expenses 865,615 656,987 2,552,542
---------- ---------- ----------
Net loss $(680,836) (458,714) (1,409,806)
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Statements of Stockholders' Deficit
Period from August 25, 1993 (inception) to December 31, 1999
<TABLE>
<CAPTION>
Accumulated
Convertible Additional Deficit During Stock Net
Preferred Stock Common Stock Paid-in Development Subscriptions Stockholders'
Shares Amount Shares Amount Capital Stage Receivable Deficit
------ ------ ------ ------ ----------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of common stock for cash -- $ -- 4,657,389 $ 2,329 12,171 -- -- 14,500
Net loss -- -- -- -- -- (5,124) -- (5,124)
---- ------ --------- -------- ---------- ---------- ---------- ----------
Balances at December 31, 1993 -- -- 4,657,389 2,329 12,171 (5,124) -- 9,376
Acquisition and retirement of
common stock -- -- (802,999 (402) (2,098) -- -- (2,500)
Net income -- -- -- -- -- 33,669 -- 33,669
---- ------ --------- -------- ---------- ---------- ---------- ----------
Balances at December 31, 1994 -- -- 3,854,390 1,927 10,073 28,545 -- 40,545
Net loss -- -- -- -- -- (721) -- (721)
---- ------ --------- -------- ---------- ---------- ---------- ----------
Balances at December 31, 1995 -- -- 3,854,390 1,927 10,073 27,824 -- 39,824
Net loss -- -- -- -- -- (39,561) -- (39,561)
---- ------ --------- -------- ---------- ---------- ---------- ----------
Balances at December 31, 1996 -- -- 3,854,390 1,927 10,073 (11,737) -- 263
Issuance of common stock for cash
and notes -- -- 587,794 294 310,956 -- (106,250) 205,000
Compensation related to grant of
stock options -- -- -- -- 15,800 -- -- 15,800
Net loss -- -- -- -- (258,519) -- (258,519)
---- ------ --------- -------- ---------- ---------- ---------- ----------
Balances at December 31, 1997 -- -- 4,442,184 2,221 336,829 (270,256) (106,250) (37,456)
Issuance of common stock for cash -- -- 507,816 254 194,746 -- -- 195,000
Collection of subscription
receivable -- -- -- -- -- -- 106,250 106,250
Compensation related to grant of
stock options -- -- -- -- 19,752 -- -- 19,752
Net loss -- -- -- -- (458,714) -- (458,714)
---- ------ --------- -------- ---------- ---------- ---------- ----------
Balances at December 31, 1998 -- -- 4,950,000 2,475 551,327 (728,970) -- (175,168)
(continued)
12
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Statements of Stockholders' Deficit - Continued
Accumulated
Convertible Additional Deficit During Stock Net
Preferred Stock Common Stock Paid-in Development Subscriptions Stockholders'
Shares Amount Shares Amount Capital Stage Receivable Deficit
------ ------ ------ ------ ---------- -------------- ------------- ------------
Issuance of convertible preferred
stock for cash 271,875 $ 543,750 -- -- (72,187) -- -- 471,563
Issuance of common stock for
services -- -- 40,000 20 13,314 -- -- 13,334
Conversion of convertible
debenture -- -- 333,333 167 99,833 -- -- 100,000
Cancellation of unexercised
options -- -- -- -- (35,552) -- -- (35,552)
Net loss -- -- -- -- -- (680,836) -- (680,836)
-------- --------- --------- ----- ------- ------------- ----------- --------
Balances at December 31, 1999 271,875 $ 543,750 5,323,333 2,662 556,735 (1,409,806) -- (306,659)
======== ========= ========= ===== ======= ============= =========== ========
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Statements of Cash Flows
Years Ended December 31, 1999 and 1998 and Cumulative Amounts from Inception
<TABLE>
<CAPTION>
Cumulative Amounts
from inception to
1999 1998 December 31, 1999
---------- ---------- ------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (680,836) (458,714) (1,409,806)
Adjustment to reconcile net loss to net
cash used in operating activities:
Depreciation, net of gain on sale 35,701 35,089 106,123
Compensation due to grant of stock
options (35,552) 19,752 --
Changes in current assets and liabilities:
Accounts receivable (7,206) (4,385) (25,753)
Inventory 70 (4,224) (30,942)
Prepaids -- (3,371) (3,371)
Accounts payable and accrued expenses 94,432 57,669 216,999
---------- ---------- ----------
Net cash used in operating
activities (593,391) (358,184) (1,146,750)
---------- ---------- ----------
Cash flows from investing activities:
Purchase of property and equipment, net of
proceeds from sale 1,189 (56,299) (105,266)
Security deposits -- -- (4,418)
---------- ---------- ----------
Net cash provided by (used in)
investing activities 1,189 (56,299) (109,684)
