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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year ended: December 31, 1998
Commission File No. 33-31067
BEECHPORT CAPITAL CORP.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
COLORADO 84-1137359
- ------------------------------- ------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identi-
Incorporation or Organization) fication Number)
750 Prospect Avenue, Cleveland, Ohio 44115
-----------------------------------------------------------
(Address of Principal Executive Offices, Including Zip Code)
Issuer's Telephone Number, Including Area Code: (216) 781-5700
Securities Registered Pursuant to Section 12(b) of the Act: None.
Securities Registered Pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
--------------------------
(Title of Class)
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is not contained in this Form, and no disclosure will be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
State Issuer's revenues for its most recent fiscal year: $-0-.
As of May 1, 1999, 2,480,000 shares of common stock were outstanding, and the
aggregate market value of the shares held by non-affiliates was approximately
$906,000.
Documents incorporated by reference: NONE.
Transitional Small Business Disclosure Format (check one): Yes __ No X
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
Beechport Capital Corp. (the "Company") was incorporated under the laws
of the State of Colorado on January 24, 1989 under the name Coalmont, Inc.
The name of the Company was changed to MCC Holdings, Inc. on August 14, 1992,
and changed again to Beechport Capital Corp. on January 10, 1996. The Company
was originally formed for the primary purpose of seeking out acquisitions of
properties, businesses or merger candidates, without limitation as to the
nature of the business operations or geographic area of the acquisition
candidate. From inception through the date of completion of its initial
public offering of securities, the Company's activities were directed toward
the acquisition of operating capital.
The Company sold 10,000 Units (each "Unit" consisting of common stock and
Class A and Class B Warrants) at $10.00 per Unit, for net proceeds of $50,054
in a public offering which closed on March 20, 1991. The Class A and B
Warrants were exercisable at $4.40 and $6.60 per share, respectively. The
Warrants expired on September 25, 1998.
On June 5, 1992, the Company issued 6,500,000 shares of its Common Stock
to the holders of 100% of the outstanding common stock of a leasing company,
to which it also loaned $50,000. During the period from June 6, 1992 to
December 31, 1993 the Company was under the management of the leasing company
officers, which expended all of the cash of the Company and failed to file the
required periodic reports with the Securities and Exchange Commission.
On December 31, 1993, pursuant to a mutual unwinding agreement, the
6,500,000 shares of common stock were returned and canceled. The $50,000 loan
repayment was written-off, resulting in a bad debt to the Company and the
stock of the leasing company was returned to its original officers and
directors.
During June 1992 the Company effected a one for four hundred and forty (1
for 440) reverse stock split of the Company's common stock outstanding. On
December 6, 1995, the Company effected a two for one forward stock split of
the shares of the Company's Common Stock outstanding. All financial
information and share data in the remainder of this Report gives retroactive
effect to these stock splits.
Since the Company does not have any cash, it must locate a potential
acquisition or merger candidate that is only interested in the liquidity of a
public company.
Effective June 30, 1998 the Company issued 800,000 shares of its Common
Stock for 100% of the issued and outstanding stock of Marketplace 2000, Inc.,
an Ohio corporation which had no business. In connection with this
transaction Lawrence Schmelzer was elected as President of the Company.
The Company's offices are located at 750 Prospect Avenue, Cleveland, Ohio
44115, and its telephone number is (216) 781-5700.
DESCRIPTION OF BUSINESS
The Company believes it has insufficient capital with which to finance
cash acquisitions of other business entities. Accordingly, the Company will
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be incapable of acquiring the assets or business of other entities except in
those instances where the Company exchanges its common stock with stock held
by the target company and/or the target company's shareholders. Another
possibility, although less likely, is that the Company may give its common
stock to a target in exchange for the target's assets. Management expects
that an exchange of the Company's common stock in a merger or acquisition, if
ever, would require the Company to issue a substantial number of shares of its
common stock. Accordingly, the percentage of common stock held by the
Company's then-shareholders would be reduced as a result of the increased
number of shares of common stock issued and outstanding following any such
merger or acquisition.
The Company expects to continue to concentrate primarily on the
identification and evaluation of prospective merger or acquisition "target"
entities including private companies, partnerships or sole proprietorships.
The Company does not intend to act as a general or limited partner in
connection with partnerships it may merge with or acquire. Management has not
identified any particular area of interest within which the Company will
continue its efforts.
Management contemplates that the Company will seek to merge with or
acquire a target company with either assets or earnings, or both, and that
preliminary evaluations undertaken by the Company will assist in identifying
possible target companies. The Company has not established a specific level
of earnings or assets below which the Company would not consider a merger or
acquisition with a target company. Moreover, management may identify a target
company which is generating losses which it will seek to acquire or merge with
the Company. The merger with or acquisition of a target company which is
generating losses or which has negative shareholders' equity may have a
material adverse affect on the price of the Company's common stock. There is
no assurance, if the Company acquires a target company with assets or
earnings, or both, that the price of the Company's common stock will increase.
PLAN OF ACQUISITION
The Company will follow a systematic approach to identify its most
suitable acquisition candidates.
First, management will continue to concentrate on identifying any number
of preliminary prospects which may be brought to the attention of management
through present associations or by virtue of the very limited advertising
campaign the Company will conduct. Management will then apply certain of its
broad criteria to the preliminary prospects. Essentially, this will entail a
determination by management as to whether or not the prospects are in an
industry which appears promising and whether or not the prospects themselves
have potential within their own industries. During this initial screening
process, management will ask and receive answers to questions framed to
provide appropriate threshold information, depending upon the nature of the
prospect's business. Such evaluation is not expected to be an in-depth
analysis of the target company's operations although it will encompass to look
at most, if not all, of the same areas to be examined once one or more target
companies are selected for an in-depth review. For instance, at this stage
management may look at a prospect's unaudited balance sheet. Once a prospect
is selected for an in-depth review, management will review the prospect's
audited financial statements. Nevertheless, management anticipates this
evaluation will provide a broad overview of the business of the target company
and should allow a large percentage of preliminary prospects to be eliminated
from further consideration.
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Management expects to enter into further negotiations with target company
management following successful conclusion of financial and evaluation
studies. Negotiations with target company management will be expected to
focus on the percentage of the Company which target company shareholders would
acquire in exchange for their shareholdings in the target company. Depending
upon, among other things, the target company's assets and liabilities, the
Company's shareholders will in all likelihood hold a lesser percentage
ownership interest in the Company following any merger or acquisition. The
percentage ownership may be subject to significant reduction in the event the
Company acquires a target company with substantial assets. Any merger or
acquisition effected by the Company can be expected to have a significant
dilutive effect on the percentage of shares held by the Company's
then-shareholders.
The final stage of any merger or acquisition to be effected by the
Company will require the Company to retain the services of its counsel and a
qualified accounting firm in order to properly effect the merger or
acquisition. The Company may be expected to incur significant legal fees and
accounting costs during the final stages of a merger or acquisition. Also, if
the merger or acquisition is successfully completed, management anticipates
that certain costs will be incurred for public relations, such as the
dissemination of information to the public, to the shareholders and to the
financial community. If the Company is unable to complete the merger or
acquisition for any reason, the Company's capital may be substantially
depleted if legal fees and accounting costs have been incurred. Management
intends to retain legal and accounting services only on an as-needed basis in
the latter stages of a proposed merger or acquisition.
