U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
BIO-AMERICAN CAPITAL CORPORATION
(Name of Small Business Issuer in its charter)
Nevada 93-1118938
State or other jurisdiction of IRS Employer ID Number
Incorporation or organization
462 Stevens Avenue, Suite #308, Solana Beach, CA 92075
(Address of principal executive offices) (Zip Code)
(858) 793-5900
(Issuer's Telephone Number)
Securities to be registered under Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common Stock, $0.001 par value.
(Title of class)
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TABLE OF CONTENTS
PART I
Page
Item 1. Business........................................................3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..........................................21
Item 3. Properties.....................................................22
Item 4. Security Ownership of Certain Beneficial Owners and Management.23
Item 5. Directors and Executive Officers of the Registrant.............23
Item 6. Executive Compensation.........................................28
Item 7. Certain Relationships and Related Transactions.................29
Item 8. Description of Securities......................................30
PART II
Item 1. Market for Registrant's Common Stock and Security Holder
Matters........................................................31
Item 2. Legal Proceedings..............................................31
Item 3. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure...........................................31
Item 4. Recent Sales of Unregistered Securities........................31
Item 5. Indemnification of Directors and Officers......................34
PART F/S
Financial Statements and Supplementary Data..................................F-1
Signature Page................................................................35
Exhibits, Financial Statement Schedule and Reports on Form 8-K................49
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
This report on Form 10-SB (the "Report") contains forward-looking
statements within the definition of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. All forward-looking
statements are inherently uncertain as they are based on current expectations
and assumptions concerning future events or future performance of the Company.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which are only predictions and speak only as of the date hereof.
Forward-looking statements usually contain the words "estimate," "anticipate,"
"believe," "expect'" or similar expressions, and are subject to numerous known
and unknown risks and uncertainties. In evaluating such statements, readers
should carefully review risks and uncertainties identified in this Report,
including the matters set forth under the caption "Risk Factors" below. These
risks and uncertainties could cause the Company's actual results to differ
materially from those indicated in the forward-looking statements. The Company
undertakes no obligation to update or publicly announce revisions to any
forward-looking statements to reflect future events or developments.
General
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Bio-American Capital Corporation ("Bio-American" or the "Company") was
incorporated under the laws of the State of Nevada on May 5, 1992 to raise
capital for a business venture. Minimal capital was raised and it engaged in no
business and remained dormant until November 1998. On November 25, 1998, Reliant
Securities, Ltd., a British Virgin Islands Corporation, purchased control of the
Company from the principal shareholder. During December 1998 the Company raised
$990,000 from an exempt Offering Circular under Regulation D, Rule 504 of the
Securities and Exchange Commission (the "Offering Circular"). The Company now
acts as a merchant bank to organize, capitalize, acquire and finance technology
companies that are positioned to effectively integrate and enhance the delivery
of products and services to consumers.
The Company intends to take senior debt and equity positions in
companies which it chooses to finance and will provide consulting services for
capital structuring, and reorganization of small technology companies to assist
in market share growth and the development of the capital structure to
facilitate an eventual public offering. The Company will also consider
acquisitions of operating technology companies for stock and debt. Once this
Report is filed, the Company will become a 12(g) registered company under the
Securities Exchange Act of 1934. The Company can continue to offer to private
acquisition targets the opportunity to become a public company and establish a
public trading market for its securities.
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Acquisitions may be made by purchase, merger, exchange of stock, or
otherwise, and may encompass assets or a business entity, such as a corporation,
joint venture, or partnership. In connection with a merger or acquisition, it is
possible that the Company would issue an amount of stock constituting control of
the Company to the acquisition candidate. Depending upon the nature of the
transaction, the current officers and directors of the Company may resign
management positions with the Company in connection with the Company's
acquisition of a business opportunity. See "Form of Acquisition," below, and
"Risk Factors - The Company - Lack of Continuity in Management." In the event of
such a resignation, the Company's current management would not have any control
over the conduct of the Company's business following the Company's combination
with a business opportunity.
Business opportunities come to the Company's attention from various
sources, including its officer and director, stockholders, professional advisors
such as attorneys and accountants, securities broker-dealers, venture
capitalists, and members of the financial community. The Company currently has
no plans, understandings, agreements, or commitments with any individual for
such person to act as a finder of opportunities for the Company.
The Company's search is directed toward small and medium-sized companies
(See "Investigation and Selection of Business Opportunities") who are (i)
recently organized with no operating history, or a history of losses
attributable to under-capitalization or other factors; (ii) experiencing
financial or operating difficulties; (iii) in need of funds to develop a new
product or service or to expand into new markets; (iv) relying upon an untested
product or marketing concept; or (v) a combination of the characteristics
mentioned in (i) through (iv). Given the above factors, investors can expect
that acquisition candidates may have a history of losses or low profitability.
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Investigation and Selection of Investment Opportunities
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The decision to investment in a specific opportunity includes the
assessment of the other company's management and personnel, the anticipated
acceptability of new products or marketing concepts, the impact of technological
changes, and the benefits derived from becoming a publicly held entity. Changes
in products and services; marketing approaches and distribution channels;
management resources; and potential cost savings and economies of scale in
operations will probably caused the historical operations of the target
opportunity to not be indicative of the potential for the future. The Company
will work with and motivate the owners of the target opportunity to identify the
need for and implement required changes. Participating in either newly organized
firms or with a firm, which is entering a new phase of growth, creates
additional risk for the Company.
The Company's management has the authority and discretion to complete
acquisitions without submitting any proposal to the stockholders for their
consideration. Management's decisions may ultimately adversely impact the
Company's shareholders. Unless required, holders of the Company's securities
should not anticipate that the Company will furnish them, prior to any merger or
acquisition, with financial statements, or any other documentation, concerning a
target company or its business.
The analysis of business opportunities will be undertaken by or under
the supervision of the Company's President. See "Management." The Company's
management may also retain outside consultants to assist in the investigation
and selection of business opportunities, and might pay a finder's fee in the
form of stock.
The following factors will be considered, among other things, in screening
investment opportunities:
1. Potential for revenue and earnings growth, indicated by new technology,
anticipated market expansion, or new products;
2. Strength and diversity of existing management, or management prospects that
are scheduled for recruitment;
3. Potential cost savings and economies of scale in operations;
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4. Capitalization on distribution strength to enhance local sales and services
capabilities;
5. Expand national market presence;
6. How any particular business opportunity will be viewed by the investment
community and by the Company's stockholders;
7. Whether, following the business combination, the financial condition of the
Company would be sufficient to enable the securities of the Company, then or in
the foreseeable future, to qualify for listing on an exchange or on a national
automated securities quotation system, such as NASDAQ, so as to permit the
trading of such securities to be exempt from the requirements of Rule 15c2-6
recently adopted by the Securities and Exchange Commission. See "Risk Factors -
The Company - Regulation of Penny Stocks."
8. Capital requirements and anticipated availability of required funds, to be
provided by the Company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;
9. The extent to which the business opportunity can be advanced;
10. Competitive position as compared to other companies of similar size and
experience within the industry segment as well as within the industry as a
whole;
11. The cost of participation by the Company as compared to the perceived
tangible and intangible values and potential; and
12. The accessibility of required management expertise, personnel, raw
materials, services, professional assistance, and other required items.
In regard to the possibility that the shares of the Company would
qualify for listing on NASDAQ, the current standards include the requirements
that the issuer of the securities that are sought to be listed have total assets
of at least $4,000,000 and total capital and surplus of at least $2,000,000.
Many, and perhaps most, of the business opportunities that might be potential
candidates for a combination with the Company would not satisfy the NASDAQ
listing criteria.
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No one of the factors described above will be controlling in the
selection of a business opportunity, and management will attempt to analyze all
factors appropriate to each opportunity and make a determination based upon
reasonable investigative measures and available data. Potentially available
business opportunities may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Potential investors must recognize that, because of the Company's
limited capital available for investigation and management's limited experience
in business analysis, the Company may not discover or adequately evaluate
adverse facts about the opportunity to be acquired.
Prior to making a decision to participate in a business opportunity, the
Company will generally request that it be provided with written materials
regarding the business opportunity containing such items as a description of
products, services and company history; management resumes; financial
information; available projections, with related assumptions upon which they are
based; an explanation of proprietary products and services; evidence of existing
patents, trademarks, or services marks, or rights thereto; present and proposed
forms of compensation to management; a description of transactions between such
company and its affiliates during relevant periods; a description of present and
required facilities; an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable period of time not
to exceed 60 days following completion of a merger transaction; and other
information deemed relevant.
As part of the Company's investigation, the Company's executive officers
and directors would meet personally with management and key personnel, would
visit and inspect material facilities, obtain independent analysis or
verification of certain information provided, check references of management and
key personnel, and take other reasonable investigative measures, to the extent
of the Company's limited financial resources and management expertise.
It is possible that the range of business opportunities that might be
available for consideration by the Company could be limited by the impact of
Securities and Exchange Commission regulations regarding purchase and sale of
"penny stocks." The regulations would affect, and possibly impair, any market
that might develop in the Company's securities until such time as they qualify
for listing on NASDAQ or on another exchange which would make them exempt from
applicability of the "penny stock" regulations. See "Risk Factors - Regulation
of Penny Stocks."
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Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.
Acquisition candidates, which have a need for an immediate cash infusion, are
not likely to find a potential business combination with the Company to be an
attractive alternative.
Form of Acquisition
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It is impossible to predict the manner in which the Company may
participate in a business opportunity. Specific business opportunities will be
reviewed as well as the respective needs and desires of the Company and the
promoters of the opportunity and, upon the basis of that review and the relative
negotiating strength of the Company and such promoters, the legal structure or
method deemed by management to be suitable will be selected. Such structure may
include, but is not limited to leases, purchase and sale agreements, licenses,
joint ventures and other contractual arrangements. The Company may act directly
or indirectly through an interest in a partnership, corporation or other form of
organization. Implementing such structure may require the merger, consolidation
or reorganization of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a transaction, the Company's existing directors may resign and new
directors may be appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in a
business opportunity through the issuance of Common Stock or other securities of
the Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current officers, directors and principal
shareholders. (See "Description of Business - General").
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It is anticipated that any new securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available, from
registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of the transaction, the Company
may agree to register such securities either at the time the transaction is
consummated, or under certain conditions or at specified times thereafter. The
issuance of substantial additional securities and their potential sale into any
trading market that might develop in the Company's securities may have a
depressive effect upon such market.
The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.
As a general matter, the Company anticipates that it, and/or its
officers and principal shareholders will enter into a letter of intent with the
management, principals or owners of a prospective business opportunity prior to
signing a binding agreement. Such a letter of intent will set forth the terms of
the proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of the
other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.
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It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys
and others. If a decision were made not to participate in a specific business
opportunity, the costs theretofore incurred in the related investigation would
not be recoverable. Moreover, because many providers of goods and services
require compensation at the time or soon after the goods and services are
provided, the inability of the Company to pay until an indeterminate future time
may make it impossible to procure goods and services.
In all probability, upon completion of an acquisition or merger, there
will be a change in control through issuance of substantially more shares of
common stock.
Universal Alliance Inc. ("UAI")
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The Company continually reviews business plans to identify candidates that
require merchant banking services or funding. The first investment that the
Company has agreed to finance is UAI. UAI, is a private holding company for
Remind America, Inc. Global Interlink Systems, Inc., thankyoustores.com Inc, and
NCSS America Inc:
UAI continues to be engaged in proof of concept test marketing, technology
development, recruitment of Management and staff and potential acquisition of
marketing companies. UAI currently drives its revenue from fulfillment services
and sales of custom-labeled gift products through the Remind American loyalty
system.
Remind America develops customer loyalty and relationship building products
and services which it provides for Universal Alliance marketing companies and
thankyoustores.com retail franchise stores. These products and services enable
businesses and individuals to build customer loyalty and celebrate relationships
by systematically thanking customers, clients, employees, vendors, friends, and
family. Remind America also provides a fulfillment and distribution service to
deliver personalized products as incentives and tools to build relationships.
Remind America sells, custom labels, and custom packages its gift products
for deliveruy to customers, vendors, employees, and others on behalf of UAI's
clients. These products include thank you cards chocolates, wines, and various
pre-packaged food products. Remind America provides personalization of these
products.
GISI expects to develop and expand the Remind America concept using a
high-technology information and delivery system using ingteractive multimedia
kiosks and Web Site. These kiosks will be targeted to shoppers in high traffic
areas and the Web Site will give access to online sales, via the Internet. GISI
intends to offer Remind America's products and other vendors' goods and services
as well as interactive local advertising and promotion, education and multimedia
presentations, directory and merchant services. GISI has yet to commence
installation and operation of the proposed kiosk network and Web site.
UAI is preparing to launch thankyoustores.com Franchjise. These franchises
will offer existing retail business owners the opportunity to earn additional
revenues through an electronic kiosk "business within a business" that offers
high quality, distinctively personalized gifts. Thankyoustores.com has yet to
commence operations
NCSS America plans to design and provide secure, high-speed wireless
communication networks and services that are fast, cost effective and provide
secure communication. Their planned networks are expected to provide (i)
broadband data, voice, fax and video channels; (ii) high-speed Internet
/Intranet access through both fixed and mobile application over large geographic
areas; (iii) an alternative to costly high speed wire carrier services in urban
and rural areas; and (iv) cost effective "last mile" link to connect to fiber or
satellite backbone infrastructure. NCSS will provide the communications link for
GlobalInterlink Kiosks in locatins where the infrastructure is inadequate or the
cost of a wire link is prohibitive. NCSS has yet to commence installation and
operation of the wireless delivery system.