---------- ---------- ----------
Cash flows from financing activities:
Proceeds from bank loans -- 2,000 56,517
Principal payments on bank notes and
capital leases (23,183) (20,025) (63,207)
Proceeds from convertible debenture 34,500 100,000 334,500
Proceeds from cash advances from
stockholders 197,300 30,200 227,500
Repayment of cash advances from
stockholder (69,500) -- (69,500)
Net proceeds from issuance of preferred and
common stock 471,563 301,250 789,813
---------- ---------- ----------
Net cash provided by financing
activities 610,680 413,425 1,275,623
---------- ---------- ----------
(continued)
14
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Statements of Cash Flows - Continued
Cumulative Amounts
from inception to
1999 1998 December 31, 1999
---------- ---------- ------------------
Net increase (decrease) in cash $ 18,478 (1,058) 19,189
Cash, beginning of period 711 1,769 --
-------- -------- --------
Cash, end of period $ 19,189 711 19,189
======== ======== ========
Supplemental disclosures of cash flow information:
Interest paid $ 14,872 17,656 45,986
Supplemental disclosures of non-cash financing
activities:
Conversion of convertible debentures
into 385,439 shares of common stock $ -- -- 200,000
Purchase of property and equipment
financed by capital lease obligations -- -- 89,611
Conversion of convertible debentures
into 333,333 shares of common stock 100,000 -- 100,000
Issuance of 40,000 shares of common
stock for legal services 13,334 -- 13,334
Conversion of cash advances from
stockholders to convertible debenture 123,000 -- 123,000
Conversion of accrued interest and
consulting services to convertible debt 72,500 -- 72,500
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999 and 1998
(1) Organization and Business
-------------------------
BBJ Environmental Solutions, Inc. (the "Company"), formerly known as BBJ
Chemical Compounds, Inc., conducts research on the causes of and develops
solutions to biologically related indoor air quality problems. It
develops, manufactures, and markets products and devices that control
contamination and air pollution in heating, air-conditioning and
refrigeration systems of homes, offices, health care facilities, food
processing plants, schools, and public buildings. The Company was founded
upon the premise that these issues can be addressed by the development of
products that not only are effective against indoor air quality
contaminants, but also do not have dangerous side effects to users,
building occupants, equipment, or the environment.
The Company's activities to date have been related to market positioning
of its products, registering certain products with the appropriate
federal and state regulatory agencies, forming distribution networks for
its products, and obtaining financing for operations and marketing.
(2) Summary of Significant Accounting Policies
------------------------------------------
(a) Development Stage
-----------------
The Company has not had significant revenues since inception and is
therefore in the development stage. The excess costs incurred over
revenues generated to date are disclosed as accumulated deficit
during development stage.
(b) Inventory
---------
Inventory, consisting primarily of raw materials and finished
goods, is stated at the lower of cost or market. Cost is determined
by the first-in, first-out method.
(continued)
16
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(2) Summary of Significant Accounting Policies - Continued
------------------------------------------------------
(c) Property and Equipment
----------------------
Property and equipment are stated at cost. Depreciation on property
and equipment is calculated on the straight-line method over the
estimated useful lives ranging from three to seven years. Equipment
under capital leases and leasehold improvements are amortized by
the straight-line method over the terms of the related leases.
(d) Income Taxes
------------
From inception through July 20, 1998, the Company elected to be
treated as a Subchapter S corporation for federal and state income
tax purposes. Profits and losses of the Company were, therefore,
included on the tax returns of the individual stockholders of the
Company. No provision for income taxes was provided for financial
statement purposes. Effective July 21, 1998, the Company terminated
its S corporation election for federal and state income tax
purposes.