Management anticipates that the Company may have to seek additional
financing in order to continue operations.
COMPETITION
The Company is and will remain an insignificant participant among the
firms that engage in mergers with and acquisitions of privately-held entities.
Many established venture-capital and financial concerns have significantly
greater financial and personnel resources and technical expertise than the
Company. In view of the Company's limited financial resources and limited
management availability, the Company will continue to be at a significant
disadvantage compared to the Company's competitors.
EMPLOYEES
The Company has no full time employees. Its officers devote as much time
as is necessary to conduct the Company's business.
ITEM 2. DESCRIPTION OF PROPERTY.
From December 31, 1993 until June 30, 1998, the Company maintained its
office in space provided by Timothy J. Brasel, the Company's President, at no
charge. Since June 30, 1998 the Company has maintained its office in space
provided by Lawrence Schmelzer, the Company's President, at no charge. The
Company owns no real property.
ITEM 3. LEGAL PROCEEDINGS.
There are no pending legal proceedings, and the Company is not aware of
any threatened legal proceedings to which the Company is a party.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1998.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) MARKET INFORMATION. To the best of management's knowledge, no
public market for any securities of the Company existed from June 23, 1993 to
March 27, 1997. The Company's common stock is currently traded in the over-
the-counter market, and prices for the common stock are quoted on the OTC
Bulletin Board under the symbol BEAH.
The following table sets forth the high and low closing bid prices of
the Company's common stock for the period indicated, as obtained from the
NASD. The stock is principally owned or controlled by Officers and Directors
of the Company, and the bid prices reported may not be indicative of the value
of the common stock. The volume of trading in the Company's common stock has
been minimal. These over-the-counter market quotations reflect inter-dealer
prices without retail markup, markdown or commissions and may not necessarily
represent actual transactions.
QUARTER ENDED HIGH BID LOW BID
------------- -------- -------
December 31, 1998 $1.9375 $ .75
September 30, 1998 $1.50 $ .50
June 30, 1998 $2.00 $1.50
March 31, 1998 $2.00 $1.875
December 31, 1997 $1.875 $ .50
September 30, 1997 $ .50 $ .375
June 30, 1997 $ .50 $ .125
March 31, 1997 $1.375 $ .375
(b) APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK. The number of record
holders of the Company's no par value common stock at May 4, 1999, was
approximately 46. This does not include shareholders who hold stock in their
accounts at broker/dealers.
(c) DIVIDENDS. No dividends have been declared or paid by the Company
since inception.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
During the fiscal year ended December 31, 1998, the Company engaged in no
significant operations other than the search for, and identification and
evaluation of, possible acquisition candidates. No revenues were received by
the Company during the fiscal year. The Company experienced a net loss of
$(19,301) during the fiscal year ended December 31, 1998, which was primarily
the result of the legal and accounting costs of compliance with the reporting
requirements of the federal securities laws, and general and administrative
expenses.
For the remainder of the current fiscal year, the Company anticipates
losses similar in magnitude to those experienced historically. Should the
Company intensify its search for an acquisition candidate, however, losses are
likely to accrue at a greater rate than experienced historically. The Company
anticipates that until a business combination is completed with an acquisition
candidate, it will not generate revenues, and may continue to operate at a
loss after completing a business combination, depending upon the performance
of the acquired business.
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As of December 31, 1998, the Company had no material commitments for
capital expenditures.
ITEM 7. FINANCIAL STATEMENTS.
The financial statements are set forth on pages F-1 through F-9 hereto.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING FINANCIAL
DISCLOSURE.
There have been no disagreements between the Company and its independent
accountants on any matter of accounting principles or practices or financial
statement disclosure since the Company's inception.
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The Directors and Executive Officers of the Company are as follows:
NAME AGE POSITION
--------------------- --- ----------------------
Lawrence C. Schmelzer 62 President and Director
Timothy J. Brasel 40 Director
Joseph Surace 74 Director
LAWRENCE C. SCHMELZER has served as President and a Director of the
Company since June 30, 1998. He formerly served as the Chairman of 1st
Cleveland Securities and as a Director of Fixcorp and Momentum Corporation.
He is a graduate of the Wharton School of Finance. Mr. Schmelzer also is a
private investor.
TIMOTHY J. BRASEL has served as a Director since December 31, 1995 and as
President from December 31, 1995 until June 30, 1998. From December 31, 1993
to December 31, 1995, he served as President and a Director, and from January
24, 1989 (inception) to June 5, 1992 he served as a Director. He also serves
as a director of ten corporations which were formed for the purpose of
acquiring or merging with a privately-held company. These ten corporations
have registered their securities with the SEC under the Securities Exchange
Act of 1934. These companies are Calneva Capital Corp., Aspen Capital Corp.,
Studio Capital Corp., Royal Belle Capital Corp., Zirconium Capital Corp.,
Copper Capital Corp., West Lake Capital Corp., Mercury Capital Corp., Hightop
Capital Corp., and Antares Capital Corp. From December 1996 until September
1998, he served as President and a Director of Cypress Capital, Inc., which
completed an acquisition of Terra Telecommunications, Inc. during September
1998. From September 1995 until January 1999, he served as President and a
Director of High Hopes, Inc. which completed an acquisition of certain
technology from Sanga e-Health LLC during January 1999. From May 1995 until
August 1997, Mr. Brasel served as President and a director of Universal
Capital Corp., which completed an acquisition of Remarc International Inc.
during August 1997. From February 1996 until February 1997, Mr. Brasel served
as President and a director of Capital 2000, Inc. which completed an
acquisition of United Shields Corporation in February 1997. From July 1996
until December 1997, Mr. Brasel served as President and a director of Mahogany
Capital, Inc. which completed an acquisition of Pontotoc Production Company,
Inc. during December 1997. From July 1996 until May 1998, Mr. Brasel served
as President and a director of Walnut Capital, Inc., which completed a merger
with Links Ltd. during May 1998. From March 1990 until September 1994, Mr.
Brasel served as President, Secretary, Treasurer and a Director of Prentice
Capital, Inc., a publicly-held blank-check company which completed an
acquisition of Universal Footcare, Inc. From March 1990 until August 1993,
Mr. Brasel was President, Secretary and a Director of Brasel Ventures, Inc., a
publicly-held blank-check company, which completed an acquisition of American
Pharmaceutical Company. Since January 1987, Mr. Brasel has been President and
a Director of Bleu Ridge Consultants, Inc., a business and management
consulting firm located in Denver, Colorado. Mr. Brasel received a Bachelor
of Science Degree in Business Administration from Morningside College, Sioux
City, Iowa in 1980.
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JOSEPH SURACE has served as a Director since June 30, 1998. Mr. Surace
is retired and is a private investor. He was formerly the owner of 3 Star
Trucking.