Share Exchange Agreement (the "Exchange Agreement"). In December 1998,
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the Company entered into an Exchange Agreement with UAI and certain shareholders
of UAI (the "UAI Controlling Shareholders"). The Exchange Agreement provided
that the Company would acquire 81.5% (9,600,000 shares) of the outstanding
capital stock of UAI. The UAI Controlling Shareholders will receive one share of
newly issued Company stock for each share of UAI Stock. The Exchange Agreement
required the Company, with certain limitation, to prepare and file a
registration statement or registration statements in compliance with the
Securities Act of 1933, as amended (the "Act") such that the UAI Controlling
Shareholders will be able to sell the exchange shares in compliance with the
Act. The Company's registration efforts shall be limited to attempting to
register up to twenty five percent (25%) of the exchange shares once in every
six (6) month period. In July 1999, the Company, UAI and the UAI Controlling
Shareholders terminated the Exchange Agreement and entered into a Stock Option
Agreement.
Stock Option Agreement (the "Option Agreement"). The Option
----------------------------------------------------
Agreement provides the Company with the option, based upon achieving specific
performance criteria, to acquire controlling interest in UAI. The Company would
issue to UAI Controlling Shareholders one and three-quaters (1.75) shares of
common stock in the Company for each share of UAI common stock. The conditions
precedent include: (i) the Company to file Form 10-SB with the Securities and
Exchange Commission on or before July 30, 1999, and comply with all future
disclosure requirements of a fully-reporting company; (ii) the Company to assist
UAI in the successful completion of the Private Offering Memorandum for
$2,000,000 of Convertible Notes; (iii) Average price of the Company's stock
traded on the Over-the-Counter Bulletin Board to average at least $2.00 from
August 1, 1999 through September 30, 1999; (iv) Tax-free exchange of the
Company's stock for UAI common stock; (v) Successful filing of a registration
statement that registers up to twenty-five percent (25%) of the Company's common
stock to be acquired by the UAI Controlling Shareholders; and (vi) executing the
option before March 31, 2,000. The Company is not obligated to complete any or
all of the conditions precedent prior to the exercise of the option. The Option
Agreement requires the Company, with certain limitation, to prepare and file a
registration statement or registration statements in compliance with the
Securities Act of 1933, as amended (the "Act") such that the UAI Controlling
Shareholders will be able to sell the exchange shares in compliance with the
Act. The Company's registration efforts shall be limited to attempting to
register up to twenty five percent (25%) of the exchange shares once in every
six (6) month period
<PAGE>
Investment Company Act and Other Regulation
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The Company may participate in a business opportunity by purchasing,
trading or selling the securities of such business. The Company does not,
however, intend to engage primarily in such activities. Specifically, the
Company intends to conduct its activities so as to avoid being classified as an
"Investment Company" under the Investment Company Act of 1940 (the "Investment
Act"), and therefore to avoid application of the costly and restrictive
registration and other provisions of the Investment Act, and the regulations
promulgated thereunder.
Section 3(a) of the Investment Act contains the definition of an
"investment company," and it excludes any entity that does not engage primarily
in the business of investing, reinvesting or trading in securities, or that does
not engage in the business of investing, owning, holding or trading "investment
securities" (defined as "all securities other than government securities or
securities of majority-owned subsidiaries") the value of which exceeds 40% of
the value of its total assets (excluding government securities, cash or cash
items). The Company intends to implement its business plan in a manner, which
will result in the availability of this exception from the definition of
"Investment Company." Consequently, the Company's participation in a business or
opportunity through the purchase and sale of investment securities will be
limited.
The Company's plan of business may involve changes in its capital
structure, management, control and business, especially if it consummates a
reorganization as discussed above. Each of these areas is regulated by the
Investment Act, in order to protect purchasers of investment company securities.
Since the Company will not register as an investment company, stockholders will
not be afforded these protections.
Any securities, which the Company might acquire in exchange for its
Common Stock, are expected to be "restricted securities" within the meaning of
the Securities Act of 1933, as amended (the "Act"). If the Company elects to
resell such securities, such sale cannot proceed unless the Securities and
Exchange Commission has declared a registration statement effective or an
exemption from registration is available. Section 4(1) of the Act, which exempts
sales of securities not involving a distribution, would in all likelihood be
available to permit a private sale. Although the plan of operation does not
contemplate resale of securities acquired, if such a sale were to be necessary,
the Company would be required to comply with the provisions of the Act to effect
such resale.
<PAGE>
An acquisition made by the Company may be in an industry, which is
regulated or licensed by federal, state or local authorities. Compliance with
such regulations can be expected to be a time-consuming and expensive process.
Competition
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The Company expects to encounter substantial competition in its efforts
to locate attractive opportunities, primarily from business development
companies, venture capital partnerships and corporations, venture capital
affiliates of large industrial and financial companies, small investment
companies, and wealthy individuals. Many of these entities will have
significantly greater experience, resources and managerial capabilities than the
Company and will therefore be in a better position than the Company to obtain
access to attractive business opportunities. The Company also will experience
competition from other public "blank check" companies, many of, which may have
more funds available than does the Company.
No Rights of Dissenting Shareholders
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The Company does not intend to provide Company shareholders with
complete disclosure documentation including audited financial statements,
concerning a possible target company prior to acquisition, because Nevada
Corporate Code vests authority in the Board of Directors to decide and approve
matters involving acquisitions. Any transaction would be structured as an
acquisition, not a merger, with the Registrant being the parent company and the
acquiree being a wholly owned subsidiary. Therefore, a shareholder will have no
right of dissent under Nevada law.
Administrative Offices
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The Company current business address is 462 Stevens Avenue, Suite 308,
Solana Beach, California 92075. The Company's telephone number is (858)
793-5900.
<PAGE>
Employees
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The Company is a development stage company and currently has no
employees. Management of the Company expects to use consultants, attorneys and
accountants as necessary, and does not anticipate a need to engage any full-time
employees so long as it is seeking and evaluating business opportunities. The
need for employees and their availability will be addressed in connection with
the decision whether or not to acquire or participate in specific business
opportunities. See "Executive Compensation" and under "Certain Relationships and
Related Transactions."
Risk Factors
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1. Conflicts of Interest. Certain conflicts of interest may exist between the
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Company and its officers and directors. They have other business interests to
which they devote their attention, and may be expected to continue to do so
although management time should be devoted to the business of the Company. As a
result, conflicts of interest may arise that can be resolved only through
exercise of such judgment as is consistent with fiduciary duties to the Company.
See "Management," and "Conflicts of Interest."
2. Need For Additional Financing. Most of the Company proceeds received from the
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Offering Circular have been provided to UAI in the form of bridge-loan
financing. The loans are to be repaid to the Company in December 1999. Before
the Company can exploit other business opportunities, these loans must be repaid
or the Company must seek additional financing, which may or may not be
available. The Company has not investigated the availability, source, or terms
that might govern the acquisition of additional capital and will not do so until
it determines a need for additional financing. If not available, the Company's
operations will be limited to those that can be financed with its available
capital. The Company also has an its option to acquire at least 80% of the
issued and outstanding stock in UAI. UAI's business plan requires additional
financing. There is no assurance that these funds will be available from any
source or, if available, that they can be obtained on terms acceptable to UAI.
3. Regulation of Penny Stocks. The Company's securities are subject to a
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Securities and Exchange Commission rule that imposes special sales practice
requirements upon broker-dealers who sell such securities to persons other than
established customers or accredited investors. For purposes of the rule, the
phrase "accredited investors" means, in general terms, institutions with assets
in excess of $5,000,000, or individuals having a net worth in excess of
$1,000,000 or having an annual income that exceeds $200,000 (or that, when
combined with a spouse's income, exceeds $300,000). For transactions covered by
the rule, the broker-dealer must make a special suitability determination for
the purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. Consequently, the rule may affect the ability of
broker-dealers to sell the Company's securities and also may affect the ability
of purchasers in this offering to sell their securities in any market that might
develop therefore.
<PAGE>
In addition, the Securities and Exchange Commission has adopted a number
of rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1,
15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities
Exchange Act of 1934, as amended. Because the securities of the Company may
constitute "penny stocks" within the meaning of the rules, the rules would apply
to the Company and to its securities. The rules may further affect the ability
of owners of Shares to sell the securities of the Company in any market that
might develop for them.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
Company's management is aware of the abuses that have occurred historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker-dealers who participate in
the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to the
Company's securities.
4. Lack of Operating History. The Company was organized in March 1992 and
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remained dormant until November 1998. Since November 1998 the Company: (i)
raised $450,000 in a private placement; (ii) entered into a Share Exchange
Agreement to acquire controlling interest of UAI; (iii) provided $450,060 in
bridge financing to UAI; and (iv) terminated the Share Exchange Agreement with
UAI and entered into a Stock Option Agreement, based upon achieving specific
performance criteria, to acquire controlling interest in UAI. The Company is not
profitable, And the only revenue earned was the accrued interest in the Notes
Receivable to UAI The Company has no successful operating history . The Company
faces all of the risks of a new business and the special risks inherent in the
investigation, acquisition, or involvement in a new business opportunity. The
Company must be regarded as a new or "start-up" venture with all of the
unforeseen costs, expenses, problems, and difficulties to which such ventures
are subject.
<PAGE>
5. No Assurance of Success or Profitability. There is no-assurance that the
- ---------------------------------------------
Company will acquire a favorable business opportunity. Even if the Company
should become involved in a business opportunity, there is no assurance that it
will generate revenues or profits, or that the market price of the Company's
Common Stock will be increased thereby.
6. Possible Business - Highly Risky. An investor can expect a potential business
- -----------------------------------
opportunity to be quite risky. The Company's acquisition of or participation in
a business opportunity will likely be highly illiquid and could result in a
total loss to the Company and its stockholders if the business or opportunity
proves to be unsuccessful. The Company has provided $ 450,060 in bridge
financing to UAI. As of June 30, 1999, UAI's unaudited balance sheet showed
assets of approximately $1.3 million; liabilities of $1.5 million and
shareholders' equity of approximately - $ 2.8 million. UAI is dependent upon the
proceeds from a Private Offering Memorandum to provide sufficient capital to
finance its future growth and operations, technology development, marketing
expenses, and to provide working capital for its continued operations as an
ongoing business. See Item 1 "Description of Business."
7. Type of Business Acquired. The type of business to be acquired may be one
- ------------------------------
that desires to avoid effecting its own public offering and the accompanying
expense, delays, uncertainties, and federal and state requirements which purport
to protect investors. Moreover, any business opportunity acquired may be
currently unprofitable or present other negative factors.
8. Impracticability of Exhaustive Investigation. The Company's limited resources
- ------------------------------------------------
and the lack of full-time management will likely make it impracticable to
conduct a complete and exhaustive investigation and analysis of a business
opportunity before the Company commits its capital or other resources thereto.
Management decisions, therefore, will likely be made without detailed
feasibility studies, independent analysis, market surveys and the like which, if
the Company had more funds available to it, would be desirable. The Company will
be particularly dependent in making decisions upon information provided by the
promoter, owner, sponsor, or others associated with the business opportunity
seeking the Company's participation. A portion of the Company's available funds
may be expended for investigative expenses and other expenses related to
preliminary aspects of completing an acquisition transaction, whether or not any
business opportunity investigated is eventually acquired.
<PAGE>
9. Lack of Diversification. Because of the limited financial-resources that the
- ---------------------------
Company has, it is unlikely that the Company will be able to diversify its
acquisitions or operations. The Company's probable inability to diversify its
activities into more than one area will subject the Company to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.
10. Reliance upon Financial Statements. The Company generally will require
- -----------------------------------------
audited financial statements from companies that it proposes to acquire. Given
cases where audited financials are available, the Company will have to rely upon
interim period unaudited information received from target companies' management
that has not been verified by outside auditors. The lack of the type of
independent verification which audited financial statements would provide,
increases the risk that the Company, in evaluating an acquisition with such a
target company, will not have the benefit of full and accurate information about
the financial condition and recent interim operating history of the target
company. This risk increases the prospect that the acquisition of such a company
might prove to be an unfavorable one for the Company or the holders of the
Company's securities.
Moreover, the Company will be subject to the reporting-provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and thus will
be required to furnish certain information about significant acquisitions,
including audited financial statements for any business that it acquires.
Consequently, acquisition prospects that do not have, or are unable to provide
reasonable assurances that they will be able to obtain, the required audited
statements would not be considered by the Company to be appropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable. Should the Company, during the time it remains subject to the
reporting provisions of the Exchange Act, complete an acquisition of an entity
for which audited financial statements prove to be unobtainable, the Company
would be exposed to enforcement actions by the Securities and Exchange
Commission (the "Commission") and to corresponding administrative sanctions,
including permanent injunctions against the Company and its management. The
legal and other costs of defending a Commission enforcement action would have
material, adverse consequences for the Company and its business. The imposition
of administrative sanctions would subject the Company to further adverse
consequences.
<PAGE>
In addition, the lack of audited financial statements would-prevent the
securities of the Company from becoming eligible for listing on NASDAQ, or on
any existing stock exchange. Moreover, the lack of such financial statements is
likely to discourage broker-dealers from becoming or continuing to serve as
market makers in the securities of the Company. Without audited financial
statements, the Company would almost certainly be unable to offer securities
under a registration statement pursuant to the Securities Act of 1933, and the
ability of the Company to raise capital would be significantly limited until
such financial statements were to become available.
11. Other Regulation. An acquisition made by the Company may be of a business
- -----------------------
that is subject to regulation or licensing by federal, state, or local
authorities. Compliance with such regulations and licensing can be expected to
be a time-consuming, expensive process and may limit other investment
opportunities of the Company.
12. Dependence upon Management; Limited Participation of Management. The Company
- -------------------------------
currently has only three individuals who are serving as its officers and
directors. The Company will be heavily dependent upon their skills, talents, and
abilities to implement its business plan, and may, from time to time, find that
the inability of the officers and directors to devote their full time attention
to the business of the Company results in a delay in progress toward
implementing its business plan. See "Management." Because investors will not be
able to evaluate the merits of possible business acquisitions by the Company,
they should critically assess the information concerning the Company's officers
and directors.
