As filed with the Securities and Exchange Commission on April 6, 1999
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
CORONADO INDUSTRIES, INC.
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(Exact name of Registrant as specified in its charter)
Nevada 22-3161629
- - ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16929 E. Enterprise Drive, Suite 202, Fountain Hills, Arizona 85268
- - ------------------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Consultant Compensation Plan
----------------------------
(Full title of the plan)
Gary R. Smith
President
Coronado Industries, Inc.
16929 E. Enterprise Drive, Suite 202, Fountain Hills, AZ 85268
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(Name and address of agent for service)
(602) 837-6810
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(Telephone number, including area code, of agent for service)
With copy to:
Michael K. Hair, P.C.
7407 E. Ironwood Court
Scottsdale, Arizona 85258
(602) 443-9657
Approximate Date of Commencement of Proposed Sale: As soon as practicable after
the Registration Statement becomes effective.
CALCULATION OF REGISTRATION FEE
================================================================================
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE PRICE FEE
- - --------------------------------------------------------------------------------
Common Stock,
$.001 par value (1) 550,000 $0.20 $110,000 $32.45
Common Stock,
$.001 par value 600,000 $0.25 $150,000 $44.25
--------- ----- -------- -------
Total 1,150,000 -- $260,000 $76.70
================================================================================
- - ----------
(1) Offering price based upon the agreement of the parties.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1
THE PLAN
The name of this plan is Capital Markets Consulting Group Compensation Plan (the
"Plan") and Coronado Industries, Inc. (the "Registrant") will fund the Plan with
up to 1,150,000 shares of its $.001 par value common stock (the "Stock"). The
Plan is the Engagement Agreement, Compensation Agreement, Specific Services
Agreement and the Indemnification Agreement (the "Agreement"), as amended
between ("CMCG") and the Registrant. The Plan is not subject to the provisions
of ERISA and the Plan has no administrators.
DESCRIPTION OF REGISTRANT'S SECURITIES
The authorized capital stock of the Company consists of 50,000,000 shares of
common stock ("Common Stock") of which 31,623,292 shares were issued and
outstanding on March 19, 1999 and 3,000,000 shares of $.001 par value
Preferred Stock, of which no shares have been issued as of March 19, 1999.
All presently outstanding shares are duly authorized, fully-paid and
non-assessable.
Each share of the Common Stock is entitled to one vote on all matters to be
voted on by the shareholders, such as the election of certain directors and
other matters that directly impact the rights of the holders of such class.
There is no cumulative voting in the election of directors. Holders of Common
Stock are entitled to receive such dividends as may be declared from time to
time by the Board of Directors out of funds legally available therefor. In the
event of any dissolution, winding up or liquidation of the Company, the shares
of Common Stock will share ratably in all the funds available for distribution
after payment of all debts and obligations. The holders of Common Stock are
subject to any rights that may be fixed for holders of preferred stock as
designated upon issuance.
ISSUANCE OF SHARES
CMCG is the only participant in the Plan and it will pay for the Stock by
performing the services described in the Agreement as executed by CMCG and the
Registrant. The Shares totalling $260,000 in value may be issued to CMCG by
the Registrant pursuant to the Agreement prior to May 10, 1999.
The Shares will not be purchased in the open market.
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<PAGE>
RESALE RESTRICTIONS
Since the Registrant does not satisfy the requirements for the use of Form S-3,
CMCG, even though not a controlling person, is bound by the volume limitations
of Rule 144, which would be applicable because any shareholder may sell up to
316,232 shares of Registrant's common stock in any 90-day period under Rule 144.
ITEM 2
The Registrant's Annual Report on Form 10-KSB for the fiscal year ended December
31, 1998 and all reports filed with the Securities and Exchange Commission
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
subsequent to December 31, 1998 are incorporated by reference into this
Prospectus. Copies of these documents are available to CMCG, without charge,
upon written or oral request made to the Registrant at 16929 E. Enterprise
Drive, Suite 202, Fountain Hills, Arizona 85268, telephone number (602)
837-6810.