All Directors of the Company hold office until the next annual meeting of
the shareholders and until their successors have been elected and qualified.
The Officers of the Company are elected by the Board of Directors at the
first meeting after each annual meeting of the Company's shareholders, and
hold office until their death, or until they shall resign or have been removed
from office.
The date of the next annual meeting of the Company will be determined by
the Company's Board of Directors in accordance with Colorado law.
ITEM 10. EXECUTIVE COMPENSATION.
The Company's sole Officer currently receives no salary from the Company.
The Company has no retirement, pension, profit-sharing or insurance or
medical reimbursement plans covering its Officers and Directors.
INCENTIVE STOCK OPTION PLAN
On January 24, 1989, the Company adopted an Incentive Stock Option Plan
(the "Plan") under which options granted are intended to qualify as "incentive
stock options" under Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"). Pursuant to the Plan, options to purchase up to 45,455
shares of the Company's Common Stock may be granted to employees of the
Company. The Plan is administered by the Board of Directors, which is
empowered to determine the terms and conditions of each option, subject to the
limitation that the exercise price cannot be less than the market value of the
common Stock on the date of the grant (110% of the market value in the case of
options granted to an employee who owns 10% or more of the Company's
outstanding Common Stock) and no option can have a term in excess of 10 years
(5 years in the case of options granted to employees who own 10% or more of
the Company's Common Stock). As of the date hereof, no options have been
granted under this Plan.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of April 15, 1999, the stock ownership
of each person known by the Company to be the beneficial owner of five percent
or more of the Company's Common Stock, each Director individually and all
Directors and Officers of the Company as a group:
AMOUNT AND
NAME AND ADDRESS NATURE OF BENE- PERCENT
OF BENEFICIAL OWNER FICIAL OWNERSHIP OF CLASS
- ------------------------- -------------------- --------
Lawrence C. Schmelzer 730,000 29.4%
21302 S. Woodland Road
Shaker Heights, OH 44122
Joseph Surace 50,000 2.0%
3819 Willow Run
Westlake, OH 44145
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Timothy J. Brasel 491,705 (1) 19.8%
5770 South Beech Court
Greenwood Village, CO 80121
J. J. Peirce 170,000 6.9%
5125 West Lake Avenue
Littleton, Colorado 80123
All Directors and 1,271,705 51.3%
Officers as a Group
(3 Person)
_______________
(1) Includes 214,383 shares of Common Stock held of record by Brasel Family
Partners, Ltd., a limited partnership of which Mr. Brasel is the general
partner, by virtue of which Mr. Brasel may be deemed to be a beneficial
holder of such shares. Also includes 100,000 shares held by Brasel
Charitable Remainder Trust; 21,000 shares held by the Charitable
Remainder Trust of Mary Jane Brasel; 22,000 shares held by the Charitable
Remainder Trust of Susan Anne Brasel; 40,000 shares held by the
Charitable Remainder Trust of Timothy J. Brasel; 10,000 shares held by
the S.A. Brasel Charitable Remainder Trust; 52,958 shares held by Bleu
Ridge Consultants Profit Sharing Plan and Trust; and 1,364 shares held by
Mary Jane Brasel and Timothy J. Brasel as trustees for the benefit of
Susan Anne Brasel. Mr. Brasel is trustee of each of the above trusts.
Also includes a total of 30,000 shares held by Janet M. Brasel, Mr.
Brasel's wife, as custodian for Tyler Jay Brasel, Colton Russell Brasel
and Justin Brasel, UGMA/CO.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During January, 1998 the Company issued 400,000 shares of its Common
Stock to the following persons in payment of promissory notes totaling $7,500:
Name No. of Shares Amount of Note
---- ------------- --------------
Brasel Family Partners 50,000 $ 937.50
Janet Brasel, as Custodian 150,000 $2,812.50
Paul H. Dragul 200,000 $3,750.00
------- ---------
400,000 $7,500.00
Effective June 30, 1998 the Company issued 800,000 shares of its Common
Stock to Lawrence Schmelzer in exchange for 100% of Marketplace 2000, Inc., an
Ohio corporation which had no assets or business. In connection with this
transaction Mr. Schmelzer was named as a Director and President of the
Company.
During June 1998 the Company issued 80,000 shares of its Common Stock to
Lawrence Schmelzer in consideration for $20,000 in cash.
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) 3. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION LOCATION
3 Articles of Incorporation, Incorporated by reference to
as amended Registrant's Form S-18 Registration
Statement (No. 33-31067)
3 Bylaws Incorporated by reference to
Registrant's Form S-18 Registration
Statement (No. 33-31067)
10 Share Exchange Agreement Filed herewith electronically
dated April 28, 1999 with
Marketplace 2000, Inc.
27 Financial Data Schedule Filed herewith electronically
(b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed during the
quarter ended December 31, 1998.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
BEECHPORT CAPITAL CORP. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
with
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
December 31, 1998 and 1997
Report of Independent Certified Public Accountants F-2
Consolidated Financial Statements:
Consolidated Balance Sheet F-3
Consolidated Statements of Operations F-4
Consolidated Statement of Changes in Stockholders' Equity F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
F-1
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Beechport Capital Corp.
Cleveland, OH 44115
We have audited the accompanying consolidated balance sheet of Beechport
Capital Corp. and consolidated subsidiary as of December 31, 1998, and the
related consolidated statements of operations, stockholders' (deficit) and
cash flows for the two years ended May 31, 1998 and 1997. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements, referred to above,
present fairly, in all material respects, the consolidated financial position
of Beechport Capital Corp. and subsidiary as of December 31, 1998, and the
consolidated results of its operations, changes in its stockholders' (deficit)
and its cash flows for the two years ended December 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
financial statements, the Company has suffered recurring losses from
operations and has a net working capital deficiency that raise substantial
doubt about its ability to continue as a going concern. The financial
statements do not include any adjustments that may result from the outcome of
this uncertainty.
/s/ Schumacher & Associates, Inc.
Schumacher & Associates, Inc.
Certified Public Accountants
12835 E. Arapahoe Road
Tower II, Suite 110
Englewood, Colorado 80112
April 13, 1999
F-2
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BEECHPORT CAPITAL CORP. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED BALANCE SHEET
December 31, 1998
ASSETS
Current Assets
Cash $ 12,957
Trust account 3,561
-----------
Total Current Assets 16,518
-----------
TOTAL ASSETS $ 16,518
===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Accounts payable $ 3,960
Advances payable, related party 21,985
-----------
Total Current Liabilities 25,945
-----------
TOTAL LIABILITIES 25,945
===========
Stockholders' (Deficit):
Preferred stock, no par value,
10,000,000 shares authorized,
None issued and outstanding -
Common stock, no par value
750,000,000 shares authorized,
2,480,000 shares issued and
outstanding 190,688
Additional paid-in capital 13,600
Accumulated (deficit) (213,715)
-----------
TOTAL STOCKHOLDERS' (DEFICIT) (9,427)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $ 16,518
===========
The accompanying notes are an integral part of the financial statements.