13. Lack of Continuity in Management. The Company does not have an employment
- ---------------------------------------
agreement with its officers and directors, and as a result, there is no
assurance they will continue to manage the Company in the future. In connection
with acquisition of a business opportunity, it is likely the current officers
and directors of the Company may resign subject to compliance with Section 14f
of the Securities Exchange Act of 1934. A decision to resign will be based upon
the identity of the business opportunity and the nature of the transaction, and
is likely to occur without the vote or consent of the stockholders of the
Company.
14. Indemnification of Officers and Directors. Nevada Revised Statutes provide
- -----------------------------------------------
for the indemnification of its directors, officers, employees, and agents, under
certain circumstances, against attorney's fees and other expenses incurred by
them in any litigation to which they become a party arising from their
association with or activities on behalf of the Company. The Company will also
bear the expenses of such litigation for any of its directors, officers,
employees, or agents, upon such person's promise to repay the Company therefor
if it is ultimately determined that any such person shall not have been entitled
to indemnification. This indemnification policy could result in substantial
expenditures by the Company, which it will be unable to recoup.
<PAGE>
15. Director's Liability Limited. Nevada Revised Statutes exclude personal
- -----------------------------------
liability of its directors to the Company and its stockholders for monetary
damages for breach of fiduciary duty except in certain specified circumstances.
Accordingly, the Company will have a much more limited right of action against
its directors than otherwise would be the case. This provision does not affect
the liability of any director under federal or applicable state securities laws.
16. Dependence upon Outside Advisors. To supplement the business experience of
- ------------------------------------
its officers and directors, the Company may be required to employ accountants,
technical experts, appraisers, attorneys, or other consultants or advisors. The
Company's President without any input from stockholders will make the selection
of any such advisors. Furthermore, it is anticipated that such persons may be
engaged on an "as needed" basis without a continuing fiduciary or other
obligation to the Company. In the event the President of the Company considers
it necessary to hire outside advisors, he may elect to hire persons who are
affiliates, if they are able to provide the required services.
17. Leveraged Transactions. There is a possibility that any acquisition of a
- -----------------------------
business opportunity by the Company may be leveraged, i.e., the Company may
finance the acquisition of the business opportunity by borrowing against the
assets of the business opportunity to be acquired, or against the projected
future revenues or profits of the business opportunity. This could increase the
Company's exposure to larger losses. A business opportunity acquired through a
leveraged transaction is profitable only if it generates enough revenues to
cover the related debt and expenses. Failure to make payments on the debt
incurred to purchase the business opportunity could result in the loss of a
portion or all of the assets acquired. There is no assurance that any business
opportunity acquired through a leveraged transaction will generate sufficient
revenues to cover the related debt and expenses.
18. Competition. The search for potentially profitable business opportunities is
- ----------------
intensely competitive. The Company expects to be at a disadvantage when
competing with many firms that have substantially greater financial and
management resources and capabilities than the Company. These competitive
conditions will exist in any industry in which the Company may become
interested.
19. No Foreseeable Dividends. The Company has not paid dividends on its Common
- -----------------------------
Stock and does not anticipate paying such dividends in the foreseeable future.
<PAGE>
20. Loss of Control by Present Management and Stockholders. The Company may
- ---------------------------------------------------------------
consider an acquisition in which the Company would issue as consideration for
the business opportunity to be acquired an amount of the Company's authorized
but unissued Common Stock that would, upon issuance, represent the great
majority of the voting power and equity of the Company. The result of such an
acquisition would be that the acquired company's stockholders and management
would control the Company, and persons unknown could replace the Company's
management at this time. Such a merger would result in a greatly reduced
percentage of ownership of the Company by its current shareholders.
21. Volatility of Stock Price. Recent history relating to the market price of
- -------------------------------
the Company's stock, indicates the market price is highly volatile. Factors such
as those discussed in this "Risk Factors" section may have a significant impact
upon the market price of the securities. Owing to the low price of the
securities, many brokerage firms may not be willing to effect transactions in
the securities. Further, many lending institutions will not permit the use of
such securities as collateral for any loans.
22. Blue Sky Considerations. Because the securities registered hereunder have
- ----------------------------
not been registered for resale under the blue sky laws of all states, the
holders of such shares and persons who desire to purchase them in any trading
market, should be aware that there may be significant state blue-sky law
restrictions upon the ability of investors to sell the securities and of
purchasers to purchase the securities in any particular state. Some
jurisdictions may not under any circumstances allow the trading or resale of
blind-pool or "blank-check" securities. Accordingly, investors should consider
the secondary market for the Company's securities to be a limited one.
23. Blue Sky Restrictions. Many states have enacted statutes or rules, which
- --------------------------
restrict or prohibit the sale or resale of securities of "blank check" companies
to residents so long as they remain shell companies. To the extent any current
shareholders or subsequent purchaser from a shareholder may reside in a state,
which restricts or prohibits resale of shares in a "blank check" company,
warning is hereby given that the shares may be "restricted" from resale as long
as the company is a shell company.
In the event of a violation of state laws regarding resale, the Company
could be liable for civil and criminal penalties, which would be a substantial
impairment to the Company.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS OR
PLAN OF OPERATIONS.
Liquidity and Capital Resources
- -------------------------------
The Company remains in the development stage. Since November 1998, the
Company has financed operations and bridge-loan financing through the issuance
of plaement of common shares through which it has received $495,000. Until the
bridge-loans are repaid the Company has limited liquidity.
The Company will carry out its plan of business as discussed above. The
Company cannot predict to what extent its liquidity and capital resources will
be diminished prior to the consummation of a business combination or whether its
capital will be further depleted by the operating losses (if any) of the
business entity which the Company may eventually acquire.
Results of Operations
- ---------------------
During the period from March 1992 (inception) through October 1998, the
Company has engaged in no significant operations other than organizational
activities.
Comparison of operating results for the year 1998 and 1997.
- -----------------------------------------------------------
In 1998 the Company accrued $3,372 in revenues from the interest earned on
the Notes Receivable to UAI. The Company had no revenues in 1997. The Company
incurred $26,710 in expenses in 1998 as compared to $185 in expenses in 1997. In
1998, $20,370 of such expenses were costs incurred to execute the Share Exchange
Agreement with UAI; $2,845 in presentations to secutities broker dealers; $1,800
for the preparation of audited financial statements and $1,500 for office
expenses.
The net operating loss in 1998 was ($23,338) as compared to ($185) in 1997.
The net loss per share each year was less than ($.01) in 1998 and less than
($0.01) in 1997.
Comparison of operating results for the three months ended June 30, 1999 and
- --------------------------------------------------------------------------------
June 30, 1998.
- --------------
In 1999, the Company accured revenues of $13,502 from the interest earned
on the Notes Receivable from to UAI. No Revenues were recorded in 1998. In 1999
the Company incurred $17,552 in expenses compared to $3,401 in 1998. In 1999
$15,000 was incurred as a management fee to the President of the Company and
$2,250 was paid for the office suite and related expenses. In 1998, $1,800 was
incurred to prepared the audited financial results and $1,257 in presentations
to broker dealers.
The net operating loss in the period in 1999 was ($4,050) as compared to
($3,401) in 1998. The net loss per share each period was less than ($0.01).
Comparison of Operating Results for the six month period ended June 30, 1999
- --------------------------------------------------------------------------------
compared to same period in 1998
- -------------------------------
In 1999, the Company accured revenues of $27,004 from the interest earned
on the Notes Receivable from to UAI. No revenues were recorded in 1998. In 1999
the Comopany incurred $46,911 in expenses compared to $3,586 in 1998. In 1999
$30,000 was incurred as a management fee to the President of the Company, $6,000
was paid to Standard Poor's for financial coverage, $5,098 was paid in
professional fees and $4,500 was paid for the office suite and related expense.
In 1998, $1,800 was incurred to prepared th audited financial results and and
$1,257 in presentations to broker dealers.
The net operating loss in 1998 was ($19,907) as compared to($3,586) in
1997. The net loss per share in 1999 was ($0.01) in 1998.
For the current fiscal year, the Company anticipates incurring a loss as
a result of legal and accounting expenses, expenses associated with registration
under the Securities Exchange Act of 1934, and expenses associated with locating
and evaluating acquisition candidates. The Company anticipates that until a
business combination is completed with an acquisition candidate, it will not
generate revenues other than interest income, and may continue to operate at a
loss after completing a business combination, depending upon the performance of
the acquired business.
<PAGE>
Need for Additional Financing
- -----------------------------
The Company does not have capital sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. The Company will have to
seek loans or equity placements to cover such cash needs. In the event the
Company is able to complete a business combination during this period, lack of
its existing capital may be a sufficient impediment to prevent it from
accomplishing the goal of completing a business combination. There is no
assurance, however, that the available funds will ultimately prove to be
adequate to allow it to complete a business combination. And once a business
combination is completed, the Company's needs for additional financing is likely
to increase substantially.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses.
Irrespective of whether the Company's cash assets prove to be inadequate
to meet the Company's operational needs, the Company might seek to compensate
providers of services by issuances of stock in lieu of cash.
Year 2000 Issues
- ----------------
Year 2000 problems result primarily from the inability of some computer
software to property store, recall, or use data after December 31, 1999. These
problems may affect many computers and other devices that contain embedded
computer chips. The Company's operations, however, do not rely on information
technology (IT) systems. Accordingly, the Company does not believe it will be
material affected by Year 2000 problems.
The Company relies on non-IT systems that may suffer from Year 2000
problems, including telephone systems and facsimile and other office machines.
Moreover, the Company relies on third-parties that may suffer from Year 2000
problems that could affect the Company's operations, including banks, oil field
operators, and utilities. In light of the Company's substantially reduced
operations, the Company does not believe that such non-IT systems or third-party
Year 2000 problems will affect the Company in a manner that is different or more
substantial than such problems affect other similarly situated companies or
industry generally. Consequently, the Company does not currently intend to
conduct a readiness assessment of Year 2000 problems or to develop a detailed
contingency plan with respect to Year 2000 problems that may affect the Company.
<PAGE>
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no property. The Company currently maintains an office at
462 Stevens Avenue, Suite 308, Solana Beach, California 92075. The Company pays
$ 750 per month for an office suite and all related expenses including
receptionist, clerical and technical support, office supplies, telephone,
computer, etc.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this Registration
Statement, the number of shares of Common Stock owned of record and beneficially
by executive officers, directors and persons who hold 5.0% or more of the
outstanding Common Stock of the Company. Also included are the shares held by
all executive officers and directors as a group.
NUMBER OF
SHAREHOLDERS BENEFICIAL OWNERS SHARES PERCENTAGE
Bonechi Finance Ltd. 300,000 9.1%
Level 6, 459 Collins Street
Melbourne 3000
Victoria Australia 8007
Booker Finance Ltd. 300,000 9.1%
Suite 26-00, Level 26, Menara IMC
Jalan Sultan Ismail
50250, Kuala Lumpu
Britannia Securities Ltd. 300,000 9.1%
North Town Mills, Level 4
PO Box 370
Trinity Square
St. Peter Port
Guernsey GYI 3NY
Collyer House Ltd. 300,000 9.1%
52 Station Street
Mt. Eliza 3930
Victoria Australia
Holder Row Ltd. 300,000 9.1%
Level 9, 575 Bourke Street
Melbourne 3000
Victoria Austrailia
Normandy Investment Ltd. 300,000 9.1%
111 Bayside Drive, Suite 200
Corona Del Mar, CA 92625
Salamander Group Investments Ltd. 300,000 9.1%
North Town Mills, Level 4
PO Box 370 Trinity Square
St. Peter Port
Guernsey GIY
Yellowstone Securities Ltd. 300,000 9.1%
6 Nova Drive
Dandenong 3175
Victoria Austrailia
Oceania Custodians, Ltd. 250,000 7.6%
23 S. Milburn Street
Dunedin, New Zealand
<PAGE>
Kurt Wright 0 0
2625 Temple Heights Dr.
Oceanside, CA 92056
Leonard Viejo 30,000 0.9%
462 Stevens Avenue, Suite 308
Solana Beach, CA 92075
Anthony D. Robinson 10,000 0.3%
7 Airedale Avenue
Hawthron East 3123
Victoria Australia
Roger C. Davey 10,000 0.3%
Canterbury Mint Pty. Ltd.
155 Cochranes Road
Cere 3221
Victoria Australia
All directors and executive 50,000 1.5%
officers as a group (3 persons)
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors and executive officers currently serving the Company are
as follows:
Name Position Term
- ---- -------- ----
Kurt Wright Chairman and Director Annual
Leonard Viejo President, Assistant Annual
Secretary and Director
Roger C. Davey Secretary and Director Annual
The directors named above will serve until the next annual meeting of
the Company's stockholders. Thereafter, directors will be elected for one-year
terms at the annual stockholders' meeting. Officers will hold their positions at
the pleasure of the board of directors, absent any employment agreement, of
which none currently exists or is contemplated. There is no arrangement or
understanding between the directors and officers of the Company and any other
person pursuant to which any director or officer was or is to be selected as a
director or officer.
<PAGE>
The directors and officers of the Company will devote such time to the
Company's affairs on an "as needed" basis. As a result, the actual amount of
time, which they will devote to the Company's affairs, is unknown and is likely
to vary substantially from month to month.
Biographical Information
- ------------------------
Kurt Wright, Director and Chairman, age 58, is president and founder of
-----------------------------------
Clear Purpose Management, Inc. (CPM) (1976-present). CPM is a management
consulting firm specializing in corporate culture change. Mr. Wright has coached
leaders from some of the most respected companies in the U.S., Canada, South
America and Europe including 3M, Shell Oil, Hallmark, Pratt & Whitney and
Alberto Culver. His work, as well as the ideas in his book, "Breaking the
Rules," grew out of a 1970 decision to spend the rest of his life working to
understand what each of us is like at our very best. Prior to founding CPM, Mr.
Wright was associated with the Dale Carnegie Courses, where he led the effort to
introduce Dale Carnegie's Management Seminar to the Denver market. Mr. Wright
began his career as a feed ingredient merchandiser (commodity trader) for the
Pillsbury Company. He attended Hamline University and the University of
Minnesota where he majored in educational psychology.