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<PAGE>
PART I
INFORMATION REQUIRED IN THE REOFFER PROSPECTUS
ITEM 1
THE PLAN
The name of this plan is Capital Markets Consulting Group Compensation Plan (the
"Plan") and Coronado Industries, Inc. (the "Registrant") will fund the Plan with
up to 1,150,000 shares of its $.001 par value common stock (the "Stock"). The
Plan is the Engagement Agreement, Compensation Agreement, Specific Services
Agreement and the Indemnification Agreement (the "Agreement"), as amended
between ("CMCG") and the Registrant. The Plan is not subject to the provisions
of ERISA and the Plan has no administrators.
DESCRIPTION OF REGISTRANT'S SECURITIES
The authorized capital stock of the Company consists of 50,000,000 shares of
common stock ("Common Stock") of which 31,623,292 shares were issued and
outstanding on March 19, 1999 and 3,000,000 shares of $.001 par value Preferred
Stock, of which no shares have been issued as of March 19, 1999. All presently
outstanding shares are duly authorized, fully-paid and non-assessable.
Each share of the Common Stock is entitled to one vote on all matters to be
voted on by the shareholders, such as the election of certain directors and
other matters that directly impact the rights of the holders of such class.
There is no cumulative voting in the election of directors. Holders of Common
Stock are entitled to receive such dividends as may be declared from time to
time by the Board of Directors out of funds legally available therefor. In the
event of any dissolution, winding up or liquidation of the Company, the shares
of Common Stock will share ratably in all the funds available for distribution
after payment of all debts and obligations. The holders of Common Stock are
subject to any rights that may be fixed for holders of preferred stock as
designated upon issuance.
The Company has engaged Olde Monmouth Stock Transfer at 77 Memorial Parkway,
Suite 101, Atlantic Highlands, NJ 07716 as its stock transfer agent.
ISSUANCE OF SHARES
CMCG is the only participant in the Plan and it will pay for the Stock by
performing the services described in the Agreement executed by CMCG and the
Registrant. The Shares totalling $260,000 in value may be issued to CMCG by the
Registrant pursuant to the Agreement.
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<PAGE>
RESALE RESTRICTIONS
There are no restrictions on resale upon the purchasers of the Stock from CMCG.
ITEM 2
The Registrant's Annual Report on Form 10-KSB for the fiscal year ended December
31, 1998 and all reports filed with the Securities and Exchange Commission
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
subsequent to December 31, 1998 are incorporated by reference into this
Prospectus. Copies of these documents are available to CMCG, without charge,
upon written or oral request made to the Registrant at 16929 E. Enterprise
Drive, Suite 202, Fountain Hills, Arizona 85268, telephone number (602)
837-6810.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference into this
Registration Statement: (a) the Registrant's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1998; and (b) all reports filed with the
Securities and Exchange Commission pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 subsequent to December 31, 1998.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES. Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Company's Articles of Incorporation eliminates the
personal liability of directors of the Company for violation of their fiduciary
duty of care.
Section 78.751 of the Nevada General Corporation Law, as amended, applies
to the Company and provides for the indemnification of officers and directors in
specified instances. It permits a corporation, pursuant to a bylaw provision or
in an indemnity contract, to pay an officer's or director's litigation expenses
in advance of a proceeding's final disposition, and provides that rights arising
under an indemnity agreement or bylaw provision may continue as to a person who
has ceased to be a director or officer.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
ITEM 8. EXHIBITS.
Exhibit Index located at Page 9.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a) (3)of the
Securities Act of 1933;
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<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof)which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (i) and (ii) do not apply if the registration
statement is on Form S-3 or Form S-8 and the information required to be included
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fountain Hills, and the State of Arizona, on
April 6, 1999.
Coronado Industries, Inc.