As of July 21, 1998, the Company has adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes."
Under the asset and liability method of SFAS No. 109, deferred tax
assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under SFAS No. 109, the effect
of a change in tax rates on deferred tax assets or liabilities is
recognized in income in the period that included the enactment.
Under SFAS No. 109, deferred taxes shall be recognized for
temporary differences at the date the Company became a taxable
entity. There were no significant net temporary differences at July
21, 1998. Accordingly, the financial statements contain no
provision as of July 21, 1998.
(continued)
17
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(2) Summary of Significant Accounting Policies - Continued
------------------------------------------------------
(e) Research and Development Expenses
---------------------------------
Research and development costs are expensed as incurred.
(f) Estimates
---------
In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
(g) Concentration of Credit Risk
----------------------------
Cash balances are maintained in financial institutions.
Occasionally, deposits exceed amounts insured by the Federal
Deposit Insurance Corporation.
The Company's customers are located primarily in the United States.
Approximately 50% of the Company's sales are generated from three
customers.
(h) Reclassification
----------------
Certain amounts in the 1998 and cumulative financial statements
have been reclassified to conform to their 1999 presentation. Such
reclassifications had no effect on reported net loss.
(continued)
18
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(3) Property and Equipment
----------------------
Property and equipment consists of the following as of December 31, 1999
and 1998, respectively:
<TABLE>
<CAPTION>
1999 1998
---- ----------
<S> <C> <C>
Furniture and fixtures $ 32,945 32,945
Office equipment 39,634 44,443
Manufacturing equipment 94,891 94,541
Leasehold improvements 17,272 17,272
---------- --------
184,742 189,201
Less accumulated depreciation
and amortization (95,988) (63,557)
---------- --------
$ 88,754 125,644
========== ========
</TABLE>
(4) Line of Credit
--------------
The Company has a revolving line of credit with a financial institution,
secured by the assets of the Company, which provides for borrowings of up
to $25,000 and is due on demand. The line of credit is guaranteed by some
of the stockholders of the Company. Interest on the line is charged at
2.5% over the current index rate (11% at December 31, 1999). As of
December 31, 1999, the total outstanding amount of this agreement is
$24,869.
(5) Indebtedness
------------
(a) Note Payable
------------
The Company has a note payable to a financial institution, secured
by the assets of the Company. The note bears interest at 11%, is
due on April 25, 2000 and had outstanding balances as of December
31, 1999 and 1998 of $2,567 and $9,718, respectively. This note is
also guaranteed by some of the stockholders of the Company.
(b) Advances from Stockholders
--------------------------
Advances from stockholders represent amounts due to the Company's
stockholders. The 1998 advances were converted into the
convertible debenture described in Note 7. The 1999 advances bear
interest at 10%.
(continued)
19
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(6) Capital Leases
--------------
The Company is obligated under various lease agreements for certain
equipment. These leases are noncancellable and require monthly payments
through September 2002. The cost of equipment under these capital leases
at December 31, 1999 and 1998 is $89,611 with accumulated amortization of
$42,594 and $24,672, respectively.
Future minimum lease payments under capital leases as of December 31,
1999 are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31:
------------
<S> <C> <C>
2000 $ 25,900
2001 25,900
2002 16,112
--------
67,912
Amount representing interest (12,427)
--------
Present value of future payments 55,485
Current installments of capital lease obligations 18,560
--------
Capital lease obligations, less current installments $ 36,925
========
(continued)
</TABLE>
20
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(7) Convertible Debentures
----------------------
During 1998, the Company entered into a convertible debenture agreement
in the amount of $100,000, which was advanced to the Company in two equal
payments of $50,000 each, bearing an interest rate of 8%. In 1999, the
lender elected to convert the debenture and its related accrued interest
into 333,333 shares of Company common stock.
In December 1999, the Company entered into a convertible debenture
agreement with a Director of the Company in the amount of $230,000. The
proceeds of the debenture were previously advanced to the Company in the
form of cash advances in the aggregate amount of $167,500, $10,000 of
accrued interest, and $62,500 for previous services rendered. The
debenture bears interest at 10% per annum with principal and interest due
in January 2001.