F-3
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BEECHPORT CAPITAL CORP. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31,
1998 1997
---------- ----------
Revenue $ - $ -
---------- ----------
Expenses
Legal and accounting 14,038 2,679
Other 5,263 863
---------- ----------
19,301 3,542
---------- ----------
Net (Loss) $ (19,301) $ (3,542)
========== ==========
Per Share $ (.01) $ nil
========== ==========
Weighted Average Shares Outstanding 2,480,000 1,200,000
========== ==========
The accompanying notes are an integral part of the financial statements.
F-4
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BEECHPORT CAPITAL CORP. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'(DEFICIT)
From December 31, 1996 through December 31, 1998
<TABLE>
<CAPTION
Additional
Common Stock Paid-in Accumulated
No./Shares Amount Capital (Deficit) Total
---------- -------- ---------- ------------ ---------
<C> <S> <S> <S> <S> <S>
Balance at December 31, 1996 1,200,000 $163,188 $13,600 $(190,872) $(14,084)
Net loss-year ended December
31, 1997 - - - (3,542) (3,542)
--------- -------- ------- --------- --------
Balance at December 31, 1997 1,200,000 163,188 13,600 (194,414) (17,626)
Issuance of stock for notes
payable 400,000 7,500 - - 7,500
Issuance of stock at $0.25 80,000 20,000 - - 20,000
Issuance of stock - business
combination 800,000 - - - -
Net loss-year ended December
31, 1998 - - - (19,301) (19,301)
--------- -------- ------- --------- --------
Balance at December 31, 1998 2,480,000 $190,688 $13,600 $(213,715) $ (9,427)
========= ======== ======= ========= ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
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BEECHPORT CAPITAL CORP. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
1998 1997
---------- ----------
Cash Flows from Operating Activities:
Net income (loss) $ (19,301) $ (14,917)
Increase in accounts payable
and accrued expenses 585 11,787
Other, net (3,561) -
---------- ----------
Net Cash (Used in) Operating
Activities (22,277) (3,130)
---------- ----------
Cash Flows Provided by Investing
Activities - -
---------- ----------
Cash Flows from Financing Activities:
Advances from related party 7,406 -
---------- ----------
Net Cash Provided from Financing
Activities 7,406 -
---------- ----------
Cash Provided by Financing Activities:
Common stock issued 27,500 -
---------- ----------
Net Cash Provided by Financing Activities 27,500 -
---------- ----------
Increase (Decrease) in Cash 12,629 (3,130)
Cash, Beginning of Period 328 3,282
---------- ----------
Cash, End of Period $ 12,957 $ 152
========== ==========
Interest Paid $ - $ -
========== ==========
Income Taxes Paid $ - $ -
========== ==========
The accompanying notes are an integral part of the financial statements.
F-6
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BEECHPORT CAPITAL CORP. AND CONSOLIDATED SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997
(1) Summary of Accounting Policies
This summary of significant accounting policies of Beechport
Capital Corp. (Company) is presented to assist in
understanding the Company's financial statements. The
financial statements and notes are representations of the
Company's management who is responsible for their integrity
and objectivity. These accounting policies conform to
generally accepted accounting principles and have been
consistently applied in the preparation of the financial
statements.
(a) Nature of Operations
The Company was organized as a Colorado corporation on
January 24, 1989, in order to evaluate, structure and
complete a merger with, or acquisition of, prospects
consisting of private companies, partnerships or sole
proprietorships. The Company may seek to acquire a
controlling interest in such entities in contemplation
of later completing an acquisition. The Company is not
limited to any operation or geographic area in seeking
out opportunities.
(b) Per Share Information
Per share information is based upon the weighted
average number of shares outstanding during the period.
Income Taxes
As of December 31, 1998, Beechport Capital Corp. had
net operating losses available for carry-over to future
years of approximately $214,000, expiring in various
years through 2013. Utilization of these carryovers
may be limited due to changes in control of the
Company. As of December 31, 1998, the company has
total deferred tax assets of approximately $42,000 due
to operating loss carryforwards. However, because of
the uncertainty of potential realization of these tax
assets, the Company has provided a valuation allowance
for the entire $42,000. Thus, no tax assets have been
recorded in the financial statements as of December 31,
1998.
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BEECHPORT CAPITAL CORP. AND CONSOLIDATED SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997
(1) Summary of Accounting Policies, Continued
(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
period. Actual results could differ from those
estimates.
(2) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles,
which contemplates continuation of the Company as a going
concern. However, the Company has sustained operating
losses since inception and has a net working capital
deficiency. These matters raise substantial doubt about the
Company's ability to continue as a going concern.
Management is attempting to locate a business combination
candidate.
In view of these matters, continuing as a going concern is
dependent upon the Company's ability to meet is financing
requirements, raise additional capital, and the success of
its future operations or completion of a successful business
combination. Management believes that actions planned and
presently being taken to revise the company's operating and
financial requirements provide the opportunity for the
Company to continue as a going concern.
(3) Business Combination
Effective June 30, 1998 the Company entered into a business
combination with Marketplace 2000, Inc. (Marketplace), an
Ohio corporation. Under the terms of the agreement, the
Company issued 800,000 shares of its restricted common stock
in exchange for 100% of the issued and outstanding common
stock of Marketplace. Since Marketplace had no
stockholders' equity and since Marketplace was an inactive
entity, no value was recorded for the stock issued. After
the completion of the transaction the controlling
shareholders of Marketplace owned approximately 50% of the
Company's outstanding common stock.
F-8
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BEECHPORT CAPITAL CORP. AND CONSOLIDATED SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997
(4) Advances from Related Parties
At December 31, 1998 a related party had outstanding
advances to the Company totaling $21,985. These advances
have no written repayment terms, do not bear interest, and
are uncollateralized.
(5) Common Stock Issued
On January 26, 1998, the Company issued 400,000 shares of
its common stock in exchange for conversion of certain loans
payable to related parties valued at $7,500. On June 30,
1998, the Company issued 80,000 shares of its common stock
to an entity in exchange for $20,000. In addition, on June
30, 1998, the Company issued 800,000 shares of its common
stock in exchange for all the outstanding shares of an
inactive entity with no stockholders' equity. See note 3.
F-9
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned thereunder duly authorized.
BEECHPORT CAPITAL CORP.
Dated: May 11, 1999 By:/s/ Lawrence Schmelzer
Lawrence Schmelzer, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
/s/ Lawrence Schmelzer President, Secretary, May 11, 1999
Lawrence Schmelzer Treasurer (Principal
Financial and Account-
ing Officer) and
Director
/s/ Timothy J. Brasel Director May 11, 1999
Timothy J. Brasel
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is made this 28 day of April 1998, by and
between Beechport Capital Corp., a Colorado corporation ("Beechport"),
Marketplace 2000, Inc., an Ohio corporation ("Marketplace"), Lawrence
Schmelzer ("Shareholder"), Timothy J. Brasel. Paul H. Dragul and Joseph J.
Peirce.