By /s/ Gary R. Smith
-------------------------------
Gary R. Smith
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Gary R. Smith President; Treasurer (Principal April 6, 1999
- - ------------------------ Financial and Accounting Officer);
Gary R. Smith Director
/s/ G. Richard Smith Chairman (Chief Executive Officer); April 6, 1999
- - ------------------------ Secretary; Director
G. Richard Smith
Director
- - ------------------------
John T. LiVecchi
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<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Method Of Filing
- - ------- ----------- ----------------
4.1 Compensation Plan *
4.2 Amended Compensation Plan *
5 Form of opinion rendered by Michael K. Hair, P.C., *
counsel for the Registrant (including consent)
23.1 Consent of Accountants *
23.2 Consent of Counsel See Exhibit 5
- - -------
* Filed herewith
9
ENGAGEMENT AGREEMENT
1. This letter will confirm the understanding between Coronado Industries
and/or its affiliates and successors (the "Company") and Capital Markets
Consulting Group and/or any affiliates and successors ("CMCG"). CMCG will
provide consulting and other services described by the attachment ("services")
and will represent you during the engagement as exclusive Financial Relations
Consultants of the kind described by that attachment, all of the terms and
conditions set forth in this letter agreement. That attachment is incorporated
in this letter agreement and forms a part hereof. Unless otherwise terminated as
provided in paragraph ten of this letter agreement, the engagement term shall be
initially for 6 months commencing, February 8, 1999.
2. The Company agrees to furnish or cause to be furnished to CMCG all
information concerning the Company as CMCG reasonably requests and deems
appropriate for purposes of this engagement. The Company represents that all
information, with respect to the Company, provided to CMCG will be complete and
correct in all material respects and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances under which such
statements are made. In rendering CMCG's services hereunder, Coronado Industries
understands that CMCG will be using and relying on publicly available
information and the information furnished to CMCG by Coronado Industries without
independent verification thereof. The Company further acknowledges and
understands the value that CMCG brings to its relationship with its contacts on
behalf of the Company. This specifically includes trust engendered and inherent
due to full and complete candor of not just material facts but all
communications on behalf of the Company. CMCG will treat as confidential any
non-public information provided to it hereunder and will not disclose the same
to third parties unless required by applicable law. In the event disclosure has
been or will be made by CMCG, CMCG will use it's best efforts to cooperate as
reasonably requested by the Company in minimizing any potential loss or injury
to the Company as a consequence of any such necessary disclosure. In addition,
CMCG will use its best efforts to comply with all applicable state and Federal
securities laws in the performance of this agreement.
3. CMCG will be generally available to you in connection with its rendering
of services. Specifically, CMCG will (a) make direct and indirect contact with
existing shareholders, potential investors, broker/dealers, security analysts,
registered representatives, institutional investors, investment bankers, and
other professional investment community contacts including financial media
sources for the purpose of enhancing the Company's public image and perceived
value, (b) oversee and assist the Company in the creation, production and
distribution of financial markets and investor/shareholder corporate image
materials, including due diligence literature, corporate profiles, and investor
packages, as well as all financial press releases; (c) assist the Company in its
endeavor to secure research analyst coverage through a targeted security
professional's campaign.
4. The Company will use its best efforts to afford CMCG 48 hours to review
any disclosure, prior to its release, which the Company plans to make to any of
the sources described in paragraph (3) within the general terms of the proposal.
In addition, CMCG will be responsible for disseminating financial industry press
releases only upon request. CMCG agrees that it will not release or distribute
any press release without the Company's prior consent.
5. In consideration of CMCG's services hereunder, the Company agrees to pay
CMCG, promptly when due, the compensation described by and in strict accordance
with the attachment ("Compensation") to this engagement letter. If CMCG and the
Company determine to change the scope of the engagement, then a mutually
acceptable amendment or supplement to that attachment shall be promptly executed
at the time by CMCG and Company. Absent any such amendment, all terms and
conditions of this agreement shall be binding to the parties.