This debenture can be converted at $1.25 per share into 184,000 shares of
common stock, adjusted for the effects of any stock dividends or split or
like transactions that effect the capital structure of the Company, prior
to its maturity date.
(8) Commitments and Contingencies
-----------------------------
(a) Leases
------
In November 1997, the Company entered into an operating lease
to expand the size of it operating facility from 1,782 square
feet to 6,964 square feet for the five-year period from January
1, 1998 through December 31, 2002. Total rent expense for the
years ended December 31, 1999 and December 31, 1998 was
approximately $65,000 and $58,000, respectively.
Future minimum lease payments under this operating lease are
approximately as follows:
2000 $ 49,000
2001 51,000
2002 53,000
========
(continued)
21
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(b) Potential Legal Claims
----------------------
The Company recognizes that claims may arise during the normal
course of business, however, currently the Company's management
and legal counsel are unaware of any pending, threatened or
unasserted claims made against the Company.
(9) Income Taxes
------------
The Company had no income tax expense in 1999 and 1998 due to its
operating losses. The Company has net operating loss carryforwards of
approximately $800,000 for tax reporting purposes at December 31, 1999.
Such loss carryforwards, subject to certain limitations, expire through
2014. To the extent that the Company has taxable net income, the loss
carryforwards will be used to offset the taxable income.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. Significant components of the Company's deferred tax assets
and liabilities as of December 31 are as follows:
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 310,000 61,000
Accrued compensation 11,000 20,000
Other -- 3,000
--------- ---------
Total deferred tax assets 321,000 84,000
Valuation allowance for deferred tax assets (321,000) (84,000)
--------- ---------
Net deferred tax assets $ -- --
========= =========
</TABLE>
(10) Stockholders' Equity
--------------------
(a) Preferred Stock
---------------
In 1999, the Company completed a private placement of 100,000
shares of Series A 10% convertible preferred stock at an
aggregate price of $200,000 and another private placement of
171,875 shares of Series B 10% convertible preferred stock at an
aggregate price of $343,750. Of the total proceeds of $515,625,
$72,187 was used to pay brokerage fees and various expenses
related to the offerings.
(continued)
22
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(10) Stockholders' Equity - Continued
--------------------------------
(a) Preferred Stock - Continued
---------------------------
The holders of the convertible preferred stock have the right to
convert such shares into shares of the Company's common stock at
any time at a conversion price equal to 1.6 shares of common
stock for each share of preferred stock, subject to certain
mandatory conversion provisions. As of December 31, 1999, no
shares of preferred stock have been converted into common stock.
Dividends on the Series A and B convertible preferred stock are
cumulative from the date of issue. Dividends were not declared
in 1999, therefore these dividends are in arrears. The aggregate
amount of arrearages in cumulative preferred dividends as of
December 31, 1999 is approximately $30,000.
(b) Common Stock
------------
In September 1997, the Company increased the authorized number
of shares of common stock from 1.5 million to 30 million shares.
Further, the Company's common stock was modified so that each
share has a par value of $.0005 per share. Concurrently, the
Board of Directors approved a 20 for 1 stock split effective
September 30, 1997. Additionally, the Board of Directors
approved a 1.927195 for 1 stock split effective July 17, 1998.
The accompanying financial statements have been retroactively
adjusted to reflect these transactions.
On December 31, 1997, the holders of two convertible debentures
totaling $200,000 elected to convert their notes, their related
accrued interest, with an additional investment of $100,000 into
578,158 shares of the Company's common stock.
On June 30, 1998, the Company issued 48,180 shares of its common
stock to a director of the Company and 9,636 shares of its
common stock to an independent investor for $50,000 and $10,000,
respectively.
(continued)
23
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(10) Stockholders' Equity - Continued
--------------------------------
(b) Common Stock - Continued
------------------------
On July 30, 1998 and November 1, 1998, the same director of the
Company invested $50,000 and $30,000 in the Company to acquire
166,667 and 100,000 shares, respectively, of the Company's
common stock. Portions of these shares were transferred to a
former Company director and legal counsel of the Company.
On November 29, 1998, a partnership entity invested $55,000 in
the Company to acquire 183,333 shares of the Company's common
stock.