WHEREAS, Beechport desires to acquire all of the issued and outstanding
shares of common stock of Marketplace in exchange for an aggregate of 800,000
authorized but unissued restricted shares of the common stock, no par value,
of Beechport (the "Common Stock") the "Exchange Offer"); and
WHEREAS, Marketplace desires to assist Beechport in a business
combination which will result in the shareholders of Marketplace owning
approximately 50% of the then issued and outstanding shares of Beechport's
Common Stock, and Beechport holding 100% of the issued and outstanding shares
of Marketplace's common stock; and
WHEREAS, the share exchange contemplated hereby will result in the
Marketplace shareholders tendering all of the outstanding common stock of
Marketplace to Beechport in exchange solely for the Common Stock and no other
consideration, which the parties hereto intend to treat as a reorganization
under I.R.C. Section 368(a)(1)(B).
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 Issuance of Shares. Subject to all of the terms and conditions
of this Agreement, Beechport agrees to offer 10,000 shares of Common Stock for
each share of Marketplace common stock issued and outstanding, or a total of
800,000 shares of Beechport's Common Stock. The Common Stock will be issued
directly to the shareholders of Marketplace on the Closing, in the amounts set
forth on Schedule 1, which is attached hereto and incorporated herein by
reference.
1.2 Exemption from Registration. The parties hereto intend that the
Common Stock to be issued by Beechport to Marketplace shareholders shall be
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), pursuant to Section 4(2) of the Act and the rules and
regulations promulgated thereunder.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF MARKETPLACE
Except as disclosed in Schedule 2 which is attached hereto and
incorporated herein by reference, Marketplace hereby represents and warrants
to Beechport that:
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2.1 Organization. Marketplace is a corporation duly organized,
validly existing, and in good standing under the laws of Ohio, has all
necessary corporate powers to own its properties and to carry on its business
as now owned and operated by it, and is duly qualified to do business and is
in good standing in each of the jurisdictions where its business requires
qualification.
2.2 Capital. The authorized capital stock of Marketplace consists of
200 shares of Common Stock, of which 80 are currently issued and outstanding.
All of the issued and outstanding shares of Marketplace are duly authorized,
validly issued, fully paid, and nonassessable. There are no outstanding
subscriptions, options, rights, warrants, debentures, instruments, convertible
securities, or other agreements or commitments obligating Marketplace to issue
or to transfer from treasury any additional shares of its capital stock of any
class.
2.3 Subsidiaries. Marketplace does not have any subsidiaries or own
any interest in any other enterprise (whether or not such enterprise is a
corporation).
2.4 Directors and Officers. Schedule 2 contains the names and titles
of all directors and officers of Marketplace as of the date of this Agreement.
2.5 Financial Statements. Marketplace has delivered to Beechport its
unaudited balance sheet as of April 15, 1998 (the "Financial Statements").
The Financial Statements are complete and correct in all material respects and
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, however, the
financials are not presented in accordance with generally accepted accounting
principles. The Financial Statements accurately set out and describe the
financial condition of Marketplace as of April 15, 1998.
2.6 Absence of Changes. Since April 15, 1998, except for changes in
the ordinary course of business which have not in the aggregate been
materially adverse, to the best of Marketplace's knowledge, Marketplace has
conducted its business only in the ordinary course and has not experienced or
suffered any material adverse change in the condition (financial or
otherwise), results of operations, properties, business or prospects of
Marketplace or waived or surrendered any claim or right of material value.
2.7 Absence of Undisclosed Liabilities. Neither Marketplace nor any
of its properties or assets are subject to any material liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due, that are not reflected in the financial
statements presented to Beechport or have otherwise been disclosed to
Beechport.
2.8 Tax Returns. Within the times and in the manner prescribed by
law, Marketplace has filed all federal, state and local tax returns required
by law, or has filed extensions which have not yet expired, and has paid all
taxes, assessments and penalties due and payable.
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2.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein,
Beechport and/or its attorneys shall have the opportunity to meet with
accountants and attorneys to discuss the financial condition of Marketplace.
Marketplace shall make available to Beechport and/or its attorneys all books
and records of Marketplace.
2.10 Trade Names and Rights. Marketplace does not use any trademark,
service mark, trade name, or copyright in its business, or own any trademarks,
trademark registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications.
2.11 Compliance with Laws. Marketplace has complied with, and is not
in violation of, applicable federal, state or local statutes, laws and
regulations (including, without limitation, any applicable building, zoning or
other law, ordinance or regulation) affecting its properties or the operation
of its business, except for matters which would not have a material affect on
Marketplace or its properties.
2.12 Litigation. Marketplace is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation pending or, to the best knowledge of Marketplace, threatened
against or affecting Marketplace or its business, assets or financial
condition, except for matters which would not have a material affect on
Marketplace or its properties. Marketplace is not in default with respect to
any order, writ, injunction or decree of any federal, state, local or foreign
court, department, agency or instrumentality applicable to it. Marketplace is
not engaged in any lawsuit to recover any material amount of monies due to it.
2.13 Authority. Marketplace has full corporate power and authority
to enter into this Agreement. The board of directors of Marketplace has taken
all action required to authorize the execution and delivery of this Agreement
by or on behalf of Marketplace and the performance of the obligations of
Marketplace under this Agreement. No other corporate proceedings on the part
of Marketplace are necessary to authorize the execution and delivery of this
Agreement by Marketplace in the performance of its obligations under this
Agreement. This Agreement is, when executed and delivered by Marketplace, and
will be a valid and binding agreement of Marketplace, enforceable against
Marketplace in accordance with its terms, except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium
and similar laws relating to creditors' rights generally.
2.14 Ability to Carry Out Obligations. Neither the execution and
delivery of this Agreement, the performance by Marketplace of its obligations
under this Agreement, nor the consummation of the transactions contemplated
under this Agreement will to the best of Marketplace's knowledge: (a)
materially violate any provision of Marketplace's articles of incorporation or
bylaws; (b) with or without the giving of notice or the passage of time, or
both, violate, or be in conflict with, or constitute a material default under,
or cause or permit the termination or the acceleration of the maturity of, any
debt, contract, agreement or obligation of Marketplace, or require the payment
of any prepayment or other penalties; (c) require notice to, or the consent
of, any party to any agreement or commitment, lease or license, to which
Marketplace is bound; (d) result in the creation or imposition of any security
interest, lien, or other encumbrance upon any material property or assets of
Marketplace; or (e) violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority to which Marketplace
is bound or subject.
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2.15 Full Disclosure. None of the representations and warranties
made by Marketplace herein, or in any schedule, exhibit or certificate
furnished or to be furnished in connection with this Agreement by Marketplace,
or on its behalf, contains or will contain any untrue statement of material
fact.
2.16 Assets. Marketplace has good and marketable title to all of its
tangible properties and such tangible properties are not subject to any
material liens or encumbrances.