6. CMCG shall be entitled to such additional fees as may be mutually agreed
upon by separate agreement between the parties hereto, for consulting services
rendered during the engagement term if (a) CMCG participates, at the request of
the Company, in substantive discussions regarding such additional services with
one or more of the parties thereto (or their representative) during the
engagement term or introduces, at the request of the Company, one or more such
parties to the Company during the engagement term, and (b) the Company and the
parties agree to a contract or agreement in principle within 24 months from the
date of termination of the agreement.
7. The Company shall agree to pay all of CMCG's out-of-pocket expenses
reasonably incurred, in connection with this engagement. If CMCG and the Company
determine to change the scope of the engagement, then a mutually acceptable
amendment or supplement to that attachment shall be promptly executed at the
time by CMCG and Company. Absent any such amendment, all terms and conditions of
this agreement shall be binding to the parties.
8. CMCG acknowledges that it will be acting on the Company's behalf,
therefore, CMCG requires bilateral indemnification, and assumes the Company
requires and agrees to the same. A copy of the indemnification provisions (the
"Indemnification Provisions") is attached to this engagement letter and is
incorporated herein and made a part hereof.
1
<PAGE>
9. CMCG hereby fully discloses that certain affiliates, officers and
employees of CMCG from time to time may be:
A. registered as Registered Investment Advisors with the U.S. Securities &
Exchange Commission;
B. licensed as Registered Securities Principals issued by the National
Association of Securities Dealers ("NASD"); and/or
C. licensed as Registered Representatives issued by the NASD.
All NASD registrations are only carried through broker dealer affiliate(s)
of which are non-CMCG affiliated NASD-registered broker/dealers.
CMCG further discloses and the Company acknowledges that CMCG is NOT a
broker/registered with the NASD or any other regulatory agency, nor is it,
or any of its affiliates and employees an owner in any broker/dealer.
Furthermore, in the performance of Services under the terms and conditions
of this agreement, such services shall not be considered to be acting in
any broker/dealer capacity, or to otherwise directly facilitate the offer
or sale of the Company as a broker dealer or underwriter in a capital
raising transaction.
10. Either party hereto may terminate this engagement as follows:
a. This Agreement may be terminated by the Company after 6 months with
written notice to CMCG if the stock has not traded at $2 per share for
thirty calendar days. In the event of such termination by the Company,
CMCG shall be entitled to receive its regular monthly compensation and
reimbursement of out-of-pocket expenses up to the effective date of
termination, or renewal term of this agreement to the extent it is
unpaid, together with any unexercised vested and non-vested stock
options, warrants or rights granted hereunder.
b. CMCG may terminate this agreement at any time upon written notice to
the Company.
(i) If the Company fails to cure any material breach of any provision
of the Agreement within sixty (60) days (unless such breach
cannot be reasonable cured within the (60) days and the Company
is actively pursuing to cure said breach).
(ii) For the Company's substantial negligence, willful misconduct,
fraud or misrepresentation.
11. The validity and interpretation of this letter agreement shall be
governed by the laws of the State of Arizona applicable to agreements made and
to be fully performed therein.
12. For the convenience of the parties, the parties may execute any number
of counterparts of this letter agreement hereto. Each such counterpart shall be
deemed to be an original instrument, but all such counterparts taken together
shall constitute one and the same letter agreement.
If the foregoing correctly sets forth our agreement, please sign the
enclosed copy of the letter in the space provided and return it to us, whereupon
all parties will be bound to the terms of this engagement.
Very truly yours,
CAPITAL MARKETS CONSULTING GROUP
By: /s/ Charles S. Aker
------------------------------
Title: President
---------------------------
CONFIRMED AND AGREED TO:
Coronado Industries Corporation
This 8th day of February, 1999.