Additionally, on January 4, 1999, the Company's securities
counsel agreed to accept 40,000 shares of Company common stock
in lieu of cash payment for $13,334 in legal fees.
On March 2, 1999, the holder of a convertible debenture in the
amount of $100,000 elected to convert it and its related accrued
interest into 333,333 shares of Company common stock.
(c) Stock Options
-------------
The Board of Directors of the Company has adopted an Employee
Benefit and Consulting Services Compensation Plan. Under the
terms of the Plan, 5,000,000 shares of authorized but unissued
shares of common stock of the Company are reserved for issuance.
The Plan provides for the grant of incentive, as well as
compensatory, stock options to officers, employees, and key
consultants at an option price to be determined by the Board of
Directors of the Company. Options granted under the Plan are
exercisable for a term no longer than five years and are not
transferable.
(continued)
24
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(10) Stockholders' Equity - Continued
--------------------------------
(c) Stock Options - Continued
-------------------------
In 1997, the Company extended one of its executives a
compensatory stock option to purchase up to 192,720 shares of
Company common stock at a price of $0.00649 per share that
vested over a five-year employment period. For the years ended
December 31, 1998 and 1997, the Company recorded compensation
expense of $19,752 and $15,800, respectively, for the difference
between the deemed fair value of shares at the time the options
were granted and the exercise price related to this stock option
plan. Upon termination of employment, the Company provided the
executive six months of severance pay in exchange for canceling
all options held by the executive to purchase common stock of
the Company. Options canceled included 192,720 at $0.00649 per
share, 40,000 at $1.00 per share, and 69,379 at $1.17 per share.
Severance pay expense is fully accrued as of December 31, 1999.
The Company measures compensation expense under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and no compensation expense has been reported for
its fixed stock option plans, except as discussed above for 1997
and 1998 that was subsequently reversed in 1999 when the options
were canceled. Had compensation expense for the Company's stock
option plans been determined using the fair value method under
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock Based Compensation," the impact on net loss would have
been immaterial.
(continued)
25
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(10) Stockholders' Equity - Continued
--------------------------------
(c) Stock Options - Continued
-------------------------
Changes in stock options are as follows:
<TABLE>
<CAPTION>
1999 1998
-------------------------------- ----------------------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
--------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C>
Beginning balance 931,843 $ 0.90 444,220 $ 0.66
Granted 1,512,500 1.15 487,623 1.11
Exercised -- -- --
Canceled (302,099) 0.40 -- --
--------------- --------------- -------------- -----------------
Ending balance 2,142,244 $ 1.15 931,843 $ 0.90
=============== =============== ============== =================
Exercisable 1,032,872 $ 1.04 623,189 $ 1.00
=============== =============== ============== =================
Weighted average fair value of
options granted during the year $ 1.15 $ 1.11
=============== =================
</TABLE>
The following table summarizes information about stock options outstanding
at December 31, 1999:
<TABLE>
<CAPTION>
Weighted
Average
Number Remaining Number
Exercise Outstanding Contractual Exercisable
Price 12/31/99 Life in Years 12/31/99
-------------------------------- ----------------------- -------------------------- ----------------------
<S> <C> <C> <C> <C>
$1.25 1,212,500 5.0 172,500
1.17 509,744 3.0 440,372
1.00 120,000 1.6 120,000
0.75 300,000 4.0 300,000
-------------------------------- ----------------------- -------------------------- ----------------------
$0.75 - $1.25 2,142,244 4.2 1,032,872
================================ ======================= ========================== ======================
(continued)
</TABLE>
26
<PAGE>
BBJ ENVIRONMENTAL SOLUTIONS, INC.
(A Development Stage Company)
Notes to Financial Statements - Continued
(11) Going Concern
-------------
As shown in the accompanying financial statements, the Company has
incurred recurring losses from operations during its development stage
resulting in negative cash flow from operating activities and net
working capital deficiencies. These factors raise doubt about the
Company's ability to continue as a going concern. Management recognizes
that the Company must generate additional resources to enable it to
continue operations. Management's plans include establishing a market
for its products, the sale of additional equity securities under
appropriate market conditions and a plan of reorganization.
On January 31, 2000, the Company entered into an Agreement and Plan of
Reorganization ("Reorganization") with Omega Development, Inc.