2.17 Material Contracts and Obligations. Attached hereto on Schedule
2 is a list of all agreements, contracts, indebtedness, liabilities and other
obligations to which Marketplace is a party or by which it is bound that are
material to the conduct and operations of its business and properties, which
provide for payments to or by the Company in excess of $10,000; or which
involve transactions or proposed transactions between the Company and its
officers and directors. Copies of such agreements and contracts and
documentation evidencing such liabilities and other obligations have been made
available for inspection by Beechport and its counsel. All of such agreements
and contracts are valid, binding and in full force and effect in all material
respects, assuming due execution by the other parties to such agreements and
contracts.
2.18 Consents and Approvals. No consent, approval or authorization
of, or declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by Marketplace in
connection with: (a) the execution and delivery by Marketplace of this
Agreement; (b) the performance by Marketplace of its obligations under this
Agreement; or (c) the consummation by Marketplace of the transactions
contemplated under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BEECHPORT
Except as disclosed in Schedule 3 which is attached hereto and
incorporated herein by reference, Beechport represents and warrants to
Marketplace that:
3.1 Organization. Beechport is a corporation duly organized, valid
existing, and in good standing under the laws of Colorado, has all necessary
corporate powers to own properties and to carry on business, and it is not now
conducting any business, except to the extent to which the effecting of the
transaction contemplated by this Agreement constitutes doing business.
3.2 Capitalization. The authorized capital stock of Beechport
consists of 750,000,000 shares of no par value Common Stock of which 1,600,000
shares of Common Stock are currently issued and outstanding. All of the
issued and outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and nonassessable. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other agreements or
commitments obligating Beechport to issue or to transfer from treasury any
additional shares of its capital stock of any class, except that there are
456,817 Class A Warrants (exercisable at $4.40 until September 25, 1998) and
456,817 Class B Warrants (exercisable at $6.60 until September 25, 1998)
outstanding.
4
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3.3 Subsidiaries. Beechport does not presently have any subsidiaries
or own any interest in any other enterprise (whether or not such enterprise is
a corporation).
3.4 Directors and Officers. Schedule 3 contains the names and titles
of all directors and officers of Beechport as of the date of this Agreement.
3.5 Financial Statements. Beechport has delivered to Marketplace its
audited balance sheet and statements of operations and cash flows as of and
for the period ended December 31, 1997 (the "Financial Statements"). The
Financial Statements are complete and correct in all material respects and
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated. The Financial
Statements accurately set out and describe the financial condition and
operating results of the Company as of the dates, and for the periods,
indicated therein. The current liabilities of Beechport are set forth on
Schedule 2. As of the Closing, the total liabilities of Beechport shall not
exceed $20,000.
3.6 Absence of Changes. Since December 31, 1997, except for changes
in the ordinary course of business which have not in the aggregate been
materially adverse, to the best of Beechport's knowledge, Beechport has not
experienced or suffered any material adverse change in its condition
(financial or otherwise), results of operations, properties, business or
prospects or waived or surrendered any claim or right of material value.
3.7 Absence of Undisclosed Liabilities. To the best of Beechport's
knowledge, neither Beechport nor any of its properties or assets are subject
to any liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due, that are not
reflected in the financial statements presented to Marketplace.
3.8 Tax Returns. Within the times and in the manner prescribed by
law, Beechport has filed all federal, state and local tax returns required by
law and has paid all taxes, assessments and penalties due and payable.
3.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein,
Marketplace shall have the opportunity to meet with Beechport's accountants
and attorneys to discuss the financial condition of Beechport. Beechport
shall make available to Marketplace all books and records of Beechport.
3.10 Trade Names and Rights. Beechport does not use any trademark,
service mark, trade name, or copyright in its business, or own any trademarks,
trademark registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications.
3.11 Compliance with Laws. To the best of Beechport's knowledge,
Beechport has complied with, and is not in violation of, applicable federal,
state or local statutes, laws and regulations (including, without limitation,
any applicable building, zoning, or other law, ordinance, or regulation)
affecting its properties or the operation of its business.
3.12 Litigation. Beechport is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or governmental
investigation pending or, to the best knowledge of Beechport, threatened
against or affecting Beechport or its business, assets, or financial
condition. Beechport is not in default with respect to any order, writ,
5
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injunction, or decree of any federal, state, local, or foreign court,
department agency, or instrumentality. Beechport is not engaged in any legal
action to recover moneys due to it.
3.13 No Prior or Pending Investigation. Beechport is not aware of
any prior or pending investigations or legal proceedings by the SEC, any state
securities regulatory agency, or any other governmental agency regarding
Beechport or any officers or directors of Beechport or any shareholders or
controlling persons of such shareholders.
3.14 Authority. Beechport has full corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated by
this Agreement. The Board of Directors of Beechport has taken all action
required to authorize the execution and delivery of this Agreement by or on
behalf of Beechport, the performance of the obligations of Beechport under
this Agreement and the consummation by Beechport of the transactions
contemplated under this Agreement. No other corporate proceedings on the part
of Beechport are necessary to authorize the execution and delivery of this
Agreement by Beechport in the performance of its obligations under this
Agreement. This Agreement is, and when executed and delivered by Beechport,
will be a valid and binding agreement of Beechport, enforceable against
Beechport in accordance with its terms, except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium
and similar laws relating to creditors rights generally.
3.15 Ability to Carry Out Obligations. Neither the execution and
delivery of this Agreement, the performance by Beechport of its obligations
under this Agreement, nor the consummation of the transactions contemplated
under this Agreement will, to the best of Beechport's knowledge: (a) violate
any provision of Beechport's articles of incorporation or bylaws; (b) with or
without the giving of notice or the passage of time, or both, violate, or be
in conflict with, or constitute a default under, or cause or permit the
termination or the acceleration of the maturity of, any debt, contract,
agreement or obligation of Beechport, or require the payment of any prepayment
or other penalties; (c) require notice to, or the consent of, any party to any
agreement or commitment, lease or license, to which Beechport is bound; (d)
result in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of Beechport; or (e) violate any
statute or law or any judgment, decree, order, regulation or rule of any court
or governmental authority to which Beechport is bound or subject.
3.16 Validity of Beechport Shares. The shares of Beechport Common
Stock to be delivered pursuant to this Agreement, when issued in accordance
with the provisions of this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable.
3.17 Full Disclosure. None of the representations and warranties
made by Beechport herein, or in any exhibit, certificate or memorandum
furnished or to be furnished by Beechport, or on its behalf, contains or will
contain any untrue statement of material fact, or omit any material fact the
omission of which would be misleading.
3.18 Assets. Beechport does not have any assets.
3.19 Material Contracts and Obligations. Beechport has no material
contracts to which it is a party or by which it is bound.
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3.20 Consents and Approvals. No consent, approval or authorization
of, or declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by Beechport in
connection with: (a) the execution and delivery by Beechport of its
obligations under this Agreement; (b) the performance by Beechport of its
obligations under this Agreement; or (c) the consummation by Beechport of the
transactions contemplated by this Agreement.
3.21 Real Property. Beechport does not own, use or claim any
interest in any real property, including without limitation any license,
leasehold or any similar interest in real property.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1 Share Ownership. Shareholders hold 100% of the issued and
outstanding shares of Marketplace common stock. Such shares are owned of
record and beneficially by Shareholders, and such shares are not subject to
any lien, encumbrance or pledge, but they are restricted securities as defined
in Rule 144 of the Securities Act of 1933. Shareholders have the full and
requisite authority to exchange such shares pursuant to this Agreement.