By: Gary R. Smith
-------------------------------
Title: President
----------------------------
2
<PAGE>
COMPENSATION AGREEMENT
In accordance with the contract terms for Coronado Industries ("Company")
following is the compensation adjustment going forward for Capital Markets
Consulting Group, and/or its affiliates ("CMCG") to perform the outlined
services. The contract period, for Financial Relations Consulting, shall be for
a SIX (6) month period from the date of this Engagement Agreement at which time
it will be automatically extended for a second six months if the stock has
traded at $2 per share. In order to earn the 1,600,000 shares referenced in
paragraph four, this page, the terms must be met in the first six month period
with the sole exception as follows: if the stock starts trading at the two
dollar level and the six month period is over, for the sole purpose of earning
the 1,600,000, it shall be extended for the number necessary, i.e. no more than
twenty-nine (29) additional days. The intent of this extension is to acknowledge
that any additional trading at the same level would be as a continued result of
efforts exerted by CMCG on behalf of the Company within the first six months and
would simply allow the thirty day requirement be completed.
Cash retainer of 6000.00 dollars per month, payable on the first of month
in advance of services. Payment to be earned, however beginning 2-8-99 partial
payment may exist by mutual agreement in writing.
Reasonable out of pocket expenses; any one item exceeding 350.00 dollars
must have prior approval of company (not including phone long distance).
In order for CMCG to participate in our success, a percentage of market
capitalization versus the price from which we have successfully started is
utilized. If, through a combination of introducing the Coronado story to
sufficient numbers of appropriate brokers, portfolio managers analysts,
marketmakers, financial news media, etc., the market capitalization reaches
60,000,000 million dollars then we vest in the opportunity to purchase shares in
the Company at 25 cents. Basis for this is the following assumption: 30,000,000
shares outstanding as of the date of this contract and a starting stock price of
25 cents. If achieved, the following is earned and 100% vested. To be earned a
combination of fifty (50%) percent restricted and fifty (50%) free trading
shares, in the amount of 1,600,000 shares vested upon stock averaging $2/sh for
thirty calendar days. Cost to CMCG for these shares will be 25 cents per share,
which is the price at which services began.
Should the contract be extended for the second six months, additional
shares can be earned as follows: on the same basis as utilized before, however
only on the difference between two (2) dollars and five (5) dollars, an
additional one (1%) percent on increased market capitalization can be earned.
The stock must attain a price of five (5) dollars and average $4.50 or above per
share for sixty days. The intent of this is to allow the Company to successfully
apply to the NASDAQ. Therefore, if the sixty day requirement is not strictly met
yet the Company is able to meet the necessary market requirements for its
application the additional stock shall still be awarded. The cost to CMCG for
these shares only is two (2) dollars per share.
A ten-percent consulting fee for any financing introduced to company which
results in successful funding.
/s/ Gary R. Smith /s/ Charles S. Aker
- - ------------------------------ ------------------------------
Coronado Industries CMCG
3
<PAGE>
SPECIFIC SERVICES AGREEMENT
Capital Markets Consulting Group and/or affiliates, (collectively "CMCG")
will serve as the exclusive Financial Relations Counsel for Coronado Industries,
Inc.
The financial relations campaign will be oriented to members of the
professional investment community. CMCG may contact existing shareholders,
broker/dealers, potential investors, registered representatives, institutions,
mutual fund managers, investment banking sources, securities analysts,
independent portfolio managers, and financial media sources in the performance
of the anticipated services listed.
CMCG anticipates the following actions will be attempted and/or implemented
within the scope of this engagement:
* Oversee further development, including input, which will specifically
benefit and target the professional investment community, and distribute
high quality, due diligence and marketing materials.
* Specifically develop, execute and maintain a targeted securities
professionals communications and information campaign directed toward
retail brokers, institutional investors, third-party portfolio managers
and small/micro-cap mutual funds, and buy and sell side analysts. CMCG
will allocate and utilize its proprietary securities industry,
micro/small/mid-cap company oriented, databases and fax communications
programs. This will include responding to all incoming investment
community inquiries and fulfillment of information and data requests.