Leonard Viejo, Director and President, age 50, is President of ASTRUM
----------------------------------------
Energy Corporation ("ASTRUM") (1997-1998) and Vice President and Chief Financial
Officer in the investment banking firm of Kinsell, Newcomb & De Dios, Inc.
("Kinsell") (1994-1998). ASTRUM is an energy services company that partners with
municipalities to offer their communities lower electric rates and improved
service benefits. Mr. Viejo also leads the utility financing and acquisition
practice for Kinsell. The firm has designed and marketed, as a lead and a
participating underwriter, over $4 billion in financings. Prior to joining
Kinsell, Mr. Viejo was a financial executive reporting to the Chairman/CEO and
served on the executive council of Sempra, an energy management company. During
his tenure in the industry, he has structured innovative and cost effective
financing transactions; and successfully negotiated strategic business
alliances. Prior to joining the utility profession, Mr. Viejo earned his CPA and
worked as a manager with Ernst & Young. He graduated with honors from the
University of Pennsylvania, Wharton School of Finance and Commerce and
Northwestern University, Kellogg Graduate School of Management.
Roger C. Davey, Director and Secretary, age 52, is an Australian resident.
---------------------------------------
He was a Director of McIntosh Hamson Hoare Govett, a major Australian brokerage
house and was responsible for the creation and management of the futures
operations as Executive Director of McIntosh Risk Management Limited. Mr. Davey
was also a Director of Sydney Futures Limited and Bain Refco Commodities
Limited. Since 1992 he has also been a Director of and held Chief Financial
Officer positions in Yamarna Goldfield, N.L., Ysabel Resources, Inc. and
Transglobal Resources, N.L. Mr. Davey has a Bachelor of Business degree from
Wesley College, is a CPA, a member of the Securities Institute of Australia and
the Australian Corporation Treasures Association and has extensive experience in
all aspects of finance and risk management techniques, as well as a full working
knowledge of financial markets in North America, Canada and Australia, and the
associated regulatory requirements.
<PAGE>
Management will devote necessary time to the operations of the Company,
and any time spent will be devoted to screening and assessing and, if warranted,
negotiating to acquire business opportunities.
None of the Company's directors receives any compensation for their
respective services rendered to the Company, nor have they received such
compensation in the past. They all have agreed to act without compensation until
authorized by the Board of Directors, which is not expected to occur until the
Company has generated revenues from operations after consummation of a merger or
acquisition. The President of the Company receives a monthly fee of $5,000. No
retirement, pension, profit sharing, stock option or insurance programs or other
similar programs have been adopted by the Company for the benefit of its
employees.
It is possible that, after the Company successfully consummates a merger
or acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of the Company's management for the purposes
of providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors were
offered compensation in any form from any prospective merger or acquisition
candidate, the proposed transaction would not be approved by the Company's Board
of Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
<PAGE>
It is possible that persons associated with management may refer a
prospective merger or acquisition candidate to the Company. In the event the
Company consummates a transaction with any entity referred by associates of
management, it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated that this fee will be
either in the form of restricted Common Stock issued by the Company as part of
the terms of the proposed transaction, or will be in the form of cash
consideration. The amount of such finder's fee cannot be determined as of the
date of filing this report, but is expected to be comparable to consideration
normally paid in like transactions.
Indemnification of Officers and Directors
- -----------------------------------------
As permitted by Nevada Revised Statutes, the Company may indemnify its
directors and officers against expenses and liabilities they incur to defend,
settle, or satisfy any civil or criminal action brought against them on account
of their being or having been Company directors or officers unless, in any such
action, they are adjudged to have acted with gross negligence or willful
misconduct. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable.
Exclusion of Liability
- ----------------------
The Nevada Business Corporation Act excludes personal liability for its
directors for monetary damages based upon any violation of their fiduciary
duties as directors, except as to liability for any breach of the duty of
loyalty, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts in violation of the Nevada
Business Corporation Act, or any transaction from which a director receives an
improper personal benefit. This exclusion of liability does not limit any right,
which a director may have to be indemnified, and does not affect any director's
liability under federal or applicable state securities laws.
Conflicts of Interest
- ---------------------
The officers and directors of the Company will not devote more than a
portion of their time to the affairs of the Company. There will be occasions
when the time requirements of the Company's business conflict with the demands
of their other business and investment activities. Such conflicts may require
that the Company attempt to employ additional personnel. There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the Company.
<PAGE>
Conflicts of Interest - General. Officers and directors of the Company may
participate in business ventures, which could be deemed to compete directly with
the Company. Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's officers or directors
are involved in the management of any firm with which the Company transacts
business. The Company's Board of Directors has adopted a policy that the Company
will not seek a merger with, or acquisition of, any entity in which management
serve as officers or directors, or in which they or their family members own or
hold a controlling ownership interest. Although the Board of Directors could
elect to change this policy, the Board of Directors has no present intention to
do so.
ITEM 6. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE OF EXECUTIVES & DIRECTORS
-----------------------------------------------------
Annual Compensation Awards
Name and Year Salary Bonus Other Annual Restricted Securities
Principal ($) ($) Compensation Stock Underlying
Position ($) Award(s) Options/
($) SARs (#)
============== --------- ------------ --------- ------------------- ------------
Leonard Viejo, 1997 0 0 0 0 0
President &
Director
--------- ------------ --------- ------------------- ------------
1998 0 0 5,000 0 0
============== --------- ------------ --------- ------------------- ------------
Kurt Wright 1998 0 0 0 0 0
Chairman &
Director
============== --------- ------------ --------- ------------------- ------------
Roger C. Davey, 1997 0 0 0 0 0
Secretary
--------- ------------ --------- ------------------- ------------
1998 0 0 0 0 0
============== --------- ------------ --------- ------------------- ------------
Option/SAR Grants Table (None)
<PAGE>
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR
value (None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
See "Certain Relationships and Related Transactions." The Company has no
stock option, retirement, pension, or profit-sharing programs for the benefit of
directors, officers or other employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 1998, Jay Geier, President and Director was issued 5 million
shares of common stock @ $.001 per share for cash
No officer, director, or affiliate of the Company any direct or indirect
material interest in any asset proposed to be acquired by the Company through
security holdings, contracts, options, or otherwise.
The Company has adopted a policy under which any consulting or finder's
fee that may be paid to a third party or affiliate for consulting services to
assist management in evaluating a prospective business opportunity would be paid
in stock or in cash. Any such issuance of stock would be made on an ad hoc
basis. Accordingly, the Company is unable to predict whether or in what amount
such a stock issuance might be made.
Although there is no current plan in existence, it is possible that the
Company will adopt a plan to pay or accrue compensation to its officers and
directors for services related to seeking business opportunities and completing
a merger or acquisition transaction.
The Company current business is the business address for another employer
of the President of the Company. The Company has agreed to pay $750 per month
for an office suite and all related expenses. It is likely that the Company will
establish and maintain a different office after completion of a business
combination.
<PAGE>
ITEM 8. DESCRIPTION OF SECURITIES
Common Stock
- ------------
The Company's Articles of Incorporation authorize the issuance of
100,000,000 shares of Common Stock $0.001 par value. Each record holder of
Common Stock is entitled to one vote for each share held on all matters properly
submitted to the stockholders for their vote. The Articles of Incorporation do
not permit cumulative voting for the election of directors. As of June 30, 1999
a total of 3,290,250 common shares are issued and outstanding.
Holders of outstanding shares of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors out of
legally available funds; and, in the event of liquidation, dissolution or
winding up of the affairs of the Company, holders are entitled to receive,
ratably, the net assets of the Company available to stockholders after
distribution is made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares of Common Stock
have no preemptive, conversion or redemptive rights. All of the issued and
outstanding shares of Common Stock are, and all unissued shares when offered and
sold will be, duly authorized, validly issued, fully paid, and nonassessable. To
the extent that additional shares of the Company's Common Stock are issued, the
relative interests of then existing stockholders may be diluted.
Shareholders
- ------------
Each shareholder has sole investment power and sole voting power over
the shares owned by such shareholder.
No shareholder has entered into or delivered any lock up agreement or
letter agreement regarding their shares or options thereon.
Transfer Agent
- --------------
The Company's transfer agent is Atlas Stock Transfer Corporation 5899
South State Street, Salt Lake City, Utah 84107 as its transfer agent.
<PAGE>
Reports to Stockholders
- -----------------------
The Company plans to furnish its stockholders with an annual report for
each fiscal year containing financial statements audited by its independent
certified public accountants. In the event the Company enters into a business
combination with another company, it is the present intention of management to
continue furnishing annual reports to stockholders. Additionally, the Company
may, in its sole discretion, issue unaudited quarterly or other interim reports
to its stockholders when it deems appropriate. The Company intends to comply
with the periodic reporting requirements of the Securities Exchange Act of 1934
for so long as it is subject to those requirements.
PART II
Item 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANTS COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS
The Company's shares of common stock began trading on the
Over-the-Counter Bulletin Board on December 8, 1998. The prices set forth below
represent closing prices.
High Low
---- ---
1998
----
Fourth Quarter $ 6.00 $ 5.25
1999
----
First Quarter $ 5.50 $ 1.00
Second Quarter $ 4.25 $ 0.75
December 28, 1998 was the last date the stock was traded in 1998, and the
closing price was $6.00. On July 16, 1999, the closing price of the stock was
five-eights (5/8). At December 31, 1998, and June 30, 1999, there were 62 and
approximately 96 holders of records of the Company's stock, respectively. No
dividends have been paid to date and the Company's Board of Directors does not
anticipate paying dividends in the foreseeable future.
<PAGE>
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
No director, officer or affiliate of the Company, and no owner of record
or beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
any litigation.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Schvaneveldt and Company completed the audit of the balance sheets as of
December 31,1997, and 1996 and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 1997, and
1998. The Independent Audit Report contained an opinion which included a
paragraph discussing uncertainties related to continuation of the Company as a
going concern. Due to the Share Purchase Agreement, that changed the principal
shareholder of the Company, the Company changed Accountants and retained Michael
Johnson & Company. In connection with these prior audits, no disagreement exist
with any former Acountant on any matter of accounting principles or pratices,
financial statements disclosure, or auditing scope of procedure, which
disagreement if not resolved to the satisfaction of th former Accountant would
have caused the Accountant to make reference in connection with his report to
the subject matter of the disagreement(s).
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
In the prior three years the Company has sold its Common Stock to the
persons listed in the table below in transactions summarizd as follows:
CONSID-
AMOUNT OF ERATION
NAME & ADDRESS PURCHASE DATE SHARES PER SHARE
- -------------- ------------- ------ ---------
Jay A. Geier March 1998 5,000,000 $0.01
cash
Booker Finance Ltd. December 7, 1998 300,000 $0.33
Suite 26-00, Level 26, Menara IMC cash
Jalan Sultan Ismail
50250, Kuala Lumpur
Britannia Securities Ltd. December 7, 1998 300,000 $0.33
North Town Mills, Level 4 cash
PO Box 370
Trinity Square
St. Peter Port
Guernsey GYI 3NY
Holder Row Ltd. December 9, 1998 300,000 $0.33
Level 9, 575 Bourke Street cash
Melbourne 3000
Victoria Austrailia
Normandy Investmentts, Inc. December 11, 1998 300,000 $0.33
111 Bayside Drive, Suite 200 cash
Corona Del Mar, CA 92625
<PAGE>
Salamander Group Investments, Ltd. December 11, 1998 300,000 $0.33
North Town Mills, Level 4 cash
PO Box 370
Trinity Square
St. Peter Port
Guernsey GYI
Leonard and Amber Viejo January 29, 1999 30,000 $0.33
462 Stevens Ave., Suite 308 cash
Solana Beach, CA 92075
Anthony D. Robinson February 2, 1999 10,000 $0.33
7 Airedale Avenue cash
Hawthorn East 3123
Victoria Australia
Bonechi Finance Ltd. June 30, 1999 300,000 $0.33
Level 6, 459 Collins Street cash
Melbourne 3000
Victoria Australia 8007
Collyer House Ltd. June 30, 1999 300,000 $0.33
52 Station Street cash
Mt. Eliza 3930
Victoria Australia
Cortell Group Ltd. June 30, 1999 300,000 $0.33
114 Cathedral Street cash
Sydney Australia 2011
Yellowstone Securities Ltd. June 30, 1999 300,000 $0.33
6 Nova Drive cash
Dandenong 3175
Victoria Australia
Oceania Custodians Ltd. June 30, 1999 250,000 $0.33
23 S Milburn Street cash
Dunedin, New Zealand
Canterbury Mint Pty. Ltd. June 30, 1999 10,000 $0.33
H. Canterbury Park cash
155 Cochranes Road, Cere 3221
Victoria Australia
Investment Concepts May 26, 1999 25,000 $0.33
PO Box 2866 cash
La Jolla, CA 92038
Investments Concepts June 30, 1999 25,000 $0.33
PO Box 2866 cash
La Jollan, CA 92038
<PAGE>
Each of the sales listd above was made for cash or serivces as listed. All
of the listed sales were made in reliance upon the eximption from retistration
offered by Section 4(2) of the Securities Acto of 1933, as amended and all sales
except to Jay A. Geier were make in reliance upon Rule 504 of Regulation D.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Nevada Revised Statutes provide that the Company may indemnify its
officers and directors for costs and expenses incurred in connection with the
defense of actions, suits, or proceedings where the officer or director acted in
good faith and in a manner he reasonably believed to be in the Company's best
interest and is a party by reason of his status as an officer or director,
absent a finding of negligence or misconduct in the performance of duty.