4.2 Investment Intent. Shareholders understand and acknowledge that
the shares of Beechport Common Stock (the "Beechport Shares") are being
offered for exchange in reliance upon the exemption provided in Section 4(2)
of the Securities Act of 1933 (the "Securities Act") for non-public offerings;
and Shareholders make the following representations and warranties with the
intent that the same may be relied upon in determining the suitability of
Shareholders as purchasers of securities.
(a) The Beechport Shares are being acquired solely for the
account of Shareholders, for investment purposes only, and not with a view to,
or for sale in connection with, any distribution thereof and with no intention
of distributing or reselling any part of the Beechport Shares.
(b) Shareholders agree not to dispose of their Beechport Shares
or any portion thereof unless and until counsel for Beechport shall have
determined that the intended disposition is permissible and does not violate
the Securities Act or any applicable state securities laws, or the rules and
regulations thereunder.
(c) Shareholders acknowledge that Beechport has made all
documentation pertaining to all aspects of the Exchange Offer available to
them, and has offered such persons an opportunity to discuss the Exchange
Offer with the officers of Beechport.
(d) Shareholders have relied solely upon independent
investigations made by Shareholders.
(e) Shareholders are knowledgeable and experienced in making and
evaluating investments of this nature and desires to accept the Exchange Offer
on the terms and conditions set forth.
(f) Shareholders are able to bear the economic risk of an
investment, as a result of the Exchange Offer, in the Beechport Shares.
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4.3 Indemnification. Shareholders recognize that the offer of the
Beechport shares to them are based upon their representations and warranties
set forth and contained herein and hereby agree to indemnify and hold harmless
Beechport against all liability, costs or expenses (including reasonable
attorney's fees) arising as a result of any misrepresentations made herein by
Shareholders.
4.4 Legend. Shareholders agree and acknowledge that the certificates
evidencing the Beechport Shares acquired pursuant to this Agreement will have
a legend placed thereon stating that the securities have not been registered
under the Act or any state securities laws and setting forth or referred to
the restrictions on transferability and sales of the Shares.
ARTICLE 5
COVENANTS
5.1 Investigative Rights. From the date of this Agreement until the
Closing Date, each party shall provide to the other party, and such other
party's counsels, accountants, auditors, and other authorized representatives,
full access during normal business hours and upon reasonable advance written
notice to all of each party's properties, books, contracts, commitments, and
records for the purpose of examining the same. Each party shall furnish the
other party with all information concerning each party's affairs as the other
party may reasonably request. If the transaction contemplated hereby is not
completed, all documents received by each party and/or its attorneys and
accountants, auditors or other authorized representatives shall be returned to
the other party who provided same upon request. The parties hereto, their
directors, employees, agents and representatives shall not disclose any of the
information described above unless such information is already disclosed to
the public, without the prior written consent of the party to which the
confidential information pertains. Each party shall take such steps as are
necessary to prevent disclosure of such information to unauthorized third
parties.
5.2 Conduct of Business. Prior to the Closing, Beechport and
Marketplace shall each conduct its business in the normal course, and shall
not sell, pledge, or assign any assets, without the prior written approval of
the other party, except in the regular course of business. Neither Beechport
nor Marketplace shall amend its Articles of Incorporation or Bylaws, declare
dividends, redeem or sell stock or other securities, incur additional or
newly-funded liabilities, acquire or dispose of fixed assets, change
employment terms, enter into any material or long-term contract, guarantee
obligations of any third party, settle or discharge any balance sheet
receivable for less than its stated amount, pay more on any liability than its
stated amount, or enter into any other transaction other than in the regular
course of business except as otherwise contemplated herein.
ARTICLE 6
CONDITIONS PRECEDENT TO BEECHPORT'S PERFORMANCE
6.1 Conditions. The obligations of Beechport hereunder shall be
subject to the satisfaction, at or before the Closing, of all the conditions
set forth in this Article 6. Beechport may waive any or all of these
conditions in whole or in part without prior notice; provided, however, that
no such waiver of a condition shall constitute a waiver by Beechport of any
other condition of or any of Beechport's other rights or remedies, at law or
in equity, if Marketplace shall be in default of any of their representations,
warranties, or covenants under this Agreement.
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6.2 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by Marketplace in this
Agreement or in any written statement that shall be delivered to Beechport by
Marketplace under this Agreement shall be true and accurate on and as of the
Closing Date as though made at that time.
6.3 Performance. Marketplace shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it, on or before the Closing
Date.
6.4 Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Marketplace on or before the Closing Date.
ARTICLE 7
CONDITIONS PRECEDENT TO MARKETPLACE'S PERFORMANCE
7.1 Conditions. Marketplace's obligations hereunder shall be subject
to the satisfaction, at or before the Closing, of all the conditions set forth
in this Article 7. Marketplace may waive any or all of these conditions in
whole or in part without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by Marketplace of any other condition
of or any of Marketplace's rights or remedies, at law or in equity, if
Beechport shall be in default of any of its representations, warranties, or
covenants under this Agreement.
7.2 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by Beechport in this
Agreement or in any written statement that shall be delivered to Marketplace
by Beechport under this Agreement shall be true and accurate on and as of the
Closing Date as though made at that time.
7.3 Performance. Beechport shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by them, on or before the Closing
Date.
7.4 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Beechport on or before the Closing Date.
7.5 Directors of Beechport. Effective on the Closing, Beechport
shall have fixed the size of its Board of Directors at four (4) persons, and
such Board of Directors shall include Timothy J. Brasel, Lawrence Schmelzer,
Joseph Surace, and Brian Coughlin.
7.6 Officers of Beechport. Effective on the Closing, Beechport shall
have elected the following new Officers of Beechport:
Lawrence Schmelzer - President
9
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<PAGE>
ARTICLE 8
CLOSING
8.1 Closing. The Closing of this transaction shall be held at the
offices of Krys Boyle Freedman & Sawyer, P.C., 600 Seventeenth Street, Suite
2700 South Tower, Denver, Colorado 80202, or such other place as shall be
mutually agreed upon, on such date as shall be mutually agreed upon by the
parties. At the Closing:
(a) Shareholders shall deliver duly endorsed certificates
representing their shares of Marketplace being exchanged for shares of
Beechport.
(b) Shareholders shall receive a certificate or certificates
representing the number of shares of Beechport Common Stock for which the
shares of Marketplace common stock shall have been exchanged.
(c) Beechport shall deliver a signed Consent and/or Minutes of
the Directors of Beechport approving this Agreement and each matter to be
approved by the Directors of Beechport under this Agreement.
(d) Marketplace shall deliver a signed Consent or Minutes of the
Directors of Marketplace approving this Agreement and each matter to be
approved by the Directors of Marketplace under this Agreement.
(e) Lawrence Schmelzer shall deliver a check or wire payable to
Krys Boyle Freedman Scott & Sawyer, P.C. Trust Account for $20,000 for the
purpose of contributing this amount to the capital of Beechport at the price
of $.25 per share.