However, all said databases, information and names remain the exclusive
property of CMCG and are not to be shared or disseminated to Third
parties.
* Selectively target speaking engagements by senior management executives.
CMCG will secure and coordinate specific speaking engagements which are
tailored toward specific groups and/or conferences, i.e., retail and/or
analytical with the intent to enhance that group's awareness and
perception of the investment opportunity that exists with the Company.
* At the Company's request CMCG will organize, monitor and follow-up
conference calls between top management and the investment community in
conjunction with material press releases, through a teleconferencing
service.
* CMCG will use its best efforts to secure investment recommendation and
on-going corporate research coverage by at least two (2) buy or sell-side
analysts from regional investment banking or research firms and/or an
endorsement by an investment news letter publication with a subscriber
base in excess of 2,500.
* CMCG will use its best efforts to secure additional market maker coverage.
CMCG intends to perform the services and accomplish the specified goals
within the scope of this agreement. However, due to the nature of services
being performed, CMCG cannot guarantee, nor can it be assumed that certain
specific results will be realized with reference to increased market
valuation of the Company.
Additional services can and will be implemented upon Company request, at
agreed upon additional compensation. These may include, but are not limited to:
* Developing, scheduling and coordinating effective "road show"
presentations for primary metropolitan financial markets.
* Planning, arranging and coordinating periodic registered representative,
instructional and/or other securities professionals meetings, luncheons,
dinners or special gatherings.
/s/ Gary R. Smith /s/ Charles S. Aker
- - ------------------------------ ------------------------------
Coronado Industries CMCG
4
<PAGE>
INDEMNIFICATION PROVISIONS
The Company agrees to defend, indemnify and hold harmless CMCG, its
officers, directors, and employees (hereafter jointly referred to as CMCG)
against any and all losses, claims, demands, suits, actions, judgments, awards,
damages, liabilities, costs, reasonable attorneys' fees (and all actions in
respect there of and any reasonable real or other expenses in giving testimony
or furnishing documents in response to a subpoena or otherwise) including the
costs of investigating, preparing or defending any such action or claim, whether
or not in connection with litigation in which CMCG is a party, directly or
indirectly causing by relating to, or asserted by a third party, based upon
arising out of (a) the Company's breach of or the incorrectness of any
representation, warranty, or covenant of Company contained in this agreement;
and/or (b) the conduct or operation of the business of the company; or (c)
failure of Company to perform any term condition, obligation required by this
Agreement to be performed by Company; or (d) any Services rendered by CMCG as
defined in or contemplated by the letter agreement to which these Provisions are
attached, as it may be amended from time to time (the "Agreement"); or (e) CMCG
acting for the Company, including without limitation, any act or omission by
CMCG in connection with its performance of its obligations under the Agreement.
Notwithstanding the foregoing, the Company shall not have any liability to CMCG
for, or in connection with the engagement of CMCG or with any of the foregoing,
for any such liability for losses, claims, demand, suits, actions, judgments,
awards, damages, liabilities, costs or expenses that is found in a final
judgment by a court of competent jurisdiction or mutually acceptable arbitrator
to have resulted primarily and directly from CMCG's negligence, willful
misconduct, CMCG's material breach or the incorrectness of any representation,
warranty or covenant of CMCG contained in this Agreement.
CMCG agrees to defend, indemnify and hold harmless the Company, its
officers, directors, and employees (hereafter jointly referred to as the
Company) against any and all losses, claims, demands, suits, actions, judgments,
awards, damages, liabilities, costs, reasonable attorneys' fees (and all actions
in respect thereof and any reasonable real or other expenses in giving testimony
or furnishing documents in response to a subpoena or otherwise) including the
consists of investigating, preparing or defending any such action or claim,
whether or not in connection with litigation in which the Company is a party,
directly or indirectly caused by, relating to, or asserted by a third party,
based upon or arising out of (a) CMCG's breach of or the incorrectness of any
representation, warranty, or covenant CMCG contained in this agreement; and/or
(b) the conduct or operation of the business of CMCG; or (c) failure of CMCG to
perform any term condition, or obligation required by this Agreement to be
performed by CMCG; or (d) any Services rendered by CMCG as defined in or
contemplated by the letter agreement to which these Provisions are attached, as
it may be amended from time to time (the "Agreement"); or (e) CMCG acting for
the Company, including without limitation, any act or omission by CMCG in
connection with its performance of its obligations under the Agreement.