<PAGE>
SIGNATURES:
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
DATED: ____________________
by:/s/Leonard Veijo
_____________________
Leonard Viejo
President
Directors:
by:/s/Kurt Wright
___________________________
Kurt Wright
Director
by:/s/Leonard Viejo
___________________________
Leonard Viejo
Director
by:/s/Roger C. Davey
___________________________
Roger C. Davey
Director
<PAGE>
BIO-AMERICAN CAPITAL CORP
(A Development Stage Company)
Index to Financial Statements
<PAGE>
BIO-AMERICAN CAPITAL CORP
(A Development Stage Company)
FINANCIAL STATEMENTS
1999
Cover Page F-1
Auditors Report for years ended December 31, 1997
and 1998 and period ended 1999 F-2
Balance Sheet F-3
Statement of Operations F-4
Statement of Cash Flows F-5
Statement of Stockholders' Equity F-6
Notes to Financial Statements F-7 - 8 - 9
Auditors Report for years ended December 31,
1996 and 1997 F-10
Balance Sheet F-11
Statement of Operations F-12
Statement of Stockholders' Equity F-13 - 14
Statement of Cash Flows F-15
Notes to Financial Statements F-16 - 17
Interim Unaudited Financial Statements
for Period Ended June 30, 1999 F-18
Balance Sheet F-19
Statement of Operations F-20
Statement of Cash Flows F-21
Statement of Operations F-22
Statement of Cash Flows F-23
Notes to Financial Statements F-24 - 25
<PAGE>
BIO-AMERICAN CAPITAL CORP
(A Development Stage Company)
FINANCIAL STATEMENTS
For the Period May 5, 1992 (Inception) to December 31, 1998
F-1
<PAGE>
Michael B. Johnson & Company LLC
91785 E. Kenyon Ave., Suite 100
Denver, Co 80237
INDEPENDENT AUDITORS' REPORT
To the board of Directors of
Bio-American Capital Corp.
We have audited the accompanying balance sheet of Bio-American Capital Corp. (A
Development Stage Company) as of December 31, 1998 and the related statements of
operations, stockholders' equity, and cash flows for the period then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is 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 overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bio-American Capital Corp., as
of December 31, 1998 and the results of their operations and their cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/Michael B. Johnson
____________________
Denver, Colorado
July 26, 1999
F-2
<PAGE>
BIO-AMERICAN CAPITAL CORP
(A Development Stage Company)
FINANCIAL STATEMENTS
For the Period May 5, 1992 (Inception) to December 31, 1998
(Audited)
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Balance Sheet
December 31, 1998 and December 31, 1997
Dec.31, Dec. 31,
1998 1997
ASSETS
CURRENT ASSETS
Cash $ 29,720 $ --
Stock Subscription (Note 3) 495,000 --
Interest Receivable 3,372 --
Notes Receivable (Note 4) 450,060 --
--------- ---------
TOTAL CURRENT ASSETS 978,152
TOTAL $ 978,152 $ --
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 22,647 $ 170
--------- ---------
TOTAL CURRENT LIABILITIES 22,647 170
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value: authorized -
100,000,000 shares; issued and outstanding -
3,290,250 shares 3,290 780
Additional paid-in capital 983,523 7,020
Accumulated deficit (31,308) (7,970)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 955,505 (170)
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 978,152 $ --
========= =========
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
Bio-American Capital Corporation
(A Development Stage Company)
Statement of Operations
For the Year Ended December 31, 1998
With Comparative Totals for December, 31, 1997 and Accumulated from May 5,
1992 (Inception) to December 31, 1998
<S> <C> <C> <C>
Dec. 31 Dec. 31, Dec. 31,
1998 1997 1998
REVENUES:
Interest Income $ 3,372 $ $ 3,372
EXPENSES:
Amortization 500
Professional Expenses 20,210 185 21,110
Management Fees 5,000 5,000
Travel 1,997
Office Expenses 1,500 6,073
Total Expenses 26,710 185 34,680
------ --- ------
Net Loss $(23,338) $ (185) $(31,308)
=========== =========== ===========
Loss Per Share $ (0.006) $ (0.00)
=========== ===========
Weighted Average Shares Outstanding 3,799,535 780,000
========= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
Bio-American Capital Corporation
(A Development Stage Company)
Statement of Cash Flow
For the Year Ended December 31, 1998
With Comparative Totals for December 31, 1997 and May 5, 1992
(Inception) to December 31, 1998
May 5, 1992
Dec. 31 Dec. 31 (Inception)to
1998 1997 Dec.31, 1998
<S> <C> <C> <C>
---- ---- ------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $ (23,338) $ (185) $(31,308)
Amortization 500 -- 100
Increase in Accounts payable 22,477 22,647 85
(Increase) in Stock Subscriptions Receivable (495,000) -- (495,000)
(Increase) in Interest Receivable (3,372)
Increase in Notes Receivable (450,000) -- (450,000)
--------- --------- ---------
Net Cash Used by Operating Activities (949,233) -- (956,533)
CASH FLOW FROM INVESTING ACTIVITIES:
Incorporation Costs -- -- (500)
Net Cash Used by Investing Activities -- -- (500)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Sale of Common Stock 978,953 -- 986,753
--------- --------- ---------
Net Cash Provided by Financing Activities 978,953
INCREASE IN CASH 29,720 -- 29,720
CASH, at Beginning of Period -- -- --
CASH, at End of Period $ 29,720 $ -- $ 29,720
======== ======== ========
Supplemental Disclosures
Interest $ -- $ -- $ --
========= ========= =========
Taxes $ $ $
========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bio-American Capital Corporation
Statements of Stockholders' Equity
December 31, 1998
Additional Total
Common Stock Paid In Accumulated Stockholders'
Shares Amount Capital Deficit Equity
------ ------ ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net Earnings for
12/31/92 $ 0 $ 0 $ 0 $ 0 $ 0
0 $ 0
0
Balance, December
31, 1992 0 0 0 0 0
Issuance to
Founders for Cash 780,000 780 7,020 0 7,800
Net Loss
12/31/93 0 0 0 (1,285) (1,285)
Balance, December
31, 1993 780,000 780 7,020 (1,285) 6,515
Net Loss
12/31/94 (2,732) (2,732)
------ ------
Balance, December
31, 1994 780,000 780 7,020 (4,017) 3,783
Net Loss
12/31/95 (3,583) (3,583)
----------- -----------
Balance, December
31, 1995 780,000 780 7,020 (7,600) 200
Net Loss
12/31/96 (185) (185)
----------- -----------
Balance, December
31, 1996 780,000 780 7,020 (7,785) 15
Net Loss 12/31/97 (185) (185)
----------- -----------
Balance, December
31, 1997 780,000 780 7,020 (7,970) (170)
Issuance 1/98
for Cash 5,000,000 5,000 0 0 5,000
Reverse Stock
Split 11/19/98 (5,489,750) (5,490) 5,490 0 0
Issuance 12/14/98
for Cash 3,000,000 3,000 971,013 0 974,013
--------- -------- --------
Net Loss for
12/31/98 (23,338) (23,338)
----------- -----------
Balance, December
31, 1998 3,290,250 $ 3,290 $983,523 $(31,308) $ 955,505
========== ========= ======== ========= ==========
The accompanying notes are an integral part of these financial statements.
F-6
</TABLE>
<PAGE>
BIO-AMERICAN CAPITAL CORP.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
Note 1 - Organization and Summary of Significant Accounting Policies:
- ---------------------------------------------------------------------
Organization:
Bio-American Capital Corporation (A Development Stage Company) was incorporated
in May 1992 to raise capital for a business venture. Minimal capital was raised
and it engaged in no business and remained dormant until November 1998. During
November 1998 the Company raised $990,000 from an exempt Offering Circular under
Regulation D, Rule 504 of the Securities and Exchange Commission. The Company
now acts as a merchant bank to organize, capitalize, acquire and finance
technology companies in the electronic communications and commerce industry.
Reverse Stock Split:
On November 10, 1998, the Company's Articles of Incorporation were amended to
reduce the number of shares issued and outstanding on a basis of one new share
for each twenty of such issued and outstanding, provided that no stockholder
shall be reduced thereby to less than 100 shares. The reverse stock split was
effective on November 25, 1998.
Basis of Presentation:
The authorized capital stock of the corporation is 100,000,000 shares of common
stock $.001.
Cash and Cash Equivalents:
The Company considers all highly-liquid debt instruments, purchased with an
original maturity of three months, to be cash equivalents.
Stock Subscription:
The Company records a stock subscription once the Subscription Agreement is
accepted.
Revenue Recognition:
The Company sells merchant banking services and invests in selected ventures.
Revenue consist of fees for services and a return on the capital invested.
Use of estimates:
The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
F-7
<PAGE>
BIO-AMERICAN CAPITAL CORP.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
Net Loss Per Share:
Net loss per share is based on the weighted average number of common shares and
common shares equivalents outstanding during the period.
Note 2 - Federal Income Taxes:
- ------------------------------
The Company adopted statement of financial Accounting Standards No. 109,
"Accounting For Income Taxes." FAS 109 requires the recognition of deferred tax
liabilities and assets for the anticipated future tax effects of temporary
differences that arise as a result of differences in the carrying amounts and
tax bases of assets and liabilities. There was no material effect on the
financial statements as a result of adopting FAS 109.
Note 3 - Stock Subscription:
- ----------------------------
During late 1998 the Company accepted the Subscription Agreements to purchase
3,000,000 shares of common stock for $990,000 pursuant to an Offering Circular
exempt from registration under Regulation D, Rule 504 the Securities and
Exchange Commission.
Note 4 - Notes Receivable
- -------------------------
The Company has provided $450,060 of bridge financing to Universal Alliance,
Inc. ("UAI"). UAI has also issued the Company warrants to purchase common stock
of UAI. The financing is to be repaid from the proceeds raised from the UAI
Confidential Offering Memorandum that was issued in December 1998.
Note 5 - Commitment and Contingencies:
- --------------------------------------
The Company continually reviews business plan to identify candidates that
require merchant banking services or funding. The first investment that the
Company has agreed to finance is UAI. UAI is the holding company for Remind
America, Inc., Global Interlink Systems, Inc., and NCSS America, Inc. Remind
America, Inc. is a service-oriented company that began operations in 1996 and
specializes in providing a unique acknowledgment service to both business and
the general public. Global Interlink Systems, Inc. was incorporated in 1996 and
provides personalized custom products to the general public through electronic
touch-pad kiosk units. NCSS America, Inc. was recently formed and specializes in
the design and installation of high-speed wireless communication networks and
services that are fast, cost-effective, high quality and provide secure
communications.
F-8
<PAGE>
BIO-AMERICAN CAPITAL CORP.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
Note 5 - Commitment and Contingencies (Continued):
- --------------------------------------------------
Share Exchange Agreement (the "Agreement")
In December 1998, the Company entered into an Agreement with UAI and certain
shareholders of UAI (the "UAI Controlling Shareholders"). The Agreement provided
that the Company would acquire 81.5% (9,600,000 shares) of the outstanding
capital stock of UAI. The UAI Controlling Shareholders will receive one share of
newly issued Company stock for each share of UAI Stock. The Agreement requires
the Company, with certain limitations, to prepare and file a registration
statement or registration statements in compliance with the Securities Act of
1933, as amended (the "Act") such that the UAI Controlling Shareholders will be
able to sell the exchange shares in compliance with the Act. The Company's
registration efforts shall be limited to attempting to register up to twenty
five percent (25%) of the exchange shares once in every six (6) month period. In
July 1999, the Company, UAI and the UAI Controlling Shareholders terminated the
Share Exchange Agreement and entered into a Stock Option Agreement.
Stock Option Agreement (the "Option Agreement"):
The Option Agreement provides the Company with the option, based upon achieving
specific performance criteria, to acquire controlling interest in UAI. The
Company would issue to UAI Controlling Shareholders one and three-quarter (1.75)
shares of common stock in the Company for each share of UAI common stock. The
conditions precedent include (i) the Company to file Form 10-SB with the
Securities and Exchange Commission on or before July 30, 1999, and comply with
all future disclosure requirements of a fully-reporting company; (ii) the
Company to assist UAI in the successful completion of the Private Offering
Memorandum for $2,000,000 of Convertible Notes; (iii) Average price of the
Company's stock traded on the Over-the-Counter Bulletin Board to average at
least $2.00 from August 1, 1999, through September 30, 1999; (iv) Tax-free
exchange of the Company's stock for UAI common stock; (v) Successful filing of a
registration statement that registers up to twenty five percent (25%) of the
Company's common stock to be acquired by the UAI Controlling Shareholders; and
(vi) executing the option before March 31, 2000. The Company is not obligated to
complete any or all of the conditions precedent prior to the exercise of the
option. The Option Agreement requires the Company, with certain limitation, to
prepare and file a registration statement or registration statements in
compliance with the Securities Act of 1933, as amended (the"Act") such that the
UAI Controlling Shareholders will be able to sell the exchange shares in
compliance with the Act. The Company's registration efforts shall be limited to
attempting to register up to twenty five percent (25%) of the exchange shares
once in every six (6) month period.
F-9
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Financial Statements
March 31, 1998
&
December 31, 1997
<PAGE>
Schvaneveldt and Company
Certified Public Accountant
275 E. South Temple, Suite 300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell T Schvaneveidt C P A
Independent Auditors Report
---------------------------
Board of Directors
Bio-American Capital Corporation
I have audited the accompanying balance sheets of Bio-American Capital
Corporation, as of March 31, 1998, December 31, 1997 & 1996, and the related
statements of operations, stockholders' equity, and cash flows for the period
ended March 31, 1998 and the years ended December 31, 1997 & 1996. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. 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 the significant estimates made by
management, as well as evaluating the overall financial statements presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of Bio-American Capital Corporation,
as of March 31, 1998, December 31, 1997 & 1996, and the results of its
operations and its cash flows for the period ended March 31, 1998 and the years
ended December 31, 1997 & 1996, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #3 to the financial
statements, the Company has an accumulated deficit and a negative net worth at
March 31, 1998. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also discussed in Note #3. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/Schvaneveldt & Company
_________________________
Salt Lake City, Utah
April 2, 1998
F-10
<PAGE>
<TABLE>
<CAPTION>
Bio-American Capital Corporation
(A Development Stage Company)
Balance Sheets
March 31, 1998, December 31, 1997 & 1996
March December December
31, 1998 31, 1997 31, 1996
-------- -------- --------
<S> <C> <C> <C>
ASSETS
Current Assets
- --------------
Cash 5,000 -0- -0-
Other Assets
- ------------
Incorporation Costs - Net -0- -0- 100
Total Assets -0- -0- -0-
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
- -------------------
Accounts Payable 355 170 85
Stockholders' Equity
- --------------------
Common Shares Authorized
100,000,000 Shares, Par Value $0.001
Per Share
5,780,000 & 780,000 Shares Issued &
Outstanding Respectively 5,780 780 780
Paid In Capital 7,020 7,020 7,020
Deficit Accumulated in the
Development Stage (8,155) (7,970) (7,785)
Total Stockholders' Equity 4,645 (170) 15
Total Liabilities & Stockholders'Equity $ 5,000 $ -0- $ 100
The accompanying notes are an integral part of these financial statements
</TABLE>
F-11
<PAGE>
<TABLE>
<CAPTION>
Bio American Capital Corp.