(f) Beechport shall deliver a certificate to Lawrence Schmelzer
for 80,000 shares of Beechport's Common Stock.
ARTICLE 9
RIGHT OF FIRST REFUSAL
9.1 Timothy J. Brasel, Joseph J. Peirce and Paul H. Dragul,
shareholders of Beechport, hereby grant to Lawrence Schmelzer a right of first
refusal to purchase shares and Class A and Class B Warrants of Beechport they,
or the members of their immediate family, currently own (as reflected on the
transfer agent's shareholder list as of April 15, 1998) or control during the
two year period commencing on the Closing Date. Before any sales are made of
stock or warrants subject to this provision, the selling shareholder must
provide to Schmelzer written notice of his intent to sell and Schmelzer shall
have five business days to purchase the stock or warrants at the closing
market price on the date of the written notice. If Schmelzer does not
purchase the stock or warrants by the end of the five business days, the
shareholder will be free to sell the stock or warrants..
ARTICLE 10
MISCELLANEOUS
10.1 Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
10
<PAGE>
<PAGE>
10.2 No Oral Change. This Agreement and any provision hereof, may
not be waived, changed, modified, or discharged orally, but it can be changed
by an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
10.3 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to
insist in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future
of any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure, and (iii) no
waiver by any party of one breach by another party shall be construed as a
waiver with respect to any other or subsequent breach.
10.4 Time of Essence. Time is of the essence of this Agreement and
of each and every provision hereof.
10.5 Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
10.6 Choice of Law. This Agreement and its application shall be
governed by the laws of the State of Colorado, except to the extent its
conflict of laws provisions would apply the laws of another jurisdiction.
10.7 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party
to whom notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
Beechport:
Beechport Capital Corp.
5770 South Beech Court
Greenwood Village, Colorado 80121
with a copy to:
Jon D. Sawyer, Esq.
Krys Boyle Freedman & Sawyer, P.C.
600 Seventeenth Street, Suite 2700 South Tower
Denver, Colorado 80202
Marketplace:
Marketplace 2000, Inc.
750 Prospect Avenue
Cleveland, Ohio 44115
with a copy to:
11
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<PAGE>
10.8 Binding Effect. This Agreement shall inure to and be binding
upon the heirs, executors, personal representatives, successors and assigns of
each of the parties to this Agreement.
10.9 Mutual Cooperation. The parties hereto shall cooperate with
each other to achieve the purpose of this Agreement, and shall execute such
other and further documents and take such other and further actions as may be
necessary or convenient to effect the transaction described herein.
10.10 Brokers. The parties hereto represent and agree that no broker
has brought about the aforementioned transaction and no finder's fee has been
paid or is payable by any party. Each of the parties hereto shall indemnify
and hold the other harmless against any and all claims, losses, liabilities or
expenses which may be asserted against it as a result of its dealings,
arrangements or agreements with any broker or person, except as described in
this paragraph.
10.11 Announcements. Beechport and Marketplace will consult and
cooperate with each other as to the timing and content of any announcements of
the transactions contemplated hereby to the general public or to employees,
customers or suppliers.
10.12 Expenses. Beechport and Marketplace will pay their own legal,
accounting and any other out-of-pocket expenses reasonably incurred in
connection with this transaction, whether or not the transaction contemplated
hereby is consummated.
10.13 Exhibits. As of the execution hereof, the parties hereto have
provided each other with the Exhibits provided for hereinabove, including any
items referenced therein or required to be attached thereto. Any material
changes to the Exhibits shall be immediately disclosed to the other party.
AGREED TO AND ACCEPTED as of the date first above written.
BEECHPORT CAPITAL CORP. MARKETPLACE 2000, INC.
By /s/ Timothy J. Brasel By /s/ Lawrence Schmelzer
Timothy J. Brasel, President Lawrence Schmelzer, President
SHAREHOLDER:
/s/ Lawrence Schmelzer
Lawrence Schmelzer
AS TO ARTICLE 9 ONLY:
/s/ Timothy J. Brasel
Timothy J. Brasel
/s/ Joseph J. Peirce
Joseph J. Peirce
/s/ Paul H. Dragul
Paul H. Dragul
12
<PAGE>
<PAGE>
SCHEDULE 1
Stock Ownership of Marketplace and
Shares of Beechport to be Exchanged Therefor
Number of
Number of Beechport
Name of Shares Shares
Lawrence Schmelzer 80 800,000
Total 80 800,000
<PAGE>
<PAGE>
SCHEDULE 2
MARKETPLACE 2000, INC.
("Marketplace")
2.4 Directors and Officers of Marketplace:
Lawrence Schmelzer - President and Director
2.17 Material Contracts of Marketplace:
None.
<PAGE>
<PAGE>
SCHEDULE 3
BEECHPORT CAPITAL CORP.
("Beechport")
3.2 Directors and Officers of Beechport:
Timothy J. Brasel - President, Secretary and Director
3.7 Liabilities of Beechport:
Schumacher & Associates $ 256.16 (plus audit)
Corporate Stock Transfer 1,573.51
Krys Boyle Freedman & Sawyer, P.C. 2,457.32 (plus work on 10-K
and Marketplace
transaction)
Loan from Brasel Family Partners 7,082.72
Total $11,369.71
3.19 Material Contracts of Beechport
None.
<PAGE>
<PAGE>
CERTIFICATE
I, Timothy J. Brasel, President of Beechport Capital Corp. ("Beechport"),
on behalf of Beechport hereby certify as follows:
All of the representations and warranties, covenants and conditions made
by or on behalf of Beechport which are set forth in the Share Exchange
Agreement with Marketplace 2000, Inc. (the "Agreement") are true and correct
as of this date and that each of the conditions set forth in Sections 7.2
through 7.6 of the Agreement have been fulfilled as of this date.
Dated: June 30, 1998
/s/ Timothy J. Brasel
Timothy J. Brasel, President
Beechport Capital Corp.
<PAGE>
<PAGE>
CERTIFICATE
I, Lawrence Schmelzer, President of Marketplace 2000, Inc.
("Marketplace"), on behalf of Marketplace hereby certify as follows:
All of the representations and warranties, covenants and conditions made
by or on behalf of Marketplace which are set forth in the Share Exchange
Agreement with Beechport Capital Corp. (the "Agreement") are true and correct
as of this date and that each of the conditions set forth in Sections 6.2
through 6.4 of the Agreement have been fulfilled as of this date.
Dated: June 30, 1998
/s/ Lawrence Schmelzer
Lawrence Schmelzer, President
Marketplace 2000, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet and statements of operations found on pages F-3 and F-4 of the
Company's Form 10-KSB for the fiscal year ended December 31, 1998, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 12,957
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,518
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,518
<CURRENT-LIABILITIES> 25,945
<BONDS> 0
0
0
<COMMON> 190,688
<OTHER-SE> (200,115)
<TOTAL-LIABILITY-AND-EQUITY> 16,518
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 19,301
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,301)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