Notwithstanding the foregoing, CMCG shall not have any liability to the Company
for, or in connection with, the engagement of CMCG or with any of the foregoing,
for any such liability for losses, claims, demands, suits, actions, judgments,
awards, damages, liabilities, costs or expenses that is found by a court of
competent jurisdiction or mutually acceptable arbitrator to have resulted
primarily and directly from the Company's negligence, willful misconduct, CMCG's
material breach or the incorrectness of any representation, warranty or covenant
of the Company contained in the Agreement.
As a condition to the foregoing indemnity, in the event of the assertion of
any claim or demand, or the institution of any suit or action with respect to
which either party is required by this paragraph to Indemnity the other party
(the indemnifying party hereinafter referred to as the "Indemnitor," and the
party entitled to indemnification hereinafter referred to as the "Indemnitee")
the Indemnitee will give notice thereof to the Indemnitor and will afford the
Indemnitor the opportunity to defend, settle, or compromise the same. Unless the
Indemnitor agrees to duly, promptly and diligently discharge or defend against
such claim, demand, suit or action in such manner as will, in the Indemnitee's
reasonable judgment, protect the Indemnitee from any liability, loss, cost or
damage as a result thereof, the indemnitee may, at the Indemnitee's option, for
the Indemnitor's account and risk, assume the defense of the same, may implead,
interplead or claim over against the Indemnitor and may thereafter hold the
Indemnitor responsible for all sums paid and all costs, expenses, and reasonable
attorney's fees incurred by the Indemnitee in so doing. The indemnitee may at
the indemnitee's option, participate in any legal proceedings being conducted by
the Indemnitor hereunder with counsel of the Indemnitee's choosing, but such
participation shall be at the Indemnitee's sole expense, so long as the
Indemnitor is diligently conducting the same in the Indemnitee's reasonable
judgment, and the Indemnitee's counsel shall to the fullest extent consistent
with its professional responsibilities cooperate with the Indemnitor and any
counsel designated by the Indemnitor.
5
<PAGE>
In the event that a court of competent jurisdiction, or an arbitrator
mutually acceptable to the parties, determines that the Indemnification CMCG are
liable to a third party asserting a claim against Company and CMCG, then as
between Company and CMCG, they each agree to contribute such amounts as may be
necessary to satisfy such liability, in amounts proportionate to their
respective comparative negligence/responsibility as determined by a court of
competent jurisdiction or mutually acceptable arbitrator. If either Company or
CMCG pays such third party more than its proportionate share as determined
above, then it shall be entitled to seek contribution from the other party to
the extent of such excess.
No person or affiliated entity found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person or
affiliated entity who is not also found liable for such fraudulent
misrepresentation.
These Indemnification Provisions shall be in addition to any liability that
either party may otherwise have to the other party or their respective
controlling persons within the meaning of the federal securities laws. The
foregoing Indemnification Provisions are in addition to any rights or remedies
available under applicable law and are not to the exclusion of any such rights
or remedies.
/s/ Gary R. Smith /s/ Charles S. Aker
- - ------------------------------ ------------------------------
Coronado Industries CMCG
6
AMENDMENT TO AGREEMENT
This amendment agreement (the "Amendment") to the Engagement Agreement,
the Compensation Agreement, the Specific Services Agreement and the
Indemnification Agreement, all effective February 8, 1999 (the "Agreement"), by
and between Coronado Industries, Inc., a Nevada corporation doing business in
the State of Arizona (the "Company"), and Capital Markets Consulting Group, an
Arizona resident ("CMCG"), is entered into this 1st day of April, 1999.