("Omega"). Under the terms of the agreement, Omega has agreed to acquire
up to 100% of the capital stock of the Company for an estimated
12,410,666 shares of Omega's common stock subject to certain closing
conditions which include, without limitation, the following: (i) a
reverse stock split by Omega of one-for-three followed by a stock
repurchase of 3,465,000 shares by Omega for nominal consideration from
certain stockholders of Omega; (ii) due diligence of Omega verifying
that it has no assets or liabilities (except for $50,000 loaned to Omega
by the Company in connection with this transaction); and (iii) Omega
being current with all reports required to be filed under the Exchange
Act of 1934, as amended. At the completion of the Reorganization, the
Company will become a wholly owned subsidiary of Omega and Omega will
continue to operate through its newly acquired subsidiary.
On the closing date of the Reorganization, the officers and directors of
Omega will resign and designees of the Company will be appointed to the
vacated positions. At this time, management will also file an amendment
to change Omega's name to BBJ Environmental Technologies, Inc. Each
common stockholder of the Company will receive two shares of Omega
common stock in exchange for each share of Company common stock and each
Series A and Series B preferred stockholder will receive 3.84 shares of
Omega common stock in exchange for each share of Company preferred
stock.
In addition to raising $375,000 by issuing 360,000 shares of Company
common stock in January 2000, the Company and Omega will jointly pursue
issuing 1 million shares of Omega common stock through a private
placement memorandum in the amount of $2 million during the first half
of 2000. On the closing date of the Reorganization, all proceeds
received under the private placement offering will be released from
escrow to the Company.
27
<PAGE>
BBJ ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Omega Development, Inc.)
Pro Forma Balance Sheet
March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Combined
Omega BBJ Adjustments Pro Forma
-------------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash $ 5,924 $ 4,016 $ 125,000 (2) $ 134,940
Accounts receivable -- 43,148 -- 43,148
Inventory -- 41,819 -- 41,819
Prepaids -- 7,120 7,120
Due from Omega -- 50,000 (50,000) (3) --
------------- ------------- -------------- --------------
Total current assets 5,924 96,103 75,000 227,027
Furniture and equipment, net -- 83,690 -- 83,690
Security deposits -- 14,614 -- 14,614
------------- ------------- -------------- --------------
$ 5,924 $ 194,407 $ 75,000 $ 325,331
============= ============= ============== ==============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses $ 15,434 $ 86,101 $ -- $ 101,535
Bank line of credit -- 24,869 -- 24,869
Current portion of bank loan and capital lease
obligations -- 19,212 -- 19,212
Advances from stockholders -- 85,000 85,000
Due to BBJ 50,000 -- (50,000) (3) --
------------- ------------- -------------- --------------
Total current liabilities 65,434 215,182 (50,000) 230,616
Capital lease obligations, less current portion -- 32,285 -- 32,285
Convertible debenture -- 230,000 -- 230,000
------------- ------------- -------------- --------------
Total liabilities 65,434 477,467 (50,000) 492,901
------------- ------------- -------------- --------------
Stockholders' deficit:
Convertible preferred stock -- 543,750 (543,750) (4) --
Common stock 15,000 2,842 (3,796) (4) 14,046
Additional paid-in capital 4,645,653 879,109 (4,047,617) (4) 1,477,145
Accumulated deficit (4,720,163) (1,658,761) 4,720,163 (4) (1,658,761)
------------- ------------- -------------- --------------
Net stockholders' deficit (59,510) (233,060) 125,000 (167,570)
------------- ------------- -------------- --------------
$ 5,924 $ 244,407 $ 75,000 $ 325,331
============= ============= ============== ==============
</TABLE>
See accompanying notes to pro forma financial statements.
28
<PAGE>
BBJ ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Omega Development, Inc.)