(A Development Stage Company)
Statements of Operations Accumulated from May
5, 1992 (Inception) to March 31, 1998 &
For the Period January 1, 1998 to March 31, 1998 & the
Years Ended December 31, 1997 & 1996
March December December
Accumulated 31, 1998 31, 1997 31, 1996
------------ -------- --------- --------
<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
- -------
Expenses
- --------
Amortization 500 -0- 100 100
Administration Expenses 4,758 185 85 85
Professional Fees 900 -0- -0- -0-
Travel 1,997 -0- -0- -0-
-------- -------- -------- -------
Total Expenses 8,155 185 185 185
-------- -------- -------- -------
Net Loss ($ 8,155) ($ 185) ($ 185) ($ 185)
======= ======= ======= ======
Loss Per Share (.00) (.00) (.00)
Weighted Averages Shares
Outstanding 1,502,223 780,000 780,000
The accompanying notes are an integral part of these financial statements
</TABLE>
F-12
<PAGE>
<TABLE>
<CAPTION>
Bio-American Capital Corporation
(A Development Stage Company)
Statements of Stockholders' Equity
May 5, 1992 (Inception) to March 31, 1998
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Balance, May 5, 1992 -0- $ -0- -0- -0-
Earnings for the Year Ended
December 31, 1992 -0-
- --------------------------------------------------------------------------------
Balance, December 31, 1992 -0- -0- -0- -0-
Shares Issued to Incorporators
for Cash at $.01 Per Share 780,000 780 7,020
Loss for the Year Ended
December 31, 1993 (1,285)
- --------------------------------------------------------------------------------
Balance, December 31, 1993 780,000 780 7,020 (1,285)
Loss for the Year Ended
December 31, 1994 (2,732)
- --------------------------------------------------------------------------------
Balance, December 31, 1994 780,000 780 7,020 (4,017)
Loss for the Year Ended
December 31, 1995 (3,583)
- --------------------------------------------------------------------------------
Balance, December 31, 1995 780,000 780 7,020 (7,600)
Loss for the Year Ended
December 31, 1996 (185)
- --------------------------------------------------------------------------------
Balance, December 31, 1996 780,000 780 7,020 (7,785)
Loss for the Year Ended
December 31, 1997 (185)
- --------------------------------------------------------------------------------
Balance, December 31, 1997 780,000 780 7,020 (7,970)
The accompanying notes are an integral part of these financial statements
</TABLE>
F-13
<PAGE>
<TABLE>
<CAPTION>
Bio-American Capital Corporation
(A Development Stage Company)
Statements of Stockholders' Equity -Continued
May 5, 1992 (Inception) to March 31, 1998
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Shares Issued for Cash at $.001
Per Share 5,000,000 5,000
Loss for Period Ended
March 31, 1998 (185)
- --------------------------------------------------------------------------------
Balance, March 31, 1998 5,780,000 $5,780 $7,020 ($8,155)
=============================================
The accompanying notes are an integral part of these financial statements
</TABLE>
F-14
<PAGE>
<TABLE>
<CAPTION>
Bio-American Capital Corporation
(A Development Stage Company)
Statements of Cash Flows Accumulated from May
5, 1992 (Inception) to March 31, 1998 &
for the Period January 1, 1998 to March 31, 1998 &
for the Years Ended December 31, 1997 & 1996
March December December
Accumulated 31, 1998 31, 1997 31, 1996
------------ --------- -------- --------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities
- ------------------------------------
Net Loss ($8,155) ($185) ($185) ($185)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
Amortization 500 -0- 100 100
Changes in Operating Assets & Liabilities
Increase in Accounts Payable 355 185 85 85
------- ------- ------- ------
Net Cash Used by
Operating Activities (7,300) -0- -0- -0-
Cash Flows from Investing Activities
Incorporation Costs (500) -0- -0- -0-
------- ------- ------- ------
Net Cash Used by
Investing Activities (500) -0- -0- -0-
Cash Flows from Financing Activities
Proceeds from Sale of Common Stock 12,800 5,000 -0- -0-
------- -------- ------- ------
Net Cash Provided by
Financing Activities 12,800 5,000 -0- -0-
Increase in Cash 5,000 5,000 -0- -0-
Cash at Beginning of Period -0- -0- -0- -0-
Cash at End of Period $5,000 $5,000 $ -0- $ -0-
Supplemental Disclosures
Interest $ -0- $ -0- $ -0- $ -0-
Taxes -0- -0- -0- -0-
The accompanying notes are an integral part of these financial statements
</TABLE>
F-15
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 -Organization & Corporate History
- -----------------------------------------
The Company was organized on May 5, 1992, under the laws of the state of Nevada.
The articles of incorporation state the corporate purpose as "To engage without
qualification in any lawful act or activity for which corporations may be
organized under the laws of the state of Nevada."
The Company has authorized capital of 100,000,000 shares of common stock each
having a par value of $0. 001.
The Company has no operations and is considered to be a development stage
company.
NOTE #2 - Significant Accounting Policies
- -----------------------------------------
A. The Company uses the accrual method of accounting.
B. Revenues and expenses are recognized in the period in which the activities
occur. There have been no operations to produce revenues since inception.
C. The Company has had no noncash investing and financing activities.
D. The Company considers all short term, highly liquid investments that are
readily convertible within ninety days to known amounts as cash. (The Company
currently has no liquid investments.)
E. Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principals requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE #3 - Going Concern
- -----------------------
The Company has sustained losses in each of the years of its existence. The
Company has no operations and generates no additional working capital. In view
of these facts there is considerable doubt as to the Company's ability to remain
a going concern. The Company's officers seek a merger candidate who can provide
a business opportunity and working capital.
NOTE #4 - Income Taxes & Net Operating Loss Carryforward for Income Tax Purposes
- --------------------------------------------------------------------------------
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax assets in
future years. Due to the uncertainty as to the utilization of net operating loss
carryforwards an evaluation allowance has been made to the extent of any tax
benefit that net operating losses may generate.
F-16
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Notes to Financial Statements -Continued
NOTE #4 - Income Taxes & Net Operating Loss Carryforward for Income Tax
Purpose -Continued
------------------------------------------------------------------------
1997 1996
---- ----
Current Tax Asset Value of Net Operating Loss
Carryforwards at Current Prevailing Federal Tax Rate $1,196 $1,168
Evaluation Allowance (1,196) (1,168)
Net Tax Asset $ -0- $ -0-
Current Income Tax Expenses -0- -0-
Deferred Income Tax Benefit -0- -0-
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Code are met. These losses are as
follows:
Year of Loss Amount Expiration Date
1992 $ -0- 2007
1993 1,285 2008
1994 2,732 2009
1995 3,583 2010
1996 185 2011
1997 185 2012
NOTE #5 - New Technical Pronouncements
- --------------------------------------
In 1997, SFAS No. 129, "Disclosure of Information about Capital Structure" was
issued effective for periods ending after December 15, 1997. The Company has
adopted the disclosure provisions of SFAS No. 129 effective with the fiscal year
ended December 31, 1998.
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" was issued
effective for fiscal years beginning after December 31, 1997, with earlier
application permitted. The Company has elected to adopt SFAS No. 130 effective
with the fiscal year ended December 31, 1998. Adoption of SFAS No. 130 is not
expected to have a material impact on the Company's financial statements.
In June 1997, SFAS No. 13 1, "Disclosures about Segments of an Enterprise and
Related Information" was issued for fiscal year beginning after December 31,
1997, with earlier application permitted. The Company has elected to adopt SFAS
No. 13 1, effective with the fiscal years ended December 31, 1998. Adoption of
SFAS No. 131 is not expected to have a material impact on the Company's
financial statements.
F-17
<PAGE>
Interim Unaudited Financial Statement
for period ended June 30, 1999
F-18
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Balance Sheet
June 30, 1999
Unaudited
ASSETS
June 30, Dec. 31,
1999 1998
---- ----
CURRENT ASSETS
Cash $ 8,387 $ 29,720
Subscription receivable (Note 3) 465,300 495,000
Interest Receivable (Note 4) 27,004 3,372
Notes Receivable (Note 4) 450,060 450,060
------- -------
TOTAL CURRENT ASSETS 950,751 978,152
TOTAL $ 950,751 978,152
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 18,525 22,647
------ ---------
TOTAL CURRENT LIABILITIES 18,525 22,647
COMMITMENTS AND CONTINGENCIES (Note 5))
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value: authorized -
100,000,000 shares; issued and outstanding - 3,290 3,290
3,290,250 shares
Additional paid-in capital 983,523 983,523
Accumulated deficit (54,587) (31,308)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 932,226 955,505
--------- ---------
TOTAL $ 950,751 $ 978,152
========= =========
The accompanying notes are an integral part of these financial statements.
F-19
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Statement of Operations
For the Period April 1, 1999 to June 30,
Unaudited
1999 1998
---- ----
REVENUES:
Interest Income $ 13,502 0
EXPENSES:
Management Fees 15,000 0
Regulatory Expenses 302 0
Professional Fees 0 1,800
Other 2,250 344
Travel 0 1,257
----------- -----------
Total Expenses 17,552 3,401
Net Loss $ (4,050) (3,401)
-------- ------
Loss Per Sharer $ (0.00) (.0)
======== ===
Weighted Average Shares Outstanding 3,290,250 5,780,000
========= =========
The accompanying notes are an integral part of these financial statements
F-20
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Statement of Cash Flow
For the Period April 1, 1999 to June 30,
Unaudited
1999 1998
---- ----
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss ($ 4,050) ($ 3,401)
Adjustments to reconcile net loss to net cash
provided by operating activities
Changes in assets and liabilities
Interest Receivable 13,502
0
Accounts payable 2,307 1,445
Net Cash Used by Operating Activities 15,245 1,956
CASH FLOW FROM INVESTING ACTIVITIES:
Net Cash Used by Investing Activities
0
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Sale of Common Stock 16,500
0
Net Cash Provided by Financing 16,500
--------
Activities 0
--------
INCREASE IN CASH 1,255 1,956
CASH, April 1, 1999 7,132 5,000
-------- --------
CASH, JUNE 30, 1999 $ 8,387 3,044
======== ========
The accompanying notes are an integral part of these financial
statements.
F-21
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Statement of Operations
For the Period January 1, 1999 to June 30,
Unaudited
1999 1998
---- ----
REVENUES:
Interest Income $ 27,004 0
EXPENSES:
Administration 34,500 0
Regulatory Expenses 7,265 0
Professional Fees 5,098 1,800
Other 48 529
Travel 0 1,257
----------- -----------
Total Expenses 46,911 3,586
----------- -----------
Net Loss ($ 19,907) (3,586)
=========== ===========
Loss Per Share ($ 0.01) (.0)
=========== ===========
Weighted Average Shares Outstanding 3,290,250 3,280,000
The accompanying notes are an integral part of these financial statements
F-22
<PAGE>
Bio-American Capital Corporation
(A Development Stage Company)
Statement of Cash Flows
For the Period January 1, 1999 to June 30,
Unaudited
1999 1998
---- ----
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss ($19,907) ($ 3,586)
Adjustments to reconcile net loss to net cash
provided by operating activities
Changes in assets and liabilities
Interest Receivable 27,004
0
Accounts payable 4,122 1,630
----- -----
Net Cash Used by Operating Activities 51,033 1,956
CASH FLOW FROM INVESTING ACTIVITIES:
Net Cash Used by Investing Activities
0 0
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Sale of Common Stock 29,700 5,000
-------- --------
Net Cash Provided by Financing 29,700 5,000
Activities
DECREASE IN CASH 21,333 3,044
CASH, JANUARY 1, 1999 29,720 0
-------- ------
CASH, JUNE 30, 1999 $ 8,387 3,044
======== =======
The accompanying notes are an integral part of these financial statements.
F-23
<PAGE>
Bio-American Capital Corporation
Notes to Financial Statements
June 30, 1999
1. ORGANIZATION AND OPERATING HISTORY
- ---------------------------------------
Description of the Business. Bio-American Capital Corporation (the "Company")
was incorporated in May 1992 to raise capital for a business venture. Minimal
capital was raised and it engaged in no business and remained dormant until
November 1998. During late 1998 and 1999 the Company raised $990,000 under
Regulation D, Rule 504 of the . The Company now acts as a merchant bank to
organize, capitalize, acquire and finance technology companies in the electronic
communications and commerce industry.
Reverse Stock Split. On November 10, 1998, the Company's Articles of
Incorporation were amended to reduce the number of shares issued and outstanding
on a basis of one new share for each twenty of such issued and outstanding;
provided that no stockholder shall be reduced thereby to less than 100 shares.
The reverse stock split was effective on November 25, 1998.
2. SIGNIFICANT ACCOUNTING POLICIES
- ------------------------------------
Stock Subscription. The Company records a stock subscription once the
Subscription Agreement is accepted.
Revenue Recognition. The Company sells merchant banking services and invests in
selected ventures. Revenues consist of fees for services and a return on the
capital invested.