WHEREAS, at this time the parties to the Agreement wish to change
certain provisions of the Compensation Agreement;
NOW THEREFORE, upon the mutual covenants contained herein and other
valuable consideration, the parties agree to amend the Compensation Agreement as
follows:
1. As of April 1, 1999 CMCG will no longer be paid $6,000 per month in
cash.
2. The Company shall deliver to CMCG as soon as possible One Hundred
Fifty Thousand (150,000) shares of the Company's unrestricted and free-trading
stock.
3. In lieu of CMCG becoming vested in the opportunity to purchase
1,600,000 shares of stock at the price of 25 cents if the Company's stock price
averages $2.00 per share for a thirty calendar day period: (i) the Company shall
deliver One Hundred Fifty Thousand (150,000) free-trading and unrestricted
shares to CMCG if the Company's stock trades at $1.00 per share and thereafter
trades at $1.00 per share for two immediately subsequent days during the term of
the Agreement; (ii) the Company shall deliver Two Hundred Fifty Thousand
(250,000) free-trading and unrestricted shares to CMCG if the Company's stock
trades at $1.50 per share and thereafter trades at $1.50 per share for two
immediately subsequent days during the term of the Agreement; and (iii) CMCG
shall immediately become vested in the opportunity to purchase 1,200,000 Company
stock shares at $.25 per share if the Company's stock trades at $2.00 and
averages $2.00 for thirty (30) calendar days thereafter, with 600,000 of the
vested shares to be issued as free-trading and 600,000 of the vested shares to
be issued as restricted shares.
4. Because of the SEC amendment to Form S-8 effective April 7, 1999
which prohibits the issuance of free-trading stock registered on Form S-8 to
stock promotion and financial public relations firms after May 10, 1999, the
parties hereto agree if any free-trading and unrestricted shares of Company
Stock are earned as compensation by CMCG pursuant to any provision of the
Agreement on or after May 10, 1999, the Company shall only be required to
delivered restricted Company shares to CMCG as full payment pursuant to the
Agreement.
<PAGE>
5. The remaining provisions of the Agreement between the parties remain
in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
the Agreement, effective as of April 1, 1999.
CORONADO INDUSTRIES, INC.
By: /s/ Gary R. Smith
------------------------------
Gary R. Smith, President
CAPITAL MARKETS CONSULTING GROUP
By: /s/ Charles S. Aker
------------------------------
Charles S. Aker, President
EXHIBIT 5
April 6, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Coronado Industries, Inc. - Compensation Plan
Ladies and Gentlemen:
We have acted as counsel to Coronado Industries, Inc., a Nevada
corporation (the "Company"), in connection with its Registration Statement on
Form S-8 (the "Registration Statement") filed under the Securities Act of 1933
relating to the registration of 1,150,000 shares of its Common Stock, $.001 par
value (the "Shares"), issuable pursuant to an agreement with Capital Markets
Consulting Group (the "Plan").
In that connection, we have examined such documents, corporate records
and other instruments as we have deemed necessary or appropriate for purposes of
this opinion, including the Articles of Incorporation and the Bylaws of the
Company.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Nevada.
2. The Shares, when issued and sold in accordance with the terms of the
Plan, will be validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Michael K. Hair, P.C.
By: /s/ Michael K. Hair
---------------------------------
Michael K. Hair, President
EXHIBIT 23.1
[LETTERHEAD OF SEMPLE & COOPER, LLP]
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Form S-8 registration statement to be filed on
or about April 6, 1999, of our report dated March 10, 1999, included in
Coronado Industries, Inc.'s Form 10-KSB for the year ended December 31, 1998,
and to all references to our Firm included in this registration statement.
/s/ SEMPLE & COOPER, LLP
Phoenix, Arizona
April 2, 1999