Pro Forma Statement of Operations
Three Months Ended March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Combined
Omega BBJ Adjustments Pro Forma
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Sales, net $ -- $ 71,305 $ -- $ 71,305
Cost of sales -- 24,285 -- 24,285
--------------- --------------- --------------- ---------------
Gross margin -- 47,020 -- 47,020
--------------- --------------- --------------- ---------------
Operating expenses:
Sales and marketing -- 121,984 -- 121,984
General and administrative 11,187 154,817 -- 166,004
Research and development -- 19,173 -- 19,173
--------------- --------------- --------------- ---------------
Total operating expenses 11,187 295,974 -- 307,161
--------------- --------------- --------------- ---------------
Net loss $ (11,187) $ (248,954) $ -- $ (260,141)
=============== =============== =============== ===============
Basic and diluted loss per share $ (0.02)
===============
Pro forma common shares outstanding 14,045,666
===============
</TABLE>
See accompanying notes to pro forma financial statements.
29
<PAGE>
BBJ ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Omega Development, Inc.)
Notes to Pro Forma Financial Statements
March 31, 2000
(Unaudited)
1. Basis of Presentation. On June 1, 2000, Omega Development, Inc. ("Omega")
issued 12,410,666 shares of its common stock in exchange for all the issued
and outstanding shares of capital stock of BBJ Environmental Solutions,
Inc. ("BBJ") in a recapitalization transaction accounted for similar to a
reverse acquisition ("Recapitalization"). Omega was formerly a
non-operating public shell corporation with no significant assets and was
treated as the "acquired" company in the transaction, but remains the
surviving legal entity. Accordingly, the transaction was treated as an
issuance of stock by BBJ for the net monetary assets of Omega, accompanied
by a recapitalization. Since this transaction is in substance a
recapitalization of BBJ and not a business combination, a valuation was not
performed and no goodwill was recorded. In connection with the
Recapitalization Omega's name was changed to BBJ Environmental
Technologies, Inc. (the "Company").
The accompanying unaudited pro forma financial statements are presented to
reflect the Recapitalization of the Company. The unaudited pro forma
balance sheet as of March 31, 2000 presents the financial position of the
Company as if the Recapitalization had occurred on that date, utilizing the
unaudited balance sheets of Omega and BBJ as of March 31, 2000. The
unaudited pro forma statement of operations for the three months ended
March 31, 2000, including basic and diluted earnings per share, is
presented as if the Recapitalization occurred at the beginning of the
period presented. The pro forma information was prepared based upon certain
assumptions described below and may not be indicative of results that
actually would have occurred had the Recapitalization occurred on the dates
presented or of results which may occur in the future. The unaudited pro
forma financial data and accompanying notes should be read in conjunction
with the annual financial statements and notes thereto of Omega and BBJ.
2. Receipt of $125,000 from issuance of 100,000 shares of Company common stock
under a currently pending private placement.
3. Elimination of intercompany receivables and payables.
4. As of the date of the Recapitalization, a total of 14,045,666 shares of
Company common stock, par value $0.001, was outstanding resulting from 1) a
reverse split of Omega common stock on a one-for-three basis, 2) the sale
by certain Omega shareholders of 3,465,000 post-split shares of Omega
common stock to Omega at a price of $.0001 per share, 3) the issuance of
12,410,666 shares of Company common stock for all the capital stock of BBJ
and 4) the issuance of 100,000 shares of Company common stock under a
currently pending private placement. As part of the Reorganization, the
accumulated deficit was eliminated against additional paid-in capital.
30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BBJ ENVIRONMENTAL TECHNOLOGIES, INC.
(formerly Omega Development, Inc.)
By: /s/ Jerry V. Schinella
--------------------------
Jerry V. Schinella, President
Date: June 6, 2000
31
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(a) - (b) The financial statements of BBJ for the two years ended
December 31, 1999 and the pro-forma financial statements of BBJ and the
Registrant are filed herewith and follow this page.
(c) Exhibits. The following exhibits are furnished in accordance with
the provisions of Item 601 of Regulation S-B.
Exhibit No. Description
----------- -----------
2 Agreement and Plan of Reorganization between
Omega Development, Inc, and BBJ
Environmental Solutions, Inc., dated January
31, 2000. (2)
3 Amendment to Articles of Incorporation (1)
16.1 Letter on change in certifying accountant
from Henderson Sutton & Co., P.C. (1)
16.2 Letter on change in certifying accountant
from Kirkland, Russ, Murphy & Tapp (1)
--------------------------
(1) Filed herewith.
(2) Incorporated by reference to Exhibit 3 to the Company"s Schedule 14C
Information Statement filed on May 10, 2000