Use of Estimates. The preparation of the pro forma financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions regarding the amounts reported and the disclosure
of contingent assets and liabilities at the date of the pro forma financial
statements. Actual results could differ from those estimates.
3. STOCK SUBSCRIPTION
- -----------------------
During December 1998 the Company accepted the Subscription Agreements to
purchase 3,000,000 shares of common stock for $990,000 pursuant to an exempt
Offering Circular under Regulation D, Rule 504 of the Securities and Exchange
Commission.
F-24
<PAGE>
4. NOTES RECEIVABLE
- ---------------------
The Company has provided $915,360 of bridge-financing to Universal Alliance,
Inc. ("UAI"). UAI has also issued the Company options to purchase 132,943 shares
of common stock of UAI at a price of $3.50 per share and 90,000 shares of common
stock of UAI at a price of $5.00 per share. The notes receivable are to be
repaid on the earlier of December 1999, or from the proceeds raised from the UAI
Confidential Offering Memorandum.
5. COMMITMENT AND CONTINGENCIES
- ---------------------------------
The Company continually reviews business plan to identify candidates that
require merchant banking services or funding. The first investment that the
Company has agreed to finance is UAI. UAI is the holding company for Remind
America, Inc., Global Interlink Systems, Inc., and NCSS America, Inc. Remind
America, Inc. is a service-oriented company that began operations in 1996 and
specializes in providing a unique acknowledgement service to both business and
the general public. Global Interlink Systems, Inc. was incorporated in 1996 and
provides personalized custom products to the general public through electronic
touch-pad kiosk units. NCSS America, Inc. was recently formed and specializes in
the design and installation of high-speed wireless communication networks and
services that are fast, cost-effective, high quality and provide secure
communications.
Share Exchange Agreement (the "Agreement"). In December 1998, the Company
entered into an Agreement with UAI and certain shareholders of UAI (the "UAI
Controlling Shareholders"). The Agreement provided that the Company would
acquire 81.5% (9,600,000 shares) of the outstanding capital stock of UAI. The
UAI Controlling Shareholders will receive one share of newly issued Company
stock for each share of UAI Stock. The Agreement required the Company, with
certain limitation, to prepare and file a registration statement or registration
statements in compliance with the Securities Act of 1933, as amended (the "Act")
such that the UAI Controlling Shareholders will be able to sell the exchange
shares in compliance with the Act. The Company's registration efforts shall be
limited to attempting to register up to twenty five percent (25%) of the
exchange shares once in every six (6) month period. In July 1999, the Company,
UAI and the UAI Controlling Shareholders terminated the Share Exchange Agreement
and entered into a Stock Option Agreement.
Stock Option Agreement (the "Option Agreement"). The Option Agreement provides
the Company with the option, based upon achieving specific performance criteria,
to acquire controlling interest in UAI. The Company would issue to UAI
Controlling Shareholders one and three-quarters (1.75) shares of common stock in
the Company for each share of UAI common stock. The conditions precedent
include: (i) the Company to file Form 10-SB with the Securities and Exchange
Commission on or before July 30, 1999, and comply with all future disclosure
requirements of a fully-reporting company; (ii) the Company to assist UAI in the
successful completion of the Private Offering Memorandum for $2,000,000 of
Convertible Notes; (iii) Average price of the Company's stock traded on the
Over-the-Counter Bulletin Board to average at least $2.00 from August 1, 1999
through September 30, 1999; (iv) Tax-free exchange of the Company's stock for
UAI common stock; (v) Successful filing of a registration statement that
registers up to twenty-five percent (25%) of the Company's common stock to be
acquired by the UAI Controlling Shareholders; and (vi) executing the option
before March 31, 2,000. The Company is not obligated to complete any or all of
the conditions precedent prior to the exercise of the option. The Option
Agreement requires the Company, with certain limitation, to prepare and file a
registration statement or registration statements in compliance with the
Securities Act of 1933, as amended (the "Act") such that the UAI Controlling
Shareholders will be able to sell the exchange shares in compliance with the
Act. The Company's registration efforts shall be limited to attempting to
register up to twenty five percent (25%) of the exchange shares once in every
six (6) month period
F-25
<PAGE>
INDEX TO EXHIBITS
SK#
3.1 Articles of Incorporation
3.2 Certificate of Amendment
3.3 Bylaws
10.1 Stock Option Agreement
24.1 Accountants Letter
ARTICLES OF INCORPORATION
OF
BIO-AMERICAN CAPITAL CORPORATION
ARTICLE ONE
The name of the corporation is BIO-AMERICAN CAPITAL CORPORATION.
ARTICLE TWO
The Resident Agent for this corporation is Marilyn K. Radloff, 115 Taurus
Circle, Reno, Nevada 89511.
ARTICLE THREE
The purpose or purposes for which this corporation is organized are:
To engage, without qualification, in any lawful act or activity for which
corporations may be organized under the laws of the State of Nevada.
ARTICLE FOUR
The amount of the total authorized capital stock the corporation shall have the
authority to issue is One Hundred Million (100,000,000) shares of Common Stock,
each having a par value of $0.001.
Each share of Common Stock issued and outstanding, shall he entitled to one vote
on all matters. Dividends shall be declared and paid only out of funds legally
available therefor. Shares of such stock may he issued for such consideration
and for such corporate purposes as the Board of Directors may from time to time
determine. Fully paid stock of this corporation shall not be liable to any
further call or assessment.
ARTICLE FIVE
The governing board of this corporation shall he known as directors, and the
number of directors may from time to time be increased or decreased in such
manner as shall be provided by the bylaws of this corporation, provided that the
number of directors shall not be reduced to less than three (3), except that in
cases where all the shares of the corporation are owned beneficially and of
record by either one or two stockholders, the number of directors may he less
than three (3), but not less than the number of stockholders.
The names and post office addresses of the first Board of Directors, which shall
be three (3) in number are as follows:
NAME ADDRESS
1. Frank J. Greene 112 W. Hollywood
San Antonio, Texas 78212
2. C. M. Dyal 434 Adrian Drive
San Antonio, Texas 78213
3. James D. McNeese 9151 Sherri Ann Drive
San Antonio, Texas 78233
<PAGE>
The Board of Directors shall be limited in number to no fewer than three (3) nor
more than nine (9).
Directors of the corporation need not be residents of the State of Nevada and
need not own shares of the corporation's s tock
ARTICLE SIX
The capital stock of the corporation, after the amount. of the subscription
price has been paid in money, property. or services, as the directors shall
determine, shall not be subject. to assessment to pay the debts of the
corporation, nor for any other purpose, and no stock issued as fully paid up
shall ever be assessable or assessed, and the Articles of Incorporation shall
not be amended in this particular.
ARTICLE SEVEN
The name and post office address of each of the incorporators signing the
Articles of Incorporation are as follows:
NAME ADDRESS
1. Frank J. Greene 112 W. Hollywood
San Antonio, Texas 78212
2. C. M. Dyal 434 Adrian Drive
San Antonio, Texas 78213
3. James D. McNeese 5151 Sherri Ann Drive
San Antonio, Texas 78233
ARTICLE EIGHT
The corporation is to have perpetual existence.
ARTICLE NINE
In furtherance and not in limitation of the powers conferred by statute, the
Board of Directors is expressly authorized:
Subject to the bylaws, if any, adopted by the stockholders, to make, alter or
amend the bylaws of the corporation.
To fix the amount to be reserved as working capital over and above its capital
stock paid In, to authorize and to cause to he executed mortgages and liens upon
the real and personal property of this corporation.
By resolution passed by a majority of the whole board, to designate one or more
committees, each committee to consist of one or more of the directors of the
corporation, which, to the extent provided in the resolution or in the bylaws of
the corporation, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to he affixed to all papers which may
require it. Such committee or committees shall have such name or names as may he
stated in the bylaws of the corporation or as may he determined from time to
time by resolution adopted by the Board of Directors.
<PAGE>
When and as authorized by the affirmative vote of stock-holders holding stock
entitling them to exercise at least a majority of the voting power given at a
stockholder's meeting called for that purpose, or when authorized by the written
con-sent of the holders of at least a majority of the voting stock issued and
outstanding, the Board of Directors shall have power and authority at any
meeting to sell, lease or exchange all of the property and assets of the
corporation, Including its good will and its corporate franchises, upon such
terms and conditions as its Board of Directors deem expedient and for the best
interests of the corporation.
ARTICLE TEN
Meetings of the stockholders may be held at such place within or without the
State of Nevada, if the bylaws so provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Nevada at such place or places as may be designated from time to time by the
Board of Directors or in the bylaws of the corporation.
ARTICLE ELEVEN
This corporation reserves the right to amend, alter, change, or repeal any
provision contained in the Articles of Incorporation, in the manner now or
hereafter prescribed by statute, or by the Articles of Incorporation, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
ARTICLE TWELVE
No shareholder shall be entitled as a matter of right to subscribe for or
receive additional shares of any class of stock of the corporation, whether now
or hereafter authorized, or any bonds, debentures or other securities
convertible into stock, but such additional shares of stock or other securities
convertible into stock may be issued or disposed of by the Board of Directors to
such persons and on such terms as in its discretion it shall deem advisable.
WE, THE UNDERSIGNED, being each of the incorporators, herein-before named for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set our hands this ____ day of
- ----------
1992.
--------------------
FRANK GREENE
--------------------
M. DYAL
--------------------
JAMES D. McNEESE
<PAGE>
STATE OF TEXAS )
) ss.
COUNTY OF BEXAR )
On this the 20th day of April 1992, before me, the undersigned Notary Public,
personally appeared FRANK J. GREENE, C. M. DYAL, and JAMES D. McNEESE,
personally known to me, or proved to me on the basis of satisfactory evidence,
to be the persons whose names are subscribed to the within instrument, and they
acknowledged that they executed it.
WITNESS my hand and official seal.
----------------------
NOTARY PUBLIC
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
BIO-AMERICAN CAPITAL CORPORATION
I, the undersigned President and Assistant Secretary of Bio-American
Capital Corporation a Nevad corporation do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
or pursuant to an action by unanimous written consent, adoopted resolutions to
amend the original Articles of Incorporation, as follows:
ARTICLE FOUR of thes Coorporation's Articles of Incorporation is amended to
add, at the end of the first paragraph of such Srticle, the sentence set forth
below.
"Upon the filing of this Certificate of Amendement, each share of common
stock of this corporation that is issued and outstanding on such date shall be
combined in a reverse lplit thereof on a basis of one new share for each twenty
of such issued and outstanding shares: provided, however, that any fractional
shares shall be increased to the next whole number; provided, further, that no
stockholder shall be reduced thereby to less than 100 share."
ARTICLE THIRTEEN is hereby added to red as follows:
"ARTICLE THIRTEEN"
"The Corporation hereby waives and preludes the application of the
antitakeover provisions of Nevada Revised Statutes 78.378 to 78.3793."
The number of shares of the Corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 5,780,000 that the said changes
and amendments have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote theron.
Dated: November ___, 1998
BIO-AMERICAN CAPITAL CORPORATION
by:_________________________________
Jay Geier, President
by:_________________________________
David Archer, Secretary
BIO-AMERICAN CAPITAL CORPORATION
BYLAWS
ARTICLE I MEETING OF STOCKHOLDERS
- --------- -----------------------
1. Stockholders' Meetings shall be held in the office of the corporation, at
Reno, Nevada, or at such other place or places as the Directors shall from time
to time determine.
2. The annual meeting of the stockholders of this corporation shall be held at
11:00 a.m. on the 10th day of December each year beginning in 1992, at which
time there shall be elected by the stockholders of the corporation a Board of
Directors for the ensuing year, and the stockholders shall transact such other
business as shall properly come before them.
3. A notice setting out the time and place of such annual meeting shall be
mailed postage prepaid to each of the stockholders of record, at his address and
as the same appears on the stock book of the Company, or if no such address
appears, at his last known place of business, at least ten (10) days prior to
the annual meeting.
4. If a quorum not he present at the annual meeting the stockholders present in
person or by proxy may adjourn to such future time as shall be agreed upon by
them, and notice of such adjournment shall be mailed, postage prepaid, to each
stockholder at least ten (10) days before such adjourned meeting; but if a
quorum be present, they may adjourn from day to day as they see fit, and no
notice of such adjournment need be given.
5. Special meetings of the stockholders may be called at any time by the
President, any three (3) Directors, or by the holder of a majority share of the
capital stock of the corporation. The Secretary shall mail a notice of such
meeting called to each stockholder of the company at least ten (10) days before
such meeting, and such notice shall state the time and place of the meeting, and
the object thereof. No business shall be transacted at a special meeting except
as stated In the notice sent to the stockholders, unless by unanimous consent of
all stockholders present, either In person or by proxy, all such stock being
represented at the meeting.
6. A majority of the stock issued and outstanding, either in person or by proxy,
shall constitute a quorum for the transaction of business at any meeting of the
stockholders.
7. Each stockholder shall he entitled to one vote for each share of stock in his
own name on the books of the company, whether represented in person or by proxy.
8. All proxies shall be in writing and signed.
9. The following order of business shall be observed at all meetings of the
stockholders so far as is practicable:
a. Call the roll;
b. Reading, correcting, and approving of the minutes of the previous meeting;
C. Reports of Officers;
<PAGE>
d. Reports of Directors;
e. Election of Directors;
f. Unfinished Business; and
g. New Business.
ARTICLE II STOCK
- ---------- -----
1. Certificates of stock shall be in a form adopted by the Board of Directors
and shall he signed by the President and Secretary of the Corporation.
2. All certificates shall he consecutively numbered; the name of the person
owning the shares represented thereby, with the number of such shares and the
date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsement thereon shall be
surrendered by cancellation and new certificates issued to the purchaser or
assignee.
ARTICLE III DIRECTORS
- ----------- ---------
1. A Board of Directors, consisting of at least three (3) and no more than nine
(9) persons shall be chosen annually by the stockholders at their annual meeting
to manage the affairs of the company except that in case all the shares of the
Corporation are owned beneficially and of record by either one or two
stockholders, the number of Directors may be less than three (3), but not less
than the number of stockholders. The Directors' term of office shall be one (1)
year, and Directors may be reelected for successive annual terms.
2. Vacancies on the Board of Directors by reason of death, resignation or causes
shall be filled by the remaining Director or Directors choosing a Director or
Directors to fill the unexpired term.
3. Regular meetings of the Board of Directors shall he held at 11:00 a.m. on the
10th day of December, March, June, and September, beginning in March, 1993, at
the office of the company at Reno, Nevada, or at such other time or place as the
Board of Directors shall by resolution appoint; special meetings may be called
by the President, or any Director giving ten (10) days, notice to each Director.
Special meetings may also be called by execution of the appropriate waiver of
notice and call when executed by a majority of the Directors of the company. A
majority of the Directors shall constitute a quorum.
4. The Directors shall have the general management and control of the business
and affairs of the company and shall exercise all the powers that may be
exercised or performed by the corporation, under the statutes, the certificates
of incorporation, and the Bylaws. Such management will be by equal vote of each
member of the Board of Directors with each board member having an equal vote.
5. A resolution, In writing, signed by all the members of the Board of
Directors, shall constitute action by the Board of Directors to the effect
therein expressed, with the same force and effect as though such resolution had
been passed at a duly convened meeting; and It shall be the duty of the
Secretary to record every such resolution in the Minute Book of the corporation
under its proper date.
<PAGE>
ARTICLE IV OFFICERS
- ---------- --------
1. The officers of this company shall consist of a President, one or more Vice
Presidents, Secretary-Treasurer, Resident Agent and such other officers as shall
from time to time be elected or appointed by the Board of Directors.
2. The PRESIDENT shall preside at all meetings of the Directors and the
Stockholders. He shall sign or countersign all stock certificates, contracts and
other Instruments of the corporation as authorized by the Board of Directors and
shall perform all such other duties as are Incident to his office or are
required by him by the Board of Directors.
3. The VICE PRESIDENT shall exercise the functions of the President during the
absence or disability of the President and shall have such powers and such
duties as may be assigned to him from time to time by the Board of Directors.
4. The SECRETARY shall issue notices for all meetings as required by the Bylaws,
shall keep a record of the minutes of the proceedings of the meetings of the
Stockholders and Directors, shall have charge of the Corporate books, and shall
make such reports and perform such other duties as are Incident to his office or
properly required of him by the Board of Directors. He shall be responsible that
the corporation complies with Section 78.109 of the Nevada Corporation laws and
supplies to the Nevada Resident Agent or Principal Office in Nevada, any and all
amendments to the Corporation's Articles of Incorporation and any and all
amendments or changes to the Bylaws of the Corporation. In compliance with
Section 78.105, he will also supply to the Nevada Resident Agent or Principal
Office in Nevada, and maintain, a current statement setting out the name of the
custodian of the stock ledger or duplicate stock ledger, and the present and
complete Post Office address, including street and number, if any, where such
stock ledger or duplicate stock ledger specified in the section is kept.
5. The TREASURER shall have the custody of all monies and securities of the
corporation and shall keep regular books of account. He shall disburse the funds
of the corporation in payment of the just demands against the Corporation, or as
may be ordered by the Board of Directors, making proper vouchers for such
disbursements and shall render to the Board of Directors from time to time, as
may be required of him, an account of all his transactions as Treasurer and of
the financial condition of the Corporation. He shall perform all duties Incident
to his office or which are properly required of him by the Board of Directors.
6. The RESIDENT AGENT shall be In charge of the corporation's registered office
in the State of Nevada, upon whom process against the Corporation may be served
and shall perform all duties required of him by statute.
7. The salaries of all officers shall be fixed by the Board of Directors and may
be changed from time to time by a majority vote of the Board.
8. Each of such officers shall serve for a term of one (1) year or until their
successors are chosen and qualified. Officers may be re-elected or appointed for
successive annual terms.
9. The Board of Directors may appoint such other officers and agents as it shall
deem necessary or expedient, who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall he determined from
time to time by the Board of Directors.
<PAGE>
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS
- --------- -----------------------------------------
1. The Corporation shall indemnify any and all of its Directors or Officers or
former Directors or Officers or any person who may have served at its request as
a Director or Officer of another corporation in which it owns shares of capital
stock or of which it Is a creditor against expenses actually and necessarily
incurred by them in connection with the defense of any action, suit or
proceeding In which they, or any of them, are made parties, or a party, by
reason of being or having been Directors or Officers or a Director or Officer of
the Corporation or of such other Corporation, except, in relation to matters as
to which any such Director or Officer or former Director or Officer or person
shall be adjudged in such action, suits or proceedings to be liable for
negligence or misconduct, In the performance of duty. Such Indemnification shall
not be deemed exclusive or any others' rights to which those Indemnified may be
entitled, under Bylaw agreement, vote of stockholders or otherwise.
ARTICLE VI AMENDMENTS
- ---------- ----------
I. Any of these Bylaws may be amended by a majority vote of the stockholders at
any annual meeting or at any special meeting called for that purpose.
2. The Board of Directors may amend the Bylaws or adopt additional Bylaws, but.
shall not alter or repeal any Bylaws adopted by the stockholders of the company.
CERTIFIED TO BE THE BYLAWS OF
BIO-AMERICAN CAPITAL, INC.
BY____________________________
SECRETARY
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (the "Agreement"), dated as of July 20, 1999,
made by and between Controlling Shareholders of Universal Alliance, Inc., a
Nevada corporation, with its place of business located at 2625 Temple Heights
Drive, Oceanside, CA 92056 ("Optionor"), and Bio-American Capital Corporation, a
Nevada corporation, with its place of business located at 462 Stevens Avenue,
Suite 308, Solana Beach, CA 92075 ("Optionee"). Universal Alliance, Inc. and
Bio-American Capital Corporation shall sometimes be referred to as UAI and BACC
respectfully. Controlling Shareholders shall included those shareholders which
collectively own at least 80% of the issued and outstanding stock, and rights to
acquire stock in UAI.
In consideration of ten dollars and no/100ths and other good and valuable
consideration Optionor hereby grants to the Optionee, its successors, the right
to acquire and receive from Optionor at least 80% of the issued and outstanding
stock, and rights to acquire stock in UAI in exchange for common stock of BACC,
or its successors, on the terms herein provided (the "Option").
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
for the purpose of defining the terms and provisions of this Agreement and the
Option hereby granted, Optionor and Optionee hereby agree as follows:
1. Terms of Exercise. Optionee must exercise the Option granted herein
before March 31, 2000. Optionee may exercise the Option by meeting the
"Conditions Precedent to the Exercise of the Option" set forth in Section 2 and
delivering to "Escrow Agent" (mutually agreed to) the shares of BACC common
stock (the "Exchange Shares") set forth in Section 4 for each share of UAI
common stock (the "Exercise Price") for which Optionee is exercising the Option.
2. Conditions Precedent to the Exercise of the Option.
a.) BACC to file Form 10-SB with the Securities and Exchange Commission on
or before July 30, 1999, and comply with all future disclosure
requirements of a fully-reporting company;
b.) BACC Management to assist UAI in the successful completion of the
draft Private Offering Memorandum for $2,000,000 of Convertible Notes;
c.) Average price of BACC common stock traded on the Over-the-Counter
Bulletin Board, during the period August 1, 1999, through September
30, 1999, to be least $2.00 per share;
d.) Tax-free exchange of BACC common stock for UAI common stock;
e.) Successful filing of a registration statement that registers up to 25%
of the BACC common stock to be acquired by the UAI Controlling
Shareholders; and
f.) Prior to March 31, 2000.
g.) Mutual agreement on Escrow Agent; which agreement will not be
unreasonably withheld.
3. BACC's Obligations. BACC shall not be obligated to complete any or all
of the Conditions Precedent set forth in Section 2 prior to the Exercise of the
Option.
4. Share Exchange Consideration for UAI Stock. BACC will issue to UAI
Controlling Shareholders one and one-half (1.5) shares of common stock of BACC
for each share of UAI common stock. No fractional shares of Exchange Shares
shall be issued to the UAI Controlling Shareholders, and any fractional share to
which the UAI Controlling Shareholders would otherwise be entitled shall be
rounded off to the nearest whole share.
5. Registration Rights. Upon issuance, seventy-five percent (75%) of the
Shares will not been registered under the Securities Act of 1933, as amended,
for purposes of public distribution. BACC will agree to prepare and file, upon
request of the holders of the Shares, a registration statement to register up to
25% of the Stock each six months following the closing of the transaction. Such
registration is subject to any terms required by an underwriter of any secondary
offering.
6. Representations, Warranties and Covenants of Optionor. Optionor hereby
represents and warrants, as of the date of this Agreement and as of the date
upon which Optionee exercises the Option, as follows:
a) None of the representations or warranties made by Optionor
contains any untrue statement of material fact, or omits to state any material
fact necessary to make the statements made, in the light of the circumstances
under which they were made, not misleading.
b) Optionor owns all right, title, and interest to the Shares, and
the Shares are and will be free and clear of any and all liens, claims, and
encumbrances of any kind or nature.
7. No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their respective
successors and permitted assigns.
8. Entire Agreement. This Agreement constitutes the entire agreement among
the parties and supersedes any prior understandings, agreements, or
representations by or among the parties, written or oral, to the extent they
related in any way to the subject matter hereof.
9. Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. No party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the Optionor.
<PAGE>
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
11. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given on the date of
delivery, if delivered by hand or by telecopy with machine confirmation to the
persons identified below, or three (3) days after mailing if mailed by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient at the address set out hereinabove. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of California and the United
States without giving effect to any choice or conflict of law provision or rule
(whether of the State of California or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
California and the United States.
13. Dispute Resolution. The parties hereto deem it to be in their
respective best interests to settle any dispute as expeditiously and
economically as possible. Therefore, the parties expressly agree to submit any
dispute between them arising out of or relating to this Agreement ("Dispute") to
mediation and, if necessary, arbitration. The parties hereto thus expressly
waive any rights they may have to trial by jury with respect to such dispute.
The dispute resolution proceedings shall be conducted in San Diego, California.
14. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Optionor and Optionee. No waiver by any party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
15. Severability. If any term, provision, condition or covenant of this
Agreement or the application thereof to any party or circumstances shall be held
to be invalid or unenforceable to any extent in any jurisdiction, then the
remainder of this Agreement and the application of such term, provision,
condition or covenant in any other jurisdiction or to persons or circumstances
other than those as to whom or which it is held to be invalid or unenforceable,
shall not be affected thereby, and each term, provision, condition and covenant
of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.
16. Expenses. Each of the parties will bear his or its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. In the event legal action is
necessary to enforce this Agreement, the prevailing party shall be entitled to
an award of all its reasonable attorney's fees and costs incurred in connection
with enforcement of this Agreement
<PAGE>
17. Construction.
a. Words. All references in this Agreement to the singular shall
include the plural, the plural shall include the singular where applicable, and
all references to gender shall include both genders and the neuter. All
references in this Agreement to days shall be calendar days unless specified as
business days. All accounting terms not otherwise identified herein shall have
the meanings assigned to them in accordance with General Accepted Accounting
Principles consistently applied.
b. Cross-References. References in this Agreement to any Section
shall include all Subsections, and Paragraphs in such Section; and references in
this Agreement to any Subsection shall include all Paragraphs in such
Subsection. Words "herein," "hereof," "hereunder" and words of similar import
refer to this Agreement as a whole and not to any particular paragraph or other
subdivision unless the context otherwise so admits.
c. Headings. The table of contents and the headings to each Section
and Subsection herein are for the purposes of convenience only and shall not be
read or interpreted as having any meaning or effect.
[Signatures on Following Page]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with legal and binding effect as of the date and year first above
written.
Optionee:
---------
- ------------------------------
Bio-American Capital Corporation
By: Leonard Viejo, President
Optionor(s):
------------
- ---------------- ----------------
James R. Wheeler Matthew J. Basson
- ---------------- ----------------
Jacob Cancelli Terry Young
- ------------------ -------------------
Bonnechi Finance, Ltd Booker Finance, Ltd.
By: Kerrod Grant Park, Authorized By: Shane Hodge, Authorized Signature
Signatory
- ----------------- -------------------
Collyer House, Ltd. Cortell Group, Ltd.
By: John B. Davis, Authorized Signatory By: Byran Cook, Authorized Signatory
- ----------------- ----------------------
Holder Row, Ltd Oceania Custodian, Ltd
By: Bruce Pilley, Authorized Signatory. By: Nico Francken, Director
- ----------------------- ------------------------
Yellowstone Securities, Ltd. NCSS International, Ltd.
By: Gregg E. McNair, Authorized By: John Thornton Bigley, Authorized
Signatory Signatory
- --------------
Ira Wheeler
<PAGE>
STATE OF ______________ )
)ss.
COUNTY OF ______________ )
On November ____, 1998, before me, __________________, a notary public
in and for said state, personally appeared Jay Geier, personally known to me to
be the person whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacities, and that by his
signature on the instrument the entity upon behalf of which the persons acted,
executed the instrument.
WITNESS my hand and official seal.
My commission Expires:
-----------------------------
Notary Public
Schvanoveldt and Compnay
Ceritfied Public Accountant
275 E. South Temple, Suite 300
Salt Lake City, Utah 84111
(801) 521-2392
U.S. Securities & Exchange Commission
Washington, D. C. 10549
The undersigned certifying accountants hereby acknowledge that they have
reviewed Item 3, "Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures," as contained in the Form 10 Registration Statement
being filed by Bio-American Capital Corporation and that the undersigned concurs
with the statements made therein by the Registrant concerning the Change in the
Registrant's independent accountant.
ss/Schvaneveldt & Company
- -------------------------
Schvaneveldt & Company
Salt Lake City, Utah
July 20, 1999
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<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-START> JAN-01-1998 JAN-01-1999
<PERIOD-END> DEC-31-1998 JUN-30-1999
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